33-1-101. Short title. This title constitutes the "Montana Insurance Code".   History: En. Sec. 1, Ch. 286, L. 1959; R.C.M. 1947, 40-2601; amd. Sec. 1, Ch. 77, L. 1979.  
  33-1-102. Compliance required -- exceptions -- health service corporations -- health maintenance organizations -- governmental insurance programs -- service contracts. (1) A person may not transact a business of insurance in Montana or a business relative to a subject resident, located, or to be performed in Montana without complying with the applicable provisions of this code.  (2) The provisions of this code do not apply with respect to:   (a) domestic farm mutual insurers as identified in chapter 4, except as stated in chapter 4;   (b) domestic benevolent associations as identified in chapter 6, except as stated in chapter 6; and   (c) fraternal benefit societies, except as stated in chapter 7.   (3) This code applies to health service corporations as prescribed in 33-30-102. The existence of the corporations is governed by Title 35, chapter 2, and related sections of the Montana Code Annotated.   (4) This code does not apply to health maintenance organizations to the extent that the existence and operations of those organizations are governed by chapter 31.   (5) This code does not apply to workers' compensation insurance programs provided for in Title 39, chapter 71, part 21, and related sections.   (6) The department of public health and human services may limit the amount, scope, and duration of services for programs established under Title 53 that are provided under contract by entities subject to this title. The department of public health and human services may establish more restrictive eligibility requirements and fewer services than may be required by this title.   (7) This code does not apply to the state employee group insurance program established in Title 2, chapter 18, part 8, or the Montana university system group benefits plans established in Title 20, chapter 25, part 13.   (8) This code does not apply to insurance funded through the state self-insurance reserve fund provided for in 2-9-202.   (9) (a) Except as otherwise provided in Title 33, chapters 22 and 28, this code does not apply to any arrangement, plan, or interlocal agreement between political subdivisions of this state in which the political subdivisions undertake to separately or jointly indemnify one another by way of a pooling, joint retention, deductible, or self-insurance plan.   (b) Except as otherwise provided in Title 33, chapter 22, this code does not apply to any arrangement, plan, or interlocal agreement between political subdivisions of this state or any arrangement, plan, or program of a single political subdivision of this state in which the political subdivision provides to its officers, elected officials, or employees disability insurance or life insurance through a self-funded program.   (10) (a) This code does not apply to the marketing of, sale of, offering for sale of, issuance of, making of, proposal to make, and administration of a service contract.   (b) A "service contract" means a contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement, or maintenance of property or to indemnify for the repair, replacement, or maintenance of property if an operational or structural failure is due to a defect in materials or manufacturing or to normal wear and tear, with or without an additional provision for incidental payment or indemnity under limited circumstances, including but not limited to towing, rental, and emergency road service. A service contract may provide for the repair, replacement, or maintenance of property for damage resulting from power surges or accidental damage from handling. A service contract does not include motor club service as defined in 61-12-301.   (11) (a) Subject to 33-18-201 and 33-18-242, this code does not apply to insurance for ambulance services sold by a county, city, or town or to insurance sold by a third party if the county, city, or town is liable for the financial risk under the contract with the third party as provided in 7-34-103.   (b) If the financial risk for ambulance service insurance is with an entity other than the county, city, or town, the entity is subject to the provisions of this code.   (12) This code does not apply to the self-insured student health plan established in Title 20, chapter 25, part 14.   (13) Except as provided in 33-2-2212, this code does not apply to private air ambulance services that are in compliance with 50-6-320 and that solicit membership subscriptions, accept membership applications, charge membership fees, and provide air ambulance services to subscription members and designated members of their households.   (14) This code does not apply to guaranteed asset protection waivers that are governed by Title 30, chapter 14, part 22.   (15) This code does not apply to direct patient care agreements established pursuant to 50-4-107.   (16) This code does not apply to a health care sharing ministry that meets the requirements of 50-4-111.   History: En. Sec. 9, Ch. 286, L. 1959; Sec. 40-2609, R.C.M. 1947; (2)En. Sec. 10, Ch. 286, L. 1959; Sec. 40-2610, R.C.M. 1947; (3)En. Sec. 11, Ch. 286, L. 1959; Sec. 40-2611, R.C.M. 1947; R.C.M. 1947, 40-2609, 40-2610, 40-2611; amd. Sec. 31, Ch. 457, L. 1987; amd. Sec. 1, Ch. 502, L. 1987; amd. Sec. 1, Ch. 558, L. 1987; amd. Sec. 52, Ch. 613, L. 1989; amd. Sec. 22, Ch. 4, Sp. L. May 1990; amd. Sec. 2, Ch. 727, L. 1991; amd. Sec. 12, Ch. 502, L. 1995; amd. Sec. 1, Ch. 590, L. 1995; amd. Sec. 1, Ch. 577, L. 1999; amd. Sec. 2, Ch. 13, L. 2001; amd. Sec. 8, Ch. 227, L. 2001; amd. Sec. 2, Ch. 359, L. 2009; amd. Sec. 2, Ch. 54, L. 2011; amd. Sec. 4, Ch. 199, L. 2011; amd. Sec. 2, Ch. 237, L. 2011; amd. Sec. 3, Ch. 351, L. 2011; amd. Sec. 8, Ch. 313, L. 2013; amd. Sec. 8, Ch. 363, L. 2013; amd. Sec. 1, Ch. 229, L. 2015; amd. Sec. 5, Ch. 320, L. 2015; amd. Sec. 10, Ch. 210, L. 2017; amd. Sec. 6, Ch. 262, L. 2021; amd. Sec. 2, Ch. 422, L. 2021. 
  33-1-103. Particular provisions prevail. Provisions of this code relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general.   History: En. Sec. 16, Ch. 286, L. 1959; R.C.M. 1947, 40-2616.  
  33-1-104. Repealed. Sec. 32, Ch. 396, L. 2017.   History: En. Sec. 17, Ch. 286, L. 1959; R.C.M. 1947, 40-2617; amd. Sec. 79, Ch. 370, L. 1987; amd. Sec. 5, Ch. 606, L. 1987.  
  33-1-105 and 33-1-106 reserved.  
  33-1-107. Repealed. Sec. 12, Ch. 456, L. 2005.   History: En. Sec. 1, Ch. 227, L. 2001.  
  33-1-108 and 33-1-109 reserved.  
  33-1-110. Limitations of provider agreements. (1) Notwithstanding any other provision of law, a provider who has entered into a provider agreement with a person as defined in 33-1-202 is not required to provide a discount or accept payment at the rate agreed to in the provider agreement for health care services that are provided to an insured individual if the payment for the services is made directly or indirectly or is otherwise required to be made:   (a) under casualty insurance as described in 33-1-206; or   (b) under property insurance as described in 33-1-210.   (2) Insurance payments made to a provider of health care services under subsection (1) must be paid according to the terms of the applicable policy or in accordance with any written agreement or contract existing between the provider and the insurer or a person contractually engaged by the insurer to perform services or an insurance function for the insurer. This section does not prohibit negotiations regarding the amount of the billed charges or a reasonable request for additional information or documents in order to evaluate the claim.   (3) An insurer making payment on a claim under a disability insurance policy, member contract, health benefit plan, group health plan, blanket disability insurance policy as defined in 33-22-601, or other medical coverage shall credit toward satisfaction of the insured's deductible, copayment, or coinsurance, if any, any payment made by a casualty or property insurer but only if the payment to be credited is applied to a covered medical expense under the terms of the applicable health policy.   (4) The provisions of this section apply regardless of whether the insured may be considered a third-party beneficiary of the provider agreement.   History: En. Sec. 1, Ch. 420, L. 2013.  
  33-1-111. Eligibility requirements of health insurance issuers. (1) As a condition of doing business in the state of Montana, a health insurance issuer, a multiple employer welfare arrangement, a third-party administrator, a health maintenance organization, a pharmacy benefit manager, a health services corporation, or any other party that by statute, contract, or agreement is legally responsible for payment of a claim for a health care item or service shall:   (a) upon request, provide to the department of public health and human services eligibility information for individuals who are eligible for or receiving medicaid, including but not limited to:   (i) data to determine during what period the medicaid recipient or medicaid-eligible individual or the spouse or dependents of the recipient or eligible individual may be or may have been covered by any of the entities listed in this section; and   (ii) data regarding the nature of the coverage that is or was provided, including but not limited to the name, address, and identifying information of the entity providing coverage;   (b) respond to any inquiry from the department of public health and human services regarding a claim for payment for any health care item or service submitted not later than 3 years after the date the item or service was provided;   (c) accept the department of public health and human services' right of recovery and the assignment from the medicaid recipient to the department of public health and human services of any right of an individual or other entity to payment from any of the entities listed in this section for an item or service for which medicaid has paid; and   (d) agree not to deny a claim submitted by the department of public health and human services solely on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point of sale that is the basis of the claim if:   (i) the claim is submitted by the department of public health and human services within the 3-year period beginning on the date on which the service or item was provided; and   (ii) any action by the department of public health and human services to enforce its rights with respect to the claim is commenced within 6 years after the department submitted the claim.   (2) This section may not be construed to:   (a) require that a third party pay any claim by the department of public health and human services for services or items that are not covered under the applicable health care plan;   (b) require that any third-party administrator, fiscal intermediary, or other contractor pay a claim by the department of public health and human services from its own funds unless the entity also bears the financial obligation for the claim under the applicable plan documents;   (c) impose any liability on an entity to pay claims that the entity does not otherwise bear; or   (d) negate any right of indemnification against a plan sponsor or other entity with ultimate liability for health care claims by a third-party administrator, fiscal intermediary, or other contractor that pays the claims.   History: En. Sec. 1, Ch. 249, L. 2007; amd. Sec. 53, Ch. 2, L. 2009.  
  33-1-112 through 33-1-114 reserved.  
  33-1-115. Operation of state fund as authorized insurer -- issuance of certificate of authority -- exceptions -- use of calendar year -- risk-based capital -- reporting requirements. (1) The state fund provided for in 39-71-2313 is an authorized insurer and, except as provided in this section, is subject to the provisions in Title 33 that are generally applicable to authorized workers' compensation insurers in this state and the provisions of Title 39, chapter 71, part 23.  (2) (a) The commissioner shall issue a certificate of authority to the state fund to write workers' compensation insurance coverages, as provided in 39-71-2316, and except as otherwise provided in this section the requirements of Title 33, chapter 2, part 1, do not apply. The certificate of authority must be continuously renewed by the commissioner.   (b) The state fund shall pay the annual fee under 33-2-708, provide the surplus funds required under 33-2-109 and 33-2-110, and provide to the commissioner the available documentation and information that is provided by other insurers when applying for a certificate of authority under 33-2-115.   (c) The state fund is subject to the reporting requirements under 33-2-705 but is not subject to the tax on net premiums.   (3) (a) The state fund, as the guaranteed market for workers' compensation insurance for employers pursuant to 39-71-2313, is not subject to:   (i) formation requirements of an insurer under Title 33, chapter 3;   (ii) revocation or suspension of its certificate of authority under any provision of Title 33 or any order or any provision that requires forfeiture of the state fund's obligation to insure employers as required in 39-71-2313;   (iii) liquidation or dissolution under Title 33;   (iv) participation in the guaranty association provided for in Title 33, chapter 10;   (v) 33-12-104; or   (vi) any assessment of punitive or exemplary damages.   (b) The state fund is subject to 33-16-1023, except as provided in 39-71-2316(1)(e), (1)(f), and (1)(g).   (4) The state fund shall complete financial reporting and accounting on a calendar year basis.   (5) (a) If the state fund's risk-based capital falls below the company action level RBC as defined in 33-2-1902, the commissioner shall issue a report to the governor, the state fund board of directors, and to the legislature in accordance with 5-11-210. If the legislature is not in session, the report must go to the economic affairs interim committee in accordance with 5-11-210 and to the legislative auditor. The report must provide a description of the RBC measurement, the regulatory implications of the state fund falling below the RBC criteria, and the state fund's corrective action plan. If the commissioner is reporting on a regulatory action level RBC event, the report must include the state fund's corrective action plan, results of any examination or analysis by the commissioner, and any corrective orders issued by the commissioner.   (b) If the state fund fails to comply with any lawful order of the commissioner, the commissioner may initiate supervision proceedings under Title 33, chapter 2, part 13, against state fund. If the state fund fails to comply with the commissioner's lawful supervision order under this subsection (5)(b), the commissioner may institute rehabilitation proceedings under Title 33, chapter 2, part 13, only if the commissioner is petitioning for rehabilitation based on the grounds provided in 33-2-1321(1) or (2).   (6) The state fund shall annually transfer funds to the commissioner, out of its surplus, for all necessary staffing and related expenses for a full-time attorney licensed to practice law in Montana and a full-time examiner qualified by education, training, experience, and high professional competence to examine the state fund pursuant to Title 33, chapter 1, part 4, and this section. The attorney and examiner must be employees of the commissioner.   (7) For the purposes of this section, the term "guaranteed market" has the definition provided in 39-71-2312.   History: En. Sec. 1, Ch. 320, L. 2015; amd. Sec. 65, Ch. 261, L. 2021. 
  33-1-1101. Short title. This part may be cited as the "Jurisdiction to Determine Jurisdiction of Providers of Health Care Benefits Act".   History: En. Sec. 1, Ch. 497, L. 1983.  
  33-1-1102. Authority and jurisdiction of insurance department. Notwithstanding any other provision of law and except as provided in this part, any person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech-language pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether such coverage is by direct payment, reimbursement, or otherwise, is presumed to be subject to the jurisdiction of the department unless the person or other entity shows that while providing such services it is subject to the jurisdiction of another agency of this or another state or any subdivision thereof or the federal government.   History: En. Sec. 2, Ch. 497, L. 1983; amd. Sec. 6, Ch. 413, L. 1989.  
  33-1-1103 through 33-1-1110 reserved.  
  33-1-1111. How to show jurisdiction. A person or entity may show that it is subject to the jurisdiction of another agency of this or another state or any subdivision of this state or another state or the federal government by providing the commissioner with the appropriate certificate, license, or other document issued by the other governmental agency that permits or qualifies it to provide those services. If it is not the practice of the governmental agency to issue a certificate, license, or other document establishing that the agency permits the person or entity to provide those services, the person or entity may show that it is subject to the jurisdiction of the agency by other means appropriate under the circumstances.   History: En. Sec. 3, Ch. 497, L. 1983; amd. Sec. 16, Ch. 420, L. 1995.  
  33-1-1112. Subject to state laws. A person or entity unable to show that it is subject to the jurisdiction of another agency of this or another state or any subdivision thereof or the federal government is subject to all appropriate provisions of this code regarding the conduct of its business.   History: En. Sec. 5, Ch. 497, L. 1983.  
  33-1-1113. Examination. A person or entity which is unable to show under 33-1-1111 that it is subject to the jurisdiction of another agency of this or another state or a subdivision thereof or the federal government must submit to an examination by the commissioner to determine the organization and solvency of the person or entity and to determine whether or not such person or entity complies with the applicable provisions of this code.   History: En. Sec. 4, Ch. 497, L. 1983.  
  33-1-1114. Disclosure. (1) A production agency or administrator that advertises, sells, transacts, or administers the coverage in this state described in 33-1-1102 and that is required to submit to an examination by the insurance commissioner under 33-1-1113 shall, if such coverage is not fully insured or otherwise fully covered by an admitted life or disability insurer or nonprofit health service corporation, advise every purchaser, prospective purchaser, and covered person of such lack of insurance or other coverage.   (2) An administrator that advertises or administers the coverage in this state described in 33-1-1102 and is required to submit to an examination by the commissioner under 33-1-1113 shall advise any production agency of the elements of the coverage, including the amount of "stop-loss" insurance in effect.   History: En. Sec. 6, Ch. 497, L. 1983.  
  33-1-1201. Short title -- purpose. (1) This part may be cited as the "Insurance Fraud Protection Act".   (2) The purpose of this part is to facilitate the detection of insurance fraud and reduce the occurrence of insurance fraud through the development of fraud prevention programs, improved investigative and prosecutorial services, and increased consumer awareness.   History: En. Sec. 1, Ch. 237, L. 1995.  
  33-1-1202. Administrative or civil insurance fraud. A person commits the act of administrative or civil insurance fraud when the person:   (1) for the purpose of obtaining any money or benefit, presents or causes to be presented to any insurer, purported insurer, producer, or administrator, as defined in 33-17-102, any written or oral statement, including computer-generated documents, containing false, incomplete, or misleading information concerning any fact or thing material to, as part of, or in support of a claim for payment or other benefit pursuant to an insurance policy;   (2) assists, abets, solicits, or conspires with another to prepare or make any written or oral statement containing false, incomplete, or misleading information concerning any fact that is intended to be presented to any insurer or purported insurer or in connection with, material to, or in support of any claim for payment or other benefit pursuant to an insurance policy or contract;   (3) presents or causes to be presented to or by an insurer, purported insurer, producer, or administrator, as defined in 33-17-102, a materially false or altered application of insurance;   (4) accepts premium money knowing that coverage will not be provided;   (5) as a health care provider, submits a false or altered bill or report of physical condition to an insurer;   (6) offers or accepts a direct or indirect inducement to file a false statement of claim with the intent of deceiving an insurer; or   (7) presents or causes to be presented counterfeit insurance documents to any person.   History: En. Sec. 2, Ch. 237, L. 1995; amd. Sec. 8, Ch. 380, L. 2003; amd. Sec. 2, Ch. 169, L. 2013; amd. Sec. 14, Ch. 396, L. 2017.  
  33-1-1203. Powers and duties of commissioner -- confidentiality of documents. (1) The commissioner may:   (a) initiate independent inquiries and conduct independent investigations when the commissioner has reason to believe that insurance fraud may be, has been, or is currently being committed;   (b) respond to notice or complaints generated by federal, state, county, and local law enforcement officers, other entities with law enforcement responsibilities, or governmental agencies or units;   (c) review and respond to notices or reports of insurance fraud submitted by any person, select the incidents of suspected fraud that in the commissioner's judgment require further and more detailed investigation, and conduct the investigations;   (d) conduct independent examinations of insurance fraud to determine the extent of insurance fraud, deceit, or intentional misrepresentation;   (e) after investigation, report any meritorious alleged violation of the law to the appropriate prosecuting authority or licensing agencies; and   (f) assemble evidence, prepare charges, and prosecute, if requested, or otherwise assist any prosecuting authority that has jurisdiction, including the attorney general.   (2) Papers, records, documents, reports, materials, or other evidence relative to the subject of an insurance fraud investigation must remain confidential and must be treated as confidential criminal justice information as defined in 44-5-103. Evidence procured pursuant to this section may not be disseminated, except as provided in 44-5-303.   (3) The commissioner shall notify the person who or the entity that has given notice of an alleged insurance fraud pursuant to 33-1-1205(2) of receipt of the notice by the commissioner and of the disposition of the notice and any resulting investigation.   History: En. Sec. 3, Ch. 237, L. 1995.  
  33-1-1204. Cooperation with law enforcement, licensing authorities, and other fraud agencies. (1) The commissioner shall cooperate with law enforcement authorities and all other authorized agencies and related insurance and professional licensing boards of this and other states. As used in this section, the term "authorized agencies" means:   (a) the attorney general of the state of Montana;   (b) the prosecuting attorney responsible for prosecution;   (c) the department of insurance of other jurisdictions;   (d) the United States attorney's office when that office is charged with investigation of the fraud; or   (e) the federal bureau of investigation or any other federal agency charged with investigation of the fraud.   (2) The commissioner shall cooperate to the extent allowed by law with insurance fraud investigators, related organizations of this and other states, and insurance commissioners of other states.   (3) If the commissioner determines that sufficient evidence of the commission of an act of insurance fraud exists, the commissioner shall inform the appropriate prosecuting authority and professional licensing boards.   History: En. Sec. 4, Ch. 237, L. 1995.  
  33-1-1205. Duties of authorized insurers, adjusters, administrators, consultants, and producers -- notice exception. (1) Each insurer, independent adjuster, independent administrator, independent consultant, and independent producer shall cooperate fully with the commissioner with respect to the provisions of this part.   (2) Except as provided in subsection (4), an insurer, an officer, or an employee of the insurer, an independent adjuster, an independent administrator, an independent consultant, or an independent producer who has reason to believe that an insurance fraud has been or is being committed shall provide notice of the alleged insurance fraud to the commissioner within 60 days. A producer of an insurer who has reason to believe that an insurance fraud has been or is being committed shall report the alleged fraud to the insurer within 60 days of discovery of the alleged insurance fraud. The insurer shall review the report. If the insurer determines that there is reasonable likelihood that fraud has occurred, the insurer shall forward the report to the commissioner within 30 days of receipt of the report.   (3) Notice to the commissioner by an insurer who has reason to believe that an insurance fraud has been committed in connection with an insurance claim, application, or policy tolls any applicable time period, for the commissioner, in any applicable insurance statute or related insurance regulation, or any applicable provisions of Title 33, chapter 1, part 15, and tolls any time period arising under 33-18-232 or 33-18-242 regarding unfair claims settlement practices.   (4) Notice of an alleged insurance fraud involving an insurance claim or application submitted to the state compensation insurance fund or a policy issued by the state compensation insurance fund must be made within 60 days to the fraud detection and prevention unit established pursuant to 39-71-211.   History: En. Sec. 5, Ch. 237, L. 1995; amd. Sec. 4, Ch. 276, L. 1997; amd. Sec. 2, Ch. 531, L. 1997; amd. Sec. 15, Ch. 396, L. 2017.  
  33-1-1206. Persons not connected with insurance industry -- reward fund. (1) Any person who has knowledge of or who believes that an act of insurance fraud is being or has been committed may provide the commissioner with a report or information pertinent to the knowledge and belief and may provide additional information that the commissioner requests.   (2) The commissioner, in cooperation with authorized insurers, producers, and other interested parties, may establish a fund to reward persons who are not connected with the insurance industry and who provide information or furnish evidence leading to the arrest and conviction of persons responsible for insurance fraud. Participation in the fund must be purely voluntary. The books and records of the fund must be open and subject to review by the legislative auditor.   History: En. Sec. 6, Ch. 237, L. 1995.  
  33-1-1207 through 33-1-1209 reserved.  
  33-1-1210. Immunity from liability. (1) In the absence of malice, an insurer, an officer, employee, or producer of the insurer, an independent adjuster, an administrator, a consultant, or any private person is not subject to civil liability for filing reports, providing information, or otherwise cooperating with an investigation or examination of insurance fraud conducted by the commissioner.   (2) A person listed in subsection (1) receives immunity if the person:   (a) cooperates with, furnishes evidence to, or provides information regarding any suspected insurance fraud to the commissioner, the national association of insurance commissioners, any nonprofit organization established to detect and prevent insurance fraud, or other insurer or producer; or   (b) complies with an order issued by a court of competent jurisdiction acting in response to a request by the commissioner to furnish evidence or provide testimony.   History: En. Sec. 7, Ch. 237, L. 1995.  
  33-1-1211. Administrative or civil penalties. (1) If, after a hearing conducted under 33-1-701, the commissioner determines that a person has committed administrative or civil insurance fraud, the commissioner may:   (a) impose any penalty provided for in 33-1-317; or   (b) require the person to pay the costs of the proceeding.   (2) In addition to any other penalties, the commissioner shall require a person who commits administrative or civil insurance fraud to make restitution to the insurer or to any other person for all financial loss sustained as a result of the insurance fraud.   History: En. Sec. 8, Ch. 237, L. 1995; amd. Sec. 16, Ch. 396, L. 2017.  
  33-1-1301. Insurance, viatical settlement, medical care discount card, pharmacy discount card, and securities fraud education and prevention program -- definitions. (1) The commissioner may:   (a) establish an insurance, viatical settlement, medical care discount card, pharmacy discount card, and securities fraud education and prevention program; and   (b) conduct investigations of insurance, viatical settlement, medical care discount card, pharmacy discount card, and securities fraud.   (2) As used in this part:   (a) "medical care discount card" and "pharmacy discount card" have the meanings provided in 33-38-102; and   (b) "viatical settlement broker", "viatical settlement contract", and "viatical settlement provider" have the meanings provided in 33-20-1302.   History: En. Sec. 1, Ch. 390, L. 1997; amd. Sec. 2, Ch. 456, L. 2005; amd. Sec. 1, Ch. 272, L. 2009.  
  33-1-1302. Insurance, viatical settlement, medical care discount card, and pharmacy discount card administrative or civil fraud -- insurer. (1) A person commits the act of insurance, viatical settlement, medical care discount card, or pharmacy discount card fraud when:   (a) in the course of offering or selling insurance, a medical care discount card, or a pharmacy discount card, the person misrepresents a material fact, known to the person to be untrue or made with reckless indifference as to whether it is true, with the intention of causing another person to rely upon the misrepresentation to that relying person's detriment; or   (b) with respect to a viatical settlement, the person violates the provisions of 33-1-1304.   (2) A person commits the act of insurance fraud or viatical settlement fraud by engaging in any transaction, act, practice, course of business, or course of dealing that involves a violation of insurable interest laws.   (3) The commissioner may, after having conducted a hearing pursuant to 33-1-701, impose the penalties provided for in 33-1-317 for a violation of 33-1-1304 or this section. Failure to pay a fine under this section results in a lien upon the assets and property of the person as provided in 33-1-318(3).   (4) In addition to any penalty provided for in 33-1-317, the commissioner may require a person regulated under this title who commits insurance, viatical settlement, medical care discount card, or pharmacy discount card fraud to make full restitution to the victim for all financial losses sustained as a result of the fraud with interest of 10% a year from the date of the fraud plus any costs and reasonable attorney fees, less the amount of any income, refund, or other benefit received by the victim from the insurance, viatical settlement, medical care discount card, or pharmacy discount card.   (5) The commissioner may require a person who commits a violation of this part to make full restitution to any person who may have sustained any losses as a result of the fraud with interest from the date of the loss plus any costs and reasonable attorney fees. The interest rate must be calculated as of the date of the order pursuant to 25-9-205.   (6) An insurer, insurance producer, or other person who sustained any losses and who was awarded restitution may bring suit to recover those sums, including any attorney fees, interest at the rate provided in 25-9-205, and costs incurred in obtaining a judgment.   (7) Failure of a person to pay any amount ordered under this section constitutes a forfeiture of the right to do business in this state.   History: En. Sec. 2, Ch. 390, L. 1997; amd. Sec. 3, Ch. 456, L. 2005; amd. Sec. 33, Ch. 44, L. 2007; amd. Sec. 2, Ch. 272, L. 2009; amd. Sec. 17, Ch. 396, L. 2017; amd. Sec. 3, Ch. 62, L. 2019.  
  33-1-1303. Reporting requirements. (1) An insurer, insurance producer, or other person who has reason to believe that insurance, viatical settlement, medical care discount card, or pharmacy discount card fraud has occurred shall report the suspected fraud to the commissioner or to the insurance producer's or other person's insurer within 60 days of discovery of the occurrence. An insurer shall review a report given to the insurer, and if the insurer determines that there is a reasonable likelihood that fraud has occurred the insurer shall forward the report to the commissioner within 30 days of receipt.   (2) In the absence of malice, an insurer, insurance producer, or other person may not be subjected to civil liability for reporting or providing information or otherwise cooperating with an investigation of insurance, viatical settlement, medical care discount card, or pharmacy discount card fraud.   History: En. Sec. 3, Ch. 390, L. 1997; amd. Sec. 34, Ch. 44, L. 2007; amd. Sec. 4, Ch. 272, L. 2009.  
  33-1-1304. Viatical settlement fraud. Viatical settlement fraud consists of but is not limited to the following committed by a person or the person's agents or employees:   (1) acts or omissions by any person who, knowingly and with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, engages in or permits the person's employees or agents to engage in acts that include but are not limited to:   (a) presenting, causing to be presented, or preparing with knowledge and belief that it will be presented to or by a viatical settlement provider, viatical settlement broker, premium finance lender, life insurer, life insurance producer, or any other person false material information; or   (b) concealing material information as part of, in support of, or concerning a fact material to one or more of the following:   (i) an application for the issuance of a viatical settlement contract or life insurance policy;   (ii) the underwriting of a viatical settlement contract or life insurance policy;   (iii) a claim for payment or benefit pursuant to a viatical settlement contract or life insurance policy;   (iv) premiums paid on a life insurance policy;   (v) payments and changes in ownership or beneficiary made in accordance with the terms of a viatical settlement contract or life insurance policy;   (vi) the reinstatement or conversion of a life insurance policy;   (vii) the solicitation, offer to enter into, or effectuation of a viatical settlement contract or life insurance policy;   (viii) the issuance of written evidence of viatical settlement contracts or life insurance; or   (ix) any application for, the existence of, or any payments related to a loan secured directly or indirectly by any interest in a life insurance policy.   (2) employing any device, scheme, or artifice to defraud in the business of viatical settlements;   (3) removing, concealing, altering, destroying, or sequestering from the commissioner the assets or records of a licensee or other person engaged in the business of viatical settlements;   (4) misrepresenting or concealing the financial condition of a licensee, financing entity, insurer, or other person;   (5) transacting the business of viatical settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of viatical settlements;   (6) filing with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact;   (7) engaging in embezzlement, theft, misappropriation, or conversion of money, funds, premiums, credits, or other property of a viatical settlement provider, viatical settlement broker, insurer, insured, policy owner, or any other person engaged in the business of viatical settlements or life insurance;   (8) knowingly and with intent to defraud entering into, brokering, or otherwise dealing in a viatical settlement contract the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy if the policy owner or the owner's agent intended to defraud the issuer of the policy;   (9) attempting to commit or to assist, aid, or abet in the commission of or conspiring to commit the acts or omissions specified in this section; or   (10) misrepresenting the state of residence of a policy owner to be a state or jurisdiction that does not have a law substantially similar to Montana's Viatical Settlement Act, Title 33, chapter 20, part 13, or this part for the purpose of evading or avoiding the provisions of Montana law.   History: En. Sec. 3, Ch. 272, L. 2009.  
  33-1-1401. Short title. This part may be cited as the "Property and Casualty Actuarial Opinion Act".   History: En. Sec. 1, Ch. 50, L. 2009.  
  33-1-1402. Actuarial opinion of reserves and supporting documentation -- definition. (1) Every property and casualty insurer doing business in this state, unless otherwise exempted by its domiciliary commissioner, shall annually submit the opinion of an appointed actuary entitled "Statement of Actuarial Opinion". The insurer shall file this opinion in accordance with the appropriate NAIC property and casualty annual statement instructions.   (2) (a) Every property and casualty resident domestic insurer that is required to submit a statement of actuarial opinion shall annually submit an actuarial opinion summary written by the insurer's appointed actuary. This actuarial opinion summary must be filed in accordance with the appropriate NAIC property and casualty annual statement instructions and is considered to be a document supporting the actuarial opinion required in subsection (1).   (b) A foreign or alien authorized insurer shall provide to the commissioner the actuarial opinion summary upon request.   (3) (a) An actuarial report and its underlying work papers as required by the appropriate NAIC property and casualty annual statement instructions must be prepared to support each actuarial opinion.   (b) If the insurer fails to provide a supporting actuarial report or work papers at the request of the commissioner or the commissioner determines that the supporting actuarial report or work papers provided by the insurer are otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and basis for the opinion and prepare a supporting actuarial report or work papers.   (4) The appointed actuary is not liable for damages to any person, other than the insurer and the commissioner, for any act, error, omission, decision, or conduct with respect to the actuary's opinion except in cases of fraud or willful misconduct on the part of the appointed actuary.   (5) For the purposes of this part, "actuarial report" means a document or presentation prepared as a formal means of conveying the actuary's professional conclusions and recommendations and communicating the methods and procedures used to reach the conclusions and recommendations, including any supporting documents.   History: En. Sec. 2, Ch. 50, L. 2009.  
  33-1-1403. Confidentiality. (1) The statement of actuarial opinion must be provided with the annual statement in accordance with the appropriate NAIC property and casualty annual statement instructions and is a public record within the meaning of 2-6-1002.   (2) (a) Actuarial reports, work papers, and actuarial opinion summaries retained by the commissioner are trade secrets and are privileged. The materials must be given confidential treatment, are not subject to subpoena, and are not subject to discovery, and the materials are not admissible in evidence in any private civil litigation.   (b) Subsection (2)(a) does not limit the commissioner's authority to release the documents to the actuarial board for counseling and discipline if the material is required for the board's professional disciplinary proceedings and if the board establishes procedures satisfactory to the commissioner to preserve the confidentiality of the documents.   (3) This section does not limit the commissioner's authority to use the actuarial reports, work papers, actuarial opinion summaries, or other information in furtherance of any regulatory or legal action brought as part of the commissioner's official duties.   (4) The commissioner and any person who receives actuarial reports, work papers, actuarial opinion summaries, or other information while acting under the authority of the commissioner may not testify in any private civil action concerning the documents or information subject to the provisions of subsection (2).   (5) To assist in the performance of the commissioner's duties, the commissioner may provide and receive documents and information pursuant to 33-1-311.   (6) A waiver of privilege or claim of confidentiality in the actuarial reports, work papers, or actuarial opinion summaries does not result from disclosure to the commissioner under this section or result from the exchange of documents and information authorized in subsections (2)(b) and (5).   History: En. Sec. 3, Ch. 50, L. 2009; amd. Sec. 52, Ch. 348, L. 2015.  
  33-1-1501. No limitation on prosecutions. Nothing in this part limits the prosecution of any conduct defined as an offense in Title 45.   History: En. Sec. 1, Ch. 396, L. 2017.  
  33-1-1502. Application of criminal law and procedure. Unless a rule or statute specifically states otherwise, the provisions of Titles 45 and 46 apply to the enforcement of the offenses provided for in this part.   History: En. Sec. 2, Ch. 396, L. 2017.  
  33-1-1503. Statute of limitations. (1) A prosecution for a felony stated in this part must be commenced within 5 years after it was committed.   (2) A prosecution for a misdemeanor stated in this part must be commenced within 3 years after it was committed.   (3) An offense is committed either when every element occurs or, when the offense is based upon a continuing course of conduct, at the time when the course of conduct is terminated. Time starts to run on the day after the offense is committed.   (4) A prosecution is commenced either when an indictment is found or an information or complaint is filed.   History: En. Sec. 3, Ch. 396, L. 2017.  
  33-1-1504. Criminal insurance fraud. (1) A person commits the offense of insurance fraud when the person purposely or knowingly:   (a) for the purpose of obtaining any money or benefit, presents or causes to be presented to any person any written or oral statement, including computer-generated documents, containing false, incomplete, or misleading information concerning any fact or thing material to, as part of, or in support of a claim for payment or other benefit pursuant to an insurance policy;   (b) presents or causes to be presented to or by an insurer, as defined in 33-1-201, or to an insurance producer or administrator, as defined in 33-17-102, a materially false or altered application of insurance;   (c) as a health care provider as defined in 33-38-102, submits a false or altered bill or report of physical condition to an insurer; or   (d) presents or causes to be presented false, incomplete, or misleading insurance documents to any person.   (2) (a) A person convicted of criminal insurance fraud involving a benefit or benefits with a value not exceeding $1,500 shall be fined not more than $1,500 or be imprisoned in the county detention center for not more than 6 months, or both.   (b) A person convicted of the offense of insurance fraud involving a benefit or benefits with a value exceeding $1,500 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   (c) A person convicted of the offense of insurance fraud involving a common scheme as defined in 45-2-101 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   History: En. Sec. 4, Ch. 396, L. 2017.  
  33-1-1505. Theft of viatical settlement proceeds. (1) A person commits the offense of theft of viatical settlement proceeds when the person purposely or knowingly obtains or exerts unauthorized control over money, funds, premiums, credits, or other property of a viatical settlement provider, viatical settlement broker, insurer, insured, policy owner, or any other person engaged in the business of viatical settlements.   (2) For purposes of this section, "viatical settlement provider" and "viatical settlement broker" have the meanings provided in 33-20-1302.   (3) (a) A person convicted of theft of viatical settlement proceeds involving property with a value not exceeding $1,500 shall be fined not more than $1,500 or be imprisoned in the county detention center for not more than 6 months, or both.   (b) A person convicted of the offense of theft of viatical settlement proceeds involving property with a value exceeding $1,500 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   (c) A person convicted of the offense of theft of viatical settlement proceeds involving a common scheme as defined in 45-2-101 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   History: En. Sec. 5, Ch. 396, L. 2017.  
  33-1-1506. Theft of medical care discount card fee. (1) A person commits the offense of theft of medical care discount card fee when the person purposely or knowingly obtains or exerts unauthorized control over any amount of money paid by a user or consumer to a health care provider, a medical care discount card provider, or a medical care discount card supplier for a medical care discount card.   (2) For purposes of this section, "medical care discount card", "health care provider", and "medical care discount card provider" have the meanings provided in 33-38-102.   (3) (a) A person convicted of theft of medical care discount card fee involving a value not exceeding $1,500 shall be fined not more than $1,500 or be imprisoned in the county detention center for not more than 6 months, or both.   (b) A person convicted of the offense of theft of medical care discount card fee involving a value exceeding $1,500 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   (c) A person convicted of the offense of theft of medical care discount card fee involving a common scheme as defined in 45-2-101 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   History: En. Sec. 6, Ch. 396, L. 2017.  
  33-1-1507. Theft of pharmacy discount card fee. (1) A person commits the offense of theft of pharmacy discount card fee when the person purposely or knowingly obtains or exerts unauthorized control over any amount of money paid by a user or consumer to a prescription drug provider or a pharmacy discount card supplier for a pharmacy discount card.   (2) For purposes of this section, "pharmacy discount card", "pharmacy discount card supplier", and "prescription drug provider" have the meanings provided in 33-38-102.   (3) (a) A person convicted of theft of pharmacy discount card fee involving a value not exceeding $1,500 shall be fined not more than $1,500 or be imprisoned in the county detention center for not more than 6 months, or both.   (b) A person convicted of the offense of theft of pharmacy discount card fee involving a value exceeding $1,500 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   (c) A person convicted of the offense of theft of pharmacy discount card fee involving a common scheme as defined in 45-2-101 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   History: En. Sec. 7, Ch. 396, L. 2017.  
  33-1-1508. Theft of insurance premium. (1) A person commits the offense of theft of insurance premium when the person purposely or knowingly exerts unauthorized control over money paid as insurance premium:   (a) by failing to provide insurance premium received for a particular insurance policy to the insurer; or   (b) knowing that insurance coverage will not be provided.   (2) For purposes of this section "insurance premium" has the same meaning as "premium" provided in 33-15-102.   (3) (a) A person convicted of theft of insurance premium involving a value not exceeding $1,500 shall be fined not more than $1,500 or be imprisoned in the county detention center for not more than 6 months, or both.   (b) A person convicted of the offense of theft of insurance premium involving a value exceeding $1,500 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   (c) A person convicted of the offense of theft of insurance premium involving a common scheme as defined in 45-2-101 shall be fined an amount not to exceed $50,000 or be imprisoned in a state prison for a term not to exceed 10 years, or both.   History: En. Sec. 8, Ch. 396, L. 2017.  
  33-1-1509. License offenses. (1) A person commits the offense of conducting an insurance transaction without a license when the person purposely or knowingly solicits, negotiates, or sells insurance, as defined in 33-1-201, without first obtaining a license to conduct insurance transactions from the commissioner of insurance pursuant to Title 33.   (2) Except as provided in subsection (1), a person commits the offense of operating without a required license when the person purposely or knowingly engages in the acts of an insurance adjuster, insurance consultant, public adjuster, or temporary insurance producer, as those acts are set out in 33-17-102, 33-17-103, 33-17-216, and 33-17-1502, without first obtaining a license from the commissioner of insurance pursuant to Title 33.   (3) A corporation or other entity commits the offenses stated in this section when:   (a) a director, officer, servant, employee, or other person who is authorized to act on behalf of the entity commits the prohibited acts; or   (b) a manager or similarly empowered agent of the entity authorizes, requests, or commands the commission of the prohibited acts.   (4) A person convicted of a license offense shall be fined an amount not to exceed $50,000 or be imprisoned in the state prison for a term not to exceed 10 years, or both.   History: En. Sec. 9, Ch. 396, L. 2017.  
  33-1-1510. Surplus lines insurance offenses. (1) A person commits the offense of surplus lines offense if the person knowingly or negligently:   (a) issues or delivers a false policy or cover note or certification of insurance, as those documents are described in 33-2-308, related to the terms of a surplus lines insurance policy; or   (b) fails to notify an insured of a material change in the coverage described in 33-2-308 in writing within 30 days of any material change in the insurance coverage.   (2) A person convicted of a surplus lines insurance offense shall be fined not less than $50 or more than $1,000 or be imprisoned in the county detention center for not less than 30 days or more than 90 days, or both.   History: En. Sec. 10, Ch. 396, L. 2017.  
  33-1-1511. Failure or refusal to cooperate with commissioner. (1) A person commits the offense of failure or refusal to cooperate with the insurance commissioner when the person purposely or knowingly fails or refuses to cooperate with the commissioner during a dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer or an investigation of such matters described in Title 33, chapter 2, part 13.   (2) A corporation or other entity commits the offense of failure or refusal to cooperate with the insurance commissioner when:   (a) a director, officer, servant, employee, or other person who is authorized to act on behalf of the entity purposely or knowingly fails or refuses to cooperate with the commissioner during a dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer or an investigation of such matters described in Title 33, chapter 2, part 13; or   (b) a manager or similarly empowered agent of the entity purposely or knowingly authorizes, requests, or commands the failure or refusal to cooperate with the commissioner during a dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer or an investigation of such matters described in Title 33, chapter 2, part 13.   (3) For purposes of this section, cooperation includes but is not limited to:   (a) responding in writing within 60 days to any written inquiry from the commissioner requesting a response;   (b) making available to the commissioner any information in the insurer's possession, custody, or control, regardless of the form in which the information exists; or   (c) engaging in the necessary procedures related to dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of an insurer.   (4) A person or entity convicted of failure or refusal to cooperate with the insurance commissioner shall be fined an amount not to exceed $10,000 or be imprisoned in a county detention facility for a term not to exceed 1 year, or both.   History: En. Sec. 11, Ch. 396, L. 2017.  
  33-1-1512. Records and assets offenses. (1) A person commits the offense of unlawful removal or unlawful concealment of records or assets when, with the purpose to prevent the commissioner from fulfilling the duties set out in Title 33, the person purposely or knowingly removes from this state the records or assets required by 33-3-401 of a domestic insurer as defined in 33-1-201.   (2) A corporation or other entity commits the offense of unlawful removal or unlawful concealment of records or assets when, with the purpose to prevent the commissioner from fulfilling the duties set out in Title 33:   (a) a director, officer, servant, employee, or other person who is authorized to act on behalf of the entity purposely or knowingly removes from this state or conceals the records or assets required by 33-3-401 of a domestic insurer as defined in 33-1-201; or   (b) a manager or similarly empowered agent of the entity purposely or knowingly authorizes, requests, or commands the removal from this state or concealment of the records or assets required by 33-3-401 of a domestic insurer as defined in 33-1-201.   (3) A person or entity convicted of the unlawful removal or unlawful concealment of records or assets shall be fined an amount not to exceed $10,000 or be imprisoned in the state prison for a term not to exceed 5 years, or both.   History: En. Sec. 12, Ch. 396, L. 2017.  
  33-1-201. Definitions -- insurance in general. For the purposes of this code, the following definitions apply unless the context requires otherwise:  (1) "Alien insurer" is an insurer formed under the laws of any country other than the United States or its states, districts, territories, and commonwealths.   (2) "Authorized insurer" is an insurer duly authorized by a certificate of authority issued by the commissioner to transact insurance in this state.   (3) "Domestic insurer" is an insurer incorporated under the laws of this state.   (4) "Foreign insurer" is an insurer formed under the laws of any jurisdiction other than this state. Except when distinguished by context, the term includes an alien insurer.   (5) (a) "Insurance" is a contract through which one undertakes to indemnify another or pay or provide a specified or determinable amount or benefit upon determinable contingencies.   (b) The term does not include:   (i) contracts for the installation, maintenance, and provision of inside telecommunications wiring to residential or business premises;   (ii) direct patient care agreements established pursuant to 50-4-107; or   (iii) an arrangement with a health care sharing ministry that meets the requirements of 50-4-111.   (6) (a) "Insurer" includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance. The term also includes a health service corporation in the provisions listed in 33-30-102.   (b) The term does not include a health care sharing ministry that meets the requirements of 50-4-111.   (7) "Resident domestic insurer" is an insurer incorporated under the laws of this state and:   (a) if a mutual company, not less than one-half of the policyholders are individuals who are residents of this state; or   (b) if a stock insurer, not less than one-half of the shares are owned by individuals who are residents of this state and all of the directors and officers of the insurer are residents of this state.   (8) "State", when used in relation to jurisdiction, means a state, the District of Columbia, or a territory, commonwealth, or possession of the United States.   (9) "Transact", with respect to insurance, means to:   (a) solicit;   (b) negotiate;   (c) sell or effectuate a contract of insurance; or   (d) transact matters subsequent to effectuation of the contract of insurance and arising out of it.   (10) "Unauthorized insurer" is an insurer not authorized by a certificate of authority issued by the commissioner to transact insurance in this state.   History: En. Secs. 2, 3, 6, 7, 8, Ch. 286, L. 1959; R.C.M. 1947, 40-2602, 40-2603, 40-2606, 40-2607, 40-2608; amd. Sec. 1, Ch. 198, L. 1979; amd. Sec. 4, Ch. 664, L. 1979; amd. Sec. 1, Ch. 202, L. 1983; amd. Sec. 2, Ch. 558, L. 1987; amd. Sec. 1, Ch. 341, L. 1989; amd. Sec. 1, Ch. 399, L. 2007; amd. Sec. 7, Ch. 262, L. 2021; amd. Sec. 3, Ch. 422, L. 2021. 
  33-1-202. Definitions -- entities. For the purposes of this code, the following definitions apply unless the context requires otherwise:   (1) "Commissioner" means the commissioner of insurance of the state of Montana.   (2) "Department" means the department of insurance of the state of Montana.   (3) "Person" includes an individual, insurer, company, association, organization, Lloyd's, society, reciprocal or interinsurance exchange, partnership, syndicate, business trust, corporation, or any other legal entity.   (4) "Resident of this state" means a person who has maintained a principal residence within the state of Montana for a period of not less than 2 consecutive years.   History: En. Secs. 4, 5, Ch. 286, L. 1959; R.C.M. 1947, 40-2604, 40-2605; amd. Sec. 2, Ch. 198, L. 1979; amd. Sec. 2, Ch. 202, L. 1983.  
  33-1-203 and 33-1-204 reserved.  
  33-1-205. Definitions of kinds of insurance not mutually exclusive. It is intended that certain insurance coverages may come within the definitions of two or more kinds of insurance as defined in this part, and the inclusion of such coverage within one definition shall not exclude it as to any other kind of insurance within the definition of which such coverage may likewise be reasonably included.   History: En. Sec. 72, Ch. 286, L. 1959; R.C.M. 1947, 40-2901.  
  33-1-206. Casualty insurance. (1) Casualty insurance includes:   (a) vehicle insurance, which is insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained in or on or being loaded or unloaded in or from a land vehicle, aircraft, or animal from any hazard or cause and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of any land vehicle, aircraft, or animal, together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, or repairing or when caused by being struck by a land vehicle, aircraft, or draft or riding animal, if the insurance is issued as an incidental part of insurance on the land vehicle, aircraft, or draft or riding animal;   (b) liability insurance, which is insurance against legal liability for the death, injury, or disability of any human being or for damage to property and the provision of medical, hospital, surgical, and disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance;   (c) workers' compensation and employer's liability, which is insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees;   (d) (i) burglary and theft, which is insurance against loss or damage by burglary, theft, robbery, forgery, fraud, deceptive practices, vandalism, criminal mischief, confiscation, or wrongful conversion, disposal, or concealment or from any attempt at any of the foregoing, including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; and   (ii) insurance against loss of or damage to money, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause;   (e) personal property floater, which is insurance upon personal effects against loss or damage from any cause under a personal property floater;   (f) glass, which is insurance against loss or damage to glass, including its lettering, ornamentation, and fittings;   (g) boiler and machinery, which is insurance against any liability and loss or damage to property or interest resulting from accident to or explosions of boilers, pipes, pressure containers, machinery, or apparatus and from making inspection of and issuing certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured;   (h) leakage and fire extinguishing equipment, which is insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes, or containers or by water entering through leaks or openings in buildings and insurance against loss or damage to the sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus;   (i) credit, which is insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured;   (j) malpractice, which is insurance against legal liability of the insured and against loss, damage, or expense incidental to a claim of liability, including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury, or disablement of any person or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary, or professional service;   (k) elevator, which is insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance, or use of elevators, except loss or damage by fire and from making inspection of and issuing certificates of inspection upon elevators;   (l) livestock, which is insurance against loss or damage to livestock and for services of a veterinarian for livestock;   (m) entertainments, which is insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation because of death, accidental injury, or sickness of performers, participants, directors, or other principals;   (n) mechanical breakdown pursuant to 33-1-214;   (o) prepaid legal pursuant to 33-1-215;   (p) involuntary unemployment pursuant to 33-1-216;   (q) gap pursuant to 33-1-217;   (r) miscellaneous, which is insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this part, if the insurance is not disapproved by the commissioner as being contrary to law or public policy.   (2) Provision of medical, hospital, surgical, and funeral benefits and of coverage against accidental death or injury as incidental to and part of other insurance as stated under subsections (1)(a) (vehicle), (1)(b) (liability), (1)(d) (burglary), and (1)(j) (malpractice) must for all purposes be considered to be the same kind of insurance to which it is incidental and is not subject to provisions of this code applicable to life or disability insurances.   History: En. Sec. 76, Ch. 286, L. 1959; amd. Sec. 49, Ch. 359, L. 1977; R.C.M. 1947, 40-2905; amd. Sec. 9, Ch. 227, L. 2001.  
  33-1-207. Disability insurance. (1) Disability insurance, including credit disability insurance, is insurance of human beings:  (a) against bodily injury, disablement, or death by accident or accidental means or the medical expense or indemnity involved; or   (b) against disablement or medical expense or indemnity resulting from sickness.   (2) Transaction of disability insurance does not include:   (a) workers' compensation insurance; or   (b) a direct patient care agreement established pursuant to 50-4-107.   History: En. Sec. 74, Ch. 286, L. 1959; R.C.M. 1947, 40-2903; amd. Sec. 2, Ch. 379, L. 1995; amd. Sec. 8, Ch. 262, L. 2021. 
  33-1-208. Life insurance. Life insurance, including credit life insurance, is insurance on human lives. The transaction of life insurance includes the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured's disability, benefits that provide reimbursement or payment for long-term home health care or long-term care in a nursing home or other related institution, and optional modes of settlement of proceeds of life insurance. Transaction of life insurance does not include workers' compensation insurance.   History: En. Sec. 73, Ch. 286, L. 1959; R.C.M. 1947, 40-2902; amd. Sec. 1, Ch. 152, L. 1991; amd. Sec. 3, Ch. 379, L. 1995.  
  33-1-209. Marine protection and indemnity and wet marine insurance. (1) Marine and transportation insurance means insurance against loss of or damage to:   (a) vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits, money, securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia, and any interest therein, with respect to risks and perils, including war risks, marine builder's risks, and personal property floater risks, of navigation and transportation or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment, while awaiting shipment, or during any delays, storage, transshipment, or reshipment;   (b) person or property in connection with marine, transit, or transportation insurance, including liability for loss or damage to either person or property incident to the construction, repair, operation, maintenance, or use of the subject matter of the insurance, but not including life insurance, surety bonds, or insurance against bodily injury arising out of the ownership, maintenance, or use of an automobile;   (c) jewels, jewelry, or precious metals, whether in the course of transportation or otherwise; and   (d) bridges; tunnels; and other instrumentalities of transportation and communication, excluding buildings and their furnishings, fixed contents, and supplies held in storage (unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion are the only hazards to be covered); piers; wharves; docks; slips; and other aids to navigation and transportation, including drydocks, marina railways, and dams and appurtenant facilities for the control of waterways.   (2) Marine protection and indemnity insurance means insurance against liability of the insured for loss, damage, or expense incident to ownership, operation, charter, maintenance, use, repair, or construction of any vessel, craft, or instrumentality for use in ocean or inland waterways. The term includes insurance against the liability of the insured for personal injury, illness, death, or loss or damage of the property of another person.   (3) For the purposes of this code, wet marine and transportation insurance is that part of marine insurance that includes only:   (a) insurance upon vessels, crafts, and hulls and of interests in or relating to the vessels, crafts, and hulls;   (b) insurance of marine builders' risks, marine war risks, and contracts of marine protection and indemnity insurance;   (c) insurance of freights and disbursements pertaining to a subject of insurance subject to this subsection; and   (d) insurance of personal property and interests in the personal property, in the course of exportation from or importation into any country and in the course of transportation coastwise or on inland waters, including transportation by land, water, or air from point of origin to final destination, with respect to risks or perils of navigation, transit, or transportation or while being prepared for or awaiting shipment or during any delays, storage, transshipment, or reshipment incident to preparation or shipment.   History: En. Sec. 78, Ch. 286, L. 1959; R.C.M. 1947, 40-2907; amd. Sec. 11, Ch. 467, L. 1981; amd. Sec. 4, Ch. 379, L. 1995.  
  33-1-210. Property insurance. Property insurance is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage.   History: En. Sec. 75, Ch. 286, L. 1959; R.C.M. 1947, 40-2904.  
  33-1-211. Surety insurance. Surety insurance includes:   (1) fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust;   (2) insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship;   (3) insurance indemnifying banks, bankers, brokers, or financial or moneyed corporations or associations:   (a) against check forgery or alteration or against loss resulting from any cause of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts, or other valuable papers, documents, money, precious metals and articles made from precious metals, jewelry, watches, necklaces, bracelets, gems, or precious and semiprecious stones, including any loss while being transported in armored motor vehicles, by mail, or by messenger but not including any other risks of transportation or navigation;   (b) against loss or damage to the insured's premises or to the insured's furnishings, fixtures, equipment, safes, and vaults on the premises caused by burglary, robbery, theft, or criminal mischief or any attempt of those crimes.   History: En. Sec. 77, Ch. 286, L. 1959; amd. Sec. 50, Ch. 359, L. 1977; R.C.M. 1947, 40-2906; amd. Sec. 3, Ch. 198, L. 1979; amd. Sec. 1059, Ch. 56, L. 2009.  
  33-1-212. Title insurance. Title insurance is insurance of owners of property or others having an interest therein or liens or encumbrances thereon against loss by encumbrance, defective titles, invalidity, or adverse claim to title.   History: En. Sec. 79, Ch. 286, L. 1959; R.C.M. 1947, 40-2908.  
  33-1-213. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 64, Ch. 472, L. 1999.  
  33-1-214. Mechanical breakdown insurance. (1) Mechanical breakdown insurance means a policy, contract, or agreement issued by an authorized insurer that provides for the repair, replacement, or service for the operational or structural failure of the property because of a defect in materials or workmanship or because of normal wear and tear.   (2) The term does not include motor club services, as defined in 61-12-301.   (3) Mechanical breakdown insurance is a type of casualty insurance provided for in 33-1-206.   History: En. Sec. 65, Ch. 472, L. 1999; amd. Sec. 10, Ch. 227, L. 2001.  
  33-1-215. Prepaid legal insurance. (1) For the purposes of this section, prepaid legal insurance means the assumption of a contractual obligation that is to be spread, directly or indirectly, among a group of persons to provide specified legal services or reimbursement for legal expenses in consideration of a specified payment for an interval of time, regardless of whether the payment is made by the beneficiary or by a third person on behalf of the beneficiary.   (2) Prepaid legal insurance does not include the provision of or reimbursement for legal services that are incidental to other insurance coverage. The following are not prepaid legal insurance:   (a) retainer contracts made with individual clients with fees based on estimates of the nature and amount of services that will be required;   (b) contracts made with a group of clients involved in the same or closely related legal matters;   (c) plans providing only a referral service or a discount card for legal services;   (d) legal services provided by unions or employee associations to members pertaining to employment or occupation; or   (e) legal services provided by an agency of state or federal government to employees.   (3) Prepaid legal insurance is a type of casualty insurance provided for in 33-1-206.   History: En. Sec. 66, Ch. 472, L. 1999; amd. Sec. 11, Ch. 227, L. 2001.  
  33-1-216. Involuntary unemployment insurance. (1) Involuntary unemployment insurance means insurance providing the insured borrower with coverage for consumer credit replacement obligations for a period or periods during which the borrower is involuntarily unemployed. Involuntary unemployment insurance must at least provide benefits for the loss of employment income caused by individual or mass layoff, a general strike, termination by an employer, a dispute involving organized labor, and a lockout.   (2) Involuntary unemployment insurance is a type of casualty insurance provided for in 33-1-206.   History: En. Sec. 67, Ch. 472, L. 1999; amd. Sec. 12, Ch. 227, L. 2001.  
  33-1-217. Gap amount -- gap insurance. (1) As used in this section, gap amount means the difference between the amount owed by the lessee or borrower under the purchase or lease agreement in the event of total loss of the personal property prior to the expiration of the agreement by theft or physical damage and the actual cash value or portion received by the lessor or creditor from insurance proceeds or from any other person on account of the total loss or destruction of the personal property.   (2) Gap insurance means insurance covering the gap amount that is payable upon the total loss of personal property, which is the subject of a lease or a loan or another credit transaction, occasioned by the theft of or physical damage to the property.   (3) Gap insurance is a type of casualty insurance provided for in 33-1-206.   History: En. Sec. 68, Ch. 472, L. 1999; amd. Sec. 13, Ch. 227, L. 2001.  
  33-1-218. Credit insurances -- definitions. As used in this code, the following definitions apply:   (1) "Credit disability insurance" means the same as defined in 33-21-103.   (2) "Credit life insurance" means the same as defined in 33-21-103.   (3) "Credit property insurance" means any policy, endorsement, rider, cover note, memorandum, certificate, or other instrument or evidence of insurance covering perils to goods purchased through a credit transaction or pledged as collateral for a credit transaction and that concerns a creditor's interest in the purchased goods or pledged collateral either in whole or in part. Credit property insurance is a type of property insurance as provided for in 33-1-210.   (4) "Credit unemployment insurance" means insurance on a debtor to provide indemnity for payments or debt becoming due on a specific loan or other credit transaction while the debtor is involuntarily unemployed as defined in the policy. Credit unemployment insurance is a type of involuntary unemployment insurance as provided for in 33-1-216.   (5) "Debtor" means the same as defined in 33-21-103.   History: En. Sec. 9, Ch. 106, L. 2001.  
  33-1-219. Mortgage insurances -- definitions. (1) "Mortgage" or "mortgage loan" is an indebtedness of more than 10 years duration that is secured by a real estate mortgage.   (2) "Mortgage disability insurance" is disability insurance designed to pay off all or a part of a mortgage loan in the event of the insured's disability. Mortgage disability insurance is a type of credit disability insurance.   (3) (a) "Mortgage guaranty insurance" is:   (i) insurance against financial loss by reason of nonpayment of principal, interest, or other sums agreed to be paid under the terms of any note, bond, or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate if the improvement of the real estate is a residential building, a condominium unit, or other building designed for occupancy by not more than four families;   (ii) insurance against financial loss by reason of nonpayment of principal, interest, or other sums agreed to be paid under the terms of any note, bond, or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate if the improvement on the real estate is a building or buildings designed for occupancy by five or more families or is designed to be occupied for industrial or commercial purposes; or   (iii) insurance against financial loss by reason of nonpayment of rent or other sums agreed to be paid under the terms of a written lease for the possession, use, or occupancy of real estate if the improvement of the real estate is a building or buildings designed to be occupied for industrial or commercial purposes.   (b) Mortgage guaranty insurance is a type of casualty insurance as provided for in 33-1-206.   (4) "Mortgage life insurance" is life insurance designed to pay off all or a part of a mortgage loan in the event of the insured's death. Mortgage life insurance is a type of credit life insurance as defined in 33-21-103.   History: En. Sec. 10, Ch. 106, L. 2001.  
  33-1-220. Rental car insurance. Rental car insurance is insurance that:   (1) provides coverage for periods of less than 90 days;   (2) applies only to the rental car subject to the rental agreement; and   (3) is limited to the following kinds of insurance:   (a) personal accident insurance for renters and other rental car occupants, for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs with the rental car during the rental period;   (b) liability insurance that provides protection to the renters and other authorized drivers of a rental car for liability arising from the operation or use of the rental car during the rental period;   (c) personal effects insurance that provides coverage to renters and other vehicle occupants for loss of or damage to personal effects in the rental car during the rental period; or   (d) motor club services, as defined in 61-12-301.   History: En. Sec. 3, Ch. 427, L. 2003.  
  33-1-221. Nationwide inland marine definition law. Sections 33-1-221 through 33-1-229 may be cited as the "Nationwide Inland Marine Definition Act".   History: En. Sec. 1, Ch. 467, L. 1981.  
  33-1-222. Purpose. (1) The purpose of 33-1-221 through 33-1-229 is to describe the kinds of risks and coverages which may be classified or identified under state insurance laws as marine, inland marine, or transportation insurance, but 33-1-221 through 33-1-229 do not include all of the kinds of risks and coverages which may be written, classified, or identified under marine, inland marine, or transportation insuring powers. Sections 33-1-221 through 33-1-229 may not be construed to mean that the kinds of risks and coverages described herein are solely marine, inland marine, or transportation insurance in all instances.   (2) Sections 33-1-221 through 33-1-229 may not be construed to restrict or limit in any way the exercise of any insuring powers granted under charters and licenses whether used separately, in combination, or otherwise.   History: En. Sec. 2, Ch. 467, L. 1981.  
  33-1-223. Imports. Imports may be covered by marine, inland marine, and transportation policies subject to the following conditions:   (1) Imports are covered wherever they are located, without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.   (2) Property is an import and the proper subject of marine, inland marine, or transportation insurance as long as the property remains segregated in such a way that it can be identified and has not become incorporated into and mixed with the general mass of property in the United States; property ceases to be an import and the proper subject of marine, inland marine, or transportation insurance when it has been:   (a) sold and delivered by the importer, factor, or consignee;   (b) removed from its place of storage and placed on sale as part of an importer's stock in trade at a point of sale or distribution; or   (c) delivered for manufacture, processing, or change in form to premises of the importer or another, to be used for such purposes.   History: En. Sec. 3, Ch. 467, L. 1981.  
  33-1-224. Exports. Exports may be covered by marine, inland marine, and transportation policies subject to the following conditions:   (1) Exports are covered wherever they are located, without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.   (2) Property is an export and the proper subject of marine, inland marine, or transportation insurance when designated or while being prepared for export and remains an export unless diverted for domestic trade. If the property is diverted for domestic trade, the provisions of 33-1-225 apply. This section does not apply to long-established methods of insuring certain commodities such as cotton.   History: En. Sec. 4, Ch. 467, L. 1981.  
  33-1-225. Domestic shipments. Domestic shipments may be covered by marine, inland marine, and transportation policies subject to the following conditions:   (1) Domestic shipments on consignment for sale, distribution, exhibit, trial, approval, or auction may be covered while in transit, while in the custody of others, and while being returned, except that the policy may not cover property while it is on premises owned, leased, or operated by the consignor.   (2) Domestic shipments not on consignment may be covered if the coverage of the issuing companies includes hazards of transportation beginning and ending within the United States. Such shipments are not covered at the manufacturing premises or after arrival at premises owned, leased, or operated by the assured or the purchaser.   History: En. Sec. 5, Ch. 467, L. 1981.  
  33-1-226. Instrumentalities of transportation and commerce. Bridges, tunnels, and other instrumentalities of transportation and communication (excluding buildings and improvements, furniture, furnishings, fixed contents, and supplies held in storage) may be covered by marine, inland marine, and transportation policies. This category includes:   (1) bridges, tunnels, and other similar instrumentalities, including auxiliary facilities and equipment attendant thereto;   (2) piers, wharves, docks, slips, drydocks, and marine railways;   (3) pipelines, including on-line propulsion, regulating, and other equipment appurtenant to such pipelines but excluding all property at manufacturing, producing, refining, converting, treating, or conditioning plants;   (4) power transmission, telephone, and telegraph lines, excluding all property at generating, converting, or transforming stations, substations, and exchanges;   (5) radio and television communication equipment in use as such, including towers and antennas with auxiliary equipment, and appurtenant electrical operating and control apparatus; and   (6) outdoor cranes, loading bridges, and similar equipment used to load, unload, and transport.   History: En. Sec. 6, Ch. 467, L. 1981.  
  33-1-227. Personal property. Risks generally covered by personal property floaters covering individuals or items of personal property may be covered by marine, inland marine, and transportation policies. This category includes:   (1) personal effects floater policies;   (2) personal property floaters;   (3) government service floaters;   (4) personal fur floaters;   (5) personal jewelry floaters;   (6) wedding present floaters for a period not exceeding 90 days after the date of the wedding;   (7) silverware floaters;   (8) fine arts floaters covering paintings, etchings, pictures, tapestries, art glass windows, and other bona fide works of art of rarity, historical value, or artistic merit;   (9) stamp and coin floaters;   (10) musical instrument floaters. For purposes of this section, radios, televisions, record players, and combinations thereof are not musical instruments.   (11) mobile articles, machinery, and equipment floaters (excluding motor vehicles designed for highway use and motor homes, trailers, and semitrailers except when hauled by tractors not designed for highway use) covering identified property of a mobile or floating nature pertaining to or usual to a household. Such policies shall not cover furniture and fixtures not customarily used away from premises where such property is usually kept.   (12) installment sales and leased property policies covering property pertaining to a household and sold under conditional contract of sale, partial payment contract, or installment sales contract or leased but excluding motor vehicles designed for highway use. Such policies must cover property in transit but shall not extend beyond the termination of the seller's or lessor's interest; and   (13) live animal floaters.   History: En. Sec. 7, Ch. 467, L. 1981.  
  33-1-228. Commercial property. Risks generally covered by commercial property floaters covering property pertaining to a business, profession, or occupation may be covered by marine, inland marine, and transportation policies. This category includes:   (1) radium floaters;   (2) physicians' and surgeons' instrument floaters. The policies may include coverage of furniture, fixtures, and tenant assured's interest in the improvements of buildings that are located in that portion of the premises occupied by the assured in the practice of the assured's profession.   (3) pattern and die floaters;   (4) theatrical floaters, excluding buildings and improvements, furniture, and fixtures that do not travel with theatrical troupes;   (5) film floaters, including a builders' risk during the production and coverage on completed negatives, positives, and sound records;   (6) salesperson's samples floaters;   (7) exhibition policies on property while it is on exhibition and in transit to or from exhibitions;   (8) live animal floaters;   (9) builders' risks and installation risks policies covering the interest of owner, seller, or contractor against loss or damage to machinery, equipment, building materials, or supplies being used with and during the course of installation, testing, building, renovating, or repairing. These policies may cover property at points or places where work is being performed, while in transit, and during temporary storage or deposit of property designated for an awaiting specific installation, building, renovating, or repairing. The coverage is limited to builders' risks or installation risks when perils in addition to fire and extended coverage are to be insured. If written for the account of the owner, the coverage ceases upon completion of work and acceptance of the work, or if written for the account of a seller or contractor, the coverage terminates when the interest of the seller or contractor terminates.   (10) mobile articles, machinery, and equipment floaters, excluding motor vehicles designed for highway use and motor homes, trailers, and semitrailers except when hauled by tractors not designed for highway use, and snowplows constructed exclusively for highway use, covering identified property of a mobile or floating nature, not on sale or consignment or in the course of manufacture, that has come into custody or control of parties who intend to use the property for which it was manufactured or created. The policies may not cover furniture and fixtures not customarily used away from premises where the property is usually kept.   (11) property in transit to or from and in the custody of bailees, not owned, controlled, or operated by the bailor, but the policies may not cover the bailee's property at the bailee's premises;   (12) installment sales and leased property policies covering property sold under conditional contract of sale, partial payment contract or installment sales contract or leased, but excluding motor vehicles designed for highway use. These policies must cover property in transit but may not extend beyond the termination of the seller's or lessor's interest. This subsection does not include machinery and equipment under certain "lease-back" contracts.   (13) garment contracts' floaters;   (14) furriers' or fur storers' customer's policies, which are policies under which certificates or receipts are issued by furriers or fur storers, covering specified articles that are the property of customers;   (15) accounts receivable policies and valuable papers and records policies;   (16) floor plan policies, covering property for sale while in possession of dealers under a floor plan or any similar plan under which the dealer borrows money from a bank or lending institution to pay the manufacturer if:   (a) the merchandise is specifically identifiable as encumbered to the bank or lending institution;   (b) the dealer's right to sell or otherwise dispose of the merchandise is conditioned upon its being released from encumbrance by the bank or lending institution; and   (c) the policies cover property in transit and do not extend beyond the termination of the dealer's interest;   (17) sign and street clock policies, including neon signs, automatic or mechanical signs, and street clocks, while in use as intended;   (18) fine arts policies covering paintings, etchings, pictures, tapestries, art glass windows, and other bona fide works of art of rarity, historical value, or artistic merit, for account of museums, galleries, universities, businesses, municipalities, and other similar interests;   (19) policies covering personal property, which may include coverage of money in locked safes or vaults on the assured's premises and may also include coverage of furniture, fixtures, tools, machinery, patterns, molds, dies, and a tenant insured's interest in improvements of buildings, which when sold to the ultimate purchaser may be covered specifically by the owner under inland marine policies, including:   (a) musical instrument dealers' policies, covering property consisting principally of musical instruments and their accessories, but radios, televisions, record players, and combinations of them are not musical instruments for the purposes of this subsection;   (b) camera dealers' policies covering property consisting principally of cameras and their accessories;   (c) furrier dealers' policies covering property consisting principally of furs and fur garments;   (d) equipment dealers' policies covering mobile equipment consisting of binders, reapers, tractors, harvesters, harrows, tedders, and other similar agricultural equipment and accessories for the equipment and covering construction equipment consisting of bulldozers, road scrapers, tractors, compressors, pneumatic tools, and similar equipment and accessories for the equipment, but excluding motor vehicles designed for highway use;   (e) stamp and coin dealers' policies covering property of philatelic and numismatic nature;   (f) jewelers' block policies; and   (g) fine arts dealers' policies;   (20) wool growers' floaters;   (21) domestic bulk liquids policies covering tanks and domestic bulk liquids stored in the tanks;   (22) "difference in conditions" coverage, excluding fire and extended coverage perils; and   (23) electronic data processing policies.   History: En. Sec. 8, Ch. 467, L. 1981; amd. Sec. 1060, Ch. 56, L. 2009.  
  33-1-229. Exceptions. Unless otherwise permitted, nothing in 33-1-223 through 33-1-229 may be construed to permit marine, inland marine, or transportation insurance policies to cover:   (1) storage of an assured's merchandise, except as specifically provided;   (2) merchandise in the course of manufacture which is the property of and on the premises of the manufacturer;   (3) furniture, fixtures, and improvements to buildings; or   (4) money or securities in safes, vaults, safety deposit vaults, or banks or on the assured's premises, except while in the course of transportation.   History: En. Sec. 9, Ch. 467, L. 1981.  
  33-1-230 through 33-1-234 reserved.  
  33-1-235. Disability income insurance. "Disability income insurance" means an individual or group policy of insurance that primarily provides payment to or for the benefit of the policyholder or certificate holder based, in whole or in part, upon lost wages or other earned income or business or financial losses as a result of an inability to work due to sickness, injury, or a combination of sickness and injury.   History: En. Sec. 5, Ch. 380, L. 2003.  
  33-1-301. Insurance department -- control -- appropriations. (1) The insurance department shall be under the control and supervision of the commissioner.   (2) Funds adequate for the maintenance and operation of the insurance department shall be expressly appropriated by the legislature and shall be used solely for the purposes for which so appropriated.   History: En. Sec. 21, Ch. 286, L. 1959; R.C.M. 1947, 40-2702(2), (3).  
  33-1-302. Commissioner's seal. (1) The commissioner must have a seal of office consisting of the same symbolic design within the inner circle as the great seal of the state of Montana, encircled by the words "Commissioner of Insurance, State of Montana".   (2) All certificates and licenses issued by the commissioner must bear the seal, except that the commissioner may omit the seal for licenses.   History: En. Sec. 22, Ch. 286, L. 1959; R.C.M. 1947, 40-2703; amd. Sec. 1061, Ch. 56, L. 2009.  
  33-1-303. Deputies and assistants -- employment, compensation, and termination. (1) The commissioner shall appoint a chief deputy insurance commissioner who is in charge of the insurance department under the direction and control of the commissioner.   (2) The commissioner may appoint additional deputy insurance commissioners for the purposes that the commissioner designates.   (3) The commissioner may employ a competent insurance actuary to perform actuarial duties, if any, of the department, to take charge of or assist in the examination of insurers, and to perform other duties assigned to the commissioner.   (4) The commissioner may appoint or employ examiners to conduct or assist in examinations of insurers and others provided for under the code. Examiners must be competent, because of experience or special education or training, to fulfill the responsibilities of an insurance examiner.   (5) The commissioner shall appoint or employ insurance protection analysts for the purpose of ensuring that insurers and their representatives comply with market regulations provided by law.   (6) The commissioner may appoint and employ a field investigator whose primary duty it is, as directed by the commissioner, to make investigations in this state of violations or claimed violations of this code.   (7) The commissioner may appoint a chief clerk for the insurance department and employ other assistants and clerks as may be necessary to assist the commissioner properly to discharge the duties imposed under this code.   (8) The commissioner may at any time terminate the appointment, designation, or employment of any deputy, actuary, chief clerk, or other employee.   (9) The commissioner may from time to time contract for and procure, on a fee or part-time basis, or both, actuarial, technical, or other professional services as the commissioner may require for the discharge of duties.   (10) The compensation of the commissioner's personal staff, as defined in Title 2, chapter 18, part 1, shall be as fixed by the commissioner but in the aggregate may not exceed current funds appropriated by the legislature to the insurance department or otherwise currently available for the purpose.   History: En. Sec. 23, Ch. 286, L. 1959; R.C.M. 1947, 40-2704; amd. Sec. 1, Ch. 4, L. 1979; amd. Sec. 4, Ch. 198, L. 1979; amd. Sec. 1, Ch. 165, L. 1993.  
  33-1-304. Delegation of authority -- responsibility. (1) The commissioner may delegate to any deputy, assistant, examiner, or employee of the commissioner's department the exercise or discharge in the commissioner's name of any power, duty, or function, whether ministerial or discretionary, vested by this code in the commissioner.   (2) The commissioner is responsible for the official acts of the commissioner's deputy, assistant, examiner, or employee acting in the commissioner's name and by the commissioner's authority.   History: En. Sec. 25, Ch. 286, L. 1959; R.C.M. 1947, 40-2706; amd. Sec. 1062, Ch. 56, L. 2009.  
  33-1-305. Conflicts of interest prohibited. The commissioner or any deputy, examiner, assistant, or employee of the commissioner:   (1) may not be financially interested, directly or indirectly, in any insurer, insurance agency, or insurance transaction except as a policyholder or claimant under a policy; and   (2) is subject to the ethics provisions in Title 2, chapter 2.   History: En. Sec. 24, Ch. 286, L. 1959; R.C.M. 1947, 40-2705(part); amd. Sec. 1, Ch. 62, L. 2019.  
  33-1-306. Dual contracts permitted. As to such matters wherein a conflict of interest does not exist on the part of any such individual, the commissioner may employ or retain from time to time insurance actuaries, attorneys, or other technicians who are independently practicing their professions even though similarly employed or retained by insurers or others.   History: En. Sec. 24, Ch. 286, L. 1959; R.C.M. 1947, 40-2705(part).  
  33-1-307 through 33-1-310 reserved.  
  33-1-311. General powers and duties. (1) The commissioner shall enforce the applicable provisions of the laws of this state and shall execute the duties imposed on the commissioner by the laws of this state.   (2) The commissioner has the powers and authority expressly conferred upon the commissioner by or reasonably implied from the provisions of the laws of this state.   (3) Except as otherwise provided in 33-39-101, the commissioner shall administer the department to ensure that the interests of insurance consumers are protected.   (4) The commissioner may conduct examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized, as the commissioner considers proper, to determine whether any person has violated any provision of the laws of this state or to secure information useful in the lawful administration of any provision. The cost of additional examinations and investigations must be borne by the state.   (5) The commissioner shall maintain as confidential any information or document received from:   (a) the national association of insurance commissioners; or   (b) another state agency, an insurance department from another state, a federal agency, the interstate insurance product regulation commission, or a foreign government that treats the same information or document as confidential. The commissioner may provide information or documents, including information or documents that are confidential, to another state agency, the national association of insurance commissioners, a state or federal law enforcement agency, a federal agency, the interstate insurance product regulation commission, a foreign government, or an insurance department in another state if the recipient agrees to maintain the confidentiality of the information or documents.   (6) The department is a criminal justice agency as defined in 44-5-103.   History: En. Sec. 28, Ch. 286, L. 1959; amd. Sec. 1, Ch. 16, L. 1969; R.C.M. 1947, 40-2709(1) thru (3), (5); amd. Sec. 1, Ch. 99, L. 1989; amd. Sec. 2, Ch. 165, L. 1993; amd. Sec. 5, Ch. 379, L. 1995; amd. Sec. 10, Ch. 472, L. 1999; amd. Sec. 14, Ch. 227, L. 2001; amd. Sec. 2, Ch. 399, L. 2007; amd. Sec. 6, Ch. 227, L. 2011; amd. Sec. 4, Ch. 360, L. 2013.  
  33-1-312. Records and certificates. (1) The commissioner shall enter in permanent form records of the commissioner's official transactions, examinations, investigations, and proceedings and keep the records in the commissioner's office. The records and insurance filings in the commissioner's office must be open to public inspection except as otherwise provided in this code with respect to particular records or filings.   (2) When required, the commissioner shall furnish a certificate as to the authority of any person to transact insurance, and the certificate must be evidence of the facts set forth in the certificate.   (3) Copies of records or documents in the commissioner's office certified to by the commissioner must be received in evidence in all courts as if they were the originals.   History: (1)En. Sec. 26, Ch. 286, L. 1959; Sec. 40-2707, R.C.M. 1947; (2), (3)En. Sec. 27, Ch. 286, L. 1959; Sec. 40-2708, R.C.M. 1947; R.C.M. 1947, 40-2707, 40-2708; amd. Sec. 1063, Ch. 56, L. 2009.  
  33-1-313. Rules. The commissioner may make reasonable rules necessary for or as an aid to the effective administration of any provision of this code.   History: En. Sec. 29, Ch. 286, L. 1959; R.C.M. 1947, 40-2710; amd. Sec. 80, Ch. 370, L. 1987; amd. Sec. 6, Ch. 606, L. 1987; amd. Sec. 15, Ch. 227, L. 2001.  
  33-1-314. Orders and notices. (1) Orders and notices of the commissioner are not effective unless in writing, signed by the commissioner or by the commissioner's authority.   (2) Each order must state its effective date and must concisely state:   (a) its intent or purpose;   (b) the grounds on which the order is based;   (c) the provisions of this code pursuant to the action taken or proposed to be taken, but failure to designate a particular provision does not deprive the commissioner of the right to rely on a particular provision.   (3) The commissioner may effect service of process of an order or notice by mailing it, postage prepaid, addressed to the person affected by the order or notice, to the person's principal place of business as recorded in the commissioner's office. The commissioner's order is effective when mailed. If the commissioner does not have a record of the person's principal place of business, the commissioner may effect service of process of an order or notice upon a person by mailing it, postage prepaid, to the address as listed on the person's driver's license, as ascertained by the commissioner through the motor vehicle division of the department of justice, or, if a partnership, corporation, or similar entity, as ascertained from documentation filed in the office of the secretary of state.   (4) The commissioner may have a person served pursuant to Rule 4(c)(2)(C), (c)(2)(D), and (d) through (s) of the Montana Rules of Civil Procedure.   History: En. Sec. 30, Ch. 286, L. 1959; R.C.M. 1947, 40-2711; amd. Sec. 16, Ch. 227, L. 2001.  
  33-1-315. Witnesses -- production of records -- subpoena -- failure to respond. (1) With respect to the subject of any examination or investigation being conducted by the commissioner, or the commissioner's designee if general written authority has been given the designee by the commissioner, the commissioner or the designee may subpoena witnesses and administer oaths or affirmations and examine any individual under oath and may require and compel the production of records, books, papers, contracts, and other documents by attachments, if necessary. Subpoenas of witnesses must be served in the same manner as if issued from a district court.   (2) If in connection with an examination of an insurer the commissioner or the commissioner's designee desires to examine an officer, director, or manager who is outside this state, the commissioner or the commissioner's designee may conduct and enforce by all appropriate and available means any examination under oath in any other state or territory of the United States in which the officer, director, or manager is located, to the full extent permitted by the laws of that state or territory.   (3) If a witness fails to obey a subpoena to appear before the commissioner or the commissioner's designee or refuses to testify or answer any material question or to produce records, books, papers, contracts, or documents when required to do so, the commissioner or the commissioner's designee shall institute proceedings in the district court to compel obedience to the subpoena or other order or to punish the witness for neglect or refusal to obey the summons or other order.   (4) Witness fees and mileage, if claimed, must be allowed on the same basis as for testimony in a district court. Witness fees, mileage, and the actual expenses necessarily incurred in securing attendance of witnesses and their testimony must be itemized and paid by the person being examined if the person is found to have been in violation of the law as to the matter with respect to which the witnesses were subpoenaed.   (5) A person who knowingly fails to attend, answer, and produce records, documents, or other evidence requested by the commissioner or the commissioner's designee, who knowingly fails to give full and truthful information or to answer in writing to any material inquiry of the commissioner or the commissioner's designee relative to the subject of an examination, investigation, or hearing, or who knowingly fails to appear and testify under oath before the commissioner or the commissioner's designee is subject to the provisions of 33-1-317 and 33-1-318.   History: En. Sec. 37, Ch. 286, L. 1959; R.C.M. 1947, 40-2718; amd. Sec. 5, Ch. 198, L. 1979; amd. Sec. 17, Ch. 227, L. 2001; amd. Sec. 3, Ch. 493, L. 2003.  
  33-1-316. Testimony compelled -- immunity from prosecution. (1) A person may not be excused from attending and testifying or producing any evidence in any examination or investigation conducted by or under authority of the commissioner on the ground that the person's testimony or the evidence required may tend to incriminate or subject the person to a penalty or forfeiture. However, testimony or evidence compelled following a claim of privilege against self-incrimination or any information directly or indirectly derived from compelled testimony or evidence may not be used against the person in a criminal prosecution.   (2) The commissioner may grant immunity from prosecution for or on account of any act, occurrence, transaction, matter, or other thing concerning which a person testifies if the commissioner determines that the ends of justice would be served by granting the additional immunity.   (3) Immunity does not extend to prosecution or punishment for false statements by the person that are contained in testimony or evidence given under this part.   History: En. Sec. 38. Ch. 286, L. 1959; R.C.M. 1947, 40-2719; amd. Sec. 1, Ch. 246, L. 1991; amd. Sec. 1, Ch. 451, L. 1993; amd. Sec. 18, Ch. 227, L. 2001.  
  33-1-317. Penalty imposed by commissioner. The commissioner may, after having conducted a hearing pursuant to 33-1-701, impose a fine not to exceed the sum of $25,000 upon a person found to have violated a provision of this code or regulation promulgated by the commissioner, except that the fine imposed upon insurance producers or adjusters may not exceed $5,000 per violation. The fine is in addition to all other penalties imposed by the laws of this state and must be collected by the commissioner in the name of the state of Montana. Imposition of a fine under this section is an order from which an appeal may be taken, pursuant to the provisions of 33-1-711.   History: En. Sec. 28, Ch. 286, L. 1959; amd. Sec. 1, Ch. 16, L. 1969; R.C.M. 1947, 40-2709(4); amd. Sec. 1, Ch. 278, L. 1987; amd. Sec. 81, Ch. 370, L. 1987; amd. Sec. 7, Ch. 606, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1, Ch. 164, L. 1993.  
  33-1-318. Injunctions and other remedies. (1) Whenever it appears to the commissioner that a person has engaged in or is about to engage in an act or practice constituting a violation of 33-1-501, 33-1-1302, 33-14-201, chapters 2, 16 through 18, and 30 of this title, part 13 of chapter 20 of this title, part 4 of chapter 25 of this title, part 1 of chapter 38 of this title, or any rule or order issued under this code, the commissioner may:   (a) issue an order directing the person to cease and desist from continuing the act or practice after reasonable notice and opportunity for a hearing;   (b) issue a temporary cease and desist order that must remain in effect until 10 days after the hearing is held. If the commissioner issues a temporary cease and desist order, the respondent has 15 days from receipt of the order to make a written request for a hearing on the allegations contained in the order. The hearing must be held within 20 days of the commissioner's receipt of the hearing request unless the time is extended by agreement of the parties. If the respondent does not request a hearing within 15 days of receipt of the order and the commissioner does not order a hearing, the order becomes final.   (c) without the issuance of a cease and desist order, bring an action in a court of competent jurisdiction to enjoin the acts or practices and to enforce compliance with this code or any rule or order issued under this code. Upon a proper showing, a permanent or temporary injunction, restraining order, or writ of mandamus must be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The commissioner may not be required to post a bond.   (2) If a hearing is held on a cease and desist order, both parties have 20 days from the date the hearing is concluded or from the date a transcript of the hearing is filed, if one is requested, to submit proposed findings of fact, conclusions of law, orders, and supporting briefs to the hearings examiner. The parties have an additional 10 days within which to submit comments on the opposing party's proposed findings of fact, conclusions of law, orders, and briefs. A final order must be issued within 30 days of the submission of the comments.   (3) The commissioner may, after giving reasonable notice and an opportunity for a hearing under this section, impose a fine not to exceed $5,000 for each violation upon a person found to have engaged in an act or practice constituting a violation of a provision of this code or any rule or order issued under this code. The fine is in addition to all other penalties imposed by the laws of this state and must be collected by the commissioner in the name of the state of Montana and deposited in the general fund. Imposition of a fine under this subsection is an order from which an appeal may be taken pursuant to 33-1-711. If a person fails to pay a fine referred to in this subsection, the amount of the fine is a lien upon all of the assets and property of that person in this state and may be recovered by suit by the commissioner and deposited in the general fund. Failure of the person to pay a fine also constitutes a forfeiture of the right to do business in this state under this code.   History: En. Sec. 1, Ch. 513, L. 1987; amd. Sec. 4, Ch. 493, L. 2003; amd. Sec. 1, Ch. 456, L. 2005.  
  33-1-401. Examination of insurers. (1) The commissioner shall examine the affairs, transactions, accounts, records, and assets of each authorized insurer as often as the commissioner considers advisable. The commissioner shall examine each authorized insurer not less frequently than every 5 years.   (2) The commissioner shall in like manner examine each insurer applying for an initial certificate of authority to do business in this state.   (3) In lieu of making an examination under this part of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on the company prepared by the insurance department for the company's state of domicile or port-of-entry state until January 1, 1994. After January 1, 1994, the reports may only be accepted if:   (a) the insurance department was at the time of the examination accredited under the national association of insurance commissioners' financial regulation standards and accreditation program; or   (b) the examination is performed under the supervision of an accredited state insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination workpapers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.   (4) For purposes of completing an examination of any company under this part, the commissioner may examine or investigate any person or the business of any person, insofar as the examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the company.   History: En. Sec. 32, Ch. 286, L. 1959; R.C.M. 1947, 40-2713; amd. Sec. 39, Ch. 596, L. 1993.  
  33-1-402. Examination of insurance producers, managers, and promoters. For the purpose of ascertaining compliance with this code, the commissioner may, as often as the commissioner considers advisable, examine the accounts, records, documents, and transactions pertaining to or affecting its insurance affairs or proposed insurance affairs of:   (1) an insurance producer, surplus lines insurance producer, general insurance producer, adjuster, or public adjuster;   (2) a person having a contract under which the person enjoys in fact the exclusive or dominant right to manage or control an insurer;   (3) a person holding the shares of voting stock or policyholder proxies of a domestic insurer, for the purpose of controlling the management of the domestic insurer, as voting trustee or otherwise;   (4) a person engaged in or proposing to be engaged in or assisting in the promotion or formation of a domestic insurer or insurance holding corporation or corporation to finance a domestic insurer or the production of its business.   History: En. Sec. 33, Ch. 286, L. 1959; R.C.M. 1947, 40-2714; amd. Sec. 22, Ch. 537, L. 1987; amd. Sec. 7, Ch. 713, L. 1989; amd. Sec. 1064, Ch. 56, L. 2009; amd. Sec. 1, Ch. 139, L. 2015.  
  33-1-403. Repealed. Sec. 71, Ch. 596, L. 1993.   History: En. Sec. 34, Ch. 286, L. 1959; R.C.M. 1947, 40-2715; amd. Sec. 1, Ch. 713, L. 1989.  
  33-1-404 through 33-1-407 reserved.  
  33-1-408. Conduct of examinations -- records -- correction of accounts -- appraisals. (1) Upon determining that an examination should be conducted, the commissioner or the commissioner's designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, an examiner shall observe the guidelines and procedures set forth in the examiners' handbook adopted by the NAIC. The commissioner may also employ other guidelines or procedures as the commissioner considers appropriate.   (2) Every company or person from whom information is sought and its officers, directors, employees, and agents shall provide to the examiners appointed under subsection (1) timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees, or agents, to submit to examination or to comply with any reasonable written request of the examiners is grounds for suspension, refusal, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction. A proceeding for suspension, revocation, or refusal of any license or authority must be conducted pursuant to 33-1-318 and 33-1-701.   (3) The commissioner or any examiner has the power to issue subpoenas, administer oaths, and examine under oath any person concerning any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the commissioner may petition a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear and testify or to produce documentary evidence. Failure to obey the court order is punishable as contempt of court.   (4) When making an examination under this part, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners. The cost of retaining the personnel must be borne by the company that is the subject of the examination.   (5) This part may not be construed to limit the commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to this title. Findings of fact and conclusions made pursuant to an examination are prima facie evidence in any legal or regulatory action.   (6) This part may not be construed to limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the commissioner may consider appropriate.   History: En. Sec. 31, Ch. 596, L. 1993; amd. Sec. 6, Ch. 380, L. 2003.  
  33-1-409. Examination reports -- hearings -- confidentiality -- publication. (1) All examination reports must be composed only of facts appearing upon the books, records, or other documents of the company, its agents, or other persons examined or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs. The report must contain the conclusions and recommendations that the examiners find reasonably warranted from the facts.   (2) Not later than 60 days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice that gives the company examined a reasonable opportunity, but not more than 30 days, to make a written submission or rebuttal with respect to any matters contained in the examination report.   (3) Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's workpapers and enter an order:   (a) adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure the violation.   (b) rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, information, or testimony and of refiling pursuant to subsection (2); or   (c) calling for an investigatory hearing with no less than 20 days' notice to the company for purposes of obtaining additional data, documentation, information, and testimony.   (4) (a) All orders entered pursuant to subsection (3)(a) must be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers, and any written submissions or rebuttals. An order must be considered a final administrative decision and may be appealed pursuant to Title 33, chapter 1, part 7, and must be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.   (b) (i) A hearing conducted under subsection (3)(c) by the commissioner or an authorized representative must be conducted as a nonadversarial, confidential, investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the commissioner's review of relevant workpapers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of the hearing, the commissioner shall enter an order pursuant to subsection (3)(a).   (ii) The commissioner may not appoint an examiner as an authorized representative to conduct the hearing. The hearing must proceed expeditiously with discovery by the company limited to the examiner's workpapers that tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner or the commissioner's representative may issue subpoenas for the attendance of witnesses or the production of documents considered relevant to the investigation, whether under the control of the department, the company, or other persons. The documents produced must be included in the record, and testimony taken by the commissioner or the commissioner's representative must be under oath and preserved for the record. This section does not require the department to disclose any information or records that would indicate or show the existence or content of an investigation or activity of a criminal justice agency.   (iii) The hearing must proceed with the commissioner or the commissioner's representative posing questions to the persons subpoenaed. The company and the department may present testimony relevant to the investigation. Cross-examination may be conducted only by the commissioner or the commissioner's representative. The company and the department must be permitted to make closing statements and may be represented by counsel of their choice.   (5) (a) Upon the adoption of the examination report under subsection (3)(a), the commissioner shall continue to hold the content of the examination report as private and confidential information for a period of 30 days, except to the extent provided in subsection (2). After 30 days, the commissioner shall open the report for public inspection as long as a court of competent jurisdiction has not stayed its publication.   (b) This title does not prevent and may not be construed as prohibiting the commissioner from disclosing the content of an examination report or preliminary examination report, the results of an examination, or any matter relating to a report or results to the insurance department of this state or of any other state or country, to law enforcement officials of this state or of any other state, or to an agency of the federal government at any time as long as the agency or office receiving the report or matters relating to the report agrees in writing to hold it in a manner consistent with this part.   (c) If the commissioner determines that regulatory action is appropriate as a result of an examination, the commissioner may initiate any proceedings or actions as provided by law.   (6) (a) Working papers must be given confidential treatment, are not subject to subpoena, are not discoverable or admissible as evidence in any private action, and may not be made public by the commissioner or any other person except to the extent provided in 33-1-311(5) and subsection (5) of this section. Persons given access to working papers shall agree, prior to receiving the information, to treat the information in the manner required by this section unless prior written consent has been obtained from the company to which the working papers pertain.   (b) For purposes of subsection (6)(a), "working papers" means:   (i) all papers and copies created, produced, obtained by, or disclosed to the commissioner or any other person in the course of an examination or analysis by the commissioner;   (ii) confidential criminal justice information, as defined in 44-5-103;   (iii) personal information protected by an individual privacy interest; and   (iv) specifically identified trade secrets, as defined in 30-14-402, that have been obtained by or disclosed to the commissioner or any other person in the course of an examination made under this part for which there are reasonable grounds of privilege that are asserted by the party claiming the privilege.   History: En. Sec. 32, Ch. 596, L. 1993; amd. Sec. 6, Ch. 416, L. 1999; amd. Sec. 1, Ch. 169, L. 2013; amd. Sec. 5, Ch. 63, L. 2015; amd. Sec. 10, Ch. 9, L. 2017.  
  33-1-410. Conflict of interest. (1) An examiner may not be appointed by the commissioner if the examiner, either directly or indirectly, has a conflict of interest with, is affiliated with the management of, or owns a pecuniary interest in any person subject to examination under this part. This section may not be construed to automatically preclude an examiner from being:   (a) a policyholder or claimant under an insurance policy;   (b) a grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business;   (c) an investment owner in shares of regulated diversified investment companies; or   (d) a settlor or beneficiary of a blind trust into which any otherwise impermissible holdings have been placed.   (2) Notwithstanding the requirements of this section, the commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other individuals who are independently practicing their professions, even though the persons may from time to time be similarly employed or retained by persons subject to examination under this part.   History: En. Sec. 33, Ch. 596, L. 1993.  
  33-1-411. Destruction of records -- hindrance of examination -- penalty. A director, officer, agent, or employee of a company who for the purpose of hindering any examination conducted pursuant to this part destroys any books, records, or documents required to be kept by law shall be punished by a fine as provided in 33-1-317. After notice and hearing in accordance with Title 33, chapter 1, part 7, the commissioner may revoke the certificate of authority of the company.   History: En. Sec. 35, Ch. 286, L. 1959; amd. Sec. 1, Ch. 28, L. 1967; R.C.M. 1947, 40-2716(3); amd. Sec. 6, Ch. 198, L. 1979; amd. Sec. 11, Ch. 472, L. 1999.  
  33-1-412. Repealed. Sec. 71, Ch. 596, L. 1993.   History: En. Sec. 35, Ch. 286, L. 1959; amd. Sec. 1, Ch. 28, L. 1967; R.C.M. 1947, 40-2716(1), (2), (4) thru (7).  
  33-1-413. Examination expense -- lien. (1) Upon presentation of a detailed account of charges and expenses by the commissioner or pursuant to the commissioner's written authorization, each person examined, other than examinations pursuant to 33-1-402, shall pay the actual travel expenses, a reasonable living expense allowance, and a per diem as compensation of examiners as necessarily incurred on account of the examination, all at reasonable rates as established or adopted by the commissioner. An account may be presented periodically during the course of the examination or at the termination of the examination as the commissioner considers proper. A person may not pay and an examiner may not accept any additional emolument on account of an examination.   (2) The commissioner shall pay to the state treasurer to the credit of the state special revenue fund all money received pursuant to subsection (1).   (3) If a person fails to pay the charges and expenses, as referred to in subsection (1), the charges and expenses must be paid out of the funds of the commissioner in the same manner as other disbursements of the funds. The amount paid is a first lien upon all of the assets and property in this state of the person and may be recovered by suit by the attorney general on behalf of the state of Montana and restored to the appropriate fund.   History: En. Sec. 36, Ch. 286, L. 1959; amd. Sec. 72, Ch. 147, L. 1963; R.C.M. 1947, 40-2717; amd. Sec. 96, Ch. 379, L. 1995.  
  33-1-501. Filing of forms -- approval -- review of disapproval or withdrawal of approval -- application. (1) (a) An insurance policy or annuity contract form, certificate, enrollment form, application form, printed rider or endorsement form, or form of renewal certificate may not be delivered or issued for delivery in Montana unless the form and, for the purposes of disability insurance, an outline of coverage as required by 33-22-244 and 33-22-521 have been filed with and approved by the commissioner and, if required, the regulatory official of the state of domicile of the insurer or the interstate insurance product regulation commission provided for in 33-39-101. This provision does not apply to surety bonds or policies, riders, endorsements, or forms of unique character designed for and used with relation to insurance upon a particular subject or that relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or disability insurance policies and are used at the request of the individual policyholder, contract holder, or certificate holder. Forms for use in property, marine, other than ocean marine and foreign trade coverages, casualty, and surety insurance coverages may be filed by a rating organization on behalf of its members and subscribers or by a member or subscriber on its own behalf.   (b) A filing required by subsection (1)(a) must be submitted by an officer of the insurer with a certification in a form prescribed by the commissioner. The certification must state that to the best of the officer's knowledge and belief, the policy, contract form, certificate, enrollment form, application form, printed rider or endorsement form, or form of renewal certificate complies with the applicable provisions of Title 33.   (c) The approval of an insurance policy or annuity contract form, certificate, enrollment form, application form, or other related insurance form by the state of domicile may be waived by the commissioner if the commissioner considers the requirements of subsection (1)(a) unnecessary for the protection of Montana insurance consumers. If the requirement is waived, an insurer shall notify the commissioner in writing within 10 days of disapproval, denial, or withdrawal of approval of a form by the state of domicile.   (2) (a) The filing must be made not less than 60 days before delivery and must be delivered by hand or sent by certified mail with a return receipt requested. The commissioner's office shall mark a filing with the date of receipt by the commissioner's office.   (b) (i) If after 60 days from the date of receipt by the commissioner's office the commissioner has not approved or disapproved the form by a notice pursuant to the provisions in subsection (4), the form is considered approved for all purposes, subject to subsection (2)(c).   (ii) The running of the 60-day period is tolled for a period commencing on the date that the commissioner notifies the insurer of problems or questions and requests additional information from the insurer concerning a form filed pursuant to subsection (1)(a) and ending on the date that the insurer submits its response to the commissioner.   (iii) For purposes of tolling the 60-day period as provided in subsection (2)(b)(ii), the commissioner's request notification may be made electronically.   (c) In a letter separate from the original filing and delivered by hand or sent by certified mail with return receipt requested, the insurer shall notify the commissioner, at least 10 days before the use of the form in the market, that the insurer believes that:   (i) the form has been or will be considered approved; and   (ii) the insurer will begin marketing the form in Montana.   (d) The commissioner's office shall mark a letter received pursuant to subsection (2)(c) with the date of receipt by the commissioner's office.   (3) Approval of a form by the commissioner constitutes a waiver of any unexpired portion of the waiting period.   (4) The commissioner may at any time, after notice and for cause shown, withdraw any approval. Notice by the commissioner disapproving a form or withdrawing a previous approval must state the grounds for disapproval or withdrawal in sufficient detail to inform the insurer of the specific reason or reasons for and the legal authority supporting the disapproval or withdrawal of approval in whole or in part. The disapproval or withdrawal of approval does not take effect unless it is issued after the commissioner has reviewed the form and provided notice to the person who filed the form pursuant to 33-1-314 and this subsection.   (5) After the date of the insurer's receipt of notice of disapproval or withdrawal of approval by the commissioner, the insurer may not deliver the form or issue the form for delivery in Montana.   (6) The insurer may request a hearing, as provided for in 33-1-701, for unresolved disputes regarding a disapproval or a withdrawal of approval.   (7) The commissioner may exempt from the requirements of this section, for so long as the commissioner considers proper, an insurance document, form, or type of document or form to which, in the commissioner's opinion, this section may not practicably be applied or the filing and approval of which are not desirable or necessary for the protection of the public.   (8) This section applies to a form used by a domestic insurer for delivery in a jurisdiction outside Montana if the insurance supervisory official of the jurisdiction informs the commissioner that the form is not subject to approval or disapproval by the official and upon the commissioner's order requiring the form to be submitted to the commissioner for the purpose. The same standards apply to these forms as apply to forms for domestic use.   (9) Section 33-1-502 and this section do not apply to:   (a) reinsurance;   (b) policies or contracts not issued for delivery in Montana or delivered in Montana, except as provided in subsection (8);   (c) ocean marine and foreign trade insurances.   (10) Except as provided in chapter 21, group certificates that are delivered or issued for delivery in Montana for group insurance policies effectuated and delivered outside Montana but covering persons resident in Montana must be filed with the commissioner upon request. The certificates must meet the minimum provisions mandated by Montana if Montana law prevails over conflicting provisions of other state law.   History: En. Secs. 258, 271, Ch. 286, L. 1959; R.C.M. 1947, 40-3701(part), 40-3714; amd. Sec. 1, Ch. 303, L. 1981; amd. Sec. 1, Ch. 518, L. 1983; amd. Sec. 1, Ch. 156, L. 1989; amd. Sec. 2, Ch. 451, L. 1993; amd. Sec. 6, Ch. 379, L. 1995; amd. Sec. 1, Ch. 295, L. 2001; amd. Sec. 1, Ch. 336, L. 2001; amd. Sec. 1, Ch. 409, L. 2005; amd. Sec. 5, Ch. 360, L. 2013.  
  33-1-502. Grounds for disapproval. The commissioner shall disapprove any form filed under 33-1-501 or withdraw any previous approval of a form only if the form:   (1) is in any respect in violation of or does not comply with the laws of this state;   (2) contains or incorporates by reference, where the incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses or exceptions and conditions that deceptively affect the risk purported to be assumed in the general coverage of the contract, including a provision in a casualty insurance form permitting defense costs within limits, except as permitted by the commissioner;   (3) has any title, heading, or other indication of its provisions that is misleading;   (4) is printed or otherwise reproduced in a manner that renders any provision of the form substantially illegible;   (5) contains any provision that violates the provisions of 49-2-309.   History: En. Sec. 272, Ch. 286, L. 1959; R.C.M. 1947, 40-3715; amd. Sec. 1, Ch. 122, L. 1987; amd. Sec. 10, Ch. 699, L. 1991; amd. Sec. 1065, Ch. 56, L. 2009; amd. Sec. 8, Ch. 151, L. 2017.  
  33-1-601. Repealed. Sec. 14, Ch. 60, L. 2019.   History: En. Sec. 63, Ch. 286, L. 1959; R.C.M. 1947, 40-2818(1), (3); amd. Sec. 19, Ch. 227, L. 2001; amd. Sec. 1, Ch. 271, L. 2009.  
  33-1-602. Repealed. Sec. 14, Ch. 60, L. 2019.   History: En. Sec. 63, Ch. 286, L. 1959; R.C.M. 1947, 40-2818(2); amd. Sec. 1066, Ch. 56, L. 2009.  
  33-1-603. Repealed. Sec. 14, Ch. 60, L. 2019.   History: En. Sec. 64, Ch. 286, L. 1959; amd. Sec. 1, Ch. 321, L. 1977; R.C.M. 1947, 40-2819; amd. Sec. 1067, Ch. 56, L. 2009.  
  33-1-604. Service of process -- domestic insurer. (1) Service of process against a domestic insurer must be made pursuant to 35-7-113 or in any other manner permitted by law.   (2) Service of process against a domestic reciprocal insurer must be on the attorney-in-fact or in any other manner permitted by law.   History: En. Sec. 1, Ch. 60, L. 2019.  
  33-1-605. Service of process -- foreign or alien insurer -- appointment of registered agent. (1) A foreign or alien insurer that transacts any business in this state must have a registered agent upon whom any legal process, notice, or demand required or permitted by law to be served upon a company must be served. The agent must be a person who either resides or maintains a business address in this state.   (2) The written appointment of an agent must be provided to the commissioner in a form prescribed by the commissioner, and must, at minimum, include a consent to service of process and the official name and address of the agent and the insurer represented.   (3) The commissioner shall keep a record of the foreign and alien insurers transacting business in Montana and the name and address of their registered agents. This record must be made public in a readily accessible form prescribed by the commissioner.   (4) Service by certified mail to a registered agent listed for an insurer constitutes service of legal process upon that insurer.   (5) An insurer may revoke the appointment of an agent by filing with the commissioner a written appointment of another agent and a statement that the appointment of the former agent is revoked. The authority of the agent whose appointment has been revoked terminates 30 days after the notice is received by the commissioner.   (6) When a foreign or alien insurer ceases to do business in this state, the agent last designated by or acting for the insurer is deemed to continue as agent for it unless a new agent is appointed. Service by certified mail upon any such agent constitutes service of legal process upon the insurer.   (7) Each insurer shall include a fee of $10 with any initial appointment, change of agent appointment, or change of address. The fee is waived for an insurer filing an agent appointment with an original application for a certificate of authority or an annual renewal.   (8) This section does not limit or affect the right to serve any process, notice, or demand upon an insurer in any other manner permitted by law.   (9) When legal process is served pursuant to this section, the insurer must appear, answer, or plead within 30 days, exclusive of the date of mailing, after the date of the certified mailing or be subject to the laws of this state regarding default judgment.   (10) For the purposes of this section:   (a) "certified mail" means a method of sending by common carrier with tracking capability; and   (b) "legal process" means a summons and complaint.   History: En. Sec. 2, Ch. 60, L. 2019.  
  33-1-606. Service of process by commissioner. (1) If a registered agent cannot be found for a foreign or alien insurer doing business in this state, if the agent of record is no longer at the agent's listed address, if the insurer has failed to maintain an agent as required by 33-1-605, or for other good cause shown for which a person's rights may be adversely affected by inability to serve an insurer, a person desiring to serve legal process, notice, or demand may initiate service on the commissioner by providing to the commissioner all of the following:   (a) an affidavit stating that one of the conditions in subsection (1) exists and stating the most recent address of the insurer that the person, after diligent search, has been able to ascertain;   (b) two copies of the document to be served on the insurer; and   (c) a filing fee of $50.   (2) If the requirements of subsection (1) have been met, the commissioner shall promptly serve the legal process, notice, or demand by certified mail to the foreign or alien insurer at its principal office as shown in the commissioner's records. Service by the commissioner upon the insurer by certified mail constitutes service of legal process on that insurer. The commissioner shall maintain a record of each process, notice, or demand the commissioner serves under this section.   (3) When legal process is served pursuant to this section, the insurer must appear, answer, or plead within 30 days, exclusive of the date of mailing, after the date of the certified mailing or be subject to the laws of this state regarding default judgment.   (4) For purposes of this section:   (a) "certified mail" means a method of sending by common carrier with tracking capability; and   (b) "legal process" means a summons and complaint.   History: En. Sec. 3, Ch. 60, L. 2019.  
  33-1-607 through 33-1-610 reserved.  
  33-1-611. Unauthorized Insurers Process Act -- interpretation. (1) Sections 33-1-611 through 33-1-616 constitute and may be cited as the "Unauthorized Insurers Process Act".   (2) Such act shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it.   History: En. Sec. 178, Ch. 286, L. 1959; R.C.M. 1947, 40-3403.  
  33-1-612. Commissioner -- process agent for unauthorized insurer doing business in state. Delivery, effectuation, or solicitation of any insurance contract, by mail or otherwise, within this state by an unauthorized insurer or the performance within this state of any other service or transaction connected with the insurance by or on behalf of the insurer must be considered to constitute an appointment by the insurer of the commissioner and the commissioner's successors in office as its attorney, upon whom may be served all lawful process issued within this state in any action or proceeding against the insurer arising out of any contract or transaction and must be considered to signify the insurer's agreement that any service of process has the same legal effect and validity as personal service of process upon it in this state.   History: En. Sec. 179, Ch. 286, L. 1959; R.C.M. 1947, 40-3404; amd. Sec. 1068, Ch. 56, L. 2009.  
  33-1-613. Service of process -- criteria mandating designation of commissioner. (1) Service of process upon any insurer pursuant to 33-1-612 must be made by delivering to and leaving with the commissioner or some person in apparent charge of the commissioner's office two copies of the process and the payment to the commissioner of the same fee as provided in 33-1-606. The commissioner shall mail by certified mail one of the copies of the process to the defendant at its principal place of business last known to the commissioner and shall keep a record of any process served upon the commissioner. The service of process is sufficient if notice of the service and a copy of the process are sent within 10 days by certified mail by the plaintiff's attorney to the defendant at its last-known principal place of business and the defendant's receipt or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff's attorney showing a compliance with this section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear or within further time that the court may allow.   (2) Service of process in any action, suit, or proceeding must in addition to the manner provided in subsection (1) be valid if:   (a) served upon any person within this state who in this state on behalf of the insurer is:   (i) soliciting insurance;   (ii) making any contract of insurance or issuing or delivering any policies or written contracts of insurance; or   (iii) collecting or receiving any premium for insurance;   (b) a copy of the process is sent within 10 days by certified mail by the plaintiff's attorney to the defendant at the last-known principal place of business of the defendant; and   (c) the defendant's receipt or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff's attorney showing a compliance with this section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear or within further time that the court may allow.   (3) A plaintiff or complainant may not be entitled to a judgment by default under this section until the expiration of 30 days from the date of the filing of the affidavit of compliance.   (4) This section does not limit or abridge the right to serve any process, notice, or demand upon any insurer in any other manner now or later permitted by law.   History: En. 40-3405 by Sec. 180, Ch. 286, L. 1975; R.C.M. 1947, 40-3405; amd. Sec. 1069, Ch. 56, L. 2009; amd. Sec. 4, Ch. 60, L. 2019.  
  33-1-614. Exemptions from service of process provisions. Sections 33-1-611 through 33-1-613 shall not apply to:   (1) surplus lines insurance lawfully effectuated under part 3, chapter 2;   (2) reinsurance; or   (3) any action or proceeding against an unauthorized insurer arising out of:   (a) wet marine and transportation insurance;   (b) insurance on or with respect to subjects located, resident, or to be performed wholly outside this state or on or with respect to vehicles or aircraft owned and principally garaged outside this state;   (c) insurance on property or operations of railroads engaged in interstate commerce; or   (d) insurance on aircraft or cargo of such aircraft or against liability, other than employer's liability, arising out of the ownership, maintenance, or use of such aircraft, where the policy or contract contains a provision designating the commissioner as its attorney for the acceptance of service of lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such policy or where the insurer enters a general appearance in any such action.   History: En. Sec. 181, Ch. 286, L. 1959; R.C.M. 1947, 40-3406; amd. Sec. 23, Ch. 537, L. 1987.  
  33-1-615. Defense of action by unauthorized insurer. (1) Before an unauthorized insurer shall file or cause to be filed any pleading in any action or proceeding instituted against it under 33-1-612 and 33-1-613, such insurer shall:   (a) procure a certificate of authority to transact insurance in this state; or   (b) deposit with the clerk of the court in which such action or proceeding is pending cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in such action. The court may in its discretion make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action or proceeding and that the insurer will pay any final judgment entered therein without requiring suit to be brought on such judgment in the state where such funds or securities are located.   (2) The court in any action or proceeding in which service is made in the manner provided in 33-1-613 may, in its discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (1) above and to defend such action.   (3) Nothing in subsection (1) above is to be construed to prevent an unauthorized insurer from filing a motion to quash or to set aside the service of any process made in the manner provided in 33-1-613 hereof, on the ground either:   (a) that such unauthorized insurer has not done any of the acts enumerated in 33-1-612; or   (b) that the person on whom service was made pursuant to 33-1-613(2) was not doing any of the acts therein enumerated.   History: En. Sec. 182, Ch. 286, L. 1959; R.C.M. 1947, 40-3407.  
  33-1-616. Attorney's fee. In any action against an unauthorized insurer under this Unauthorized Insurers Process Act, if the insurer has failed for 30 days after demand prior to the commencement of the action to make payment in accordance with the terms of the insurance contract and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney's fee and include such fee in any judgment that may be rendered in such action. The fee shall not exceed one-third of the amount which the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall such fee be less than $100. Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.   History: En. Sec. 183, Ch. 286, L. 1959; R.C.M. 1947, 40-3408.  
  33-1-701. Hearings -- discretion -- written demand -- procedure. (1) The commissioner may hold hearings for any purpose within the scope of this code considered necessary. Hearing procedures contained in Title 33, chapter 1, apply only to Title 33, except as otherwise provided.   (2) A person may provide the commissioner with a written demand for a hearing. A written demand must specify the grounds relied upon as a basis for the relief sought at the hearing. If the commissioner does not issue an order granting a person's request for a hearing within 30 days of receiving a request, the hearing is considered refused.   (3) All hearings must be conducted pursuant to the Montana Administrative Procedure Act, as provided in Title 2, chapter 4, part 6. Any supplemental hearing procedures may be adopted by administrative rule.   History: En. Sec. 39, Ch. 286, L. 1959; R.C.M. 1947, 40-2720; amd. Sec. 1, Ch. 331, L. 1999; amd. Sec. 20, Ch. 227, L. 2001; amd. Sec. 6, Ch. 63, L. 2015.  
  33-1-702. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 40, Ch. 286, L. 1959; R.C.M. 1947, 40-2721.  
  33-1-703. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 41, Ch. 286, L. 1959; R.C.M. 1947, 40-2722.  
  33-1-704. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 42, Ch. 286, L. 1959; R.C.M. 1947, 40-2723(1) thru (5); amd. Sec. 7, Ch. 198, L. 1979; amd. Sec. 32, Ch. 457, L. 1987; amd. Sec. 32, Ch. 798, L. 1991.  
  33-1-705. Rehearing. Upon written request of a party to a hearing filed with the commissioner within 30 days after any order made pursuant to the hearing has been mailed or delivered to the persons entitled to receive the order, the commissioner may grant a rehearing or reargument of the matters involved in the hearing.   History: En. Sec. 42, Ch. 286, L. 1959; R.C.M. 1947, 40-2723(6); amd. Sec. 7, Ch. 380, L. 2003.  
  33-1-706. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 43, Ch. 286, L. 1959; R.C.M. 1947, 40-2724.  
  33-1-707. Administrative or civil action -- statute of limitations. (1) Unless otherwise provided by law, the department shall commence an administrative or civil action for a violation of the insurance code within 2 years of the date of the violation or within 2 years after the department discovers the violation or, through the use of reasonable diligence, should have discovered the violation, whichever occurs later.   (2) Regardless of when the department discovers a violation or should have discovered a violation through the use of reasonable diligence, the department may not commence an administrative or civil action unless it is brought within 5 years of the date of the violation.   History: En. Sec. 4, Ch. 227, L. 2001; amd. Sec. 13, Ch. 396, L. 2017.  
  33-1-708 through 33-1-710 reserved.  
  33-1-711. Appeals of commissioner's order -- stays -- exceptions. (1) Except as provided in subsection (2), an appeal of the commissioner's order must be filed with the district court in Lewis and Clark County pursuant to the procedures provided for in Title 2, chapter 4, part 7.   (2) Appeals from the suspension or revocation of the certificate of authority of a domestic insurer or of the license of an insurance producer or surplus lines insurance producer may be filed in the district court of the county of Montana that the insurer or producer has its principal place of business or the licensee resides.   (3) Any request for a stay of the commissioner's order must be made within 30 days of filing an appeal in district court.   (4) Costs must be awarded as in civil actions.   (5) This section does not apply to appeals for matters covered by Title 33, chapter 16.   History: En. Sec. 44, Ch. 286, L. 1959; R.C.M. 1947, 40-2725; amd. Sec. 1, Ch. 119, L. 1987; amd. Sec. 24, Ch. 537, L. 1987; amd. Sec. 8, Ch. 713, L. 1989; amd. Sec. 1, Ch. 798, L. 1991; amd. Sec. 21, Ch. 227, L. 2001.  
  33-1-801. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:   (1) "Enrollee" means the individual to whom a health care service is provided or will be provided under a health plan.   (2) "Health care provider" or "provider" means a health care professional or facility.   (3) "Health carrier" means an entity that is subject to the insurance laws and rules of this state and that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. The term includes a disability insurer, health maintenance organization, or a health service corporation or other entity providing a health benefit plan.   (4) "Health plan" or "health benefit plan" means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.   (5) "Managed care organization" means an entity that manages, owns, contracts with, or employs health care providers to provide health care services under a health plan. The term includes a health maintenance organization, as defined in 33-31-102, and an entity that does not itself provide health plans.   (6) "Medical communication" means:   (a) a communication made by a health care provider to an enrollee or to the guardian or other legal representative of an enrollee receiving health care services from the provider:   (i) concerning the mental or physical health care needs or treatment of the enrollee and the provisions, terms, or requirements of the health plan or another health plan relating to the needs or treatment of the enrollee; and   (ii) including a communication concerning:   (A) a test, consultation, or treatment option and a risk or benefit associated with the test, consultation, or option;   (B) variation among health care providers and health care facilities, as defined in 50-5-101, in experience, quality of health care services, or health outcomes;   (C) the basis or standard for the decision of the enrollee's health carrier or managed care organization to authorize or deny a health care service;   (D) the process used by the enrollee's health carrier or managed care organization to determine whether to authorize or deny a health care service; or   (E) a financial incentive or disincentive provided by the enrollee's health carrier or managed care organization to a health care provider to authorize or deny a health care service;   (b) a communication made by a health care provider to another health care provider, an employee or contractor of the enrollee's managed care organization, or an employee of the health carrier advocating a particular method of treatment on behalf of an enrollee.   History: En. Sec. 2, Ch. 527, L. 1997.  
  33-1-802. Gag clauses and other action affecting medical communications prohibited -- exceptions. (1) A health carrier or managed care organization may not by an oral or written contract, by an oral or written direction or requirement, or by a financial inducement or penalty prohibit a provider from making or interfere with a provider making a medical communication to an enrollee. A contract, direction, requirement, or financial inducement or penalty violating this subsection is void.   (2) Subsection (1) does not apply to:   (a) an oral or written contract, direction, requirement, or financial inducement or penalty prohibiting a provider from disclosing a trade secret, as defined in 30-14-402, to the same extent as other employees or contractors of the health carrier or managed care organization are prohibited from disclosing the trade secret;   (b) an oral or written contract, direction, requirement, or financial inducement or penalty prohibiting a health care provider from referring an enrollee to another health plan or managed care organization in which the provider making the referral has a direct financial interest; and   (c) the terms of an oral or written contract mutually agreed upon by a health carrier or managed care organization and a provider requiring the provider to participate in and cooperate with all programs, policies, and procedures implemented by the health carrier or managed care organization to ensure, review, or improve the quality of health care.   History: En. Sec. 3, Ch. 527, L. 1997.  
  33-1-803. Sanction because of medical communication prohibited. A health carrier or managed care organization may not take any of the following actions with regard to a health care provider because the provider made a medical communication to an enrollee or to the guardian or legal representative of the enrollee:   (1) terminate an agreement between the health carrier or managed care organization and the health care provider to provide health care services;   (2) reduce compensation to the provider;   (3) demote the provider in regard to relative seniority within the managed care organization;   (4) transfer the provider to other duties within the managed care organization;   (5) deny the provider admitting or other privileges; or   (6) take other action against the provider in retaliation for a medical communication made by the provider to an enrollee.   History: En. Sec. 4, Ch. 527, L. 1997.  
  33-1-804. Civil penalty -- civil action for collection of penalty. (1) A health carrier or a managed care organization violating 33-1-802 or 33-1-803 is subject to a civil penalty, as provided in 33-1-317, for each violation. Each day of violation constitutes a separate violation for the purposes of this section.  (2) In addition to other enforcement methods provided by law, the commissioner may bring a civil action in the district court in the county in which the violation occurred to collect the civil penalty provided for in subsection (1) from a person violating a provision of this part. If the violation occurred in more than one county, any county in which the violation occurred is a proper venue for a civil action. An amount collected by the commissioner pursuant to this section must be deposited in the general fund.   History: En. Sec. 5, Ch. 527, L. 1997; amd. Sec. 15, Ch. 535, L. 2021. 
  33-10-101. Short title, purpose, scope, and construction. (1) This part shall be known and may be cited as the "Montana Insurance Guaranty Association Act".   (2) The purpose of this part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers.   (3) This part shall apply to all kinds of direct insurance, except life, title, surety, disability, credit, mortgage guaranty, and ocean marine insurance.   (4) This part shall be liberally construed to effect the purpose under subsection (2) which shall constitute an aid and guide to interpretation.   History: En. Secs. 1, 2, 3, 4, Ch. 63, L. 1971; R.C.M. 1947, 40-5701, 40-5702, 40-5703, 40-5704; amd. Sec. 3, Ch. 139, L. 1987.  
  33-10-102. Definitions. As used in this part, the following definitions apply:   (1) "Association" means the Montana insurance guaranty association created under 33-10-103.   (2) (a) "Covered claim" means an unpaid claim, including one for unearned premiums, that arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this part applies issued by an insurer, if the insurer becomes an insolvent insurer after July 1, 1971, and:   (i) the claimant or insured is a resident of this state at the time of the insured event; or   (ii) the property from which the claim arises is permanently located in this state.   (b) Covered claim does not include any amount:   (i) awarded as punitive or exemplary damages;   (ii) sought as a return of premium under a retrospective rating plan; or   (iii) due a reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries, reinsurance recoveries, contribution, or indemnification. A reinsurer, insurer, insurance pool, or underwriting association may not assert a claim for any amount against the insured of the insolvent insurer other than to the extent that the claim exceeds the policy limits of the insolvent insurer's policy.   (3) "Insolvent insurer" means an insurer:   (a) authorized to transact insurance in this state either at the time the policy was issued or when the insured event occurred; and   (b) against whom an order of liquidation has been entered with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile.   (4) "Member insurer" means a person who:   (a) writes any kind of insurance to which this part applies under 33-10-101(3), including the exchange of reciprocal or interinsurance contracts; and   (b) is licensed to transact insurance in this state.   (5) (a) "Net direct written premiums" means direct gross premiums written in this state on insurance policies to which this part applies, less return premiums on the policies and dividends paid or credited to policyholders of policies to which this part applies.   (b) Net direct written premiums does not include premiums on contracts between insurers or reinsurers.   (6) "Person" means any individual, corporation, partnership, association, or voluntary organization.   History: En. Sec. 5, Ch. 63, L. 1971; R.C.M. 1947, 40-5705(1), (3) thru (7); amd. Sec. 24, Ch. 472, L. 1999; amd. Sec. 35, Ch. 227, L. 2001; amd. Sec. 17, Ch. 380, L. 2003.  
  33-10-103. Creation of the association. There is created a nonprofit unincorporated legal entity to be known as the Montana insurance guaranty association. All insurers defined as member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under a plan of operation established and approved under 33-10-106 and shall exercise its powers through a board of directors established under 33-10-104.   History: En. Sec. 6, Ch. 63, L. 1971; R.C.M. 1947, 40-5706.  
  33-10-104. Board of directors -- commissioner approval -- compensation. (1) The board of directors of the association consists of not less than seven or more than nine persons serving terms as established in the plan of operation. Two of the members must be appointed from the public at large by the commissioner. The other members of the board must be member insurers and must be selected by member insurers subject to the approval of the commissioner. Vacancies on the board must be filled for the remaining period of the term in the same manner as initial appointments.   (2) In approving selections to the board, the commissioner shall consider among other things whether all member insurers are fairly represented.   (3) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors.   History: En. Sec. 7, Ch. 63, L. 1971; R.C.M. 1947, 40-5707(part); amd. Sec. 1, Ch. 65, L. 1995; amd. Sec. 10, Ch. 169, L. 2013.  
  33-10-105. General powers and duties. (1) Subject to subsection (2), the association:   (a) (i) is obligated to the extent of the covered claims existing prior to the determination of insolvency and arising within 30 days after the determination of insolvency or before the policy expiration date if less than 30 days after the determination or before the insured replaces the policy or causes its cancellation if the insured does so within 30 days of the determination;   (ii) is obligated under subsection (1)(a)(i) only for that amount of each covered claim that does not exceed $300,000, except that:   (A) the association shall pay an amount not exceeding $10,000 for each policy for a covered claim for the return of unearned premium; and   (B) the association shall pay the full amount of any covered claim arising out of a workers' compensation or excess workers' compensation policy; and   (iii) is not obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises;   (b) is considered the insurer to the extent of its obligation on the covered claims and to that extent has all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent;   (c) shall investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association's obligation and deny all other claims and may review settlements, releases, and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which the settlements, releases, and judgments may be properly contested;   (d) shall notify persons as the commissioner directs under 33-10-109(2)(a), including the department of labor and industry for workers' compensation claims;   (e) shall handle claims through its employees or through one or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the commissioner, but the designation may be declined by a member insurer.   (f) shall reimburse each servicing facility for obligations of the association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the association and shall pay the other expenses of the association authorized by this part.   (2) (a) Except as provided in subsection (2)(b), a covered claim may not include a claim filed with the association or a liquidator for protection under the insured's policy for losses incurred but not reported and may not include a claim filed with the association after the earlier of:   (i) 36 months after the date of the order of liquidation; or   (ii) the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer.   (b) (i) If the claimant learns that the claimant's condition resulted from an occupational disease compensable under Title 39, chapter 71, within 36 months of the order of liquidation or the final date set by the court for the filing of claims against the liquidator, the claimant shall file a claim, which must be paid under the terms of subsection (1)(a). If the claimant does not learn of a compensable condition under Title 39, chapter 71, until after the time specified in either subsection (2)(a)(i) or (2)(a)(ii) has expired, the claimant shall file a claim with the association within 1 year from the date the claimant knew or should have known that the claimant's condition resulted from an occupational disease.   (ii) Notice by a claimant or insurer to the department of labor and industry of a workers' compensation claim or an occupational disease claim pursuant to Title 39, chapter 71, constitutes notice to the liquidator for the purposes of workers' compensation or occupational disease claims.   (3) The association may:   (a) employ or retain persons necessary to handle claims and perform other duties of the association;   (b) borrow funds necessary to effect the purposes of this part in accord with the plan of operation;   (c) sue or be sued;   (d) negotiate and become a party to contracts necessary to carry out the purpose of this part;   (e) perform other acts necessary or proper to effectuate the purpose of this part;   (f) refund to the member insurers in proportion to the contribution of each member insurer to the association that amount by which the assets of the association exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the association exceed the liabilities of the association as estimated by the board of directors for the coming year.   History: En. Sec. 8, Ch. 63, L. 1971; R.C.M. 1947, 40-5708(part); amd. Sec. 53, Ch. 596, L. 1993; amd. Sec. 1, Ch. 29, L. 2005; amd. Sec. 1, Ch. 195, L. 2005; amd. Sec. 41, Ch. 416, L. 2005; amd. Sec. 13, Ch. 63, L. 2015.  
  33-10-106. Plan of operation -- delegation to other organization. (1) (a) The association shall submit to the commissioner a plan of operation and any amendments to the plan of operation that are necessary or suitable to ensure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments to the plan become effective upon approval in writing by the commissioner.   (b) If at any time the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate reasonable rules that are necessary or advisable to effectuate the provisions of this part. The rules continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.   (2) All member insurers shall comply with the plan of operation.   (3) The plan of operation must:   (a) establish the procedures under which all the powers and duties of the association under 33-10-105 and 33-10-116 will be performed;   (b) establish procedures for handling assets of the association;   (c) establish the amount and method of reimbursing members of the board of directors under 33-10-104;   (d) establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims;   (e) establish regular places and times for meetings of the board of directors;   (f) establish procedures for records to be kept of all financial transactions of the association, its insurance producers, and the board of directors;   (g) provide that any member insurer aggrieved by any final action or decision of the association may appeal to the commissioner within 30 days after the action or decision;   (h) establish the procedures under which selections for the board of directors will be submitted to the commissioner;   (i) contain additional provisions necessary or proper for the execution of the powers and duties of the association.   (4) The plan of operation may provide that any or all powers and duties of the association, except those under 33-10-105(3)(b) and 33-10-116, are delegated to a corporation, association, or other organization that performs or will perform functions similar to those of the association or its equivalent in two or more states. A corporation, association, or organization must be reimbursed as a servicing facility would be reimbursed and must be paid for its performance of any other functions of the association. A delegation under this subsection takes effect only with the approval of both the board of directors and the commissioner and may be made only to a corporation, association, or organization that extends protection not substantially less favorable and effective than that provided by this part.   History: En. Sec. 9, Ch. 63, L. 1971; R.C.M. 1947, 40-5709(part); amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 35, Ch. 44, L. 2007.  
  33-10-107. Tax exemption. The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied on real or personal property.   History: En. Sec. 15, Ch. 63, L. 1971; R.C.M. 1947, 40-5715.  
  33-10-108. Prevention of insolvencies -- directors' and commissioner's action. (1) It is the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating that any member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public.   (2) The board of directors may, upon majority vote, request that the commissioner order an examination of any member insurer that the board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within 30 days of the receipt of the request, the commissioner shall begin the examination. The examination may be conducted as a national association of insurance commissioners examination or may be conducted by persons that the commissioner designates. The cost of the examination must be paid by the association, and the examination report must be treated as are other examination reports. The examination report may not be released to the board of directors prior to its release to the public, but this does not preclude the commissioner from complying with subsection (3). The commissioner shall notify the board of directors when the examination is completed. The request for an examination must be kept on file by the commissioner, but it may not be open to public inspection prior to the release of the examination report to the public.   (3) It is the duty of the commissioner to report to the board of directors when the commissioner has reasonable cause to believe that any member insurer examined or being examined at the request of the board of directors may be insolvent or in a financial condition hazardous to the policyholders or the public.   (4) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or supervision of any member insurer. The reports and recommendations may not be considered public documents.   (5) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of insurer insolvencies.   (6) The board of directors shall, at the conclusion of any insurer insolvency in which the association was obligated to pay covered claims, prepare a report on the history and causes of the insolvency, based on the information available to the association, and submit the report to the commissioner.   History: En. Sec. 13, Ch. 63, L. 1971; R.C.M. 1947, 40-5713; amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 1177, Ch. 56, L. 2009.  
  33-10-109. Notice of insolvencies -- suspension -- other powers and duties of commissioner. (1) The commissioner shall:   (a) notify the association of the existence of an insolvent insurer not later than 3 days after the commissioner receives notice of the determination of the insolvency;   (b) upon request of the board of directors, provide the association with a statement of the net direct written premiums of each member insurer.   (2) The commissioner may:   (a) require that the association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this part. The notification must be by mail at their last-known addresses, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation is sufficient.   (b) suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a fine on any member insurer that fails to pay an assessment when due. The fine may not exceed 5% of the unpaid assessment a month, except that a fine may not be less than $100 a month.   (c) revoke the designation of any servicing facility if the commissioner finds claims are being handled unsatisfactorily.   (3) Any final action or order of the commissioner under this part must be subject to judicial review in a court of competent jurisdiction.   History: En. Sec. 10, Ch. 63, L. 1971; R.C.M. 1947, 40-5710; amd. Sec. 1178, Ch. 56, L. 2009.  
  33-10-110. Immunity. There is not any liability on the part of and a cause of action of any nature may not be brought against any member insurer or its agents or employees, the association or the association's agents or employees, the board of directors, or the commissioner or the commissioner's representatives for any action taken by them in the performance of their powers and duties under this part.   History: En. Sec. 17, Ch. 63, L. 1971; R.C.M. 1947, 40-5717; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 2, Ch. 29, L. 2005.  
  33-10-111. Stay of proceedings -- reopening of default judgments. (1) All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state must be stayed for 6 months from the date the insolvency is determined or an ancillary proceeding is instituted in the state, whichever is later, or must be stayed for any additional time as may be determined by the court in order to permit proper defense by the association of all pending causes of action.   (2) As to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the association either on its own behalf or on behalf of the insured may apply to have the judgment, order, decision, verdict, or finding set aside by the same court or administrator that made the judgment, order, decision, verdict, or finding and must be permitted to defend against the claim on the merits.   History: En. Sec. 18, Ch. 63, L. 1971; R.C.M. 1947, 40-5718; amd. Sec. 54, Ch. 596, L. 1993.  
  33-10-112. Examination of association. The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the commissioner.   History: En. Sec. 14, Ch. 63, L. 1971; R.C.M. 1947, 40-5714.  
  33-10-113. Claims -- notice. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the association or its insurance producer, and a list of such claims shall be periodically submitted to the association or similar organization in another state by the receiver or liquidator.   History: En. Sec. 9, Ch. 63, L. 1971; R.C.M. 1947, 40-5709(part); amd. Sec. 1, Ch. 713, L. 1989.  
  33-10-114. Claims -- effect as to insured and receiver. (1) Any person recovering under this part is considered to have assigned the person's rights under the policy to the association to the extent of the person's recovery from the association. Every insured or claimant seeking the protection of this part shall cooperate with the association to the same extent that the person would have been required to cooperate with the insolvent insurer. The association does not have a cause of action against the insured of the insolvent insurer for any sums it has paid out except causes of action that the insolvent insurer would have had if the sums had been paid by the insolvent insurer. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the association may not operate to reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments.   (2) The association has the right to recover from the following persons the amount of any "covered claim" paid on behalf of the person pursuant to this part:   (a) any insured whose net worth, on December 31 of the year preceding the date the insurer becomes an insolvent insurer, exceeds $50 million and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part; and   (b) any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part.   (3) The receiver, liquidator, or statutory successor of an insolvent insurer is bound by settlements of covered claims by the association or a similar organization in another state. The court having jurisdiction shall grant the claims priority equal to that which the claimant would have been entitled in the absence of this part against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims must be accorded the same priority as the liquidator's expenses.   (4) The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association which shall preserve the rights of the association against the assets of the insolvent insurer.   History: En. Sec. 11, Ch. 63, L. 1971; R.C.M. 1947, 40-5711; amd. Sec. 55, Ch. 596, L. 1993.  
  33-10-115. Recovery -- sequence -- nonduplication. (1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer that is also a covered claim must be required to exhaust the person's right under the policy. Any amount payable on a covered claim under this part must be reduced by the amount of any recovery under the insurance policy.   (2) Any person having a claim that may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured, except that if it is a first party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property, and if it is a workers' compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this part must be reduced by the amount of recovery from any other insurance guaranty association or its equivalent.   History: En. Sec. 12, Ch. 63, L. 1971; R.C.M. 1947, 40-5712; amd. Sec. 1179, Ch. 56, L. 2009.  
  33-10-116. Assessment. (1) The association shall assess insurers amounts necessary to pay the obligations of the association under 33-10-105(1)(a) subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of examinations under 33-10-108, and other expenses authorized by this part.   (2) The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bear to the net direct written premiums of all member insurers for the preceding calendar year. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year an amount greater than 2% of that member insurer's net direct written premiums for the preceding calendar year.   (3) If the maximum assessment together with the other assets of the association does not provide in any one year an amount sufficient to make all necessary payments, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available.   (4) The association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance.   (5) Each member insurer may set off against any assessment authorized payments made on covered claims and expenses incurred in the payment of such claims by the member insurer.   History: En. Sec. 8, Ch. 63, L. 1971; R.C.M. 1947, 40-5708(1)(c).  
  33-10-117. Recognition of assessments in rates. The rates and premiums charged for insurance policies to which this part applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the association by the member insurer less any amounts returned to the member insurer by the association, and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer.   History: En. Sec. 16, Ch. 63, L. 1971; R.C.M. 1947, 40-5716.  
  33-10-201. Short title, purpose, and construction. (1) This part may be cited as the "Montana Life and Health Insurance Guaranty Association Act".   (2) The purpose of this part is to protect policyowners, insureds, beneficiaries, annuitants, payees, and assignees of life insurance policies, health insurance policies, annuity contracts, and supplemental contracts, subject to certain limitations, against failure in the performance of contractual obligations due to the impairment or insolvency of the insurer issuing the policies or contracts.   (3) To provide this protection:   (a) an association of insurers is created to enable the guaranty of payment of benefits and of continuation of coverages;   (b) members of the association are subject to assessment to provide funds to carry out the purpose of this part; and   (c) the association is authorized to assist the commissioner, in the prescribed manner, in the detection and prevention of insurer impairments or insolvencies.   (4) This part must be liberally construed to effect the purpose under subsections (2) and (3), which constitute an aid and guide to interpretation.   (5) This part may not be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.   History: En. 40-5801 thru 40-5804, 40-5814 by Secs. 1 thru 4, 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5801, 40-5802, 40-5803, 40-5804, 40-5814(1); amd. Sec. 1, Ch. 576, L. 1987; amd. Sec. 56, Ch. 596, L. 1993; amd. Sec. 39, Ch. 379, L. 1995; amd. Sec. 3, Ch. 195, L. 2003; amd. Sec. 1, Ch. 27, L. 2011.  
  33-10-202. Definitions. As used in this part, the following definitions apply:   (1) "Account" means either of the two accounts created under 33-10-203.   (2) "Association" means the Montana life and health insurance guaranty association created under 33-10-203.   (3) "Authorized assessment" or "authorized" when used in the context of assessments means a specified amount of money authorized for collection from member insurers by a resolution of the board of directors established in 33-10-204. The authorized assessment may be called for immediately or in the future. The assessment is authorized when the board passes the resolution.   (4) "Benefit plan" means a benefit plan for a specific employee, union, or association of natural persons.   (5) "Called", when used in the context of assessments, means that the association has issued a notice to member insurers requiring that an authorized assessment be paid within the timeframe set forth within the notice. An authorized assessment becomes a called assessment when the association mails the notice to member insurers.   (6) "Contractual obligation" means an obligation under any of the following for which coverage is provided in this part:   (a) a policy or contract;   (b) a certificate under a group policy or contract; or   (c) a portion of a policy or contract or a portion of a certificate.   (7) "Covered policy" means any policy or contract or portion of a policy or contract for which coverage is provided within the scope of this part.   (8) "Extracontractual claims" includes but is not limited to those claims relating to bad faith in the payment of claims, punitive or exemplary damages, or attorney fees and costs.   (9) "Health insurance coverage" has the same meaning as provided in 33-22-140, except that the term does not include excepted benefits as defined in 33-22-140.   (10) "Impaired insurer" means a member insurer that is not an insolvent insurer and that is placed under an order of rehabilitation or supervision by a court of competent jurisdiction.   (11) "Insolvent insurer" means a member insurer that is placed under an order of liquidation by a court of competent jurisdiction upon a finding of insolvency.   (12) "Long-term care insurance" has the same meaning as provided in 33-22-1107.   (13) (a) "Member insurer" means an insurer, health service corporation, or health maintenance organization that is licensed or that holds a certificate of authority to transact any kind of insurance in this state for which coverage is provided under this part and includes any insurer, health service corporation, or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn.   (b) The term does not include:   (i) a hospital or medical service organization, whether for profit or not for profit;   (ii) a fraternal benefit society;   (iii) a mandatory state pooling plan;   (iv) a mutual assessment company or any other person that operates on an assessment basis;   (v) an insurance exchange;   (vi) a multiple employer welfare arrangement as defined in 29 U.S.C. 1002;   (vii) an organization that has a certificate or license limited to the issuance of charitable gift annuities; or   (viii) an entity similar to any of the entities listed in subsections (13)(b)(i) through (13)(b)(vii).   (14) "Moody's corporate bond yield average" means the monthly average corporates as published by Moody's investors service, inc., or its successor.   (15) (a) "Owner", "contract owner", and "policyowner" mean the person who is identified as the legal owner under the terms of a policy or contract or who is vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and who is properly recorded as the owner on the books of the insurer.   (b) The terms do not include a person with a mere beneficial interest in a policy or a contract.   (16) "Person" means any individual, corporation, limited liability company, partnership, association, governmental body or entity, or voluntary organization.   (17) "Plan sponsor" means:   (a) the employer in the case of a benefit plan established or maintained by a single employer;   (b) the employee organization in the case of a benefit plan established or maintained by an employee organization; or   (c) in the case of a benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan.   (18) (a) "Premiums" means the amount or consideration received on covered policies or contracts less return premiums, considerations, and deposits, and less dividends and experience credits.   (b) The term does not include:   (i) amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided pursuant to this part, except that an assessable premium may not be reduced based on 33-10-224(2)(b) relating to interest limitations and 33-10-224(3)(b) relating to one individual, one participant, and one contract owner;   (ii) premiums in excess of $5 million on an unallocated annuity contract not issued under a governmental retirement benefit plan or the plan's trustee established under section 401, 403(b), or 457 of the Internal Revenue Code; or   (iii) premiums in excess of $5 million with respect to multiple nongroup policies of life insurance owned by one owner, whether the policyowner is an individual, firm, corporation, or other person and whether the persons insured are officers, managers, employees, or other persons, regardless of the number of policies or contracts held by the owner.   (19) "Principal place of business" means:   (a) in the case of a plan sponsor, the state in which more than 50% of the participants in the benefit plan are employed;   (b) if 50% of the participants of a benefit plan are not employed in a single state and for a person other than an individual, the single state in which the individuals who establish policies for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, as determined by the association in its reasonable judgment by considering the following factors:   (i) the state in which the primary executive and administrative headquarters is located;   (ii) the state in which the principal office of the chief executive officer is located;   (iii) the state in which the board of directors or similar governing persons conduct its meetings;   (iv) the state in which the executive or management committee of the board of directors or similar governing person or persons conduct the majority of their meetings;   (v) the state from which the management of the overall operations is directed; and   (vi) in the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors; or   (c) with respect to a plan sponsor defined in subsection (17)(c), the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of specific or clear designation of a principal place of business, is the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.   (20) "Receivership court" means the court in the insolvent or impaired insurer's state that has jurisdiction over the supervision, rehabilitation, or liquidation of the insurer.   (21) "Resident" means a person to whom a contractual obligation is owed and who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired insurer or a court order that determines a member insurer to be an insolvent insurer. A person may be a resident of only one state, and in the case of a person other than an individual, the person is a resident of the state where its principal place of business is located. Citizens of the United States who are either residents of foreign countries or residents of the possessions, territories, or protectorates of the United States and who do not have an association similar to the association created by this part must be considered residents of the state of domicile of the insurer that issued the policies or contracts.   (22) "State" means a state, the District of Columbia, the Commonwealth of Puerto Rico, or a United States possession, territory, or protectorate.   (23) "Structured settlement annuity" means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant.   (24) "Supplemental contract" means a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or a life, health, or annuity contract.   (25) "Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of annuity benefits guaranteed to an individual by the insurer under the contract or certificate.   History: En. 40-5805 by Sec. 5, Ch. 245, L. 1974; R.C.M. 1947, 40-5805(1), (2), (4) thru (10); amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 2, Ch. 576, L. 1987; amd. Sec. 57, Ch. 596, L. 1993; amd. Sec. 40, Ch. 379, L. 1995; amd. Sec. 145, Ch. 42, L. 1997; amd. Sec. 20, Ch. 531, L. 1997; amd. Sec. 4, Ch. 195, L. 2003; amd. Sec. 2, Ch. 27, L. 2011; amd. Sec. 1, Ch. 25, L. 2019.  
  33-10-203. Creation of association -- accounts -- supervision by commissioner. (1) There is created a nonprofit legal entity to be known as the Montana life and health insurance guaranty association. A member insurer must be and remain a member of the association as a condition of the member's authority to transact insurance in this state. The association shall perform functions under the plan of operation established and approved under 33-10-216 and shall exercise powers through a board of directors established under 33-10-204.   (2) For purposes of administration and assessment, the association shall maintain two accounts:   (a) the health insurance account; and   (b) the life insurance and annuity account that includes the following subaccounts:   (i) the life insurance account;   (ii) the annuity account that includes contracts owned by a governmental retirement plan or the plan's trustee established under section 401, 403(b), or 457 of the Internal Revenue Code, but does not otherwise include unallocated annuities; and   (iii) the unallocated annuity account that must exclude unallocated annuity contracts owned by a governmental retirement benefit plan or the plan's trustee established under section 401, 403(b), or 457 of the Internal Revenue Code.   (3) The association is under the immediate supervision of the commissioner and is subject to the applicable provisions of the insurance laws of this state.   History: En. 40-5806 by Sec. 6, Ch. 245, L. 1974; R.C.M. 1947, 40-5806; amd. Sec. 58, Ch. 596, L. 1993; amd. Sec. 5, Ch. 195, L. 2003; amd. Sec. 9, Ch. 469, L. 2005.  
  33-10-204. Board of directors -- commissioner approval -- compensation. (1) The board of directors of the association consists of seven members serving terms as established in the plan of operation. Two of the members must be appointed from the public at large by the commissioner. The other members of the board must be selected by member insurers subject to the approval of the commissioner. Vacancies on the board must be filled for the remaining period of the term in the manner described in the plan of operation. In approving selections or in appointing members to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.   (2) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors, but members of the board may not otherwise be compensated by the association for their services. However, any designated representatives of members of the board who are not full-time employees of the member insurers that designated them may receive reasonable compensation for their services on the board of directors upon annual approval by the members of the association.   History: En. 40-5807 by Sec. 7, Ch. 245, L. 1974; R.C.M. 1947, 40-5807(part); amd. Sec. 3, Ch. 576, L. 1987; amd. Sec. 2, Ch. 65, L. 1995.  
  33-10-205. Powers and duties of association. (1) If a member insurer is an impaired insurer, the association, in its discretion and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer and that are approved by the commissioner, may:   (a) guarantee, assume, reissue, reinsure, or cause to be guaranteed, assumed, reissued, or reinsured any or all of the policies or contracts of the impaired insurer; and   (b) provide any money, pledges, loans, notes, guarantees, or other means to effectuate this section and ensure payment of the contractual obligations of the impaired insurer pending action under this section.   (2) If a member insurer is an insolvent insurer, the association, in its discretion, shall do one or more of the following:   (a) (i) guarantee, assume, reissue, or reinsure the policies or contracts of the insolvent insurer, cause the policies or contracts to be guaranteed, assumed, reissued, or reinsured, or ensure payment of the contractual obligations of the insolvent insurer; and   (ii) provide money, pledges, loans, notes, guarantees, or other means reasonably necessary to discharge the association's duties;   (b) provide coverage and benefits with respect to a covered policy or contract for life or health insurance or annuities by:   (i) ensuring payment of benefits that would have been payable under the policies or contracts of the insolvent insurer for claims incurred:   (A) for group policies or contracts by not later than the earlier of the next renewal date, as specified in the policy or contract, or 45 days; or   (B) for nongroup policies, contracts, or annuities by the earlier of the next renewal date, if any, as specified in the policy or contract, or 1 year;   (ii) ensuring payment under subsection (2)(b)(i) not less than 30 days from the date on which the association becomes obligated with respect to the policies or contracts;   (iii) making diligent efforts to provide all known insureds and annuitants for nongroup policies and contracts or group policyowners with respect to group policies 30 days' notice of termination; and   (iv) (A) making available substitute coverage on an individual basis, with respect to nongroup life and health insurance policies and annuities covered by the association, to each known insured or annuitant or owner if other than the insured or annuitant and to an individual formerly insured or formerly an annuitant under a group policy if that individual is not eligible for replacement group coverage. This subsection (2)(b)(iv)(A) must be applied in accordance with the provisions of subsection (2)(b)(iv)(B), as applicable, if the insureds or annuitants had a right under law or if the terminated policy or annuity contained provisions to convert coverage to individual coverage or to continue an individual policy or annuity in force until a specified age or a specified time, during which the insurer had no right to unilaterally make changes in any provision of the policy or annuity or had a right only to make changes in premium by class.   (B) providing the substitute coverage required under subsection (2)(b)(iv)(A) either by issuing an alternative policy as provided in subsection (2)(b)(iv)(C) or reissuing the terminated coverage, as provided in subsection (2)(b)(iv)(D). Any reissued or alternative policy must be offered without requiring evidence of insurability and may not require a waiting period or exclusion that would not have applied under the terminated policy. The association may reinsure any reissued or alternative policy.   (C) submitting alternative policies or contracts adopted by the association to the commissioner for approval. The association may adopt alternative policies of various types for future issuance without regard to any particular impairment or insolvency. Alternative policies must contain at least the minimum statutory provisions required in this state and provide benefits that are not unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates adopted by the association. The premium must be actuarially justified and reflect the amount of insurance to be provided and the age and class of risk of each insured. The premium may not reflect any changes in the health of the insured after the original policy was last underwritten. Alternative policies issued by the association must provide coverage of a type similar to that of the policy issued by the impaired or insolvent insurer, as determined by the association.   (D) setting a premium at a premium different from that charged under the terminated policy if the association elects to reissue terminated coverage. The association shall set the premium in accordance with the amount of insurance provided and the age and class of risk. The premium must be actuarially justified and is subject to approval by the commissioner. A premium may also be set by a court of competent jurisdiction.   (c) cease any of its obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy on the date the coverage or policy is replaced by another similar policy by the policyowner, the insured, or the association; or   (d) ensure the payment or crediting of a rate of interest consistent with 33-10-224(2)(b)(iii) when proceeding under this section with respect to a policy or contract carrying guaranteed minimum interest rates.   (3) Except for claims incurred or any net cash surrender value that may be due in accordance with the provisions of this part, the association's obligation under the policy or contract terminates within 31 days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage for nonpayment of premiums.   (4) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer belong to and are payable at the direction of the association. The association is liable only for unearned premiums due to policyowners or contract owners arising after the entry of the order of liquidation.   (5) If the association fails to act within a reasonable period of time, the commissioner has the powers and duties of the association under this part with respect to a domestic, foreign, or alien insolvent insurer.   (6) (a) In carrying out its duties under subsections (1) through (4), the association may, subject to approval by a court of competent jurisdiction, impose:   (i) permanent policy or contract liens in connection with a guarantee, assumption, or reinsurance agreement if the association finds that:   (A) the amounts that can be assessed under this part are less than the amounts needed to ensure full and prompt performance of the association's duties under this part; or   (B) the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of permanent policy or contract liens to be in the public interest; or   (ii) temporary moratoriums or liens on payments of cash values and policy loans or any other right to withdraw funds held in conjunction with policies or contracts. This subsection (6)(a)(ii) also allows temporary moratoriums or liens on any contractual provisions for deferral of cash or policy loan value.   (b) If the receivership court imposes a temporary moratorium or moratorium charge on payment of cash values or policy loans or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights for the period of the moratorium or moratorium charge imposed by the receivership court. This subsection (6)(b) does not apply to claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.   (7) The association is not liable under this part for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides protection by statute or regulation for residents of this state if that protection is substantially similar to that provided by this part for residents of other states.   (8) In carrying out its duties under this section, the association may, subject to the approval of the commissioner, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed for calculating returns or changes in value. The alternative policy or contract issued under this subsection (8):   (a) must provide in lieu of the index or other external reference in the original policy or contract:   (i) a fixed interest rate;   (ii) payment of dividends within minimum guarantees; or   (iii) a different method for calculating interest or changes in value;   (b) may not contain a requirement for evidence of insurability, a waiting period, or other exclusion that would not have applied under the replaced policy or contract; and   (c) must be substantially similar to the replaced policy or contract in all other material terms.   (9) In addition to other rights provided by law, the association may:   (a) enter into contracts that are necessary or proper to carry out the provisions and purposes of this part;   (b) sue or be sued, including taking any legal actions necessary or proper to recover any unpaid assessments and to settle claims or potential claims against it;   (c) borrow money to effect the purposes of this part. Any notes or other evidence of indebtedness of the association not in default must be legal investments for domestic insurers and may be carried as admitted assets.   (d) employ or retain persons who are necessary to handle the financial transactions of the association and to perform other functions that become necessary or proper under this part;   (e) negotiate and contract with any liquidator, rehabilitator, supervisor, or ancillary receiver to carry out the powers and duties of the association;   (f) take legal action that may be necessary or appropriate to avoid or recover payment of improper claims;   (g) exercise, for the purposes of this part and to the extent approved by the commissioner, the powers of a domestic life or health insurer, but the association may not issue insurance policies or annuity contracts other than those issued to perform its obligations under this part;   (h) organize itself as a corporation or in any other legal form permitted by the laws of the state;   (i) request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this part with respect to the person. The person shall promptly comply with the request.   (j) unless prohibited or otherwise limited by another section in this title and in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage under this part; and   (k) take other necessary or appropriate action to discharge its duties and obligations under this part or to exercise its powers under this part.   (10) The association may render assistance and advice to the commissioner, upon request, concerning rehabilitation, liquidation, payment of claims, continuations of coverage, or the performance of other contractual obligations of any impaired or insolvent insurer.   (11) The association has standing to appear or intervene before any court or agency in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this part or before any court with jurisdiction over any person or property against which the association may have rights through subrogation or otherwise. The association's standing extends to all matters germane to the powers and duties of the association, including but not limited to proposals for reinsuring, modifying, or guaranteeing the covered policies or contracts of the impaired or insolvent insurer and the determination of the covered policies or contracts. The association also has the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or before a court with jurisdiction over any person or property against which the association may have rights through subrogation or otherwise.   (12) The association may join an organization of one or more other state associations of similar purposes to further the purposes and administer the powers and duties of the association.   (13) The board of directors of the association may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this part in an economical and efficient manner.   (14) When the association has arranged or offered to provide the benefits of this part to a covered person under a plan or arrangement that fulfills the association's obligations under this part, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.   (15) Venue in a suit against the association arising under this part is in the first judicial district of this state. The association is not required to give an appeal bond in an appeal that relates to a cause of action arising under this part.   (16) The protection provided by this part does not apply when any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer that is other than this state.   History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(7), (8), (11); amd. Sec. 6, Ch. 195, L. 2003; amd. Sec. 3, Ch. 27, L. 2011; amd. Sec. 2, Ch. 25, L. 2019.  
  33-10-206. Records of meetings and negotiations. Records must be kept of all negotiations and meetings of the board of directors held to discuss the activities of the association in carrying out its powers and duties under this part. Records of negotiations or meetings pertaining to an impaired or insolvent insurer may be made public only upon the termination of a liquidation, rehabilitation, or supervision proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. This section does not limit the duty of the association to render a report of its activities under 33-10-209.   History: En. 40-5814 by Sec. 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5814(2); amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 7, Ch. 195, L. 2003.  
  33-10-207. Immunity. There is not any liability on the part of and a cause of action of any nature may not be brought against any member insurer or its agents or employees, the association or the association's agents or employees, members of the board of directors, or the commissioner or the commissioner's representatives for any action taken by them in the performance of their powers and duties under this part.   History: En. 40-5818 by Sec. 18, Ch. 245, L. 1974; R.C.M. 1947, 40-5818; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 8, Ch. 195, L. 2003; amd. Sec. 18, Ch. 380, L. 2003.  
  33-10-208. Tax exemptions. The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied on real property.   History: En. 40-5816 by Sec. 16, Ch. 245, L. 1974; R.C.M. 1947, 40-5816.  
  33-10-209. Examination of the association -- annual report. The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit to the commissioner, not later than May 1 of each year, a financial report for the preceding calendar year in a form approved by the commissioner and a report of its activities during the preceding calendar year.   History: En. 40-5815 by Sec. 15, Ch. 245, L. 1974; R.C.M. 1947, 40-5815.  
  33-10-210. Unfair trade practice -- notice to policyowners. (1) It is a prohibited unfair trade practice for any person to make use in any manner of the protection afforded by this part in the sale of insurance.   (2) The association shall prepare a summary document, complying with subsection (3) and describing the general purposes and current limitations of this part. The document must be submitted to the commissioner for approval. Sixty days after receiving approval, a member insurer may not deliver a policy or contract described in 33-10-224(2)(a) to a policyowner or contract owner unless the document is delivered to the policyowner or contract owner prior to or at the time of delivery of the policy or contract. The document must be available upon request by a policyowner. The distribution, delivery, contents, or interpretation of this document does not mean that either the policy or the contract or the owner of the policy or contract would be covered in the event of the impairment or insolvency of a member insurer. The description document must be revised by the association as amendments to this part may require. Failure to receive this document does not give the policyowner, contract owner, certificate holder, or insured any greater rights than those stated in this part.   (3) The document prepared under subsection (2) must contain a clear and conspicuous disclaimer on its face. The commissioner shall promulgate a rule establishing the form and content of the disclaimer. The disclaimer must:   (a) state the name and address of the life and health insurance guaranty association and insurance department;   (b) prominently warn the policyowner or contract owner that the life and health insurance guaranty association may not cover the policy or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in the state;   (c) state that the insurer and its insurance producers are prohibited by law from using the existence of the life and health insurance guaranty association for the purpose of sales, solicitation, or inducement to purchase any form of insurance;   (d) emphasize that the policyowner or contract owner should not rely on coverage under the life and health insurance guaranty association when selecting an insurer;   (e) provide other information as directed by the commissioner.   History: En. 40-5814 by Sec. 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5814(5); amd. Sec. 59, Ch. 596, L. 1993; amd. Sec. 9, Ch. 195, L. 2003; amd. Sec. 4, Ch. 27, L. 2011; amd. Sec. 3, Ch. 25, L. 2019.  
  33-10-211 through 33-10-214 reserved.  
  33-10-215. Duties and powers of commissioner. (1) In addition to the duties and powers enumerated elsewhere in this part, the commissioner shall:   (a) notify the board of directors of the existence of an impaired or insolvent insurer after an order of impairment or insolvency is entered or the commissioner receives notice of impairment or insolvency;   (b) upon request of the board of directors, provide the association with a statement of the premiums in the appropriate states for each member insurer;   (c) when an impairment or insolvency is declared and the amount of the impairment or insolvency is determined, serve a demand upon the impaired or insolvent insurer to make good the impairment or insolvency within a reasonable time. Notice to the impaired or insolvent insurer constitutes notice to its shareholders, if any. The failure of the insurer to promptly comply with the demand does not excuse the association from the performance of its powers and duties under this part.   (2) The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a fine on any member insurer that fails to pay an assessment when due. The fine may not exceed 5% of the unpaid assessment per month, except that the fine may not be less than $100 per month.   (3) A final action of the board of directors may be appealed to the commissioner by a member insurer if the appeal is taken within 60 days of the member insurer's receipt of notice of the final action being appealed. A final action or order of the commissioner is subject to judicial review in a court of competent jurisdiction in accordance with the laws of this state that apply to the actions or orders of the commissioner.   (4) The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all affected persons of the effect of this part.   History: En. 40-5811 by Sec. 11, Ch. 245, L. 1974; R.C.M. 1947, 40-5811(1); amd. Sec. 10, Ch. 195, L. 2003; amd. Sec. 4, Ch. 25, L. 2019.  
  33-10-216. Plan of operation -- delegation of powers provision. (1) (a) The association shall submit to the commissioner a plan of operation and any amendments to the plan that are necessary or suitable to ensure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments to the plan become effective upon the commissioner's written approval or 60 days after receipt by the commissioner's office if the commissioner does not disapprove the submitted plan of operation and any amendments within those 60 days.   (b) If the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate reasonable rules necessary or advisable to effectuate the provisions of this part. The rules remain in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.   (2) All member insurers shall comply with the plan of operation.   (3) The plan of operation must, in addition to requirements enumerated elsewhere in this part:   (a) establish procedures for handling the assets of the association;   (b) establish the amount and method of reimbursing members of the board of directors under 33-10-204;   (c) establish regular places and times for meetings of the board of directors;   (d) establish procedures for keeping records of all financial transactions of the association, its agents, and the board of directors;   (e) establish procedures to select the board of directors and submit notice of the selections to the commissioner;   (f) establish any additional procedures for assessments under 33-10-227;   (g) establish procedures for the removal of a director for cause, including in a case in which a member insurer director becomes an impaired or insolvent insurer;   (h) require the board of directors to establish a policy and procedures for addressing conflicts of interests;   (i) contain additional provisions necessary or proper for the execution of the powers and duties of the association.   (4) The plan of operation may provide that any or all powers and duties of the association, except those under 33-10-205(9)(c) and 33-10-227, may be delegated to a corporation, association, or other organization that performs or will perform functions similar to those of this association or its equivalent in two or more states. A corporation, association, or organization to which these powers and duties are delegated must be reimbursed for any payments made on behalf of the association and must be paid for performing any function of the association. A delegation of authority under this subsection may take effect only with the approval of both the board of directors and the commissioner and may be made only to a corporation, association, or organization that extends protection not substantially less favorable or less effective than that provided by this part.   History: En. 40-5810 by Sec. 10, Ch. 245, L. 1974; R.C.M. 1947, 40-5810; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 5, Ch. 27, L. 2011; amd. Sec. 5, Ch. 25, L. 2019.  
  33-10-217. Prevention of insolvencies or impairments. (1) To aid in the detection and prevention of insurer insolvencies or impairments, the commissioner shall:   (a) (i) notify the commissioners of all the other states when the commissioner takes any of the following actions against a member insurer:   (A) the revocation of a license;   (B) the suspension of a license; or   (C) the issuance of any formal order that the company restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyowners or creditors;   (ii) mail the notice to all commissioners within 30 days following the action taken or the date on which the action occurs;   (b) report to the board of directors when the commissioner has taken any of the actions set forth in subsection (1)(a) or has received a report from any other commissioner indicating that an action has been taken in another state. The report to the board of directors must contain all significant details of the action taken or the report received from another commissioner.   (c) report to the board of directors when the commissioner has reasonable cause to believe from any examination, whether completed or in process, of any member company that the company may be an impaired or insolvent insurer; and   (d) furnish to the board of directors the national association of insurance commissioners' insurance regulatory information system (IRIS) ratios and listings of companies not included in the ratios developed by the national association of insurance commissioners. The board of directors may use the information contained in the ratios and listings in carrying out its duties and responsibilities under this section. The report and the information contained in the ratios and listings must be kept confidential by the board of directors until the commissioner or other lawful authority makes the report or information public.   (2) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting the commissioner's duties and responsibilities regarding the financial condition of member insurers and companies seeking admission to transact insurance business in this state.   (3) The board of directors shall, upon majority vote, notify the commissioner of any information indicating any member insurer may be unable or potentially unable to fulfill its contractual obligations.   (4) The board of directors may, upon majority vote, request that the commissioner order an examination of any member insurer which the board in good faith believes may be unable or potentially unable to fulfill its contractual obligations.   (5) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or supervision of any member insurer or germane to the solvency of any company seeking to provide life or health insurance in this state. The reports and recommendations are not considered public documents.   (6) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of insurer impairments or insolvencies.   History: En. 40-5812 by Sec. 12, Ch. 245, L. 1974; R.C.M. 1947, 40-5812(part); amd. Sec. 17, Ch. 198, L. 1979; amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 60, Ch. 596, L. 1993; amd. Sec. 11, Ch. 195, L. 2003; amd. Sec. 6, Ch. 27, L. 2011.  
  33-10-218. Examination by commissioner -- cost. (1) The commissioner may conduct the examination requested by the board pursuant to 33-10-217(4). The examination may be conducted as a national association of insurance commissioners examination or may be conducted by persons whom the commissioner designates. The cost of the examination must be paid by the association, and the examination report must be treated as are other examination reports.   (2) The examination report may not be released to the board of directors of the association prior to its release to the public, but this may not excuse the commissioner from the obligation to comply with subsection (4). The commissioner shall notify the board of directors when the examination is completed.   (3) The request for an examination must be kept on file by the commissioner, but it may not be open to public inspection prior to the release of the examination report to the public and must be released at that time only if the examination discloses that the examined insurer is unable or potentially unable to meet its contractual obligations.   (4) The commissioner shall report to the board of directors when the commissioner has reasonable cause to believe that any member insurer examined at the request of the board of directors may be unable or potentially unable to fulfill its contractual obligations.   History: En. 40-5812 by Sec. 12, Ch. 245, L. 1974; R.C.M. 1947, 40-5812(part); amd. Sec. 61, Ch. 596, L. 1993.  
  33-10-219. Repealed. Sec. 13, Ch. 27, L. 2011.   History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(1), (2); amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 4, Ch. 576, L. 1987; amd. Sec. 12, Ch. 195, L. 2003.  
  33-10-220. Repealed. Sec. 13, Ch. 27, L. 2011.   History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(3) thru (6); amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 5, Ch. 576, L. 1987; amd. Sec. 13, Ch. 195, L. 2003.  
  33-10-221. Nomination of liquidator by association -- notification given by liquidator. (1) The association may recommend an individual to serve as a special deputy to act for the commissioner and under the commissioner's supervision in the liquidation, rehabilitation, or supervision of any member insurer.   (2) The liquidator, rehabilitator, or supervisor of any impaired or insolvent insurer may notify all interested persons of the effect of this part.   History: En. 40-5811, 40-5813 by Secs. 11, 13, Ch. 245, L. 1974; R.C.M. 1947, 40-5811(4), 40-5813; amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 14, Ch. 195, L. 2003.  
  33-10-222. Stay of proceedings -- reopening default judgments. (1) All proceedings in which the insolvent insurer is a party in any court in this state must be stayed 180 days from the date an order of liquidation, rehabilitation, or supervision is final to permit proper legal action by the association on any matters germane to its powers or duties.   (2) As to a judgment under any decision, order, verdict, or finding based on default, the association may apply to have the judgment set aside by the same court that made the judgment and must be permitted to defend against the suit on the merits.   History: En. 40-5819 by Sec. 19, Ch. 245, L. 1974; R.C.M. 1947, 40-5819; amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 15, Ch. 195, L. 2003; amd. Sec. 7, Ch. 27, L. 2011.  
  33-10-223. Assignment by beneficiaries -- subrogation. (1) Any person receiving benefits under this part must be considered to have assigned the person's rights under the covered policy or contract, pertaining to any causes of action against the person for losses resulting from or otherwise relating to the covered policy or contract, to the association to the extent of the benefits received because of this part whether the benefits are payments of contractual obligations or continuation of coverage or provision of substitute or alternative coverage. The association may require an assignment to it of the rights by any payee, policyowner or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this part upon the person. The association must be subrogated to these rights against the assets of any impaired or insolvent insurer.   (2) The subrogation rights of the association under this section have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this part.   (3) In addition to the rights detailed in this section, the association has all common-law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, or payee of a policy or contract with respect to the policy or contract, including without limitation, in the case of a structured settlement annuity, any rights of the owner, beneficiary, or payee of the annuity, to the extent of benefits received pursuant to this part, against a person originally or by succession responsible for the losses arising from the personal injury relating to the annuity or payment for the annuity, except for any person responsible solely by reason of serving as an assignee with respect to a qualified assignment under section 130 of the Internal Revenue Code.   (4) If subsections (1) through (3) are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations must be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policy or a portion of the policy covered by the association.   (5) If the association has provided benefits with respect to a covered obligation and a person recovers any amount to which the association has rights as described in this section, the person shall pay to the association the portion of the recovery attributable to the policy or a portion of the policy covered by the association.   History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(9); amd. Sec. 16, Ch. 195, L. 2003; amd. Sec. 8, Ch. 27, L. 2011.  
  33-10-224. Coverage, limitations, and extent of liability. (1) (a) This part establishes coverage for the policies and contracts specified in subsection (2) to persons who, except as provided in subsections (1)(b) through (1)(e), are:   (i) beneficiaries, assignees, or payees, including health care providers, of the persons covered under subsection (1)(a)(ii) regardless of where the beneficiaries, assignees, or payees reside, except for nonresident certificate holders under group policies or contracts;   (ii) owners of or certificate holders or enrollees under the policies and contracts specified in subsection (2), other than unallocated annuity contracts and structured settlement annuities that are provided for in subsections (1)(b) and (1)(c), if the persons are:   (A) residents; or   (B) nonresidents, but only under all of the following conditions:   (I) the member insurer that issued the policies is domiciled in this state;   (II) the state in which the person resides has an association similar to the association created under this part; and   (III) the person is not eligible for coverage by an association in any other state because the insurer, health service corporation, or health maintenance organization was not licensed in the state at the time specified in the state's guaranty association law.   (b) The provisions of subsection (1)(a) do not apply to unallocated annuity contracts specified in subsection (2). A person who is the owner of an unallocated annuity contract receives coverage under this part, except as provided in subsections (1)(d) and (1)(e), if:   (i) the contract is issued to or in connection with a specific benefit plan whose plan sponsor has its principal place of business in this state; or   (ii) the unallocated annuity contract was issued to or in connection with a government lottery if the owner is a resident.   (c) The provisions of subsection (1)(a) do not apply to structured settlement annuities specified in subsection (2). A person who is a payee under a structured settlement annuity or the beneficiary of a payee if the payee is deceased receives coverage under this part, except as provided in subsections (1)(d) and (1)(e), if the payee:   (i) is a resident, regardless of where the contract owner resides; or   (ii) is not a resident and one of the following conditions applies:   (A) the contract owner of the structured settlement annuity is a resident and is not eligible for coverage by another state's association, and the payee or beneficiary is not eligible for coverage by the association of the state in which the payee or beneficiary resides; or   (B) the contract owner of the structured settlement annuity is not a resident, the insurer that issued the structured settlement annuity is domiciled in this state, the state in which the contract owner resides has an association similar to the association created by this part, and the payee, beneficiary, and contract owner are not eligible for coverage by the association in the state in which the payee, beneficiary, or contract owner resides.   (d) This part does not provide coverage to:   (i) a person who is a payee or a beneficiary of a contract owner that is a resident of this state if the payee or beneficiary is afforded any coverage by the association of another state;   (ii) a person covered under subsection (1)(b) if any coverage is provided by the association of another state to the person; or   (iii) a person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before or after 26 U.S.C. 5891(c)(3)(A) became effective.   (e) This part is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. To avoid duplicate coverage, a person may not receive coverage under this part if the person who would otherwise receive coverage under this part receives coverage under the laws of any other state. To determine the application of this subsection (1)(e) to a situation in which a person could be covered by the association of more than one state, whether as an owner, payee, beneficiary, or assignee, this part must be construed in conjunction with other state laws to result in coverage by only one association.   (2) (a)  (i) Except as otherwise provided in this part, this part provides coverage to the persons specified in subsection (1) for:   (A) direct, nongroup life and health policies, direct, nongroup annuity contracts, and supplemental contracts to any of these;   (B) certificates under direct group policies and contracts and supplemental contracts to any of these; and   (C) unallocated annuity contracts issued by member insurers.   (ii) Annuity contracts and certificates under group annuity contracts include but are not limited to guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement annuities, annuities issued in connection with government lotteries, and any immediate or deferred annuity contracts.   (b) This part does not provide coverage for any of the following:   (i) a portion of a policy or contract not guaranteed by the member insurer or under which the risk is borne by the policy or contract owner;   (ii) a policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;   (iii) except for the portion of the policy, including a rider, that provides long-term care or any other health insurance benefits, a portion of a policy or contract to the extent that the rate of interest on which the portion is based or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:   (A) when averaged over the period of 4 years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this part exceeds the rate of interest determined by subtracting 2 percentage points from Moody's corporate bond yield average that is averaged for that same period or for a lesser period if the policy or contract was issued less than 4 years before the member insurer became an impaired or insolvent insurer under this part; and   (B) when the returns or changes in value exceed the rate of interest determined by subtracting 3 percentage points from the Moody's corporate bond yield average most recently available on or after the date on which the member insurer becomes an impaired or insolvent insurer under this part;   (iv) a portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others to the extent that the plan or program is self-funded or uninsured, including but not limited to benefits payable by an employer, association, or other person under:   (A) a multiple employer welfare arrangement as defined in 29 U.S.C. 1002;   (B) a minimum premium group insurance plan;   (C) a stop-loss group insurance plan; or   (D) an administrative services-only contract;   (v) a portion of a policy or contract to the extent that it contains provisions for dividends, experience rating credits, or voting rights or for payment of any fees or allowances to any person, including the policyowner or contract owner, in connection with the service to or administration of the policy or contract;   (vi) a policy or contract issued in this state by a member insurer at any time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;   (vii) any unallocated annuity contract issued to or in connection with a benefit plan that is protected under the federal pension benefit guaranty corporation, regardless of whether the federal pension benefit guaranty corporation has yet become liable to make any payments with respect to the benefit plan;   (viii) a portion of any unallocated annuity contract that is not issued to or in connection with a specific employee, union, or association of natural persons' benefit plan or a government lottery;   (ix) a portion of a policy or contract to the extent that federal or state law preempts or otherwise does not permit the assessments required by 33-10-227 with respect to the policy or contract;   (x) an obligation that does not arise under the express written terms of the policy or contract issued by the insurer to the contract owner or policyowner, including without limitation:   (A) claims based on marketing materials;   (B) claims based on side letters, riders, or other documents that were issued by the insurer without meeting applicable requirements for filing policy forms or for policy approval;   (C) misrepresentation of or regarding policy benefits;   (D) extracontractual claims; or   (E) a claim for penalties or consequential or incidental damages;   (xi) a contractual agreement that establishes the member insurer's obligation to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case may not be an affiliate of the member insurer;   (xii) a portion of a policy or contract to the extent that it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policyowner's or contract owner's rights are subject to forfeiture as of the date the member insurer becomes an impaired or insolvent insurer under this part. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture under this section, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of the impairment or insolvency of the member insurer and the interest or changes in value are not subject to forfeiture.   (xiii) a policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to either 42 U.S.C. 1395w-21 through 1395w-152, commonly known as medicare parts C and D, or 42 U.S.C. 1396 to 1396w-5, commonly known as medicaid, or any regulations issued pursuant to those federal statutes; or   (xiv) structured settlement annuity benefits to which a payee or beneficiary has transferred the payee's or beneficiary's rights in a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before or after 26 U.S.C. 5891(c)(3)(A) became effective.   (3) The benefits for which the association may become liable may not exceed the lesser of:   (a) the contractual obligations for which the insurer is liable or would have become liable if it were not an impaired or insolvent insurer; or   (b) (i) with respect to any one life, regardless of the number of policies or contracts:   (A) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance;   (B) in health insurance benefits:   (I) $500,000 for health insurance coverage;   (II) $300,000 for disability income insurance;   (III) $300,000 for long-term care insurance;   (IV) $100,000, including any net cash surrender and net cash withdrawal values, for coverages not included in subsections (3)(b)(i)(B)(I) through (3)(b)(i)(B)(III);   (C) $250,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values;   (ii) with respect to each individual participating in a governmental retirement plan established under section 401, 403(b), or 457 of the Internal Revenue Code and covered by an unallocated annuity contract or with respect to the beneficiaries of each individual, if deceased, in the aggregate, $250,000 in present value annuity benefits, including net cash surrender and net cash withdrawal values;   (iii) with respect to each payee of a structured settlement annuity or beneficiary of the payee if the payee is deceased, $250,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;   (iv) with respect to either one contract owner provided coverage under subsection (1)(b) or one plan sponsor whose plan owns directly or in trust one or more unallocated annuity contracts not included in subsection (3)(b)(ii), $5 million in benefits, irrespective of the number of contracts held by the contract owner or plan sponsor. If one or more unallocated annuity contracts are covered contracts under this part and are owned by a trust or other entity for the benefit of two or more plan sponsors, coverage must be afforded by the association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state. In no event is the association obligated to cover more than $5 million in benefits with respect to all these unallocated contracts.   (4) In no event is the association obligated to cover more than:   (a) an aggregate of $300,000 in benefits with respect to any one life under subsections (3)(b)(i) through (3)(b)(iii), except with respect to benefits for health insurance coverage under subsection (3)(b)(i), in which case the aggregate liability of the association may not exceed $500,000 with respect to any one individual; and   (b) with respect to one owner of multiple nongroup policies of life insurance, whether the policyowner is an individual, firm, corporation, or other person and whether the persons insured are officers, managers, employees, or other persons, $5 million in benefits, regardless of the number of policies and contracts held by the owner.   (5) The limitations set forth in this section are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this part may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights.   (6) In performing its obligations to provide coverage under this part, the association is not required to guarantee, assume, reinsure, or perform or cause to be guaranteed, assumed, reinsured, or performed the contractual obligations of the impaired or insolvent insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract.   (7) For purposes of this part, benefits provided by a long-term care rider to a life insurance policy or annuity contract must be considered the same type of benefits as the basic life insurance policy or annuity contract to which it relates.   History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(10); amd. Sec. 6, Ch. 576, L. 1987; amd. Sec. 62, Ch. 596, L. 1993; amd. Sec. 17, Ch. 195, L. 2003; amd. Sec. 9, Ch. 27, L. 2011; amd. Sec. 6, Ch. 25, L. 2019.  
  33-10-225. Association as creditor -- use of assets. (1) For the purpose of carrying out its obligations under this part, the association is a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as subrogee pursuant to 33-10-223.   (2) All assets of the impaired or insolvent insurer attributable to covered policies must be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this part. Assets attributable to covered policies, as used in this section, is that proportion of the assets which the reserves that should have been established for such policies bear to the reserve that should have been established for all policies of insurance written by the impaired or insolvent insurer.   (3) As a creditor of the impaired or insolvent insurer, as established in this part and consistent with 33-2-1363, the association and other similar associations are entitled to receive a disbursement of assets out of the marshalled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this part. If, within 120 days of the receivership court issuing a final determination of insolvency of an insurer, the liquidator has not made an application to the court for the approval of a proposal to disburse assets out of marshalled assets to guaranty associations having obligations because of the insolvency, then the association may make application to the receivership court for approval of its own proposal to disburse those assets.   History: En. 40-5814 by Sec. 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5814(3); amd. Sec. 10, Ch. 27, L. 2011.  
  33-10-226. Distribution of ownership rights -- distribution to shareholders. (1) Prior to the termination of any liquidation, rehabilitation, or supervision proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, and policyowners of the impaired or insolvent insurer and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the impaired or insolvent insurer. In the determination, consideration must be given to the welfare of the policyowners of the continuing or successor insurer.   (2) A distribution to stockholders, if any, of an impaired or insolvent insurer may not be made until and unless the association has fully recovered the total amount of valid claims of the association, with interest, for funds expended in carrying out its powers and duties under this part.   History: En. 40-5814 by Sec. 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5814(4); amd. Sec. 140, Ch. 575, L. 1981; amd. Sec. 18, Ch. 195, L. 2003; amd. Sec. 11, Ch. 27, L. 2011.  
  33-10-227. Assessments -- abatement -- basis for ratesetting. (1) For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at the times and for the amounts as the board finds necessary.   (2) Assessments are due not less than 30 days after prior written notice to the member insurers. An unpaid assessment accrues interest at 10% a year on and after the due date. The association may also impose any charges on a late-paid assessment if the plan of operation provides for late-paid assessments.   (3) There are two classes of assessments:   (a) Class A assessments must be authorized and called for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer.   (b) Class B assessments must be authorized and called to the extent necessary to carry out the powers and duties of the association under 33-10-205 with regard to an impaired or insolvent insurer.   (4) (a) The amount of any Class A assessment for each account must be determined by the board and may be authorized and called on a pro rata or non-pro rata basis. If pro rata, the board may provide that the amount be credited against future Class B assessments.   (b) The amount of any Class B assessment, except for assessments related to long-term care insurance, must be allocated for assessment purposes among the accounts pursuant to an allocation formula that may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard determined by the board in its sole discretion as being fair and reasonable under the circumstances.   (c) The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer must be allocated according to a methodology included in the plan of operation and approved by the commissioner. The methodology must provide for 50% of the assessment to be allocated to accident and health member insurers and 50% to life and annuity member insurers.   (d) Class B assessments against member insurers for each account and subaccount must be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account or subaccount bear to the premiums received on business in this state by all assessed member insurers. This ratio must be calculated from information that is available for the 3 most recent calendar years preceding the year in which the insurer became insolvent or, in the case of an assessment with respect to an impaired insurer, the 3 most recent calendar years for which information is available preceding the year in which the insurer became impaired.   (e) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be authorized and called until necessary to implement the purposes of this part. Classification of assessments under subsection (3) and computation of assessments under this subsection (4) must be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.   (5) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred, in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the association.   (6) (a) (i) Subject to the provisions of subsection (6)(a)(ii), the total of all assessments authorized by the association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the health account may not in 1 calendar year exceed 2% of that member insurer's average annual premiums received in this state on the policies and contracts covered by the subaccount or account during the 3 calendar years preceding the year in which the insurer became an impaired or insolvent insurer.   (ii) If two or more assessments are authorized in 1 calendar year with respect to insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subsection (6)(a)(i) must be equal and limited to the higher of the 3-year average annual premiums for the applicable account or subaccount as calculated pursuant to this section.   (iii) If the maximum assessment, together with the other assets of the association in an account, does not provide in 1 year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds must be assessed as soon as permitted by this part.   (b) The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, for use when the board determines that the maximum assessment is insufficient to cover anticipated claims.   (c) If the maximum assessment for a subaccount of the life insurance and annuity account in 1 year does not provide an amount sufficient to carry out the responsibilities of the association, then pursuant to subsection (4)(d), the board shall assess the other subaccounts of the life insurance and annuity account for the necessary additional amount, subject to the maximum assessment stated in subsection (6)(a).   (7) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, and net realized gains and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses.   (8) It is proper for any member insurer, in determining its premium rates and policyowner dividends as to any kind of insurance within the scope of this part, to consider the amount reasonably necessary to meet its assessment obligations under this part.   (9) The association shall issue to each insurer paying an assessment under this part a certificate of contribution, in a form prescribed by the commissioner, for the amount paid. All outstanding certificates must be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the insurer in its financial statement as an asset in that form and for the amount, if any, and period of time that the commissioner may approve.   (10) (a) A member insurer that wishes to protest all or a part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the association. The payment must be available to meet association obligations during the pendency of the protest or any subsequent appeal. A written statement must accompany the payment and must indicate that the payment is made under protest and include a brief description of the grounds for the protest.   (b) Within 60 days after the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issue raised by the protest.   (c) Within 30 days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the commissioner.   (d) Instead of rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the commissioner for a final decision, with or without a recommendation from the association.   (e) If the protest or appeal of the assessment is upheld, the amount paid in error or excess must be returned to the member insurer. Interest on a refund due to a protesting member insurer must be paid at the rate actually earned by the association.   (11) The association may request information of member insurers to aid in the exercise of its powers and duties under this section. Member insurers shall promptly comply with a request from the association.   History: En. 40-5809 by Sec. 9, Ch. 245, L. 1974; R.C.M. 1947, 40-5809; amd. Sec. 7, Ch. 576, L. 1987; amd. Sec. 69, Ch. 596, L. 1993; amd. Sec. 19, Ch. 195, L. 2003; amd. Sec. 12, Ch. 27, L. 2011; amd. Sec. 7, Ch. 25, L. 2019.  
  33-10-228. Repealed. Sec. 13, Ch. 27, L. 2011.   History: En. 40-5811 by Sec. 11, Ch. 245, L. 1974; R.C.M. 1947, 40-5811(2), (3).  
  33-10-229. Repealed. Sec. 71, Ch. 596, L. 1993.   History: En. 40-5814 by Sec. 14, Ch. 245, L. 1974; R.C.M. 1947, 40-5814(6); amd. Sec. 18, Ch. 198, L. 1979.  
  33-10-230. Tax -- writeoffs of certificates of contribution. (1) Unless a longer period has been allowed by the commissioner, a member insurer shall at its option have the right to show a certificate of contribution for a Class B assessment only as an asset in the form approved by the commissioner pursuant to 33-10-227(9), at percentages of the original face amount approved by the commissioner, for calendar years as follows:   (a) 100% for calendar year of issuance;   (b) 80% for the first calendar year after year of issuance;   (c) 60% for second calendar year after year of issuance;   (d) 40% for third calendar year after year of issuance;   (e) 20% for fourth calendar year after year of issuance.   (2) The insurer may offset the amount written off by it in the calendar year under subsection (1) above against its premium tax liability to this state accrued with respect to business transacted in the calendar year.   (3) Any sums acquired by refund, pursuant to 33-10-227(7), from the association which have therefore been written off by contributing insurers and offset against premium taxes as provided in subsection (2) above and are not then needed for purposes of this part must be paid by the association to the commissioner and deposited by the commissioner with the state treasurer for credit to the general fund of this state.   History: En. 40-5817 by Sec. 17, Ch. 245, L. 1974; R.C.M. 1947, 40-5817; amd. Sec. 8, Ch. 576, L. 1987; amd. Sec. 70, Ch. 596, L. 1993.  
  33-10-231 through 33-10-234 reserved.  
  33-10-235. Association election to continue reinsurance. (1) Within 1 year after the coverage date, which is the date that the association becomes responsible for the obligations of a member insurer, the association may elect to succeed to the rights and obligations of a member insurer that accrued on or after the coverage date under an indemnity reinsurance agreement entered into by the member insurer as the ceding insurer. The association may not exercise an election with respect to a reinsurance agreement if the rehabilitator or liquidator of the member insurer has previously expressly disaffirmed the agreement.   (2) The election to succeed to the rights and obligations of the member insurer must be accomplished through notice to the supervisor, rehabilitator, or liquidator and to the affected reinsurers.   (3) If the association makes an election, the association:   (a) is responsible for all unpaid premiums due under the agreements for the periods before and after the coverage date and is responsible for the performance of all obligations to be performed after the coverage date in each contract covered, either in whole or in part, by the association. The association may charge contracts covered in part by the association the costs for reinsurance in excess of the obligations of the association, using reasonable allocation methods.   (b) is entitled to any amounts payable by the reinsurer under the agreements with respect to losses or events that occur in periods after the coverage date and that relate to contracts covered by the association, in whole or in part. In order to receive these amounts, the association must be obligated to pay the beneficiary of the underlying policy or contract a portion of the amount equal to the excess of the amount received by the association minus:   (i) the benefits paid by the association under the policy or contract; and   (ii) any amount properly retained by the impaired or insolvent insurer for the loss or event.   (c) shall calculate, within 30 days of the election, the net balance due to or from the association under each reinsurance agreement as of the date of the association's election, giving full credit to all items paid to either the member insurer, its rehabilitator or liquidator, or the indemnity reinsurer during the period between the coverage date and the date of the association's election. Either the association or the indemnity insurer shall pay the net balance due the other within 5 days of completion of the calculation. If the rehabilitator or liquidator has received any amount under this section, the rehabilitator or liquidator shall remit it to the association as soon as practicable.   (4) If, within 60 days of the election, the association pays the premiums due for the periods before and after the coverage date that relate to the contracts covered by the association, either in whole or in part, the reinsurer may not terminate the reinsurance agreement insofar as the agreement relates to contracts covered by the association, in whole or in part, and is not entitled to set off any unpaid premium due for periods prior to the coverage date against amounts due the association.   (5) The association may transfer any rights or obligations under this section to a third-party insurer under terms agreed upon by the association and the third-party insurer.   (6) Except as otherwise expressly stated in this section, this section may not be construed to alter or modify the terms and conditions of the reinsurance agreement of an insolvent member insurer. This section is not intended to:   (a) abrogate or limit any rights of a reinsurer to claim that it is entitled to rescind a reinsurance agreement; or   (b) give a policyowner or beneficiary an independent cause of action against an insurer that is not otherwise provided for in the reinsurance agreement.   History: En. Sec. 1, Ch. 195, L. 2003.  
  33-10-236. Deposits paid to association. (1) A deposit in this state that is held pursuant to law or required by the commissioner to be held for the benefit of creditors, including policyowners, and that is not turned over to the liquidator upon entry of the final order of liquidation or upon entry of the order approving a rehabilitation plan of an insurer domiciled in this state or in a reciprocal state pursuant to 33-2-1381 must be promptly paid to the association.   (2) The association is entitled to retain a portion of any amount paid under this section equal to the percentage determined by dividing the aggregate amount of policyowner claims related to the insolvency for which the association has provided statutory benefits by the aggregate amount of all policyowner claims in this state related to the insolvency. The association shall remit to the domiciliary receiver the amount paid to the association and not retained under this section.   History: En. Sec. 2, Ch. 195, L. 2003.  
  33-11-101. Purpose. The purpose of this part is to regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the provisions of the federal Liability Risk Retention Act of 1986 (15 U.S.C. 3901, et seq.).   History: En. Sec. 1, Ch. 249, L. 1987.  
  33-11-102. Definitions. As used in this part, the following definitions apply:   (1) "Completed operations liability" means:   (a) liability arising out of the installation, maintenance, or repair of any product at a site that is not owned or controlled by:   (i) a person who performs that work; or   (ii) a person who hires an independent contractor to perform that work; and   (b) liability for activities that are completed or abandoned before the date of the occurrence giving rise to the liability.   (2) "Domicile", for purposes of determining the state where a purchasing group is domiciled, means:   (a) for a corporation, the state where the purchasing group is incorporated; and   (b) for an unincorporated entity, the state of its principal place of business.   (3) "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to:   (a) meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or   (b) pay other obligations in the normal course of business.   (4) "Insurance" means primary insurance, excess insurance, reinsurance, surplus line insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state.   (5) (a) "Liability" means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injuries to other persons, damage to their property, or other damage or loss to other persons resulting from or arising out of:   (i) a business, whether profit or nonprofit, trade, product, service (including professional service), premises, or operation; or   (ii) an activity of any state or local government or an agency or political subdivision of state or local government.   (b) The term does not include personal risk liability or an employer's liability with respect to its employees other than legal liability under the federal Employers' Liability Act, 45 U.S.C. 51 through 60. As used in this subsection, "personal risk liability" means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from personal, familial, or household responsibilities or activities rather than from responsibilities or activities referred to in subsection (5)(a).   (6) "Plan of operation or a feasibility study" means an analysis that presents the expected activities and results of a risk retention group, including at a minimum:   (a) the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;   (b) historical and expected loss experience of the proposed members and national experience of similar exposures to the extent this experience is reasonably available;   (c) pro forma financial statements and projections;   (d) appropriate opinions by a qualified independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;   (e) identification of management, underwriting procedures, managerial oversight methods, and investment policies; and   (f) other matters as may be prescribed by the commissioner for liability insurance companies authorized by the insurance laws of the state where the risk retention group is chartered.   (7) "Purchasing group" means a group that:   (a) has as one of its purposes the purchase of liability insurance on a group basis;   (b) purchases liability insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (7)(c);   (c) is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, service, premises, or operation; and   (d) is domiciled in any state.   (8) "Risk retention group" means a corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands:   (a) whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members;   (b) that is organized for the primary purpose of conducting the activity described under subsection (8)(a);   (c) (i) that is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or   (ii) that, before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance regulatory official of at least one state that it satisfied the capitalization requirements of that state. However, the group is considered to be a risk retention group only if it has been engaged in business continuously since January 1, 1985, and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability. For purposes of this subsection (8), "product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product but does not include the liability of any person for those damages if the product involved was in the possession of that person when the incident giving rise to the claim occurred.   (d) that does not exclude any person from membership in the group solely to provide to members of the group a competitive advantage over the person;   (e) (i) that has as its members only persons who have an ownership interest in the group and that has as its owners only persons who are members and who are provided insurance by the risk retention group; or   (ii) that has as its sole member and sole owner an organization that is owned by persons who are provided insurance by the risk retention group;   (f) whose members are engaged in businesses or activities that are similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business, trade, product, service, premises, or operation;   (g) whose activities do not include the provision of insurance other than:   (i) liability insurance for assuming and spreading all or any portion of the liability of its group members; and   (ii) reinsurance with respect to the liability of any other risk retention group or member of the other group that is engaged in businesses or activities so that the group or member meets the requirement described in subsection (8)(f) for membership in the risk retention group that provides the reinsurance; and   (h) whose name includes the phrase "risk retention group".   (9) "State" means any state of the United States or the District of Columbia.   History: En. Sec. 2, Ch. 249, L. 1987; amd. Sec. 41, Ch. 379, L. 1995.  
  33-11-103. Chartering -- licensing -- plan of operation. (1) A risk retention group seeking to be chartered in this state must be chartered and licensed to write only casualty insurance pursuant to the insurance laws of this state and, except as provided in this part, shall comply with all of the laws, rules, regulations, and requirements applicable to the insurers chartered and authorized in this state, including 33-11-104, to the extent that the requirements are not a limitation on laws, rules, regulations, or requirements of this state. Before offering insurance in any state, the risk retention group shall also submit for approval to the commissioner a plan of operation or a feasibility study and revisions of the plan or study if the group intends to offer any additional lines of liability insurance.   (2) At the time of filing its application for charter, the risk retention group shall provide to the commissioner in summary form the following information:   (a) the identity of the initial members of the risk retention group;   (b) the identity of those individuals who organized the risk retention group or who will provide administrative services or otherwise influence or control the activities of the risk retention group;   (c) the amount and nature of initial capitalization;   (d) the coverages to be afforded; and   (e) the states in which the risk retention group intends to operate.   (3) Upon receipt of the information required under subsection (2), the commissioner shall forward the information to the national association of insurance commissioners. Providing this information to the national association of insurance commissioners does not satisfy the requirements of 33-11-104 or any other section of this chapter.   (4) All risk retention groups chartered in this state shall file with the department and the national association of insurance commissioners an annual statement in a form prescribed by the national association of insurance commissioners, including electronically if required by the commissioner, and completed in accordance with instructions provided by the national association of insurance commissioners and the national association of insurance commissioners' accounting practices and procedures manual.   (5) All risk retention groups must be in compliance with the governance standards contained within this section within 1 year of April 30, 2015. New risk retention groups must be in compliance with the standards at the time of licensure.   (6) (a) The board of directors of the risk retention group must consist of a majority of independent directors. If the risk retention group is reciprocal, the attorney-in-fact shall adhere to the same standards regarding independence of operation and governance as are imposed on the risk retention group's board of directors under these standards. The board of directors shall affirmatively determine that a director has no material relationship with the risk retention group for that director to be considered independent.   (b) Each risk retention group shall disclose the determinations of independence to the commissioner annually.   (c) (i) For the purpose of determining independence under this subsection (6), any person that is a direct or indirect owner of or a subscriber in the risk retention group or is an officer, director, or employee of the owner and insured, unless meeting the material relationship provisions under subsection (6)(c)(ii), is considered to be independent.   (ii) A person described in subsection (6)(c)(i) is not considered independent and has a material relationship of its members, as described in 15 U.S.C. 3901(a)(4)(E)(ii), if the person, a member of the person's immediate family, or any business with which the person is affiliated:   (A) has received in any 12-month period from the risk retention group, including a consultant or a service provider to the risk retention group, compensation or payment of any item of value that accounts for either 5% of the risk retention group's gross written premium for that 12-month period or 2% of the risk retention group's surplus, whichever is greater;   (B) has a relationship of employment or affiliation in a professional capacity or has had a relationship of employment or affiliation within 1 year with a present or former internal or external auditor of the risk retention group; or   (C) has a relationship or has had a relationship within 1 year with a related entity by which a director or an immediate family member of the director is employed as an executive officer. This condition includes any of the risk retention group's present executives serving on the related company's board of directors.   (7) (a) A material service provider contract with a risk retention group or its renewal:   (i) may not exceed 5 years;   (ii) requires the approval of a majority of the risk retention group's independent directors; and   (iii) is considered material if the amount to be paid for the contract is greater than or equal to 5% of the risk retention group's annual gross written premium or 2% of the risk retention group's surplus, whichever is greater.   (b) The entire board of directors may terminate any service provider contract at any time for cause after providing adequate notice as defined in the contract.   (c) The board may not enter a service provider contract with a person who has a material relationship with the risk retention group as provided in subsection (6)(c)(ii) unless the board has notified the commissioner at least 30 days prior to entering the contract and the commissioner has not disapproved the contract.   (8) The risk retention group's board of directors shall adopt in the plan of operation a written policy that requires the board to:   (a) ensure that all owners or insureds of the risk retention group receive evidence of ownership interest;   (b) develop a set of governance standards applicable to the risk retention group;   (c) oversee the evaluation of the risk retention group's management, including but not limited to the performance of the captive manager, managing general underwriter, or any other party that is responsible for underwriting, determination of rates, collection of premium, adjusting or settling claims, or the preparation of financial statements;   (d) review and approve the amount to be paid for all material service providers; and   (e) review and approve at least annually:   (i) the risk retention group's goals and objectives relevant to the compensation of officers and service providers;   (ii) the officers' and service providers' performance in light of those goals and objectives; and   (iii) the continued engagement of the officers and material service providers.   (9) (a) Except as provided in subsection (9)(b), the risk retention group shall name an audit committee composed of at least three independent board members as defined in subsection (6)(c)(i). A nonindependent board member may participate in the activities of the audit committee but may not be a member of the audit committee.   (b) The entire board of directors shall serve as the audit committee if the board chooses not to designate a separate audit committee.   (10) An audit committee shall approve a written charter that defines the committee's purpose, which at a minimum must be to:   (a) assist board oversight of:   (i) the integrity of the financial statements;   (ii) the board's compliance with legal and regulatory requirements; and   (iii) the qualifications, independence, and performance of the independent auditor and actuary;   (b) discuss the annual audited financial statements and quarterly financial statements with management;   (c) discuss the annual audited financial statement with its independent auditor and, if advisable, discuss its quarterly financial statements with its independent auditor;   (d) discuss policies with respect to risk assessment and risk management;   (e) meet separately and periodically, either directly or through a designated representative of the committee, with management and independent auditors;   (f) review with the independent auditor any audit problems or difficulties and management's response;   (g) set clear hiring policies of the risk retention group as to the hiring of employees or former employees of the independent auditor;   (h) require the external auditor to rotate the lead or coordinating audit partner having primary responsibility for the risk retention group's audit as well as the audit partner responsible for reviewing the audit so that neither individual performs audit services for more than 5 consecutive fiscal years; and   (i) report regularly to the board of directors.   (11) (a) The board of directors shall adopt and disclose standards that make information available through electronic or other means and shall provide that information upon request.   (b) For the purposes of this subsection (11), the information must include:   (i) the process by which the directors are elected by the owner or the insureds;   (ii) qualification standards, responsibilities, and compensation for directors;   (iii) director access to management and, as necessary and appropriate, to independent advisors;   (iv) director orientation and continuing education;   (v) management succession policies and procedures; and   (vi) annual board performance evaluation policies and procedures.   (12) (a) The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers, and employees. Any waivers of this code as the code applies to directors and officers must be voted on by a majority of the independent directors.   (b) The code must address:   (i) conflicts of interest, including director's conflicting interest transactions as defined in 35-14-860;   (ii) confidentiality;   (iii) fair dealing;   (iv) protection and proper use of risk retention group assets;   (v) compliance with all applicable laws, rules, and regulations; and   (vi) requirements for the reporting of any illegal or unethical behavior that affects the operation of the risk retention group.   (13) The captive manager, president, or chief executive officer of the risk retention group shall promptly notify the commissioners in writing as soon as that person is aware of any material noncompliance with any standard provided for in this section.   History: En. Sec. 3, Ch. 249, L. 1987; amd. Sec. 63, Ch. 596, L. 1993; amd. Sec. 36, Ch. 370, L. 2015; amd. Sec. 236, Ch. 271, L. 2019.  
  33-11-104. Risk retention groups not chartered in this state. A risk retention group chartered in a state other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state as follows:   (1) Before offering insurance in this state, a risk retention group shall submit to the commissioner:   (a) a statement identifying the state or states where the risk retention group is chartered and authorized as a casualty insurer, date of chartering, its principal place of business, and other information, including information on its membership, as the commissioner requires to verify that the risk retention group is qualified under 33-11-102(8);   (b) a copy of its plan of operation or a feasibility study and revisions of the plan or study submitted to its state of domicile. However, this provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance that was defined in the federal Product Liability Risk Retention Act of 1981 (15 U.S.C. 3901 through 3904) before it was amended by Public Law 99-563, approved on October 27, 1986, and that was offered before that date by a risk retention group that had been chartered and operated for not less than 3 years before that date; and   (c) a statement of registration that designates the commissioner as its agent for the purpose of receiving service of legal documents or process.   (2) A risk retention group doing business in this state shall submit to the commissioner:   (a) a copy of the group's financial statement submitted to its state of domicile, which must be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American academy of actuaries or by a qualified loss reserve specialist under criteria established by the national association of insurance commissioners;   (b) a copy of each examination of the risk retention group as certified by the insurance regulatory official of the state in which the examination was conducted or public official conducting the examination;   (c) upon request by the commissioner, a copy of any audit performed with respect to the risk retention group; and   (d) any information as may be required to verify the group's continuing qualification as a risk retention group under 33-11-102(8).   (3) (a) Each risk retention group is liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this state and shall report to the commissioner the net premiums written for risks resident or located within this state. The risk retention group is subject to taxation and any applicable interest, fines, and penalties for nonpayment that apply to foreign admitted insurers.   (b) To the extent that an insurance producer is used, the insurance producer shall report to the commissioner the premiums of direct business for risks resident or located within this state that the licensees have placed with or on behalf of a risk retention group not chartered in this state.   (c) To the extent that an insurance producer is used, the insurance producer shall keep a complete and separate record of all policies procured from each risk retention group. The record is open to examination by the commissioner, as provided in 33-1-408. The records must, for each policy and each kind of insurance provided under the policy, include the limit of liability, the time period covered, the effective date, the name of the risk retention group that issued the policy, the gross premium charged, and the amount of return premiums, if any.   (4) Each risk retention group, its insurance producers, and its representatives shall comply with Title 33, chapter 18, part 2.   (5) Each risk retention group shall comply with the provisions of Title 33, chapter 18, part 2, regarding deceptive, false, or fraudulent acts or practices. However, if the commissioner seeks an injunction regarding the risk retention group's conduct, the injunction must be obtained from a court of competent jurisdiction.   (6) Each risk retention group shall submit to an examination by the commissioner to determine its financial condition if the insurance regulatory official of the jurisdiction where the group is chartered has not initiated an examination or does not initiate an examination within 60 days after a request by the commissioner. The examination must be coordinated to avoid unjustified repetition and be conducted in an expeditious manner in accordance with the national association of insurance commissioners examiners handbook.   (7) Each policy issued by a risk retention group must contain, in 10-point type on the front page and the declaration page, the following notice:   "NOTICE   This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group."   (8) The following acts by a risk retention group are prohibited:   (a) the solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and   (b) the solicitation or sale of insurance by or operation of a risk retention group that is in a hazardous financial condition or is financially impaired.   (9) A risk retention group is not allowed to do business in this state if an insurer is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurers.   (10) A risk retention group may not offer insurance policy coverage declared unlawful by the Montana supreme court.   (11) A risk retention group not chartered in this state and doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by the insurance regulatory official of any state if there has been a finding of financial impairment after an examination under subsection (6).   (12) Upon completion of registration requirements, the commissioner shall issue to the risk retention group a proper certificate of registration.   (13) A risk retention group that violates any provision of this chapter is subject to fines and penalties, including revocation of the right to do business in this state, applicable to licensed insurers generally.   History: En. Sec. 4, Ch. 249, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 14, Ch. 451, L. 1993; amd. Sec. 64, Ch. 596, L. 1993; amd. Sec. 42, Ch. 379, L. 1995.  
  33-11-105. Compulsory associations. (1) A risk retention group may not join or contribute financially to any insurance insolvency guaranty fund or similar mechanism in this state. In addition, a risk retention group or its insureds may not receive any benefit from any guaranty fund for claims arising out of the operations of the risk retention group.  (2) A risk retention group shall participate in this state's joint underwriting associations, mandatory liability pools, and similar mechanisms.   (3) When a purchasing group obtains insurance covering its members' risks from an insurer not authorized in this state or from a risk retention group, the risks, wherever resident or located, may not be covered by any insurance guaranty fund or similar mechanism in this state.   (4) When a purchasing group obtains insurance covering its members' risks from an authorized insurer, only risks resident or located in this state may be covered by the state guaranty fund, subject to Title 33, chapter 10, part 1.   History: En. Sec. 5, Ch. 249, L. 1987; amd. Sec. 56, Ch. 10, L. 1993; amd. Sec. 65, Ch. 596, L. 1993; amd. Sec. 21, Ch. 475, L. 2005; amd. Sec. 1, Ch. 21, L. 2021. 
  33-11-106. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 6, Ch. 249, L. 1987.  
  33-11-107. Purchasing groups -- exemption from certain laws relating to group purchase of insurance. A purchasing group meeting the criteria established under the provisions of the federal Liability Risk Retention Act of 1986 (15 U.S.C. 3901, et seq.) is exempt from any law of this state relating to the formation of groups for the purchase of insurance, prohibition of group purchasing, or any law that would discriminate against a purchasing group or its members. In addition, an insurer is exempt from any law of this state that prohibits providing or offering to provide to a purchasing group or its members advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages, or other matters. A purchasing group is subject to all other applicable laws of this state.   History: En. Sec. 7, Ch. 249, L. 1987.  
  33-11-108. Notice and registration requirements of purchasing groups. (1) A purchasing group that intends to do business in this state shall furnish notice to the commissioner that:   (a) identifies the state where the group is domiciled and all other states in which the group intends to do business;   (b) specifies the lines and classifications of liability insurance that the purchasing group intends to purchase;   (c) identifies the insurer from which the purchasing group intends to purchase its insurance and the domicile of that insurer;   (d) identifies the Montana-licensed insurance producer or Montana-licensed surplus lines insurance producer through which the purchasing group intends to place its business;   (e) identifies the principal place of business of the purchasing group;   (f) provides information required by the commissioner to verify that the purchasing group is qualified under 33-11-102(7); and   (g) identifies the person or persons controlling the activities of the group and includes biographical information on the person or persons.   (2) The purchasing group shall register with and designate the commissioner as its agent solely for the purpose of receiving service of legal documents or process. However, the requirements do not apply in the case of a purchasing group:   (a) (i) that was domiciled before April 2, 1986, in any state of the United States; and   (ii) that was domiciled on and after October 27, 1986, in any state of the United States;   (b) (i) that, before October 27, 1986, purchased insurance from an insurer licensed in any state; and   (ii) that, since October 27, 1986, purchased its insurance from an insurer licensed in any state;   (c) that was a purchasing group under the requirements of the federal Product Liability Risk Retention Act of 1981 (15 U.S.C. 3901 through 3904) before it was amended by Public Law 99-563, approved on October 27, 1986; and   (d) that does not purchase insurance that was not authorized for purposes of an exemption under the federal Product Liability Risk Retention Act of 1981, as in effect before October 27, 1986.   (3) Upon completion of registration requirements, the commissioner shall issue a proper certificate of registration to the purchasing group.   History: En. Sec. 8, Ch. 249, L. 1987; amd. Sec. 3, Ch. 180, L. 1991; amd. Sec. 15, Ch. 451, L. 1993; amd. Sec. 66, Ch. 596, L. 1993; amd. Sec. 43, Ch. 379, L. 1995.  
  33-11-109. Restriction on insurance purchased by purchasing groups. (1) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not authorized in the state where the purchasing group is located, unless the purchase is effected through a licensed insurance producer acting pursuant to the surplus lines laws and regulations of that state.   (2) For purposes of subsection (1), the state where a purchasing group is located is each state where a member of the purchasing group has a risk resident, located, or to be performed.   (3) A purchasing group that obtains liability insurance from an insurer not admitted in this state or from a risk retention group shall inform each of the members of the group who have a risk resident or located in this state that the risk is not protected by an insurance insolvency guaranty fund in this state and that the insurer or risk retention group may not be subject to all insurance laws and regulations of this state.   (4) A purchasing group may not purchase insurance that provides for a deductible or self-insured retention applicable to the group as a whole. Coverage may provide for a deductible or self-insured retention applicable to individual members.   (5) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits that are applicable to all purchases of group insurance.   History: En. Sec. 9, Ch. 249, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 67, Ch. 596, L. 1993.  
  33-11-110. Taxation of purchasing group. Premium taxes and taxes on premiums paid for coverage of risks resident or located in this state by a purchasing group or any members of the purchasing group must be:   (1) imposed at the same rate and subject to the same interest, fines, and penalties as those applicable to premium taxes and taxes on premiums paid to surplus lines insurers and authorized insurers, pursuant to 33-2-311 and 33-2-705, respectively; and   (2) paid by the authorized or surplus lines insurers and, if not paid by them, paid by the insurance producer for the purchasing group and, if not paid by the insurance producer, paid by the purchasing group and, if not paid by the purchasing group, paid by each of its members.   History: En. Sec. 34, Ch. 596, L. 1993.  
  33-11-111 through 33-11-120 reserved.  
  33-11-121. Administrative and procedural authority regarding risk retention groups and purchasing groups. The commissioner is authorized to use any powers established under this title to enforce the laws of this state so long as those powers are not specifically preempted by the federal Liability Risk Retention Act of 1986 (15 U.S.C. 3901, et seq.). The commissioner's powers include but are not limited to the commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and impose penalties. With regard to any investigation, administrative proceedings, or litigation, the commissioner may rely on the procedural law and regulations of the state. The injunctive authority of the commissioner in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.   History: En. Sec. 10, Ch. 249, L. 1987.  
  33-11-122. Penalties. A risk retention group that violates any provision of this part is subject to fines and penalties applicable to licensed insurers generally, including revocation of its license to do business in this state.   History: En. Sec. 11, Ch. 249, L. 1987.  
  33-11-123. Duty of insurance producers to obtain license. A person acting or offering to act as an insurance producer for a risk retention group or purchasing group that solicits members, sells insurance coverage, purchases coverage for its members located within the state, or otherwise does business in this state shall, before commencing such activity, obtain a license from the commissioner.   History: En. Sec. 12, Ch. 249, L. 1987; amd. Sec. 1, Ch. 713, L. 1989.  
  33-11-124. Enforceability of orders issued in United States district court. An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance or operating in any state, territory, or possession of the United States upon a finding that such a group is in a hazardous financial condition is enforceable in the courts of this state.   History: En. Sec. 13, Ch. 249, L. 1987.  
  33-11-125. Rules and regulations. The commissioner may make and amend any reasonable rules relating to risk retention groups and purchasing groups necessary or desirable to carry out the provisions of this part.   History: En. Sec. 14, Ch. 249, L. 1987.  
  33-12-101. Purpose and scope. (1) The purpose of this chapter is to protect the interests of insureds by promoting insurer solvency and financial strength. This purpose will be accomplished through the application of investment standards that facilitate a reasonable balance of the following objectives:   (a) to preserve principal;   (b) to ensure reasonable diversification as to type of investment, issuer, and credit quality; and   (c) to allow insurers to allocate investments in a manner consistent with principles of prudent investment management to achieve an adequate return so that obligations to insureds are adequately met and financial strength is sufficient to cover reasonably foreseeable contingencies.   (2) This chapter applies only to investments and investment practices of domestic insurers and United States branches of alien insurers entered through this state. This chapter does not apply to separate accounts of an insurer.   History: En. Sec. 1, Ch. 304, L. 1999.  
  33-12-102. Definitions. As used in this chapter, the following definitions apply:   (1) "Acceptable collateral" means:   (a) (i) as to securities lending transactions and for the purpose of calculating the counterparty exposure amount, cash, cash equivalents, letters of credit, or direct obligations of or securities that are fully guaranteed as to principal and interest by the government of the United States, by any agency of the United States, by the federal national mortgage association, or by the federal home loan mortgage corporation; and   (ii) as to lending foreign securities, sovereign debt rated 1 by the SVO;   (b) as to repurchase transactions, cash, cash equivalents, and direct obligations of or securities that are fully guaranteed as to principal and interest by the government of the United States, by an agency of the United States, by the federal national mortgage association, or by the federal home loan mortgage corporation; and   (c) as to reverse repurchase transactions, cash and cash equivalents.   (2) "Acceptable private mortgage insurance" means insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company, with an SVO 1 designation or a rating issued by a nationally recognized statistical rating organization equivalent to an SVO 1 designation, that covers losses up to an 80% loan-to-value ratio.   (3) "Accident and health insurance" means insurance protection that provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance, and long-term care insurance.   (4) "Accident and health insurer" means a licensed life or health insurer or health service corporation whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutorily required reserves.   (5) (a) "Admitted assets" means, subject to subsection (5)(b), assets determined in accordance with the requirements of 33-2-501.   (b) The term does not include assets of separate accounts. The investments of separate accounts are not subject to the provisions of this chapter.   (6) "Affiliate" has the meaning provided in 33-2-1101.   (7) (a) "Asset-backed security" means a security or other instrument, excluding a mutual fund, evidencing an interest in or the right to receive payments from or payable from distributions on an asset, a pool of assets, or specifically divisible cash flows that are legally transferred to a trust or another special purpose bankruptcy-remote business entity, on the following conditions:   (i) the trust or other business entity is established solely for the purpose of acquiring specific types of assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights, and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and   (ii) the assets of the trust or other business entity consist solely of interest-bearing obligations or other contractual obligations representing the right to receive payment from the cash flows from the assets or rights.   (b) However, the existence of credit enhancements, such as letters of credit, guarantees, or support features, such as swap agreements, may not cause a security or other instrument to be ineligible as an asset-backed security.   (8) "Business entity" includes a sole proprietorship, corporation, limited liability company, association, partnership, joint-stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for profit or not for profit.   (9) "Cap" means an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number. The predetermined number is sometimes called the strike rate or strike price.   (10) "Capital and surplus" means the sum of the capital and surplus of the insurer required to be shown on the most recent statutory financial statement of the insurer required to be filed with the commissioner.   (11) "Cash equivalents" means short-term, highly rated, and highly liquid investments or securities readily convertible to known amounts of cash without penalty and so near maturity that they present insignificant risk of change in value. Cash equivalents include government money market mutual funds and class one money market mutual funds.   (12) "Class one bond mutual fund" means a mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purposes and Procedures of the Securities Valuation Office or any successor publication.   (13) "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purposes and Procedures of the Securities Valuation Office or any successor publication.   (14) "Collar" means an agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor.   (15) "Construction loan" means a loan for a term of less than 3 years that is made for financing the cost of construction of a building or other improvement to real estate and that is secured by the real estate.   (16) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or nonmanagement services), or otherwise, unless the power is the result of an official position with a corporation or a corporate office held by the person. Presumption of control is pursuant to 33-12-108.   (17) "Counterparty exposure amount" means the net amount of credit risk attributable to a derivative instrument, pursuant to 33-12-109, entered into with a business entity other than through a qualified exchange or qualified foreign exchange or cleared through a qualified clearinghouse. The derivative instrument is also known as an over-the-counter derivative instrument.   (18) "Covered" means that an insurer:   (a) owns or can immediately acquire, through the exercise of options, warrants, or already-owned conversion rights, the underlying interest in order to fulfill or secure its obligations under a call option, cap, or floor it has written; or   (b) has set aside, under a custodial or escrow agreement, cash or cash equivalents with a market value equal to the amount required to fulfill its obligations under a put option it has written in an income generation transaction.   (19) "Credit tenant loan" means a mortgage loan that is made primarily in reliance on the credit standing of a major tenant, structured with an assignment of the rental payments to the lender with real estate pledged as collateral in the form of a first lien.   (20) (a) "Derivative instrument" means an agreement, an option, an instrument, or a series or combination of agreements, options, or instruments:   (i) to make or take delivery of or assume or relinquish a specified amount of one or more underlying interests or to make a cash settlement in lieu of delivery; or   (ii) that has a price, level, performance, value, or cash flow based primarily upon the actual or expected price, level, performance, value, or cash flow of one or more underlying interests.   (b) (i) Derivative instruments include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, futures, and any other agreements, options, or instruments substantially similar to the enumerated instruments or any series or combination of the enumerated instruments and any agreements, options, or instruments permitted under rules adopted pursuant to 33-12-111.   (ii) Derivative instruments do not include an investment authorized by 33-12-203 through 33-12-209, 33-12-211, and 33-12-305 through 33-12-309.   (21) "Derivative transaction" means a transaction involving the use of one or more derivative instruments.   (22) "Direct" or "directly", when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation.   (23) "Dollar roll transaction" means two simultaneous transactions with different settlement dates that are no more than 96 days apart, so that in the transaction with the earlier settlement date, an insurer sells to a business entity, and in the other transaction, the insurer is obligated to purchase from the same business entity, substantially similar securities of the following types:   (a) asset-backed securities issued, assumed, or guaranteed by the government national mortgage association, the federal national mortgage association, or the federal home loan mortgage corporation or their successors; and   (b) other asset-backed securities referred to in section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1), as amended.   (24) "Domestic jurisdiction" means the United States, any state, Canada, any province of Canada, or any political subdivision of a state or province.   (25) "Equity interest" means any of the following that are not rated credit instruments:   (a) common stock;   (b) preferred stock;   (c) trust certificate;   (d) equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund;   (e) investment in a common trust fund of a bank regulated by a federal or state agency;   (f) an ownership interest in minerals, oil, or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil, or gas is located;   (g) instruments that are mandatorily, or at the option of the issuer, convertible to equity;   (h) limited partnership interests and those general partnership interests authorized under 33-12-104(4);   (i) member interests in limited liability companies;   (j) warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or   (k) instruments that would be rated credit instruments except for the provisions of subsection (70)(b).   (26) "Equivalent securities" means:   (a) in a securities lending transaction, securities that are identical to the loaned securities in all features including the amount of the loaned securities, except as to certificate number if held in physical form, but if any different security is exchanged for a loaned security by recapitalization, merger, consolidation, or other corporate action, the different security is considered to be the loaned security;   (b) in a repurchase transaction, securities that are identical to the purchased securities in all features including the amount of the purchased securities, except as to the certificate number if held in physical form; or   (c) in a reverse repurchase transaction, securities that are identical to the sold securities in all features including the amount of the sold securities, except as to the certificate number if held in physical form.   (27) "Floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a price, level, performance, or value of one or more underlying interests.   (28) "Foreign currency" means a currency other than that of a domestic jurisdiction.   (29) (a) "Foreign investment" means an investment in a foreign jurisdiction, or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction, that is substantially of the same type as those eligible for investment under part 2 of this chapter, 33-12-301 through 33-12-306, 33-12-308, 33-12-310 through 33-12-312, and this part.   (b) An investment may not be considered to be foreign if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless:   (i) the issuing person is a shell business entity; and   (ii) the investment is not assumed, accepted, guaranteed or insured, or otherwise backed by a domestic jurisdiction or a person that is not a shell business entity and that is domiciled in a domestic jurisdiction.   (30) "Foreign jurisdiction" means a jurisdiction other than a domestic jurisdiction.   (31) "Forward" means an agreement, other than a future, to make or take delivery of or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests.   (32) "Future" means an agreement, traded on a qualified exchange or qualified foreign exchange, to make or take delivery of or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests.   (33) "Government money market mutual fund" means a money market mutual fund that at all times:   (a) invests only in obligations issued, guaranteed, or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and   (b) qualifies for investment without a reserve under the Purposes and Procedures of the Securities Valuation Office or any successor publication.   (34) "Government-sponsored enterprise" means a:   (a) governmental agency; or   (b) corporation, limited liability company, association, partnership, joint-stock company, joint venture, trust, or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose.   (35) "Guaranteed or insured", when used in connection with an obligation acquired under this chapter, means that the guarantor or insurer has agreed to:   (a) perform or insure the obligation of the obligor or purchase the obligation; or   (b) be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity, or sufficient liquidity to enable the obligor to pay the obligation in full.   (36) "Hedging transaction" means a derivative transaction that is entered into and maintained to reduce:   (a) the risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities that the insurer has acquired or incurred or anticipates acquiring or incurring; or   (b) the currency exchange rate risk or the degree of exposure as to assets or liabilities that an insurer has acquired or incurred or anticipates acquiring or incurring.   (37) "High-grade investment" means a rated credit instrument rated 1 or 2 by the SVO.   (38) "Highly rated" means an investment rated "P-1" by Moody's investors service, inc. or "A-1" by Standard and Poor's division of the McGraw Hill companies, inc. or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO.   (39) "Income" means, as to a security, interest, accrual of discount, dividends, or other distributions, such as rights, tax or assessment credits, warrants, and distributions in kind.   (40) "Income generation transaction" means a derivative transaction involving the writing of covered call options, covered put options, covered caps, or covered floors that is intended to generate income or enhance return.   (41) "Insurance future" means a future relating to an index or pool that is based on insurance-related items.   (42) "Insurance futures option" means an option on an insurance future.   (43) "Investment company" means an investment company as defined in section 80a-3 of the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended, and a person described in section 80a-3(c) of that act.   (44) "Investment company series" means an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated.   (45) "Investment practices" means transactions of the types described in 33-12-208, 33-12-210, 33-12-308, or 33-12-310.   (46) "Investment strategies" means the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing.   (47) "Investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this chapter applicable to the insurer.   (48) "Letter of credit" means a clean, irrevocable, and unconditional letter of credit issued or confirmed by and payable and presentable at a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the Purposes and Procedures of the Securities Valuation Office or any successor publication.   (49) "Limited liability company" means a business organization, excluding partnerships and ordinary business corporations, organized or operating under the laws of the United States or any state that limits the personal liability of investors to the equity investment of the investor in the business entity.   (50) "Lower-grade investment" means a rated credit instrument rated 4, 5, or 6 by the SVO.   (51) "Market value" means:   (a) as to cash and letters of credit, the amounts of cash or a letter of credit; and   (b) as to a security, as of any date, the price for the security on that date obtained from a generally recognized source or the most recent quotation from a generally recognized source or, to the extent that a generally recognized source does not exist, the price for the security as determined in good faith by the parties to a transaction, plus accrued but unpaid income on a security to the extent not included in the price as of that date.   (52) "Medium-grade investment" means a rated credit instrument rated 3 by the SVO.   (53) "Money market mutual fund" means a mutual fund that meets the conditions of 17 CFR 270.2a-7, under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended or renumbered.   (54) "Mortgage loan" means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate.   (55) "Multilateral development bank" means an international development organization of which the United States is a member.   (56) "Mutual fund" means an investment company or an investment company series that is registered with the United States securities and exchange commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended.   (57) "NAIC" means the national association of insurance commissioners.   (58) "Obligation" means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money (or participations, certificates, or other evidences of an interest in any of the foregoing), whether constituting a general obligation of the issuer or payable only out of certain revenue or certain funds pledged or otherwise dedicated for payment.   (59) "Option" means an agreement giving the buyer the right to buy or receive (a "call option"), sell or deliver (a "put option"), enter into, extend or terminate, or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests.   (60) "Person" has the meaning provided in 33-1-202.   (61) "Potential exposure" means the amount determined in accordance with the NAIC Annual Statement Instructions.   (62) "Preferred stock" means preferred, preference, or guaranteed stock of a business entity authorized to issue the stock that has a preference in liquidation over the common stock of the business entity.   (63) "Qualified bank" means:   (a) a national bank, state bank, or trust company that at all times is adequately capitalized as determined by standards adopted by United States banking regulators and that is either regulated by state banking laws or is a member of the federal reserve system; or   (b) a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as a bank or trust company by that country's government or an agency of that government and that at all times is adequately capitalized as determined by the standards adopted by international banking authorities.   (64) "Qualified business entity" means a business entity that is:   (a) an issuer of obligations or preferred stock that is rated 1 or 2 by the SVO or an issuer of obligations, preferred stock, or derivative instruments that are rated the equivalent of 1 or 2 by the SVO or by a nationally recognized statistical rating organization recognized by the SVO; or   (b) a primary dealer in United States government securities recognized by the federal reserve bank of New York.   (65) "Qualified clearinghouse" means a clearinghouse for, and subject to the rules of, a qualified exchange or a qualified foreign exchange, which provides clearing services, including acting as a counterparty to each of the parties to a transaction so that the parties no longer have a credit risk as to each other.   (66) "Qualified exchange" means:   (a) a securities exchange registered as a national securities exchange or a securities market regulated under the Securities Exchange Act of 1934 (15 U.S.C. 78, et seq.), as amended;   (b) a board of trade or commodities exchange designated as a contract market by the commodity futures trading commission or its successor;   (c) private offerings, resales, and trading through automated linkages;   (d) a designated offshore securities market as defined in securities exchange commission regulation S, 17 CFR part 230, as amended; or   (e) a qualified foreign exchange.   (67) "Qualified foreign exchange" means a foreign exchange, board of trade, or contract market located outside the United States or its territories or possessions:   (a) that has received regulatory comparability relief under commodity futures trading commission rule 30.1 (as set forth in appendix C to part 30 of the regulations, 17 CFR part 30);   (b) that is, or its members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under commodity futures trading commission rule 30.1 (as set forth in appendix C to part 30 of the regulations, 17 CFR part 30) as to futures transactions in the jurisdiction where the exchange, board of trade, or contract market is located; or   (c) upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the CFTC's office of general counsel, provided that an exchange, board of trade, or contract market that qualifies as a qualified foreign exchange only under this subsection (67) is a qualified foreign exchange as to foreign stock index futures contracts that are the subject of no-action relief.   (68) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.   (69) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.   (70) (a) "Rated credit instrument" means a contractual right to receive cash or another rated credit instrument from another entity if the instrument:   (i) is rated or required to be rated by the SVO;   (ii) in the case of an instrument with a maturity of 397 days or less, is issued, guaranteed, or insured by an entity that is rated by, or another obligation of the entity is rated by, the SVO or by a nationally recognized statistical rating organization recognized by the SVO;   (iii) in the case of an instrument with a maturity of 90 days or less, is issued by a qualified bank;   (iv) is a share of a class one bond mutual fund; or   (v) is a share of a money market mutual fund.   (b) The term does not include:   (i) an instrument that is mandatorily or at the option of the issuer convertible to an equity interest; or   (ii) a security that has a par value and whose terms provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency, an index of equities, commodities, foreign currencies, or combinations of equities, commodities, and foreign currency.   (71) (a) "Real estate" means:   (i) real property;   (ii) interests in real property, such as leaseholds, minerals, oil, and gas, that have not been separated from the underlying fee interest;   (iii) improvements and fixtures located on or in real property; and   (iv) the seller's equity in a contract providing for a deed of real estate.   (b) As to a mortgage on a leasehold estate, real estate includes the leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee, extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to at least 20% of the original term of the obligation or 10 years, whichever is greater.   (72) "Replication transaction" means a derivative transaction that is intended to replicate the performance of one or more assets that an insurer is authorized to acquire under this chapter. A derivative transaction that is entered into as a hedging transaction may not be considered a replication transaction.   (73) "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand.   (74) "Required liabilities" means total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the commissioner.   (75) "Residential mortgage loan" means a loan primarily secured by a mortgage on real estate improved with a residence for no more than four families.   (76) "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand.   (77) "Secured location" means the contiguous real estate owned by one person.   (78) "Securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand.   (79) "Series company" means an investment company that is organized as a series company, as defined in rules adopted under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended.   (80) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction.   (81) "Short-term" means investments with a remaining term to maturity of 90 days or less.   (82) "Sinking fund stock" means preferred stock that:   (a) is subject to a mandatory sinking fund or similar arrangement that will provide for the redemption or open market purchase of the entire issue over a period not longer than 40 years from the date of acquisition; and   (b) provides for mandatory sinking fund installments or open market purchases commencing not more than 10 1/2 years from the date of issue, with the sinking fund installments providing for the purchase or redemption, on a cumulative basis commencing 10 years from the date of issue, of at least 2.5% a year of the original number of shares of that issue of preferred stock.   (83) "State" has meaning provided in 33-1-201.   (84) "Substantially similar securities" means securities that meet all criteria for substantially similar specified in the NAIC Accounting Practices and Procedures Manual, as amended, and in an amount that constitutes good delivery form as determined from time to time by the public securities administration.   (85) "SVO" means the securities valuation office of the NAIC or any successor office established by the NAIC.   (86) "Swap" means an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance, or value of one or more underlying interests.   (87) "Total investment of the insurer" includes:   (a) direct investment by the insurer in an asset; and   (b) the insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer, which must be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary.   (88) "Underlying interest" means the assets, liabilities, other interests, or a combination of assets, liabilities, or other interests underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities, or derivative instruments.   (89) "Unrestricted surplus" means the amount by which total admitted assets exceed 125% of the insurer's required liabilities.   (90) "Warrant" means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement. Warrants may be issued alone or in connection with the sale of other securities, for example, as part of a merger or recapitalization agreement, or to facilitate divestiture of the securities of another business entity.   History: En. Sec. 2, Ch. 304, L. 1999.  
  33-12-103. General investment qualifications. (1) Insurers may acquire, hold, or invest in investments or engage in investment practices as set forth in this chapter. Investments not conforming to this chapter may not be admitted assets. Affiliate investments under 33-2-1103, other than those investments made by or on behalf of domestic insurers, are not subject to this provision.   (2) Subject to subsection (3), an insurer may not acquire or hold an investment as an admitted asset unless at the time of acquisition it is:   (a) (i) eligible for the payment or accrual of interest or discount, whether in cash or other securities;   (ii) eligible to receive dividends or other distributions; or   (iii) otherwise income-producing; or   (b) acquired under 33-12-207(3), 33-12-208, 33-12-210, 33-12-212, 33-12-307(3), 33-12-308, 33-12-310, or 33-12-311 or under the authority of sections of Montana law other than this chapter.   (3) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify as provided in this chapter if the insurer has not acquired them for the purpose of circumventing any limitations contained in this chapter and if the insurer complies with the provisions of 33-12-105 and 33-12-108 and acquires the investments in the following circumstances:   (a) as payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness if taken to protect the insurer's interest in that investment;   (b) as realization on collateral for an obligation;   (c) in connection with an otherwise qualified investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice, or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;   (d) under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or   (e) under a bulk reinsurance, merger, or consolidation transaction approved by the commissioner if the assets constitute admissible investments for the ceding, merged, or consolidated companies.   (4) An investment or portion of an investment acquired by an insurer under subsection (3) must become a nonadmitted asset 3 years, or 5 years in the case of mortgage loans and real estate, from the date of its acquisition, unless within that period the investment has become a qualified investment under a provision of this chapter other than subsection (3). However, an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if provided for in the plan for reinsurance, merger, or consolidation as approved by the commissioner. Upon application by the insurer and a showing that the nonadmission of an asset held under subsection (3) would materially injure the interests of the insurer, the commissioner may extend the period for admissibility for an additional reasonable period of time.   (5) Except as provided in subsections (6) and (8), an investment must qualify under this chapter if, on the date the insurer committed to acquire the investment or on the date of its acquisition, it would have qualified under this chapter. For the purposes of determining limitations contained in this chapter, an insurer shall give appropriate recognition to any commitments to acquire investments.   (6) (a) An investment held as an admitted asset by an insurer on July 1, 1999, that qualified under former law remains qualified as an admitted asset under this chapter.   (b) Each specific transaction constituting an investment practice of the type described in this chapter that was lawfully entered into by an insurer and was in effect on July 1, 1999, continues to be permitted under this chapter until its expiration or termination under its terms.   (7) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus relates to the amount required to be shown on the most recent statutory balance sheet of the insurer required to be filed with the commissioner. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on its statutory balance sheet for:   (a) the return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;   (b) cash received in a dollar roll transaction; and   (c) the amount reported as borrowed money in the most recently filed financial statement to the extent not included in subsections (7)(a) and (7)(b).   (8) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other section if the relevant conditions contained in the other section are satisfied at the time of qualification or requalification.   (9) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this chapter.   (10) An insurer may not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights.   (11) Notwithstanding the provisions of this chapter, the commissioner, for good cause, may under the Montana Administrative Procedure Act order an insurer to nonadmit, limit, dispose of, withdraw from, or discontinue an investment or investment practice. The authority of the commissioner under this subsection is in addition to any other authority of the commissioner.   (12) Insurance futures and insurance futures options are not considered investments or investment practices for purposes of this chapter.   History: En. Sec. 3, Ch. 304, L. 1999; amd. Sec. 36, Ch. 227, L. 2001.  
  33-12-104. Authorization of investments by board of directors. (1) An insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of investments and that contains other specifications including investment strategies intended to ensure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus.   (2) The board of directors is ultimately responsible for investment decisions and shall review, at least annually, whether all investments acquired and held under this chapter have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.   (3) An insurer's board of directors or committee of the board of directors shall:   (a) on no less than a quarterly basis and more often if considered appropriate, receive and review a summary report on the insurer's investment portfolio, its investment activities, and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and   (b) on no less than an annual basis and more often if considered appropriate, review and revise, as appropriate, the written plan.   (4) In discharging its duties under this section, the board of directors may require that records of any authorizations or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection (1) may be made available on a regular basis to the board of directors.   (5) If an insurer does not have a board of directors, all references to the board of directors in this chapter are considered to be references to the governing body of the insurer having authority equivalent to that of a board of directors.   (6) In discharging their duties under this section, the directors of an insurer shall perform their duties as provided in 35-14-830.   History: En. Sec. 4, Ch. 304, L. 1999; amd. Sec. 237, Ch. 271, L. 2019.  
  33-12-105. Prohibited investments. (1) An insurer may not, directly or indirectly, without the prior written approval of the commissioner:   (a) invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in 33-12-106;   (b) invest in an obligation or security of, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which 10% or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer, except as authorized in Title 33, chapter 2, part 11, or as provided in 33-12-106;   (c) engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this chapter; or   (d) except as provided in subsection (2), invest in or lend its funds upon the security of shares of its own stock.   (2) (a) An insurer may acquire shares of its own stock for the following purposes:   (i) conversion of a stock insurer into a mutual or reciprocal insurer or conversion of a mutual or reciprocal insurer into a stock insurer; or   (ii) issuance to the insurer's officers, employees, or agents in connection with a plan approved by the commissioner in connection with stock option and employee benefit plans.   (b) Shares of stock that are subject to subsection (2)(a) may not be admitted assets of the insurer.   (3) (a) An insurer may not, directly or indirectly, without the prior written approval of the commissioner invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:   (i) if all other partners in the partnership are subsidiaries of the insurer;   (ii) for the purpose of:   (A) meeting cash calls committed to prior to July 1, 1999;   (B) completing those specific projects or activities of the partnership in which the insurer was a general partner as of July 1, 1999, that had been undertaken as of July 1, 1999; or   (C) making capital improvements to property owned by the partnership on July 1, 1999, if the insurer was a general partner as of July 1, 1999; or   (iii) in accordance with 33-12-103(3).   (b) Subsection (3)(a) does not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.   History: En. Sec. 5, Ch. 304, L. 1999.  
  33-12-106. Loans to officers and directors. (1) (a) Except as provided in subsection (2), an insurer may not, directly or indirectly, without the prior written approval of the commissioner:   (i) make a loan to an officer or director of the insurer or make another investment in a person in which the officer or director has any direct or indirect financial interest;   (ii) make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or   (iii) enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest.   (b) For purposes of this section, an officer or director may not have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than 2% of all outstanding equity interests issued by a person that is a party to the transaction or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction.   (c) This subsection (1) does not permit an investment that is prohibited by 33-12-105.   (d) This subsection (1) does not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with Title 33, chapter 2, part 11, other than a transaction between an insurer and its officer or director.   (2) An insurer may, without the prior written approval of the commissioner, make any of the following:   (a) policy loans in accordance with the terms of the policy or contract and 33-12-211;   (b) advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses;   (c) loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request if the loans comply with the requirements of 33-12-207 or 33-12-307 and the terms and conditions are the same as those generally available from unaffiliated third parties;   (d) secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request if the loans:   (i) do not have a term exceeding 2 years;   (ii) are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;   (iii) do not exceed an amount equal to the equity of the officer in the prior residence; and   (iv) are required to be fully repaid upon the earlier of the end of the 2-year period or the sale of the prior residence; or   (e) loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity.   History: En. Sec. 6, Ch. 304, L. 1999.  
  33-12-107. Valuation of investments. For the purposes of this chapter, the value or amount of an investment acquired or held under this chapter or an investment practice engaged in under this chapter, unless otherwise specified in statute, must be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC, including the Purposes and Procedures Manual of the Securities Valuation Office, the Valuation of Securities Manual, the Accounting Practices and Procedures Manual, the annual statement instructions, or any successor valuation procedures officially adopted by the NAIC.   History: En. Sec. 7, Ch. 304, L. 1999; amd. Sec. 10, Ch. 469, L. 2005.  
  33-12-108. Presumption of control. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The commissioner may determine, after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.   History: En. Sec. 8, Ch. 304, L. 1999.  
  33-12-109. Credit risk attributable to derivative statement. (1) The amount of credit risk equals:   (a) the market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or   (b) zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer.   (2) If over-the-counter derivative instruments are entered into under a written master agreement that provides for netting of payments owed by the respective parties and the domiciliary jurisdiction of the counterparty is either within the United States or if not within the United States, within a foreign jurisdiction listed in the Purposes and Procedures of the Securities Valuation Office as eligible for netting, the net amount of credit risk must be the greater of zero or the net sum of:   (a) the market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and   (b) the market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity.   (3) For open transactions, market value must be determined at the end of the most recent quarter of the insurer's fiscal year and must be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both parties.   History: En. Sec. 9, Ch. 304, L. 1999.  
  33-12-110. Special rated credit instrument. (1) (a) Subject to subsection (1)(b), a rated credit instrument is a special rated credit instrument if it is an instrument that is:   (i) structured so that if it is held until retired by or on behalf of the issuer, its rate of return, based on its purchase cost and any cash flow stream possible under the structure of the transaction, may become negative because of reasons other than the credit risk associated with the issuer of the instrument; or   (ii) an asset-backed security that:   (A) relies on cash flows from assets that are prepayable at par at any time;   (B) does not make payments of par that are fixed as to amount and timing; and   (C) has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used with the prepayment threshold assumption defined as either:   (I) two times the prepayment expectation reported by a recognized, publicly available source as being the median of expectations contributed by broker dealers or other entities, except insurers, engaged in the business of selling or evaluating the securities or assets. The prepayment expectation used in this calculation must be, at the insurer's election, the prepayment expectation for passthrough securities of the federal national mortgage association, the federal home loan mortgage corporation, or the government national mortgage association or for other assets of the same type as the assets that underlie the asset-backed security, in either case with a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security.   (II) another prepayment threshold assumption specified by the commissioner by rule adopted under 33-12-111.   (b) A rated credit instrument may not be a special rated credit instrument under this section if it is:   (i) a share in a class one bond mutual fund;   (ii) an instrument, other than an asset-backed security, with payments of par value fixed as to amount and timing or callable but in any event payable only at par or greater and with interest or dividend cash flows that are based on either a fixed or variable rate determined by reference to a specified rate or index;   (iii) an instrument, other than an asset-backed security, that has a par value and is purchased at a price no greater than 110% of par;   (iv) an instrument, including an asset-backed security, with a rate of return that would become negative only as a result of a prepayment due to casualty, condemnation, economic obsolescence of collateral, or change of law;   (v) an asset-backed security that relies on collateral that meets the requirements of subsection (1)(b)(ii), the par value of which collateral:   (A) is not permitted to be paid sooner than one-half of the remaining term to maturity from the date of acquisition;   (B) is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or   (C) is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or   (vi) an asset-backed security that relies on cash flows from assets that are not prepayable at any time at par, but is not otherwise governed by subsection (1)(b)(v), if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price no greater than 105% of the par amount.   (2) For purposes of subsection (1), if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination. The insurer shall maintain documentation demonstrating that the securities were acquired and are continuing to be held in combination.   History: En. Sec. 10, Ch. 304, L. 1999.  
  33-12-111. Rules. The commissioner may adopt rules implementing the provisions of this chapter.   History: En. Sec. 11, Ch. 304, L. 1999.  
  33-12-112. Foreign and alien insurers. A foreign insurer or an alien insurer, as those terms are defined in 33-1-201, shall maintain its investments according to the laws of its domicile. For purposes of this section, an alien insurer shall claim as its domicile the state where it maintains its principal deposit.   History: En. Sec. 12, Ch. 304, L. 1999.  
  33-12-113. Indemnification agreement. An insurer may contract with any national or state bank, trust company, or securities brokerage firm to act as custodian for the insurer's securities. The contract must contain an indemnification agreement stating that the custodian is obligated to indemnify the insurer for any loss of the insurer's securities in its custody resulting from the intentional or negligent act or omission of the custodian or the employee, officer, or agent of the custodian.   History: En. Sec. 1, Ch. 109, L. 2005.  
  33-12-201. Applicability. This part applies to the investments and investment practices of life and health insurers, subject to the provisions of 33-12-101(2).   History: En. Sec. 13, Ch. 304, L. 1999.  
  33-12-202. General 5% diversification -- medium-grade and lower-grade investments -- Canadian investments. (1) (a) Except as otherwise specified in this chapter, an insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under this chapter if, as a result of and after giving effect to the investment, the insurer would hold more than 5% of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person.   (b) The 5% limitation does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.   (c) Asset-backed securities are subject to the limitations of subsection (1)(a). However, an insurer may not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity then held by the insurer would exceed 5% of its admitted assets.   (2) (a) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under 33-12-203, 33-12-206, or 33-12-209 or counterparty exposure under 33-12-210(4) if, as a result of and after giving effect to the investment:   (i) the aggregate amount of medium-grade and lower-grade investments then held by the insurer would exceed 20% of its admitted assets;   (ii) the aggregate amount of lower-grade investments then held by the insurer would exceed 10% of its admitted assets;   (iii) the aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed 3% of its admitted assets;   (iv) the aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed 1% of its admitted assets; or   (v) the aggregate amount of medium-grade and lower-grade investments then held by the insurer that receive as cash income less than the equivalent yield for treasury issues with a comparative average life would exceed 1% of its admitted assets.   (b) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under 33-12-203, 33-12-206, or 33-12-209 or counterparty exposure under 33-12-210(4) if, as a result of and after giving effect to the investment:   (i) the aggregate amount of medium-grade and lower-grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 1% of its admitted assets; or   (ii) the aggregate amount of lower-grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 0.5% of its admitted assets.   (c) If an insurer attains or exceeds the limit of any one rating category referred to in this subsection (2), the insurer is precluded from acquiring investments in other rating categories subject to the specific and multicategory limits applicable to those investments.   (3) (a) An insurer may not acquire, directly or indirectly through an investment subsidiary, a Canadian investment authorized by this chapter if, as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed 40% of its admitted assets or if the aggregate amount of Canadian investments not acquired under 33-12-203(3) then held by the insurer would exceed 25% of its admitted assets.   (b) However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subsection (3)(a) must be increased by the greater of:   (i) the amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or   (ii) 115% of the amount of the insurer's reserves and other obligations under contracts on lives or risks resident or located in Canada.   History: En. Sec. 14, Ch. 304, L. 1999; amd. Sec. 37, Ch. 227, L. 2001.  
  33-12-203. Rated credit instruments. (1) Subject to the limitations of subsection (7), an insurer may acquire rated credit instruments in accordance with this section.   (2) Subject to the limitations of 33-12-202(2), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:   (a) the United States; or   (b) a government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.   (3) (a) Subject to the limitations of 33-12-202(2), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:   (i) Canada; or   (ii) a government-sponsored enterprise of Canada, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada.   (b) An insurer may not acquire an instrument under this subsection (3) if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subsection (3) would exceed 40% of its admitted assets.   (4) (a) Subject to the limitations of 33-12-202(2), an insurer may acquire rated credit instruments, excluding asset-backed securities:   (i) issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;   (ii) issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under subsection (2);   (iii) issued, assumed, guaranteed, or insured by a state, if the instruments are general obligations of the state; or   (iv) issued by a multilateral development bank.   (b) However, an insurer may not acquire an instrument of any one fund, enterprise, entity, or state under this subsection (4) if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise, entity, or state under this subsection (4) would exceed 10% of its admitted assets.   (5) Subject to the limitations of 33-12-202, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment:   (a) the aggregate amount of preferred stocks then held by the insurer under this subsection (5) does not exceed 20% of its admitted assets; and   (b) the aggregate amount of preferred stocks then held by the insurer under this subsection (5) that are not sinking fund stocks or rated P-1 or P-2 by the SVO does not exceed 10% of its admitted assets.   (6) Subject to the limitations of 33-12-202, in addition to those investments eligible under subsections (2) through (5) of this section, an insurer may acquire rated credit instruments that are not foreign investments.   (7) An insurer may not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the insurer would exceed 5% of its admitted assets.   (8) The provisions of subsections (2) through (4) are not subject to the limitation provided in 33-12-202(1).   History: En. Sec. 15, Ch. 304, L. 1999; amd. Sec. 38, Ch. 227, L. 2001.  
  33-12-204. Insurer investment pools. (1) An insurer may acquire investments in investment pools that invest only in:   (a) (i) obligations that are rated 1 or 2 by the SVO or a nationally recognized statistical rating organization recognized by the SVO or in the absence of a 1 or 2 or equivalent rating, the issuer has outstanding obligations with an SVO rating of 1 or 2 or an equivalent rating and that have:   (A) remaining maturity of 397 days or less or a put option that entitles the holder to receive the principal amount of the obligation and the put option may be exercised through maturity at specified intervals not exceeding 397 days; or   (B) remaining maturity of 3 years or less and:   (I) a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index such as federal funds, prime rate, treasury bills, London interbank offered rate, or commercial paper; and   (II) is subject to no maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes;   (ii) government money market mutual funds or class one money market mutual funds; or   (iii) securities lending, repurchase, and reverse repurchase transactions that meet all the requirements of 33-12-208, except the quantitative limitations of 33-12-208(4); or   (b) investments that an insurer may acquire under this chapter if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of this chapter.   (2) For an investment in an investment pool to be qualified under this chapter, the investment pool may not:   (a) acquire securities issued, assumed, guaranteed, or insured by the insurer or an affiliate of the insurer;   (b) borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of 33-12-208, except the quantitative limitations of 33-12-208(4); or   (c) permit the aggregate value of securities then loaned, sold to, purchased from, or invested in any one business entity under this section to exceed 10% of the total assets of the investment pool.   (3) The limitations of 33-12-202(1) do not apply to an insurer's investment in an investment pool. However, an insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section:   (a) in any one investment pool would exceed 10% of its admitted assets;   (b) in all investment pools investing in investments permitted under subsection (1)(b) would exceed 25% of its admitted assets; or   (c) in all investment pools would exceed 35% of its admitted assets.   (4) For an investment in an investment pool to be qualified under this chapter, the manager of the investment pool:   (a) must be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;   (b) must be:   (i) the insurer, an affiliated insurer, a business entity affiliated with the insurer, a qualified bank, or a business entity registered under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.), as amended;   (ii) in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact; or   (iii) in the case of a United States branch of an alien insurer, its United States manager or affiliates or subsidiaries of its United States manager;   (c) shall compile and maintain detailed accounting records setting forth:   (i) the cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;   (ii) a complete description of all underlying assets of the investment pool, including amount, interest rate, maturity date, if any, and other appropriate designations; and   (iii) other records that, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and   (d) shall maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement must:   (i) state and recognize the claims and rights of each participant;   (ii) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and   (iii) contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.   (5) The pooling agreement for each investment pool must be in writing and must provide that:   (a) an insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under subsection (1)(a), the insurer and its subsidiaries or affiliates, any pension or profit-sharing plan of the insurer or its subsidiaries and affiliates, or in the case of a United States branch of an alien insurer, the affiliates or subsidiaries of its United States manager shall, at all times, hold 100% of the interests in the investment pool;   (b) the underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;   (c) in proportion to the aggregate amount of each pool participant's interest in the investment pool:   (i) each participant owns an undivided interest in the underlying assets of the investment pool; and   (ii) the underlying assets of the investment pool are held solely for the benefit of each participant;   (d) a participant or, in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;   (e) withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds must occur within a reasonable and customary period not to exceed 5 business days. Distributions under this section must be calculated in each case net of all then-applicable fees and expenses of the investment pool. The pooling agreement must provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:   (i) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;   (ii) in kind, a pro rata share of each underlying asset; or   (iii) in a combination of cash and in-kind distributions, a pro rata share in each underlying asset.   (f) the pool manager shall make the records of the investment pool available for inspection by the commissioner.   History: En. Sec. 16, Ch. 304, L. 1999.  
  33-12-205. Equity interests. (1) Subject to the limitations of 33-12-202, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.   (2) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section would exceed 20% of its admitted assets or the amount of equity interests then held by the insurer that are not listed on a qualified exchange would exceed 5% of its admitted assets. An accident and health insurer is subject to this section but is subject to the same aggregate limitation on equity interests as a property and casualty insurer under 33-12-305 and is also subject to the provisions of 33-12-312.   (3) An insurer may not acquire under the provisions of this section any investments that the insurer may acquire under 33-12-207.   (4) An insurer may not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within 6 months of the short sale.   History: En. Sec. 17, Ch. 304, L. 1999.  
  33-12-206. Tangible personal property under lease. (1) (a) Subject to the limitations of 33-12-202, an insurer may acquire tangible personal property or equity interests in tangible personal property located or used wholly or in part within a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments.   (b) Investments acquired under subsection (1)(a) are eligible only if:   (i) the property is subject to a lease or other agreement with a person whose rated credit instruments could be acquired by the insurer under 33-12-203 in the amount of the purchase price of the personal property; and   (ii) the lease or other agreement provides the insurer with the right to receive rental, purchase, or other fixed payments for the use or purchase of the property and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, are adequate to return the cost of the insurer's investment in the property, plus a return considered adequate by the insurer.   (2) The insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the insurer.   (3) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this section would exceed:   (a) 2% of its admitted assets; or   (b) 0.5% of its admitted assets as to any single item of tangible personal property.   (4) For purposes of determining compliance with the limitations of 33-12-202, investments acquired by an insurer under this section must be aggregated with those acquired under 33-12-203 and each lessee of the property under a lease referred to in this section is considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (2).   (5) Nothing in this section is applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under Title 33, chapter 2, part 11.   History: En. Sec. 18, Ch. 304, L. 1999.  
  33-12-207. Mortgage loans -- income-producing real estate -- real estate for the accommodation of business -- quantitative limitations. (1) Subject to the limitations of 33-12-203, an insurer may acquire obligations secured by mortgages on real estate situated within a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. However, a mortgage loan that is secured by other than a first lien may not be acquired unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority may not, at the time of acquisition of the obligation, exceed:   (a) 90% of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or similar security received by the insurer upon disposition of the real estate;   (b) 80% of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of 30 years or less, and has periodic payments made no less frequently than annually. Each periodic payment must be sufficient to ensure that at all times the outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate, and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted under this subsection (1)(b) are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan. For residential mortgage loans, the 80% limitation may be increased to 97% if acceptable private mortgage insurance has been obtained.   (c) 75% of the fair market value of the real estate for mortgage loans that do not meet the requirements of subsection (1)(a) or (1)(b).   (2) For purposes of subsection (1)(a), the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the federal housing administration, guaranteed by the administrator of veterans affairs, or insured or guaranteed by their successors.   (3) A mortgage loan that is held by an insurer under 33-12-103(6) or that is acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual or a successor publication continues to qualify as a mortgage loan under this chapter.   (4) Subject to the limitations of 33-12-202, credit lease transactions that do not qualify for investment under 33-12-203 with the following characteristics are exempt from the provisions of subsection (1)(a) of this section:   (a) the loan amortizes over the initial fixed lease term in at least an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;   (b) the lease payments cover or exceed the total debt service over the life of the loan;   (c) a tenant or its affiliated entity with rated credit instruments that have an SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;   (d) the insurer holds or is the beneficial holder of a first lien mortgage on the real estate;   (e) the expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking, and heating, ventilation, and air-conditioning replacement expenses, unless annual escrow contributions, from cash flows derived from the lease payments, cover the expense shortfall; and   (f) there is a perfected assignment of the rents due pursuant to the lease to or for the benefit of the insurer.   (5) (a) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate must be income-producing or intended for improvement or development for investment purposes under an existing program, in which case the real estate is considered to be income-producing.   (b) The real estate may be subject to mortgages, liens, or other encumbrances, the amount of which must, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsections (7)(b) and (7)(c).   (6) (a) An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's or the insurer's affiliates' business operations, including home office, branch office, and field office operations.   (b) Real estate acquired under this subsection (6) may include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (5) and is so qualified by the insurer.   (c) The real estate acquired under this subsection (6) may be subject to one or more mortgages, liens, or other encumbrances, the amount of which must, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (7)(d).   (d) For purposes of this subsection (6), business operations may not include that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds. An insurer may acquire real estate used for these purposes under subsection (5).   (7) (a) An insurer may not acquire an investment under subsection (1) if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection (1) would exceed:   (i) 1% of its admitted assets in mortgage loans covering any one secured location;   (ii) 0.25% of its admitted assets in construction loans covering any one secured location; or   (iii) 2% of its admitted assets in construction loans in the aggregate.   (b) An insurer may not acquire an investment under subsection (5) if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments then held by the insurer under subsection (5) plus the guarantees then outstanding would exceed:   (i) 1% of its admitted assets in one parcel or group of contiguous parcels of real estate, except that this limitation does not apply to that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds, such as hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services; or   (ii) 15% of its admitted assets in the aggregate, but not more than 5% of its admitted assets as to properties that are to be improved or developed.   (c) An insurer may not acquire an investment under subsection (5) or (6) if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of all investments then held by the insurer under subsection (5) or (6) plus the guarantees then outstanding would exceed 45% of its admitted assets. However, an insurer may exceed this limitation by no more than 30% of its admitted assets if:   (i) this increased amount is invested only in residential mortgage loans;   (ii) the insurer has no more than 10% of its admitted assets invested in mortgage loans other than residential mortgage loans;   (iii) the loan-to-value ratio of each residential mortgage loan does not exceed 60% at the time the mortgage loan is qualified under this increased authority and the fair market value is supported by an appraisal no more than 2 years old prepared by an independent appraiser;   (iv) a single mortgage loan qualified under this increased authority may not exceed 0.5% of its admitted assets;   (v) the insurer files with the commissioner, and receives approval from the commissioner for, a plan that is designed to result in a portfolio of residential mortgage loans that is sufficiently geographically diversified; and   (vi) the insurer agrees to file annually with the commissioner records that demonstrate that its portfolio of residential mortgage loans is geographically diversified in accordance with the plan.   (d) The limitations of 33-12-202 do not apply to an insurer's acquisition of real estate under subsection (6). An insurer may not acquire real estate under subsection (6) if, as a result of and after giving effect to the acquisition, the aggregate amount of real estate then held by the insurer under subsection (6) would exceed 10% of its admitted assets. With the permission of the commissioner, additional amounts of real estate may be acquired under subsection (6).   History: En. Sec. 19, Ch. 304, L. 1999.  
  33-12-208. Securities lending, repurchase, reverse repurchase, and dollar roll transactions. (1) An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions with business entities, subject to the following requirements:   (a) The insurer's board of directors shall adopt a written plan that is consistent with the requirements of the written plan provided for in 33-12-104(1) and that specifies guidelines and objectives to be followed, such as:   (i) a description of how cash received will be invested or used for general corporate purposes of the insurer;   (ii) operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and   (iii) the extent to which the insurer may engage in these transactions.   (b) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement must require that each transaction terminates no more than 1 year from its inception or upon the earlier demand of the insurer. The agreement must be with the business entity counterparty, but for securities lending transactions, the agreement may be with an agent acting on behalf of the insurer if the agent is a qualified business entity and if the agreement:   (i) requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and   (ii) prohibits securities lending transactions under the agreement with the agent or its affiliates.   (c) Cash received in a transaction under this section must be invested in accordance with this chapter and in a manner that recognizes the liquidity needs of the transaction or must be used by the insurer for its general corporate purposes. For as long as the transaction remains outstanding, the insurer or its agent or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book-entry systems of the federal reserve, depository trust company, participants trust company, or other securities depositories approved by the commissioner:   (i) possession of the acceptable collateral;   (ii) a perfected security interest in the acceptable collateral; or   (iii) in the case of a jurisdiction outside of the United States, title to or rights of a secured creditor to the acceptable collateral.   (d) The limitations of 33-12-202 and 33-12-209 do not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection (1)(d), effect may not be given to the insurer's future obligation to resell securities, in the case of a repurchase transaction, or to repurchase securities, in the case of a reverse repurchase transaction. An insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction:   (i) the aggregate amount of securities then loaned, sold to, or purchased from any one business entity counterparty under this section would exceed 5% of the insurer's admitted assets. In calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement.   (ii) the aggregate amount of all securities then loaned, sold to, or purchased from all business entities under this section would exceed 40% of the insurer's admitted assets.   (e) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 102% of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty is obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 102% of the market value of the loaned securities.   (f) In a reverse repurchase transaction, other than a dollar roll transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 95% of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than 95% of the market value of the securities transferred, the business entity counterparty is obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 95% of the market value of the transferred securities.   (g) In a dollar roll transaction, the insurer must receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date.   (h) In a repurchase transaction, the insurer must receive as acceptable collateral transferred securities having a market value at least equal to 102% of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than 100% of the purchase price paid by the insurer, the business entity counterparty is obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 102% of the purchase price. Securities acquired by an insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.   (2) To constitute acceptable collateral for the purposes of this section, a letter of credit must have an expiration date beyond the term of the subject transaction.   History: En. Sec. 20, Ch. 304, L. 1999.  
  33-12-209. Foreign investments and foreign currency exposure. (1) Subject to the limitations of 33-12-202, an insurer may acquire foreign investments or engage in investment practices with persons of or in foreign jurisdictions if the investments or investment practices are of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than of the type permitted under 33-12-204 and if, as a result of and after giving effect to the investment, the aggregate amount of foreign investments then held by the insurer under this subsection (1):   (a) does not exceed 20% of its admitted assets; and   (b) in a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 3% of its admitted assets as to any other foreign jurisdiction.   (2) (a) Subject to the limitations of 33-12-202, an insurer may acquire investments or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (1) or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency, if the aggregate amount of investments then held by the insurer under this subsection (2) denominated in:   (i) foreign currencies does not exceed 10% of its admitted assets; and   (ii) the foreign currency of a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 3% of its admitted assets as to any other foreign jurisdiction.   (b) However, an investment under subsection (2)(a) may not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under 33-12-210 and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate that effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.   (3) (a) In addition to investments permitted under subsections (1) and (2), an insurer that is authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction subject to the limitations of 33-12-202.   (b) However, investments made under this subsection (3) in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises are not subject to the limitations of 33-12-202 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection (3) may not exceed the greater of:   (i) the amount the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or   (ii) 115% of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.   (4) In addition to investments permitted under subsections (1) and (2), an insurer that is not authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction subject to the limitations of 33-12-202. However, investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises are not subject to the limitations of 33-12-202 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection may not exceed 105% of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.   (5) Investments acquired under this section must be aggregated with investments of the same types made under this chapter and, in a similar manner, for purposes of determining compliance with the limitations, if any, contained in this chapter. Investments in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises, except for those exempted under subsections (3) and (4), are subject to the limitations of 33-12-202.   History: En. Sec. 21, Ch. 304, L. 1999.  
  33-12-210. Derivative transactions. An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section under the following conditions:   (1) (a) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income-generation transactions as provided in rules adopted by the commissioner.   (b) An insurer must be able to demonstrate to the commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other appropriate analyses.   (2) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction:   (a) the aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed 5% of its admitted assets;   (b) the aggregate statement value of options, caps, and floors written in hedging transactions does not exceed 3% of its admitted assets; and   (c) the aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5% of its admitted assets.   (3) An insurer may enter into the following types of income-generation transactions only if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed-income assets that are subject to call or that generate the cash flows for payments under the caps or floors, plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the put options does not exceed 10% of its admitted assets:   (a) sales of covered call options on noncallable, fixed-income securities, callable fixed-income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed-income securities;   (b) sales of covered call options on equity securities if the insurer holds in its portfolio or can immediately acquire, through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold;   (c) sales of covered put options on investments that the insurer is permitted to acquire under this chapter if the insurer has placed in escrow or entered into a custodian agreement segregating cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put option during the complete term of the put option sold; or   (d) sales of covered caps or floors if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding.   (4) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of 33-12-202.   (5) Pursuant to rules adopted under 33-12-111, the commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (2) or for other risk management purposes under rules adopted by the commissioner, but replication transactions may not be permitted for other than risk management purposes.   History: En. Sec. 22, Ch. 304, L. 1999.  
  33-12-211. Policy loans. A life insurer may lend to a policyholder, on the security of the cash surrender value of the policyholder's policy, a sum not exceeding the legal reserve that the insurer is required to maintain on the policy.   History: En. Sec. 23, Ch. 304, L. 1999.  
  33-12-212. Additional investment authority. (1) Under this subsection (1), an insurer may acquire an investment or may engage in investment practices described in 33-12-208 solely for the purpose of acquiring investments that exceed the quantitative limitations of 33-12-202 through 33-12-209. However, an insurer may not acquire an investment or engage in investment practices described in 33-12-208 under this subsection (1) if, as a result of and after giving effect to the transaction:   (a) the aggregate amount of investments then held by an insurer under this subsection (1) would exceed 5% of its admitted assets; or   (b) the aggregate amount of investments as to a limitation in 33-12-202 through 33-12-209 then held by the insurer under this subsection (1) would exceed 1% of its admitted assets.   (2) (a) In addition to the authority provided under subsection (1), an insurer may acquire under this subsection (2) an investment of any kind or engage in investment practices described in 33-12-208 that are not specifically prohibited by this chapter without regard to the categories, conditions, standards, or other limitations of 33-12-202 through 33-12-209 if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held under this subsection (2) would not exceed the lesser of:   (i) 10% of its admitted assets; or   (ii) 75% of its capital and surplus.   (b) However, an insurer may not acquire any investment or engage in any investment practice under this subsection (2) if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person then held by the insurer under this subsection (2) would exceed 5% of its admitted assets.   (3) In addition to the investments acquired under subsections (1) and (2), an insurer may acquire under this subsection (3) an investment of any kind or engage in investment practices described in 33-12-208 that are not specifically prohibited by this chapter without regard to any limitations of 33-12-202 through 33-12-209 if:   (a) the commissioner grants prior approval;   (b) the insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and   (c) as a result of and after giving effect to the transaction, the aggregate amount of investments then held by the insurer under this subsection (3) does not exceed the greater of:   (i) 25% of its capital and surplus; or   (ii) 100% of capital and surplus less 10% of its admitted assets.   (4) An investment prohibited under 33-12-105 that is not permitted under 33-12-210 or additional derivative instruments acquired under 33-12-210 may not be acquired under this section.   History: En. Sec. 24, Ch. 304, L. 1999; amd. Sec. 39, Ch. 227, L. 2001.  
  33-12-301. Applicability. Subject to the provisions of 33-12-101(2), this part applies to the investments and investment practices of property and casualty, financial guaranty, mortgage guaranty, surety, marine, and title insurers.   History: En. Sec. 25, Ch. 304, L. 1999.  
  33-12-302. General 5% diversification -- medium-grade and lower-grade investments -- Canadian investments. (1) (a) Except as otherwise specified in this chapter, an insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under this chapter if, as a result of and after giving effect to the investment, the insurer would hold more than 5% of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person.   (b) The 5% limitation in subsection (1)(a) does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.   (c) Asset-backed securities are not subject to the limitations of subsection (1)(a). However, an insurer may not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities that are secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity and that are then held by the insurer would exceed 5% of its admitted assets.   (2) (a) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under 33-12-303, 33-12-306, or 33-12-309 or counterparty exposure under 33-12-310(4) if, as a result of and after giving effect to the investment:   (i) the aggregate amount of all medium-grade and lower-grade investments then held by the insurer would exceed 20% of its admitted assets;   (ii) the aggregate amount of lower-grade investments then held by the insurer would exceed 10% of its admitted assets;   (iii) the aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed 5% of its admitted assets;   (iv) the aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed 1% of its admitted assets; or   (v) the aggregate amount of medium-grade and lower-grade investments then held by the insurer that receive as cash income less than the equivalent yield for treasury issues with a comparative average life would exceed 1% of its admitted assets.   (b) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under 33-12-303, 33-12-306, or 33-12-309 or counterparty exposure under 33-12-310(4) if, as a result of and after giving effect to the investment:   (i) the aggregate amount of medium-grade and lower-grade investments issued, assumed, accepted, insured, or guaranteed by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 1% of its admitted assets; or   (ii) the aggregate amount of lower-grade investments issued, assumed, accepted, insured, or guaranteed by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 0.5% of its admitted assets.   (c) If an insurer attains or exceeds the limit of any one rating category referred to in this subsection (2), the insurer is not precluded from acquiring investments in other rating categories subject to the specific and multicategory limits applicable to those investments.   (3) (a) An insurer may not acquire, directly or indirectly through an investment subsidiary, any Canadian investments authorized by this chapter if as a result of and after giving effect to the investment, the aggregate amount of the investments then held by the insurer would exceed 40% of its admitted assets or if the aggregate amount of Canadian investments not acquired under 33-12-303(1)(b) then held by the insurer would exceed 25% of its admitted assets.   (b) However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subsection (3)(a) must be increased by the greater of:   (i) the amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or   (ii) 125% of the amount of its reserves and other obligations under contracts on risks resident or located in Canada.   History: En. Sec. 26, Ch. 304, L. 1999.  
  33-12-303. Rated credit instruments. (1) Subject to the limitations of subsection (2), an insurer may acquire rated credit instruments in accordance with the following:   (a) Subject to the limitations of 33-12-302(2), but not to the limitations of 33-12-302(1), an insurer may acquire rated credit instruments issued, assumed, insured, or guaranteed by:   (i) the United States; or   (ii) a government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.   (b) (i) Subject to the limitations of 33-12-302(2), but not to the limitations of 33-12-302(1), an insurer may acquire rated credit instruments issued, assumed, insured, or guaranteed by:   (A) Canada; or   (B) a government-sponsored enterprise of Canada, if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada.   (ii) However, an insurer may not acquire an instrument under this subsection (1)(b) if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subsection (1)(b) would exceed 40% of its admitted assets.   (c) (i) Subject to the limitations of 33-12-302(2), but not to the limitations of 33-12-302(1), an insurer may acquire rated credit instruments, excluding asset-backed securities:   (A) issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;   (B) issued, assumed, insured, or guaranteed by a government-sponsored enterprise of the United States other than those eligible under subsection (1)(a);   (C) issued, assumed, insured, or guaranteed by a state if the instruments are general obligations of the state; or   (D) issued by a multilateral development bank.   (ii) However, an insurer may not acquire an instrument of any one fund, any one enterprise or entity, or any one state under this subsection (1)(c) if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise, entity, or state under this subsection (1)(c) would exceed 10% of its admitted assets.   (d) Subject to the limitations of 33-12-302, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment:   (i) the aggregate amount of preferred stocks then held by the insurer under this subsection (1)(d) does not exceed 20% of its admitted assets; and   (ii) the aggregate amount of preferred stocks then held by the insurer under this subsection (1)(d) that are not sinking fund stocks or rated P-1 or P-2 by the SVO does not exceed 10% of its admitted assets.   (e) Subject to the limitations of 33-12-302, in addition to those investments eligible under subsections (1)(a) through (1)(d), an insurer may acquire rated credit instruments that are not foreign investments.   (2) An insurer may not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the insurer would exceed 5% of its admitted assets.   History: En. Sec. 27, Ch. 304, L. 1999.  
  33-12-304. Insurer investment pools. (1) An insurer may acquire investments in investment pools that:   (a) invest only in:   (i) obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating by a nationally recognized statistical rating organization recognized by the SVO or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating and have:   (A) a remaining maturity of 397 days or less or a put option that entitles the holder to receive the principal amount of the obligation that may be exercised through maturity at specified intervals not exceeding 397 days; or   (B) a remaining maturity of 3 years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, London interbank offered rate, or commercial paper) and is subject to no maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes;   (ii) government money market mutual funds or class one money market mutual funds; or   (iii) securities lending, repurchase, and reverse repurchase transactions that meet all the requirements of 33-12-308, except the quantitative limitations of 33-12-308(1)(d); or   (b) invest only in investments that an insurer may acquire under this chapter if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of this chapter.   (2) For an investment in an investment pool to be qualified under this chapter, the investment pool may not:   (a) acquire securities issued, assumed, insured, or guaranteed by the insurer or an affiliate of the insurer;   (b) borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of 33-12-308, except the quantitative limitations of 33-12-308(1)(d); or   (c) permit the aggregate value of securities then loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10% of the total assets of the investment pool.   (3) The limitations of 33-12-302(1) do not apply to an insurer's investment in an investment pool. However, an insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section:   (a) in any one investment pool would exceed 10% of its admitted assets;   (b) in all investment pools investing in investments permitted under subsection (1)(b) would exceed 25% of its admitted assets; or   (c) in all investment pools would exceed 40% of its admitted assets.   (4) For an investment in an investment pool to be qualified under this chapter, the manager of the investment pool:   (a) must be organized under the laws of the United States or a state and must be designated as the pool manager in a pooling agreement;   (b) must be:   (i) the insurer, an affiliated insurer, a business entity affiliated with the insurer, a qualified bank, or a business entity registered under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.), as amended;   (ii) in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact; or   (iii) in the case of a United States branch of an alien insurer, its United States manager or affiliates or subsidiaries of its United States manager;   (c) shall compile and maintain detailed accounting records setting forth:   (i) the cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;   (ii) a complete description of all underlying assets of the investment pool, including amount, interest rate, maturity date, if any, and other appropriate designations; and   (iii) other records that, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and   (d) shall maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement must:   (i) state and recognize the claims and rights of each participant;   (ii) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and   (iii) contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.   (5) The pooling agreement for each investment pool must be in writing and must provide that:   (a) an insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under subsection (1)(a), the insurer and its subsidiaries or affiliates, any pension or profit-sharing plan of the insurer or its subsidiaries and affiliates, or in the case of a United States branch of an alien insurer, the affiliates or subsidiaries of its United States manager shall, at all times, hold 100% of the interests in the investment pool;   (b) the underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;   (c) in proportion to the aggregate amount of each pool participant's interest in the investment pool:   (i) each participant owns an undivided interest in the underlying assets of the investment pool; and   (ii) the underlying assets of the investment pool are held solely for the benefit of each participant;   (d) a participant or, in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;   (e) withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds must occur within a reasonable and customary period after withdrawal not to exceed 5 business days. Distributions under this subsection (5)(e) must be calculated in each case net of all then-applicable fees and expenses of the investment pool. The pooling agreement must provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:   (i) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;   (ii) in kind, a pro rata share of each underlying asset; or   (iii) in a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and   (f) the pool manager shall make the records of the investment pool available for inspection by the commissioner.   History: En. Sec. 28, Ch. 304, L. 1999.  
  33-12-305. Equity interests. (1) Subject to the limitations of 33-12-302, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.   (2) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section would exceed the greater of 25% of its admitted assets or 100% of its surplus as regards policyholders.   (3) An insurer may not acquire under this section any investments that the insurer may acquire under 33-12-307.   (4) An insurer may not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within 6 months of the short sale.   History: En. Sec. 29, Ch. 304, L. 1999.  
  33-12-306. Tangible personal property under lease. (1) (a) Subject to the limitations of 33-12-302, an insurer may acquire tangible personal property or equity interests in tangible personal property located or used wholly or in part within a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments.   (b) Investments acquired under subsection (1)(a) are eligible only if:   (i) the property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire under 33-12-303; and   (ii) the lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, are adequate to return the cost of the insurer's investment in the property, plus a return considered adequate by the insurer.   (2) The insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the insurer.   (3) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this section would exceed:   (a) 2% of its admitted assets; or   (b) 0.5% of its admitted assets as to any single item of tangible personal property.   (4) For purposes of determining compliance with the limitations of 33-12-302, investments acquired by an insurer under this section must be aggregated with those acquired under 33-12-303 and each lessee of the property under a lease referred to in this section is considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (2).   (5) This section is not applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under Title 33, chapter 2, part 11.   History: En. Sec. 30, Ch. 304, L. 1999.  
  33-12-307. Mortgage loans -- income producing real estate -- real estate for accommodation of business -- quantitative limitations. (1) (a) Subject to the limitations of 33-12-302, an insurer may acquire obligations secured by mortgages on real estate situated within a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. However, a mortgage loan that is secured by other than a first lien may not be acquired unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority may not, at the time of acquisition of the obligation, exceed:   (i) 90% of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or similar security received by the insurer upon disposition of the real estate;   (ii) 80% of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of 30 years or less, and has periodic payments made no less frequently than annually. Each periodic payment must be sufficient to ensure that at all times the outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate, and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted under this subsection (1)(b) are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan. For residential mortgage loans, the 80% limitation may be increased to 97% if acceptable private mortgage insurance has been obtained.   (iii) 75% of the fair market value of the real estate for mortgage loans that do not meet the requirements of subsections (1)(a)(i) or (1)(a)(ii).   (b) For purposes of subsection (1)(a), the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the federal housing administration, guaranteed by the administrator of veterans affairs, or insured or guaranteed by their successors.   (c) A mortgage loan that is held by an insurer under 33-12-103(6) or acquired under this section and that is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual or a successor publication continues to qualify as a mortgage loan under this chapter.   (d) Subject to the limitations of 33-12-302, credit lease transactions that do not qualify for investment under 33-12-303 and that have the following characteristics are exempt from the provisions of subsection (1)(a):   (i) the loan amortizes over the initial fixed lease term in at least an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;   (ii) the lease payments cover or exceed the total debt service over the life of the loan;   (iii) a tenant or its affiliated entity with rated credit instruments that have an SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;   (iv) the insurer holds or is the beneficial holder of a first lien mortgage on the real estate;   (v) the expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking, and heating, ventilation, and air-conditioning replacement expenses, unless annual escrow contributions, from cash flows derived from the lease payments, cover the expense shortfall; and   (vi) there is a perfected assignment of the rents due pursuant to the lease to or for the benefit of the insurer.   (2) (a) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by 33-12-104(4), joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate must be income-producing or intended for improvement or development for investment purposes under an existing program, in which case the real estate must be considered to be income-producing.   (b) The real estate may be subject to mortgages, liens, or other encumbrances, the amount of which must, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsections (4)(b) and (4)(c).   (3) (a) An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's or the insurer's affiliates' business operations, including home office, branch office, and field office operations.   (b) Real estate acquired under this subsection (3) may include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (2) and is so qualified by the insurer.   (c) The real estate acquired under this subsection (3) may be subject to one or more mortgages, liens, or other encumbrances, the amount of which must, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (4)(d).   (d) For purposes of this subsection (3), business operations may not include that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively. An insurer may acquire real estate used for these purposes under subsection (2).   (4) (a) An insurer may not acquire an investment under subsection (1) if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection (1) would exceed:   (i) 1% of its admitted assets in mortgage loans covering any one secured location;   (ii) 0.25% of its admitted assets in construction loans covering any one secured location; or   (iii) 1% of its admitted assets in construction loans in the aggregate.   (b) An insurer may not acquire an investment under subsection (2) if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments then held by the insurer under subsection (2) plus the guarantees then outstanding would exceed:   (i) 1% of its admitted assets in any one parcel or group of contiguous parcels of real estate, except that this limitation does not apply to that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively, such as hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services; or   (ii) the lesser of 10% of its admitted assets or 40% of its surplus as regards policyholders in the aggregate, except for an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively. This limitation must be increased to 15% of its admitted assets in the aggregate.   (c) An insurer may not acquire an investment under subsection (1) or (2) if, as a result of and after giving effect to the investment and any outstanding guarantees it has made in connection with the investment, the aggregate amount of all investments then held by the insurer under subsection (1) or (2) plus the guarantees then outstanding would exceed 25% of its admitted assets.   (d) The limitations of 33-12-302 do not apply to an insurer's acquisition of real estate under subsection (3). An insurer may not acquire real estate under subsection (3) if, as a result of and after giving effect to the acquisition, the aggregate amount of all real estate then held by the insurer under subsection (3) would exceed 10% of its admitted assets. With the permission of the commissioner, additional amounts of real estate may be acquired under subsection (3).   History: En. Sec. 31, Ch. 304, L. 1999.  
  33-12-308. Securities lending, repurchase, reverse repurchase, and dollar roll transactions. (1) An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions with business entities, subject to the following requirements:   (a) The insurer's board of directors shall adopt a written plan that is consistent with the requirements of the written plan provided for in 33-12-104(1) that specifies guidelines and objectives to be followed, such as:   (i) a description of how cash received will be invested or used for general corporate purposes of the insurer;   (ii) operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and   (iii) the extent to which the insurer may engage in these transactions.   (b) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement must require that each transaction terminate no more than 1 year from its inception or upon the earlier demand of the insurer. The agreement must be with the business entity counterparty, but for securities lending transactions, the agreement may be with an agent acting on behalf of the insurer if the agent is a qualified business entity and if the agreement:   (i) requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and   (ii) prohibits securities lending transactions under the agreement with the agent or its affiliates.   (c) Cash received in a transaction under this section must be invested in accordance with this chapter and in a manner that recognizes the liquidity needs of the transaction or must be used by the insurer for its general corporate purposes. For as long as the transaction remains outstanding, the insurer or its agent or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book-entry systems of the federal reserve, depository trust company, participants trust company, or other securities depositories approved by the commissioner:   (i) possession of the acceptable collateral;   (ii) a perfected security interest in the acceptable collateral; or   (iii) in the case of a jurisdiction outside of the United States, title to or rights of a secured creditor to the acceptable collateral.   (d) The limitations of 33-12-302 and 33-12-309 do not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection (1), no effect will be given to the insurer's future obligation to resell securities, in the case of a repurchase transaction, or to repurchase securities, in the case of a reverse repurchase transaction. An insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction:   (i) the aggregate amount of securities then loaned, sold to, or purchased from any one business entity counterparty under this section would exceed 5% of the insurer's admitted assets. In calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement.   (ii) the aggregate amount of all securities then loaned, sold to, or purchased from all business entities under this section would exceed 40% of its admitted assets. However, the limitation of this subsection (1)(d) does not apply to reverse repurchase transactions as long as the borrowing is used to meet operational liquidity requirements resulting from an officially declared catastrophe and is subject to a plan approved by the commissioner.   (e) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 102% of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty must be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 102% of the market value of the loaned securities.   (f) In a reverse repurchase transaction, other than a dollar roll transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 95% of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than 95% of the market value of the securities transferred, the business entity counterparty is obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 95% of the market value of the transferred securities.   (g) In a dollar roll transaction, the insurer must receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date.   (h) In a repurchase transaction, the insurer must receive as acceptable collateral transferred securities having a market value at least equal to 102% of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than 100% of the purchase price paid by the insurer, the business entity counterparty must be obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, equals at least 102% of the purchase price. Securities acquired by an insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.   (2) To constitute acceptable collateral for the purposes of this section, a letter of credit must have an expiration date beyond the term of the subject transaction.   History: En. Sec. 32, Ch. 304, L. 1999.  
  33-12-309. Foreign investments and foreign currency exposure. (1) Subject to the limitations of 33-12-302, an insurer may acquire foreign investments or engage in investment practices with persons of or in foreign jurisdictions if the investments or investment practices are of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than of the type permitted under 33-12-304 and if as a result of and after giving effect to the investment the aggregate amount of foreign investments then held by the insurer under this subsection (1):   (a) does not exceed 20% of its admitted assets; and   (b) in a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 5% of its admitted assets as to any other foreign jurisdiction.   (2) (a) Subject to the limitations of 33-12-302, an insurer may acquire investments or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (1), or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency if:   (i) the aggregate amount of investments then held by the insurer under this subsection (2) denominated in foreign currencies does not exceed 15% of its admitted assets; and   (ii) the aggregate amount of investments then held by the insurer under this subsection (2) denominated in the foreign currency of a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 5% of its admitted assets as to any other foreign jurisdiction.   (b) However, an investment may not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under 33-12-310 and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate that effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.   (3) (a) Subject to 33-12-302 and subsection (3)(b) of this section and in addition to investments permitted under subsections (1) and (2), an insurer that is authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction.   (b) However, investments made under this subsection (3) in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises are not subject to the limitations of 33-12-302 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection (3) may not exceed the greater of:   (i) the amount the insurer is required by law to invest in the foreign jurisdiction; or   (ii) 125% of the amount of its reserves, net of reinsurance, and other obligations under the contracts.   (4) (a) In addition to investments permitted under subsections (1) and (2) and except as provided in subsection (4)(b), an insurer that is not authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in a foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction subject to the limitations set forth in 33-12-302.   (b) However, investments made under this subsection (4) in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises are not subject to the limitations of 33-12-302 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection (4) may not exceed 105% of the amount of its reserves, net of reinsurance, and other obligations under the contracts on risks resident or located in the foreign jurisdiction.   (5) Investments acquired under this section must be aggregated with investments of the same types made under this chapter and, in a similar manner, for purposes of determining compliance with the limitations, if any, contained in this chapter. Investments in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises, except for those exempted under subsections (3) and (4), are subject to the limitations of 33-12-302.   History: En. Sec. 33, Ch. 304, L. 1999.  
  33-12-310. Derivative transactions. An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section under the following conditions:   (1) (a) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions as provided in rules adopted by the commissioner.   (b) An insurer must be able to demonstrate to the commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of transactions through cash flow testing or other appropriate analyses.   (2) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction:   (a) the aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed 5% of its admitted assets;   (b) the aggregate statement value of options, caps, and floors written in hedging transactions does not exceed 3% of its admitted assets; and   (c) the aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5% of its admitted assets.   (3) An insurer may enter into the following types of income-generation transactions only if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed-income assets that are subject to call, plus the face value of fixed-income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the put options does not exceed 10% of its admitted assets:   (a) sales of covered call options on noncallable, fixed-income securities, callable fixed-income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed-income securities;   (b) sales of covered call options on equity securities if the insurer holds in its portfolio or can immediately acquire, through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold; or   (c) sales of covered put options on investments that the insurer is permitted to acquire under this chapter if the insurer has placed in escrow or entered into a custodian agreement segregating cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put option during the complete term of the put option sold.   (4) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of 33-12-302.   (5) Pursuant to rules adopted under 33-12-111, the commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (2) or for other risk management purposes under rules adopted by the commissioner, but replication transactions may not be permitted for other than risk management purposes.   History: En. Sec. 34, Ch. 304, L. 1999.  
  33-12-311. Additional investment authority. (1) Under this section, an insurer may acquire investments, may engage in investment practices of any kind that are not specifically prohibited by this chapter, or may engage in investment practices without regard to any limitation in 33-12-302 through 33-12-309. However, an insurer may not acquire an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments then held by the insurer under this section would exceed the greater of:   (a) its unrestricted surplus; or   (b) the lesser of:   (i) 10% of its admitted assets; or   (ii) 50% of its surplus as regards policyholders.   (2) An insurer may not acquire an investment or engage in an investment practice under subsection (1) if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person then held by the insurer under subsection (1) would exceed 5% of its admitted assets.   History: En. Sec. 35, Ch. 304, L. 1999.  
  33-12-312. Reserve requirements -- authority of commissioner. (1) Subject to all other limitations and requirements of this title, a property and casualty, financial guaranty, mortgage guaranty, surety, marine, title, or accident and health insurer shall maintain an amount at least equal to 100% of adjusted loss reserves and loss adjustment expense reserves, 100% of adjusted unearned premium reserves, and 100% of statutorily required policy and contract reserves in:   (a) cash and cash equivalents;   (b) high-grade investments and medium-grade investments that qualify under 33-12-303 or 33-12-304;   (c) equity interests that qualify under 33-12-305 and that are traded on a qualified exchange;   (d) investments of the type set forth in 33-12-309 if the investments are rated in the highest generic rating category by a nationally recognized statistical rating organization recognized by the SVO for rating foreign jurisdictions and if any foreign currency exposure is effectively hedged through the maturity date of the investments;   (e) qualifying investments of the type set forth in subsection (1)(b), (1)(c), or (1)(d) that are acquired under 33-12-311;   (f) interest and dividends receivable on qualifying investments of the type set forth in subsections (1)(a) through (1)(e); or   (g) reinsurance recoverable on paid losses.   (2) (a) For purposes of determining the amount of assets to be maintained under this subsection (2), the calculation of adjusted loss reserves and loss adjustment expense reserves, adjusted unearned premium reserves, and statutorily required policy and contract reserves must be based on the amounts reported as of the most recent annual or quarterly statement date.   (b) Adjusted loss reserves and loss adjustment expense reserves must be equal to the sum of the amounts derived from the following calculations:   (i) the result of each amount reported by the insurer as losses and loss adjustment expenses unpaid for each accident year for each individual line of business; multiplied by   (ii) the discount factor that is applicable to the line of business and accident year published by the internal revenue service under Internal Revenue Code section 846 (26 U.S.C. 846), as amended, for the calendar year that corresponds to the most recent annual statement of the insurer; minus   (iii) accrued retrospective premiums discounted by an average discount factor. The discount factor must be calculated by dividing the losses and loss adjustment expenses unpaid after discounting (the product of subsections (2)(b)(i) and (2)(b)(ii)) by loss and loss adjustment expense reserves before discounting subsection (2)(b)(i).   (c) For purposes of the calculations in subsections (2)(b)(i) through (2)(b)(iii), the losses and loss adjustment expenses unpaid must be determined net of anticipated salvage and subrogation and gross of any discount for the time value of money or tabular discount.   (d) Adjusted unearned premium reserves must be equal to the result of the following calculation:   (i) the amount reported by the insurer as unearned premium reserves; minus   (ii) the admitted asset amounts reported by the insurer as:   (A) premiums in and agents' balances in the course of collection, accident and health premiums due and unpaid, and uncollected premiums for accident and health premiums;   (B) premiums, agents' balances, and installments booked but deferred and not yet due; and   (C) bills receivable, taken for premium.   (3) A property and casualty, financial guaranty, mortgage guaranty, surety, marine, title, or accident and health insurer shall supplement its annual statement with a reconciliation and summary of its assets and reserve requirements as required in (1). A reconciliation and summary showing that an insurer's assets as required in subsection (1) are greater than or equal to its undiscounted reserves referred to in subsection (1) must be sufficient to satisfy this requirement. Upon prior notification, the commissioner may require an insurer to submit a reconciliation and summary with any quarterly statement filed during the calendar year.   (4) If a property and casualty, financial guaranty, mortgage guaranty, surety, marine, title, or accident and health insurer's assets and reserves do not comply with subsection (1), the insurer shall notify the commissioner immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets, explain why the deficiency exists, and within 30 days of the date of the notice, propose a plan of action to remedy the deficiency.   (5) (a) If the commissioner determines that an insurer is not in compliance with subsection (1), the commissioner shall require the insurer to eliminate the condition causing the noncompliance within a specified time from the date the notice of the commissioner's requirement is mailed or delivered to the insurer.   (b) If an insurer fails to comply with the commissioner's requirement under subsection (5)(a), the insurer is considered to be in hazardous financial condition and the commissioner shall take one or more of the actions authorized by law with respect to insurers in hazardous financial condition.   History: En. Sec. 36, Ch. 304, L. 1999.  
  33-14-101. Short title. This chapter may be cited as the "Insurance Premium Finance Company Act".   History: En. Sec. 1, Ch. 360, L. 1981.  
  33-14-102. Definitions. As used in this chapter, the following definitions apply:   (1) "Insurance premium finance company" means a person engaged in the business of entering into premium finance agreements with insureds or of acquiring such premium finance agreements from insurance producers, brokers, or other premium finance companies.   (2) "Licensee" means a premium finance company holding a license issued by the commissioner under this chapter.   (3) "Premium finance agreement" means an agreement by which an insured or prospective insured promises to pay to a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance producer or broker in payment of premiums on an insurance contract, together with a finance charge as authorized by this chapter, and as security therefor the insurance premium finance company receives an assignment of the unearned premium.   (4) "Unearned premium" means that part of the original premium, including a deposit, not yet earned by the insurer and therefore due the insured if a policy is canceled.   History: En. Sec. 2, Ch. 360, L. 1981; amd. Sec. 1, Ch. 123, L. 1987; amd. Sec. 1, Ch. 713, L. 1989.  
  33-14-201. License required -- fee -- renewal of license. (1) Except as provided in subsection (4), a person may not engage in the business of financing insurance premiums without first having obtained a license as a premium finance company from the commissioner. Any person who engages in the business of financing insurance premiums in the state without obtaining a license as provided under this chapter is, upon conviction, guilty of a misdemeanor.   (2) The annual license fee is $100. A license may be renewed as of January 1 each year, upon payment of the fee of $100. The license fee must be paid to the commissioner.   (3) The person to whom the license or the renewal of the license is issued shall file sworn answers, subject to the penalties of perjury, to any interrogatories as the commissioner may require. The commissioner may, at any time, require the applicant fully to disclose the identity of all stockholders, partners, officers, and employees, and the commissioner may, in the commissioner's discretion, refuse to issue or renew a license in the name of any firm, partnership, or corporation if not satisfied that any officer, employee, stockholder, or partner who may materially influence the applicant's conduct meets the standards of this chapter.   (4) This section does not apply to and a license is not required of:   (a) savings and loan associations, banks, trust companies, licensed finance companies, credit unions, and resident insurance producers; or   (b) a person who, within 15 days after entering into an insurance premium finance agreement, transfers the agreement to a licensee or to any of the organizations exempt under this subsection (4).   History: En. Sec. 3, Ch. 360, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 16, Ch. 451, L. 1993.  
  33-14-202. Applicant qualifications -- hearing. (1) Upon the filing of an application and the payment of the license fee, the commissioner may make a background examination of each applicant and shall issue a premium finance company license if the applicant is qualified in accordance with this chapter. If the commissioner denies the application, the applicant may file a written demand for a hearing pursuant to the provisions of 33-1-701.   (2) The commissioner shall issue or renew a license when the commissioner is satisfied that the person to be licensed:   (a) is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for;   (b) has a good business reputation and has had experience, training, or education that qualifies the applicant in the business for which the license is applied; and   (c) if a corporation, is a corporation incorporated under the laws of the state or is a foreign corporation authorized to transact business in the state.   History: En. Sec. 4, Ch. 360, L. 1981; amd. Sec. 40, Ch. 227, L. 2001.  
  33-14-203. License revocation -- suspension. The commissioner may revoke or suspend the license of a premium finance company when and if after investigation it appears to the commissioner that:   (1) a license issued to the company was obtained by fraud;   (2) there was misrepresentation in the application for the license;   (3) the holder of the license has otherwise been shown untrustworthy or incompetent to act as a premium finance company; or   (4) the company has violated any provisions of this chapter.   History: En. Sec. 5, Ch. 360, L. 1981; amd. Sec. 1180, Ch. 56, L. 2009.  
  33-14-204. Records required of licensees -- form -- inspection. (1) Every premium finance company shall maintain records of its premium finance transactions, and the records must be open to examination and investigation by the commissioner. The commissioner may at any time require the company to bring records that the commissioner may direct to the commissioner's office for examination.   (2) Every premium finance company shall preserve its records of premium finance transactions for at least 3 years after making the final entry in respect to any premium finance agreement. The records may be preserved in photographic form.   History: En. Sec. 6, Ch. 360, L. 1981; amd. Sec. 1181, Ch. 56, L. 2009.  
  33-14-301. Premium finance agreements -- contents -- form -- delivery. (1) A premium finance agreement must:   (a) be dated and signed by the insured or by any person authorized in writing to act in behalf of the insured, and the printed portion of the agreement must be in at least 8-point type;   (b) contain the name and place of business of the insurance producer negotiating the related insurance policy, the name and residence or the place of business of the insured as specified by the insured, the name and place of business of the premium finance company to which payments are to be made, and a description of the insurance policies involved and the amount of the premium for the policies; and   (c) set forth when applicable:   (i) the total amount of the premiums;   (ii) the amount of the downpayment;   (iii) the principal balance, which is the difference between the items enumerated in subsections (1)(c)(i) and (1)(c)(ii);   (iv) the amount of the finance charge;   (v) the balance payable by the insured, which is the sum of the items enumerated in subsections (1)(c)(iii) and (1)(c)(iv); and   (vi) the number of installments required, the amount of each installment expressed in dollars, and the due date or period of the installments.   (2) The items set out in subsection (1)(c) are not required to be stated in the sequence or order in which they appear in that subsection, and additional items may be included to explain the computations made in determining the amount to be paid by the insured.   (3) The information required by subsection (1) may be required in the initial agreement only if the premium finance company and the insured enter into an open-end credit transaction, which is defined as a plan prescribing the terms of credit transactions that may be made under the plan from time to time and under the terms of which a finance charge may be computed on the outstanding unpaid balance from time to time under the plan.   (4) The premium finance company or the insurance producer shall deliver to the insured or mail to the insured at the address shown in the agreement a complete copy of the agreement.   History: En. Sec. 7, Ch. 360, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1182, Ch. 56, L. 2009.  
  33-14-302. Charges for premium financing regulated -- method of computation. (1) A premium finance company may not charge, contract for, receive, or collect a finance charge other than as permitted by this chapter.   (2) The finance charge must be computed on the balance of the premiums due, after subtracting the downpayment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance coverage for which the premiums are being advanced to and including the date when the final payment of the premium finance agreement is payable.   (3) Notwithstanding any other provision of law, the finance charge may not exceed interest at the annual rate of 21%, plus a service charge of $12.50 per premium finance agreement. The service charge of $12.50 is not required to be refunded upon cancellation or prepayment.   (4) An insured may prepay the premium finance agreement in full at any time prior to the due date of the final payment, and upon payment the unearned finance charge must be refunded.   History: En. Sec. 8, Ch. 360, L. 1981; amd. Sec. 1183, Ch. 56, L. 2009.  
  33-14-303. Delinquency charges regulated. (1) A premium finance agreement may provide for the payment by the insured of a delinquency charge of $1 to a maximum of 5% of the delinquent installment but not to exceed $5 on any installment that is in default for 5 days or more.   (2) If the default results in the cancellation of any insurance contract listed in the agreement, the agreement may provide for payment by the insured of a cancellation charge equal to the difference between any delinquency charge or default charge imposed with respect to the installment in default and $5. A premium finance agreement may also provide for the payment of attorney's fees and court costs if the agreement is referred for collection to an attorney not a salaried employee of the insurance premium finance company.   History: En. Sec. 9, Ch. 360, L. 1981.  
  33-14-304. Cancellation of insurance upon default. (1) When a premium finance agreement contains a power of attorney or other authority enabling the insurance premium finance company to cancel any insurance contract listed in the agreement, the insurance contract or contracts may not be canceled by the premium finance company unless the cancellation is effectuated in accordance with this section.   (2) Written notice must be mailed to the insured setting forth the intent of the insurance premium finance company to cancel the insurance contract unless the default is cured prior to the date stated in the notice. The written notice must be mailed at least 10 days prior to the date stated in the notice. The insurance producer indicated on the premium finance agreement must also be mailed 10 days' notice of this action.   (3) Pursuant to the power of attorney or other authority referred to above, the insurance premium finance company may cancel on behalf of the insured by mailing to the insurer written notice stating when the cancellation will become effective, and the insurance contract must be canceled as if the notice of cancellation had been submitted by the insured but without requiring the return of the insurance contract. If the insurer or its insurance producer does not provide the insurance premium finance company with a specific mailing address for the purpose of receipt of the notice, mailing by the insurance premium finance company to the insurer at the address that is on file with the commissioner is considered sufficient notice under this section. The insurance premium finance company shall also mail a notice of cancellation to the insured at the insured's last-known address and to the insurance producer indicated on the premium finance agreement.   (4) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party apply whenever cancellation is effected under the provisions of this section. The insurer shall give the prescribed notice in behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days' notice required to complete the cancellation.   History: En. Sec. 10, Ch. 360, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 44, Ch. 379, L. 1995.  
  33-14-305. Return of unearned premiums. (1) Whenever a financed insurance contract is canceled by a person other than the insured, the insurer shall process cancellation of the financed insurance policy on a pro rata basis. The insurer shall return whatever gross unearned premiums are due under the insurance contract to the premium finance company for the account of the insured or insureds.   (2) If the crediting of the return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund the excess to the insured, except that a refund is not required if the excess amounts to less than $1.   History: En. Sec. 11, Ch. 360, L. 1981; amd. Sec. 2, Ch. 123, L. 1987; amd. Sec. 17, Ch. 451, L. 1993.  
  33-14-306. Agreement effective as security interest. No filing of the premium finance agreement or recording of a premium finance transaction shall be necessary to perfect the validity of the agreement as a secured transaction as against creditors, subsequent purchasers, pledgees, encumbrancers, successors, or assigns.   History: En. Sec. 12, Ch. 360, L. 1981.  
  33-14-307. Exceptions. This chapter does not apply to any insurance company or insurance companies affiliated under the same management and control authorized to do business in this state which provide installment premium payments programs at no interest to policyholders or to an insurance producer licensed to do business in this state on policies written by the insurance producer or issued by the company or companies.   History: En. Sec. 13, Ch. 360, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-15-101. Scope. Parts 1 through 5 do not apply as to:   (1) reinsurance;   (2) policies or contracts not issued for delivery in this state or delivered in this state;   (3) ocean marine and foreign trade insurances;   (4) title insurance, except as to the following provisions: 33-15-102, 33-15-103, 33-15-303, 33-15-305, 33-15-306, 33-15-307, 33-15-316, and 33-15-411.   History: En. Sec. 258, Ch. 286, L. 1959; R.C.M. 1947, 40-3701; amd. Sec. 17, Ch. 303, L. 1981.  
  33-15-102. Definitions. (1) "Policy" means the written contract of or written agreement for or effecting insurance, by whatever name called, and includes all clauses, riders, endorsements, and papers attached thereto and a part thereof.   (2) "Premium" is the consideration for insurance, by whatever name called. Any assessment or membership, policy, survey, inspection, service, or similar fee or charge in consideration for an insurance contract is deemed part of the premium.   History: En. Secs. 259, 260, Ch. 286, L. 1959; R.C.M. 1947, 40-3702, 40-3703.  
  33-15-103. Power to contract -- purchase of insurance by minors. (1) Any person of competent legal capacity may contract for insurance.   (2) Any minor 15 years of age or older, as determined by the nearest birthday, may contract for annuities and for insurance upon the minor's own life, body, health, property, liabilities, or other interests or on the person of another in whom the minor has an insurable interest. The minor must be considered competent to exercise all rights and powers with respect to or under any contract for annuity or for insurance upon the minor's own life, body, or health or any contract the minor effected upon the minor's own property, liabilities, or other interests or on the person of another as might be exercised by a person of full legal age and may at any time surrender the minor's interest in any contracts and give valid discharge for any benefit accruing or money payable under the contracts. The minor may not, by reason of minority, be entitled to rescind, avoid, or repudiate the contract or to rescind, avoid, or repudiate any exercise of a right or privilege under the contract, except that the minor, not otherwise emancipated, may not be bound by any unperformed agreement to pay by promissory note or otherwise any premium on any annuity or insurance contract.   (3) If any minor mentioned in subsection (2) is possessed of an estate that is being administered by a guardian, the contract is not binding upon the estate as to payment of premiums except when consented to by the guardian and approved by the district court of the county in which the administration of the estate is pending, and the consent and approval is required for each annual premium payment.   (4) Any annuity contract or policy of life or disability insurance procured by or for a minor under subsection (2) must be made payable either to the minor, to the minor's estate, or to a person having an insurable interest in the life of the minor under 33-15-201.   History: En. Sec. 267, Ch. 286, L. 1959; R.C.M. 1947, 40-3710; amd. Sec. 147, Ch. 575, L. 1981; amd. Sec. 1184, Ch. 56, L. 2009.  
  33-15-1101. Purpose -- applicability. (1) The purpose of this part is to protect the public with regard to insurance transactions that involve cancellation, renewal, nonrenewal, or premium increases on contracts of property or casualty insurance by:   (a) regulating the grounds for midterm cancellation of an insurance policy;   (b) except as provided in 33-15-1108, prohibiting midterm increases in premiums;   (c) increasing the opportunity for insureds to shop for replacement or substitute insurance;   (d) reducing the opportunity for breach of contract, misrepresentation by omission or untimely disclosure, and unfair discrimination among insureds; and   (e) increasing the opportunity for insurance producers to compete freely.   (2) This part applies to those forms of insurance defined in 33-1-206 and 33-1-210, except to the extent they conflict with chapter 23 of this title.   (3) This part does not limit the activities that may constitute undefined unfair trade practices prohibited by 33-18-1003. The commissioner may apply other provisions of this code to insurance transactions involving cancellation, renewal, nonrenewal, or premium increases on contracts of property or casualty insurance. Policies may provide terms more favorable to insureds than are required by this part. The rights provided by this part are in addition to and do not prejudice any other rights that the insured may have under common law, statutes, or rules.   History: En. Sec. 1, Ch. 120, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1, Ch. 501, L. 2003.  
  33-15-1102. Definitions. As used in this part, the following definitions apply unless the context requires otherwise:   (1) "Anniversary date" means the month and day that rates, rating plans, and rating systems are initially applied to a policy in effect. The term includes each annual anniversary thereafter unless the insurer establishes a different date by a filing with the commissioner.   (2) "Cancellation" means the decision by the insurer to terminate an insurance policy prior to the expiration of its term.   (3) "Classification" means an arrangement of insurance risks into an underwriting or rating group according to a classification system used by an insurer as a basis for tabulating statistical experience and determining premium rates.   (4) "Classification system" means a schedule of classifications and a rule used by an insurer for determining the classifications applicable to an insured.   (5) "Insurer" means an insurer authorized to transact property or casualty insurance in this state or an unauthorized insurer transacting surplus lines insurance in this state.   (6) "Premium" means the contractual consideration charged to an insured for insurance for a specified period of time, regardless of the timing of actual charges.   (7) "Rate" means a monetary amount applied to the units of exposure assigned to a classification and used by an insurer to determine the premium for an insured.   (8) "Rating plan" means a rule used by an insurer to calculate:   (a) the premium for an insured; and   (b) the parameter values used in such calculation after application of classification premium rates to units of exposure.   (9) "Renewal" means an agreement between an insurer and an insured to extend or continue an existing insurance policy for 90 days or more.   History: En. Sec. 2, Ch. 120, L. 1987; amd. Sec. 4, Ch. 180, L. 1991.  
  33-15-1103. Midterm cancellation. (1) An insurer may not cancel an insurance policy before either the expiration of the agreed term or 1 year from the effective date of the policy or renewal date, whichever is less, except:   (a) for reasons specifically allowed by statute;   (b) for failure to pay a premium when due; or   (c) on grounds stated in the policy which pertain to the following:   (i) material misrepresentation;   (ii) substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk when the contract was written;   (iii) substantial breaches of contractual duties, conditions, or warranties;   (iv) determination by the commissioner that continuation of the policy would place the insurer in violation of this code;   (v) financial impairment of the insurer; or   (vi) any other reason approved by the commissioner.   (2) Except as provided in 33-23-401, cancellation under subsection (1) is not effective until 10 days after a notice of cancellation is either delivered or mailed to the insured.   (3) Subsections (1) and (2) do not apply to a newly issued insurance policy if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. A cancellation under this subsection is not effective until 10 days after the notice is delivered or mailed to the insured.   (4) If a policy has been issued for a term longer than 1 year and if either the premium is prepaid or an agreed term is guaranteed for additional premium consideration, the insurer may not cancel the policy except:   (a) for reasons specifically allowed by statute;   (b) for failure to pay a premium when due; or   (c) on grounds stated in the policy which pertain to those grounds listed in subsection (1)(c).   History: En. Sec. 3, Ch. 120, L. 1987; amd. Sec. 1, Ch. 263, L. 2005.  
  33-15-1104. Anniversary cancellation -- anniversary rate increases. (1) An insurer may issue a policy for a term longer than 1 year or for an indefinite term if the policy contains a clause that allows cancellation by the insurer if the insurer gives notice 45 days prior to an anniversary date.   (2) If a policy has been issued for a term longer than 1 year and for additional premium consideration an annual premium has been guaranteed, the insurer may not increase the annual premium for the term of that policy.   History: En. Sec. 4, Ch. 120, L. 1987; amd. Sec. 1, Ch. 339, L. 2003.  
  33-15-1105. Nonrenewal -- renewal premium. (1) (a) An insured has a right to reasonable notice of nonrenewal. Unless otherwise provided by statute or unless a longer term is provided in the policy, at least 45 days prior to the expiration date provided in the policy, an insurer who does not intend to renew a policy beyond the agreed expiration date shall mail or deliver to the insured a notice of the intention not to renew. The insurer shall also mail or deliver a copy to the insured's insurance producer.   (b) Notification of nonrenewal to the insured's insurance producer via electronic transfer of data or by an electronic data retrieval device meets the requirement of a mailed or delivered copy.   (2) An insurer shall give notice of premium due not more than 60 days or less than 30 days before the due date of a renewal premium. The notice must clearly state the effect of nonpayment of the premium on or before the due date.   (3) Subsections (1) and (2) do not apply if:   (a) the insured has obtained insurance elsewhere, has accepted replacement coverage, or has requested or agreed to nonrenewal; or   (b) the policy is expressly designated as nonrenewable.   (4) An insurer may not refuse to renew a property and casualty insurance policy on the basis of a single loss occurring during the policy period unless the insurer has previously disclosed in writing to the insured, at the time that the insured applied for the insurance or prior to the insured's renewal, that a single loss is among the insurer's criteria for nonrenewal.   (5) (a) For the purposes of this subsection (5), the following definitions apply:   (i) "Claim" means a contact with an insurer by an insured or third party for the purpose of seeking payment. An inquiry into coverage on a property and casualty insurance policy is not claim activity unless:   (A) a payment is made;   (B) a reserve is established or loss adjustment expenses are incurred; or   (C) a written, formal denial of the claim is issued to the insured or claimant.   (ii) "Inquiry" means a request for information regarding the terms, conditions, or coverages offered under a property and casualty insurance policy that does not result in a claim.   (b) An insurer may not use a direct or indirect inquiry as the basis for declining or not renewing insurance coverage or a binder of insurance coverage or for increasing the insurance premium.   (c) An inquiry may not be considered a claim under 33-18-201.   (d) An insurer may not submit to any insurance-support organization or consumer reporting agency an insured's name if the insured made an inquiry about terms or coverage of an insurance policy.   History: En. Sec. 5, Ch. 120, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 21, Ch. 531, L. 1997; amd. Sec. 1, Ch. 364, L. 1999; amd. Sec. 2, Ch. 339, L. 2003; amd. Sec. 2, Ch. 263, L. 2005; amd. Sec. 1, Ch. 498, L. 2005.  
  33-15-1106. Renewal with altered terms. (1) If an insurer offers or purports to renew a policy but on less favorable terms, at a higher rate, or at a higher rating plan, the new terms, rate, or rating plan take effect on the policy renewal date only if the insurer has mailed or delivered notice of the new terms, rate, or rating plan to the insured at least 45 days before the expiration date.   (2) This section does not apply if the increase in the rate or the rating plan, or both, results from a classification change based on the altered nature or extent of the risk insured against.   History: En. Sec. 6, Ch. 120, L. 1987; amd. Sec. 4, Ch. 699, L. 1991; amd. Sec. 22, Ch. 531, L. 1997; amd. Sec. 3, Ch. 339, L. 2003.  
  33-15-1107. Information about grounds for nonrenewal. (1) If the insurer or insurance producer receives a written request from an insured within 60 business days from the date on which the insurer mailed a notice of cancellation or nonrenewal to the insured, the insurer or insurance producer shall, within 21 days of receiving the insured's written request, furnish the insured the information that the insurer or insurance producer used to make its decision. A notice is not effective unless it contains adequate information about the insured's right to make the request.   (2) This section does not apply if the ground for cancellation or nonrenewal is nonpayment of the premium and the reason is stated in the notice.   History: En. Sec. 7, Ch. 120, L. 1987; amd. Sec. 26, Ch. 472, L. 1999.  
  33-15-1108. Limitation on midterm premium increases. (1) In any case involving property or casualty insurance that is subject to this part, the insurer may not unilaterally increase the rate charged or decrease the coverage provided for the contract period unless:   (a) there is a change in risk during that period because of the addition or removal of persons or property that was included in the rate at last renewal;   (b) the risk was misrepresented by the insured; or   (c) the insured requests a policy change that increases the rate because of that specific request.   (2) This section does not prohibit the cancellation of a policy for any other reason permitted by the policy or by law during an initial policy period not to exceed 60 days.   History: En. Sec. 2, Ch. 501, L. 2003; amd. Sec. 10, Ch. 62, L. 2019.  
  33-15-1109 and 33-15-1110 reserved.  
  33-15-1111. Home owner insurance not affected by day-care operations. (1) No insurer writing home owner insurance in this state may deny an applicant home owner insurance or cancel or refuse to renew a home owner insurance policy covering a dwelling located in this state for the principal reason that an insured under the policy operates at the insured location a day-care facility, as defined in 52-2-703, that satisfies the requirements of 52-2-723 or 52-2-724.   (2) This section does not prevent an insurer from excluding or limiting coverage with respect to liability or property losses arising out of an insured's business pursuits, including those related to the operation of a day-care facility.   History: En. Sec. 8, Ch. 120, L. 1987.  
  33-15-1112 through 33-15-1120 reserved.  
  33-15-1121. Unfair trade practices. (1) The failure of an insurer to comply with this part constitutes an unfair trade practice under 33-18-1003.   (2) Midterm premium increases and policy coverage reductions not in compliance with this part that are attempted or executed constitute unfair trade practices under 33-18-1003.   History: En. Sec. 9, Ch. 120, L. 1987.  
  33-15-1122 through 33-15-1125 reserved.  
  33-15-1126. Disclosure of certain claim information on insurance policies. (1) On request of a policyholder, an insurer shall provide to the policyholder, or to an insurance producer designated by the policyholder, a list of claims charged against the policy.   (2) The information must include:   (a) the date and description of the claim;   (b) details relating to the cause and disposition of the claim; and   (c) a list of the claims charged against the policy, including payments made on each claim.   (3) The information must be provided within 10 days of the policyholder's request.   (4) The information provided under this section is confidential insurance information. The information may be used by the policyholder for internal management purposes or for procuring insurance products but may not be disclosed for any other purpose without the express written consent of the insurer.   (5) This section does not apply to workers' compensation insurance.   History: En. Sec. 1, Ch. 267, L. 2015.  
  33-15-201. Restrictions on contracting for personal insurance -- insurable interests -- violation. (1) Any individual of competent legal capacity may procure or effect an insurance contract upon the individual's own life or body for the benefit of any person. However, a person may not procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under the contract are payable to the individual insured, to the individual's personal representatives, or to a person having, at the time when the contract was made, an insurable interest in the individual insured.   (2) If the beneficiary, assignee, or other payee under any contract made in violation of this section receives from the insurer any benefits under the contract accruing upon the death, disablement, or injury of the individual insured, the individual insured or the individual's personal representative may maintain an action to recover the benefits from the person receiving them.   (3) "Insurable interest" with reference to personal insurance includes only interests as follows:   (a) in the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection;   (b) in the case of other persons, a lawful and substantial economic interest in having the life, health, or bodily safety of the individual insured continue, as distinguished from an interest that would arise only by or would be enhanced in value by the death, disablement, or injury of the individual insured.   (4) An individual who is a party to a contract or option for the purchase or sale of an interest in a business partnership or firm or of shares of stock of a closed corporation or of an interest in the shares has an insurable interest in the life of each individual party to the contract and for the purposes of the contract only in addition to any insurable interest that may otherwise exist as to the life of the individual.   (5) A charitable institution has an insurable interest in an individual if:   (a) the individual authorizes the charitable institution to purchase insurance naming the charitable institution as an irrevocable beneficiary; and   (b) the insurance is purchased with contributions made by the individual.   History: En. Sec. 261, Ch. 286, L. 1959; R.C.M. 1947, 40-3704; amd. Sec. 148, Ch. 575, L. 1981; amd. Sec. 3, Ch. 670, L. 1991; amd. Sec. 1185, Ch. 56, L. 2009.  
  33-15-202 through 33-15-204 reserved.  
  33-15-205. Restrictions on property insurance -- interest. (1) No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.   (2) "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.   (3) The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.   History: En. Sec. 262, Ch. 286, L. 1959; R.C.M. 1947, 40-3705.  
  33-15-206. Interest of named insured -- change of interest on death -- transfer. (1) When the name of the person insured is specified in a policy insuring property, the insurance can be applied only to the person's own proper interest.   (2) A change of interest, by will or succession, on the death of the insured does not avoid an insurance of property, and the insurance passes to the person taking the insured's interest in the thing insured.   (3) A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured, to the others does not avoid an insurance of property even though it has been agreed that the insurance must cease upon an alienation of the thing insured.   History: En. Secs. 263, 264, 265, Ch. 286, L. 1959; R.C.M. 1947, 40-3706, 40-3707, 40-3708; amd. Sec. 1186, Ch. 56, L. 2009.  
  33-15-207. Insurance without interest or of wager -- void. (1) Every stipulation in a policy of insurance of property for the payment of loss without regard to absence of an insurable interest in such property on the part of the insured or that the policy shall be received as proof of such interest is void.   (2) Every policy executed by way of gaming or wagering is void.   History: En. Sec. 266, Ch. 286, L. 1959; R.C.M. 1947, 40-3709.  
  33-15-301. Requiring standard provisions -- waiver. (1) Insurance contracts must contain the standard or uniform provisions and benefits required by the applicable provisions of this code pertaining to contracts of particular kinds of insurance. The commissioner may waive a particular provision in a particular insurance policy form if:   (a) the commissioner finds the provision or benefit unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and   (b) the policy is otherwise approved by the commissioner.   (2) A policy or certificate may not contain any provision or benefit inconsistent with or contradictory to any standard or uniform provision or benefit used or required to be used, but the commissioner may approve any substitute provision or benefit that is, in the commissioner's opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required.   (3) In lieu of the provisions required by this code for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the commissioner.   (4) A provision, if required to be contained in the policy, may not be waived by agreement between the insurer and any other person.   History: En. Sec. 273, Ch. 286, L. 1959; R.C.M. 1947, 40-3716; amd. Sec. 45, Ch. 379, L. 1995.  
  33-15-302. Policy must contain entire contract. The policy, when issued, shall contain the entire contract between the parties, and neither the insurer or any insurance producer or representative thereof nor any person insured thereunder shall make any agreement as to the insurance which is not plainly expressed in the policy. This provision shall not be deemed to prohibit the modification of a policy, after issuance, by written rider or endorsement duly issued by the insurer.   History: En. Sec. 274, Ch. 286, L. 1959; R.C.M. 1947, 40-3717; amd. Sec. 1, Ch. 713, L. 1989.  
  33-15-303. Contents of policies in general -- identification. (1) Each policy must specify:   (a) the names of the parties to the contract;   (b) the subject of the insurance;   (c) the risks insured against;   (d) the time when the insurance under the policy takes effect and the period during which the insurance is to continue;   (e) the premium;   (f) the conditions pertaining to the insurance.   (2) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid must be included.   (3) All policies and annuity contracts issued by insurers and the forms of policies and annuity contracts filed with the commissioner must have printed on the policy or annuity contract an appropriate designating letter or figure, combination of letters or figures, or terms identifying the respective forms of policies or contracts. Each form, including riders and endorsements, must be identified by a designating letter or figure placed in a lower, preferably left-hand, corner of the first page of the form. Whenever any change is made in any form, the designating letters, figures, or terms on the form must be correspondingly changed and the revision date must be noted next to the designating letters.   History: En. Sec. 275, Ch. 286, L. 1959; R.C.M. 1947, 40-3718; amd. Sec. 18, Ch. 303, L. 1981; amd. Sec. 18, Ch. 451, L. 1993; amd. Sec. 46, Ch. 379, L. 1995.  
  33-15-304. Permissible content. A policy may contain additional provisions not inconsistent with this code and which are:   (1) required to be inserted by the laws of the insurer's domicile;   (2) necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or   (3) desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.   History: En. Sec. 276, Ch. 286, L. 1959; R.C.M. 1947, 40-3719.  
  33-15-305. Prohibited content -- charter or bylaws. No policy shall contain any provision purporting to make any portion of the charter, bylaws, or other constituent document of the insurer, other than the subscribers' agreement or power of attorney of a reciprocal insurer, a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid.   History: En. Sec. 277, Ch. 286, L. 1959; R.C.M. 1947, 40-3720.  
  33-15-306. Execution of policies -- facsimile signature. (1) Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney-in-fact, employee, or representative duly authorized by the insurer.   (2) A facsimile signature of any such executing individual may be used in lieu of an original signature.   (3) No insurance contract heretofore or hereafter issued and which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.   History: En. Sec. 278, Ch. 286, L. 1959; R.C.M. 1947, 40-3721.  
  33-15-307. Underwriters' and combination policies. (1) Two or more authorized insurers may jointly issue and shall be jointly and severally liable on an underwriters' policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department, and such policy shall plainly show the true name of the insurer.   (2) Two or more insurers may, with the approval of the commissioner, issue a combination policy which shall contain provisions substantially as follows:   (a) that the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and   (b) that service of process or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.   (3) This section shall not apply to cosurety obligations.   History: En. Sec. 279, Ch. 286, Ch. 1959; R.C.M. 1947, 40-3722.  
  33-15-308. Explanation of charges. An insurer, health service corporation, or health maintenance organization that issues policies, certificates, membership contracts, or subscriber contracts for delivery in this state on or after January 1, 2000, and that limits payment of health care services based on standards described as usual and customary, reasonable and customary, prevailing fee, allowable charges, a relative value schedule, or other comparable terms shall include, displayed in the schedule page or elsewhere in the policy, certificate, membership contract, or subscriber contract:   (1) a definition of the term or terms and an explanation of how the limitation of payment based on the term or terms is derived;   (2) if the standard of the term or terms is derived by the use of a database, a description of the database reasonably calculated to inform the insured or certificate holder of the method used to define the geographic or demographic area from which the data used to determine the term or terms is derived; and   (3) a statement informing the insured that the insured's health care provider may charge more than the limits established by the defined terms and that the additional charges may not be covered by the policy, certificate, membership contract, or subscriber contract.   History: En. Sec. 1, Ch. 173, L. 1995; amd. Sec. 1, Ch. 134, L. 1999.  
  33-15-309 through 33-15-314 reserved.  
  33-15-315. Validity of noncomplying forms. Any insurance policy, rider, or endorsement hereafter issued and otherwise valid which contains any condition or provision not in compliance with the requirements of this code shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this code.   History: En. Sec. 281, Ch. 286, L. 1959; R.C.M. 1947, 40-3724.  
  33-15-316. Construction of policies. Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application which is a part of the policy.   History: En. Sec. 282, Ch. 286, L. 1959; R.C.M. 1947, 40-3725.  
  33-15-317. Insurance coverage of punitive damages. (1) Insurance coverage does not extend to punitive or exemplary damages unless expressly included by the contract of insurance.   (2) Prior to renewal of any policy in effect on October 1, 1987, the insurer shall provide the insured with notice of nonrenewal of coverage of punitive or exemplary damages in the same manner as required by the commissioner of insurance for the renewal of policies with altered terms.   History: En. Sec. 3, Ch. 627, L. 1987.  
  33-15-318. Safety program requirement in workers' compensation policies. A policy, contract, or agreement to insure an employer against a workers' compensation or occupational disease risk must require each insured employer to implement a safety program, as provided in 39-71-1507, as part of the policy, contract, or agreement to provide workers' compensation or occupational disease insurance coverage.   History: En. Sec. 11, Ch. 295, L. 1993.  
  33-15-319 and 33-15-320 reserved.  
  33-15-321. Life and disability insurance policy language simplification. Sections 33-15-321 through 33-15-329 may be cited as the "Life and Disability Insurance Policy Language Simplification Act".   History: En. Sec. 1, Ch. 302, L. 1981.  
  33-15-322. Purpose. (1) The purpose of 33-15-321 through 33-15-329 is to establish minimum standards for language used in policies, contracts, and certificates of life, disability, credit life, and credit disability insurance delivered or issued for delivery in this state to facilitate ease of reading by insureds.   (2) Sections 33-15-321 through 33-15-329 are not intended to increase the risk assumed by insurance companies or other entities subject to 33-15-321 through 33-15-329 or to supersede their obligation to comply with the substance of other insurance legislation applicable to life, disability, credit life, or credit disability insurance policies. Sections 33-15-321 through 33-15-329 are not intended to impede flexibility and innovation in the development of policy forms or content or to lead to the standardization of policy forms or content.   History: En. Sec. 2, Ch. 302, L. 1981.  
  33-15-323. Definitions. As used in 33-15-321 through 33-15-329, the following definitions apply:   (1) "Company" or "insurer" means any life or disability insurance company, fraternal benefit society, nonprofit health service corporation, nonprofit hospital service corporation, nonprofit medical service corporation, prepaid health plan, dental care plan, vision care plan, pharmaceutical plan, health maintenance organization, and all similar types of organizations.   (2) "Policy" or "policy form" means any:   (a) policy, contract, plan, or agreement of life or disability insurance, including credit life and credit disability insurance, delivered or issued for delivery in this state by any company subject to 33-15-321 through 33-15-329;   (b) certificate, contract, or policy issued by a fraternal benefit society; and   (c) certificate issued pursuant to a group insurance policy delivered or issued for delivery in this state.   History: En. Sec. 3, Ch. 302, L. 1981.  
  33-15-324. Application -- exceptions. (1) Sections 33-15-321 through 33-15-329 apply to all policies delivered or issued for delivery in this state by any company on or after the date such forms must be approved under 33-15-321 through 33-15-329, but nothing in 33-15-321 through 33-15-329 applies to:   (a) a policy which is a security subject to federal jurisdiction;   (b) a group policy covering a group of 1,000 or more lives at date of issue, other than a group credit life insurance policy or a group credit disability insurance policy, but a certificate issued pursuant to a group policy delivered or issued for delivery in this state is not exempt;   (c) a group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;   (d) a form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under 33-15-321 through 33-15-329; or   (e) the renewal of a policy delivered or issued for delivery prior to the dates such forms must be approved under 33-15-321 through 33-15-329.   (2) Sections 33-15-321 through 33-15-329 provide the exclusive manner for determining language simplification standards for any policy forms.   (3) A non-English language policy delivered or issued for delivery in this state is in compliance with 33-15-325(1)(a) if the insurer certifies that the policy is translated from an English language policy which complies with 33-15-325(1)(a).   History: En. Sec. 4, Ch. 302, L. 1981.  
  33-15-325. Minimum policy language simplification standards. (1) In addition to any other requirements of law, no policy form, except as stated in 33-15-324, may be delivered or issued for delivery in this state on or after the date such form must be approved under 33-15-321 through 33-15-329, unless:   (a) the text achieves a minimum score of 40 on the Flesch reading ease test or an equivalent score on any other comparable test as provided in subsection (3);   (b) it is printed, except for specification pages, schedules, and tables, in not less than 10-point type, 1-point leaded;   (c) the style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and   (d) it contains a table of contents or an index of the principal sections of the policy if the policy has more than 3,000 words printed on three or fewer pages of text, or if the policy has more than three pages regardless of the number of words.   (2) For the purposes of this section, a Flesch reading ease test score is measured by the following method:   (a) For policy forms containing 10,000 words or less of text, the entire form is analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples must be separated by at least 20 printed lines.   (b) The number of words and sentences in the text is counted and the total number of words is divided by the total number of sentences. The figure obtained is multiplied by a factor of 1.015.   (c) The total number of syllables is counted and divided by the total number of words. The figure obtained is multiplied by a factor of 84.6.   (d) The sum of the figures computed under subsections (2)(b) and (2)(c) subtracted from 206.835 equals the Flesch reading ease score for the policy form.   (e) For the purposes of subsections (2)(b) through (2)(d), the following procedures are used:   (i) a contraction, hyphenated word, or numbers and letters, if separated by spaces, are counted as one word;   (ii) a unit of words ending with a period, semicolon, or colon, but excluding headings and captions, is counted as a sentence; and   (iii) a syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. If the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.   (f) The term "text" as used in this section includes all printed matter except the following:   (i) the name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules, or tables; and   (ii) policy language which is drafted to conform to the requirements of a federal law, regulation, or agency interpretation; policy language required by a collectively bargained agreement; medical terminology; words which are defined in the policy; and policy language required by law or regulation. The insurer must identify the language or terminology excepted by this subsection and certify in writing that the language or terminology is entitled to be excepted by this subsection.   (3) Any other reading test may be approved by the commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result to the Flesch reading ease test.   (4) Filings subject to this section must be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score on the test used or stating that the score is lower than the minimum required but should be approved in accordance with 33-15-327. To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.   (5) At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they may be used.   History: En. Sec. 5, Ch. 302, L. 1981.  
  33-15-326. Construction -- time period. Nothing in 33-15-321 through 33-15-329 may be construed to negate any law of this state permitting the issuance of any policy form after it has been on file for the time period specified.   History: En. Sec. 6, Ch. 302, L. 1981.  
  33-15-327. Powers of the commissioner. The commissioner may authorize a lower score than the Flesch reading ease score required in 33-15-325(1)(a) whenever, in in the commissioner's sole discretion, the commissioner finds that a lower score:   (1) will provide a more accurate reflection of the readability of a policy form;   (2) is warranted by the nature of a particular policy form or type or class of policy forms; or   (3) is caused by certain policy language that is drafted to conform to the requirements of any state law, regulation, or agency interpretation.   History: En. Sec. 7, Ch. 302, L. 1981; amd. Sec. 1187, Ch. 56, L. 2009.  
  33-15-328. Approval of forms. A policy form meeting the requirements of 33-15-325(1)(a) may be approved by the commissioner notwithstanding the provisions of other laws that specify content of policies if the approved policy form provides policyholders and claimants protection not less favorable than they would be entitled to under such laws.   History: En. Sec. 8, Ch. 302, L. 1981.  
  33-15-329. Applicability schedule. (1) Except as provided in 33-15-324, the provisions of 33-15-321 through 33-15-329 apply to all policy forms filed on or after July 1, 1983. A policy form may not be delivered or issued for delivery in this state on or after July 1, 1986, unless approved by the commissioner or permitted to be issued under 33-15-321 through 33-15-329. Any policy form that has been approved or permitted to be issued prior to July 1, 1986, and that meets the standards set by 33-15-321 through 33-15-329 is not required to be refiled for approval but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the commissioner of a list of the forms identified by form number and accompanied by a certificate as to each form in the manner provided in 33-15-325(4).   (2) The commissioner may extend the dates in subsection (1).   History: En. Sec. 10, Ch. 302, L. 1981; amd. Sec. 1188, Ch. 56, L. 2009.  
  33-15-330 through 33-15-332 reserved.  
  33-15-333. Short title. Sections 33-15-333 through 33-15-340 may be cited as the "Property and Casualty Insurance Policy Language Simplification Act".   History: En. Sec. 1, Ch. 416, L. 1993.  
  33-15-334. Purpose. (1) The purpose of 33-15-333 through 33-15-340 is to establish minimum language and format standards to make property and casualty policies easier to read.   (2) Sections 33-15-333 through 33-15-340 are not intended to increase the risk assumed under policies subject to 33-15-333 through 33-15-340. Sections 33-15-333 through 33-15-340 are not intended to impede flexibility and innovation in the development of policy forms or content. Sections 33-15-333 through 33-15-340 do not grant authority to the commissioner to mandate the standardization of policy forms or content.   History: En. Sec. 2, Ch. 416, L. 1993.  
  33-15-335. Definitions. As used in 33-15-333 through 33-15-340, the following definitions apply:   (1) "Casualty insurance" does not include accident and health or disability insurance.   (2) "Policy" or "policy form" means any written contract of property or casualty insurance delivered or issued for delivery in this state by or on behalf of any insurer licensed in this state.   History: En. Sec. 3, Ch. 416, L. 1993.  
  33-15-336. Applicability. (1) Other statutes of this state setting simplification standards for language or format do not apply to property and casualty policies.   (2) Sections 33-15-333 through 33-15-340 do not apply to policies in manuscript form or to the following kinds of insurance:   (a) ocean marine;   (b) surety and financial institution bonds;   (c) reinsurance;   (d) commercial aviation; or   (e) large commercial risks whose aggregate annual premiums for insurance on all risks totals at least $100,000.   (3) A non-English policy is considered in compliance with 33-15-337 if it was translated from an English policy that complies with 33-15-337.   History: En. Sec. 4, Ch. 416, L. 1993; amd. Sec. 25, Ch. 472, L. 1999.  
  33-15-337. Minimum policy simplification standards. (1) All property and casualty policies subject to 33-15-333 through 33-15-340 must take into consideration the following factors:   (a) use of simple sentence structure, short sentences, and personal style;   (b) use of commonly understood words and everyday conversational language consistent with the policy's standing as a contract;   (c) avoidance of use of technical and legal terms and words with special meanings whenever possible;   (d) minimal reference to other sections or provisions of the policy;   (e) logical organization of text; and   (f) legibility.   (2) The policy must include a table of contents and notice section of important provisions.   (3) Each section must be self-contained and independent. However, general provisions applicable to more than one section may be included in a common section.   (4) The policy, except for declarations pages, schedules, and tables, must be printed in not less than 10-point type, 1-point leaded.   (5) The policy must be printed in a legible type style, with adequate contrast between ink and paper. Captions, headings, and spacings must be used to increase overall legibility.   (6) Policy exclusions may use technical terms, terms with special meanings, and court-interpreted terms to ensure policy clarity.   (7) Technical terms and words with special meanings must be avoided whenever possible.   (8) The policy text must achieve a minimum score of 40 on the Flesch reading ease test, an equivalent score on a comparable test, or a lower score on either if the commissioner finds the policy reasonably easy to read. For purposes of this section, a Flesch reading ease test must be scored by the following method:   (a) For a policy containing 10,000 words or less, the entire policy must be analyzed. For a policy containing more than 10,000 words, the readability of two 100-word samples per page may be analyzed instead. The samples must be separated by at least 20 printed lines.   (b) The total number of words in the text or sample must be divided by the total number of sentences. The figure obtained must be multiplied by 1.015.   (c) The total number of syllables in the text or sample must be divided by the total number of words. The figure obtained must be multiplied by 84.6.   (d) The sum of the figures computed under subsections (8)(b) and (8)(c) subtracted from 206.835 equals the Flesch reading ease test score.   (9) (a) For purposes of subsection (8), the following procedures must be used:   (i) A contraction, hyphenated word, number, and letter, when separated by spaces, are counted as one word.   (ii) A unit of text ending with a period, semicolon, or colon is counted as a sentence.   (iii) A syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. When the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.   (iv) At the option of the insurer, a form made a part of the policy may be scored separately or as part of the policy.   (b) The term "text", as used in this section, includes all printed matter except:   (i) the name and address of the insurer;   (ii) the name, number, or title of the policy or form;   (iii) the table of contents or index;   (iv) headings and captions; and   (v) declarations pages, schedules, or tables.   History: En. Sec. 5, Ch. 416, L. 1993.  
  33-15-338. Powers of commissioner. (1) At the commissioner's discretion, the commissioner may extend any dates under 33-15-333 through 33-15-340.   (2) The commissioner has sole authority to enforce the provisions of 33-15-333 through 33-15-340 or to seek remedies for its violation.   (3) The commissioner may authorize a lower score than the Flesch reading ease score required in 33-15-337 when, in the commissioner's discretion, a lower score:   (a) will provide a more accurate reflection of the readability of a policy;   (b) is warranted by the nature of a particular policy or type or class of policy; or   (c) is caused by certain policy language that is drafted to conform to the requirements of any state law, regulation, or agency interpretation.   History: En. Sec. 6, Ch. 416, L. 1993.  
  33-15-339. Compliance with other statutorily required language. The requirements of any other laws that specify the language or content of a policy may be met by a policy complying with the provisions of 33-15-337. However, the policy must provide protection that, considered as a whole, is not less favorable to the insured than is required by the other laws.   History: En. Sec. 7, Ch. 416, L. 1993.  
  33-15-340. Liability and coverage not imputed. The existence or nonexistence of coverage or liability under a policy may not be construed from policy approval by the commissioner.   History: En. Sec. 8, Ch. 416, L. 1993.  
  33-15-401. Application required -- life and disability insurance. No life or disability insurance contract upon an individual, except a contract of group life insurance or of group or blanket disability insurance, shall be made or effectuated unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, applies therefor or has consented thereto in writing, except in the following cases:   (1) A spouse may effectuate such insurance upon the other spouse.   (2) Any person having an insurable interest in the life of a minor or any person upon whom a minor is dependent for support and maintenance may effectuate insurance upon the life of or pertaining to such minor.   (3) Family policies insuring any two or more members of a family may be issued on an application signed by either parent, a stepparent, or by a husband or wife.   History: En. Sec. 268, Ch. 286, L. 1959; R.C.M. 1947, 40-3711.  
  33-15-402. Application as evidence -- copy to insured -- alteration. (1) An application for the issuance of any life or disability insurance policy or annuity contract may not be admissible in evidence in any action relative to the policy or contract unless a true copy of the application was attached to or otherwise made a part of the policy or contract when issued. This provision does not apply to industrial life insurance policies.   (2) If any policy of life or disability insurance delivered in this state is reinstated or renewed and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for reinstatement or renewal, the insurer shall, within 30 days after receipt of the request at its home office or at any of its branch offices, deliver or mail to the person making the request a copy of the application. If the copy is not delivered or mailed after having been requested, the insurer is precluded from introducing the application in evidence in any action or proceeding based upon or involving the policy or its reinstatement or renewal. In the case of a request from a beneficiary, the time within which the insurer is required to furnish a copy of the application may not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract.   (3) As to kinds of insurance other than life or disability insurance, an application for insurance signed by or on behalf of the insured may not be admissible in evidence in any action between the insured and the insurer arising out of the policy applied for if the insurer has failed, at expiration of 30 days after receipt by the insurer of written demand by or on behalf of the insured, to furnish to the insured a copy of the application reproduced by any legible means.   (4) An alteration of any written application for any life or disability insurance policy may not be made by any person other than the applicant without the applicant's written consent, except that insertions may be made by the insurer, for administrative purposes only, in a manner that clearly indicates that the insertions are not to be ascribed to the applicant.   History: En. Sec. 269, Ch. 286, L. 1959; R.C.M. 1947, 40-3712; amd. Sec. 1189, Ch. 56, L. 2009.  
  33-15-403. Representations in applications -- benefit precluded and rescission allowed if fraudulent or material. (1) All statements and descriptions in any application for an insurance policy or annuity contract or in negotiations for an insurance policy or annuity contract by or on behalf of the insured or annuitant are considered representations and not warranties.   (2) Misrepresentations, omissions, concealment of facts, and incorrect statements preclude a benefit and allow rescission under the policy or contract if:   (a) the representations are fraudulent;   (b) the representations are material either to the acceptance of the risk or to the hazard assumed by the insurer; or   (c) the insurer in good faith would either not have issued the policy or contract or would not have issued a policy or contract in as large an amount or at the same premium or rate or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise; and   (d) the questions in the application are sufficiently specific so that a reasonable person would understand the requirement to provide the particular facts and that the applicant's response was material to the insurer's decision to provide coverage or to determine the premium or rate to be charged for the coverage.   (3) Subsection (2)(c) does not apply to nonrenewal or discontinuation of group health insurance offered in connection with a group health plan in the small group market or large group market, as those terms are defined in 33-22-140.   (4) If the parties to an insurance policy disagree regarding the propriety of rescission of a policy or a contract under this section, the district courts of this state have jurisdiction to determine the relative rights of the parties under the Uniform Declaratory Judgments Act in Title 27, chapter 8.   (5) This section may not be construed to limit or impair the powers and authority of the commissioner under this title.   History: En. Sec. 270, Ch. 286, L. 1959; R.C.M. 1947, 40-3713; amd. Sec. 1, Ch. 416, L. 1997; amd. Sec. 1, Ch. 315, L. 2019.  
  33-15-404 through 33-15-410 reserved.  
  33-15-411. Binders for temporary insurance. (1) Binders or other contracts for temporary insurance may be made orally or in writing and shall be deemed to include all the usual terms of the policy as to which the binder was given, together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.   (2) No binder shall be valid beyond the issuance of the policy with respect to which it was given or beyond 90 days from its effective date, whichever period is the shorter.   (3) If the policy has not been issued, a binder may be extended or renewed beyond such 90 days with the written approval of the insurer.   (4) This section shall not apply to life or disability insurance.   History: En. Sec. 283, Ch. 286, L. 1959; R.C.M. 1947, 40-3726.  
  33-15-412. Delivery of policy. (1) Subject to the insurer's requirements as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance, except where a condition required by the insurer has not been met by the insured.   (2) In event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle or aircraft and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle or aircraft is insured, a duplicate of such policy setting forth the name and address of the insurer, insurance classification of vehicle or aircraft, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy or memorandum thereof containing the same such information shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of such duplicate policy or memorandum.   History: En. Sec. 284, Ch. 286, L. 1959; R.C.M. 1947, 40-3727.  
  33-15-413. Renewal by certificate. Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable may be renewed or extended at the option of the insurer and upon a currently authorized policy form and at the premium rate then required therefor, for a specific additional period or periods by certificate or by endorsement of the policy, and without requiring the issuance of a new policy.   History: En. Sec. 285, Ch. 286, L. 1959; R.C.M. 1947, 40-3728.  
  33-15-414. Assignment. (1) A policy or group certificate issued under a policy may be assignable or not assignable, as provided by its terms.   (2) Subject to its terms relating to the assignability, any life or disability policy or group certificate under either, under the terms of which the beneficiary may be changed upon the sole request of the insured or owner, may be assigned either by pledge or by transfer of title, by an assignment executed by the insured or owner, alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer.   (3) An assignment valid under this section may transfer to the assignee all the rights, privileges, and incidents of ownership of the assignor in the policy or group certificate, including but not limited to the rights to designate beneficiaries and of a group certificate holder to have an individual policy issued in accordance with 33-20-1209 and 33-20-1210. Any assignment entitles the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment. However, the insurer may not be prejudiced by any payment made or action taken inconsistent with the terms of any assignment before the insurer has received and had reasonable time to act on written notice of the assignment.   (4) This section acknowledges, declares, and codifies the existing right of assignment of interests under insurance policies. An assignment otherwise valid is not invalid because it was made prior to July 1, 1971.   (5) An insurance producer may not have an ownership interest in any policy, by assignment or otherwise, unless the insurance producer has an insurable interest, as defined in 33-15-201, in the life of the insured, except with permission of the commissioner.   History: En. Sec. 286, Ch. 286, L. 1959; amd. Sec. 1, Ch. 167, L. 1971; R.C.M. 1947, 40-3729; amd. Sec. 41, Ch. 227, L. 2001.  
  33-15-415. Notice of right to return policy. Each individual life or disability insurance policy, except a single-premium nonrenewable disability policy, issued for delivery in this state or issued after January 1, 1996, must contain a notice stating in substance that if the person to whom the policy is issued is not satisfied for any reason, the person may return the policy within 10 days of its delivery or a longer period if provided by the policy and have refunded directly to the person the premium paid. A policy returned pursuant to this section is void from the beginning.   History: En. Sec. 75, Ch. 379, L. 1995.  
  33-15-416. Dating of insurance applications -- antedating prohibited. An application for issuance of an insurance policy may not be antedated by any person in order to obtain or provide coverage for losses or injuries incurred prior to the date of application.   History: En. Sec. 77, Ch. 379, L. 1995.  
  33-15-501. Payment discharges insurer -- notice to contrary. Whenever the proceeds of or payments under a life or disability insurance policy or annuity contract heretofore or hereafter issued become payable in accordance with the terms of such policy or contract or the exercise of any right or privilege thereunder and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor, and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.   History: En. Sec. 287, Ch. 286, L. 1959; R.C.M. 1947, 40-3730.  
  33-15-502. Minor may give acquittance. (1) Any minor domiciled in this state who has attained the age of 16 years shall be deemed competent to receive and to give full acquittance and discharge for a payment or payments in aggregate amount not exceeding $3,000 in any one year made by a life insurer under the maturity, death, or settlement agreement provisions in effect or elected by such minor under a life insurance policy or annuity contract, provided such policy, contract, or agreement shall provide for the payment or payments to such minor and if prior to such payment the insurer has not received written notice of the appointment of a duly qualified guardian of the property of the minor. No such minor shall be deemed competent to alienate the right to or to anticipate such payments. This section shall not be deemed to restrict the rights of minors set forth in 33-15-103.   (2) This section shall not be deemed to require any insurer to determine whether any other insurer may be effecting a similar payment to the same minor.   History: En. Sec. 288, Ch. 286, L. 1959; R.C.M. 1947, 40-3731.  
  33-15-503. Forms for proof of loss to be furnished. An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.   History: En. Sec. 289, Ch. 286, L. 1959; R.C.M. 1947, 40-3732.  
  33-15-504. Claims administration not waiver. Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:   (1) acknowledgment of the receipt of notice of loss or claim under the policy;   (2) furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted;   (3) investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.   History: En. Sec. 290, Ch. 286, L. 1959; R.C.M. 1947, 40-3733.  
  33-15-505 through 33-15-510 reserved.  
  33-15-511. Exemption from execution of life insurance proceeds. (1) If a policy of insurance is effected by any person on the person's own life or on another life in favor of a person other than the applicant or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any person, the lawful beneficiary or assignee of the policy, other than the insured or the person effecting the insurance or executors or administrators of the insured or the person effecting the insurance, is entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the policy whether or not the right to change the beneficiary is reserved or permitted and whether or not the policy is made payable to the person whose life is insured if the beneficiary or assignee predecease that person. However, subject to the statute of limitations, the amount of any premiums for the insurance paid with intent to defraud creditors with interest on the premiums accrues to the creditor's benefit from the proceeds of the policy, but the insurer issuing the policy must be discharged of all liability by payment of its proceeds in accordance with its terms unless before the payment the insurer received written notice at its home office, by or in behalf of a creditor, of a claim to recover for transfer made or premiums paid with intent to defraud creditors, with specifications of the amount claimed.   (2) For the purposes of subsection (1), a policy must also be considered to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the individual insured by paying the death benefits to a person as permitted by the clause.   History: En. Sec. 291, Ch. 286, L. 1959; R.C.M. 1947, 40-3734; amd. Sec. 1190, Ch. 56, L. 2009.  
  33-15-512. Exemption from execution of proceeds of group life -- exception. (1) A policy of group life insurance or the proceeds of the policy payable to the individual insured or to the beneficiary under the policy may not be liable, either before or after payment, to be applied by any legal or equitable process to pay any debt or liability of the insured individual, of the individual's beneficiary, or of any other person having a right under the policy. The proceeds of the policy, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, may not constitute a part of the estate of the individual insured for the payment of the individual's debts.   (2) This section does not apply to group life insurance issued pursuant to Title 33, chapter 20, parts 10, 11, and 12, to a creditor covering the creditor's debtors to the extent that the proceeds are applied to payment of the obligation for the purpose of which the insurance was issued.   History: En. Sec. 292, Ch. 286, L. 1959; R.C.M. 1947, 40-3735; amd. Sec. 1191, Ch. 56, L. 2009.  
  33-15-513. Exemption from execution of proceeds of disability insurance. The proceeds or other payments of all contracts of disability insurance and of provisions providing benefits on account of the insured's disability that are supplemental to life insurance or annuity contracts are exempt from all liability for any debt of the insured and from any debt of the beneficiary existing at the time the proceeds are made available for the insured's use.   History: En. Sec. 293, Ch. 286, L. 1959; R.C.M. 1947, 40-3736; amd. Sec. 1192, Ch. 56, L. 2009.  
  33-15-514. Exemption from execution of proceeds of annuity contracts -- assignability of rights. (1) The benefits, rights, privileges, and options that under any annuity contract are due or prospectively due the annuitant may not be subject to execution, the annuitant may not be compelled to exercise any rights, powers, or options, and creditors may not be allowed to interfere with or terminate the contract, except:   (a) as to amounts paid for or as premium on any annuity with intent to defraud creditors, with interest, and of which the creditor has given the insurer written notice at its home office prior to the making of the payments to the annuitant out of which the creditor seeks to recover. The notice must specify the amount claimed or the facts that will enable the insurer to ascertain the amount and must set forth the facts that will enable the insurer to ascertain the annuity contract, the annuitant, and the payments sought to be avoided on the ground of fraud.   (b) the total exemption of benefits presently due and payable to any annuitant periodically or at stated times under all annuity contracts under which the person is an annuitant may not at any time exceed $250 a month for the length of time represented by the installments and the periodic payments in excess of $350 a month must be subject to garnishee execution;   (c) if the total benefits presently due and payable to any annuitant under all annuity contracts under which the person is an annuitant at any time exceed payment at the rate of $350 a month, then the court may order the annuitant to pay to a judgment creditor or apply on the judgment, in installments, the portion of the excess benefits that appear to the court to be just and proper, after due regard for the reasonable requirements of the judgment debtor and the debtor's family, if dependent upon the debtor, as well as any payments required to be made by the annuitant to other creditors under prior court orders.   (2) If the contract provides, the benefits, rights, privileges, or options accruing under the contract to a beneficiary or assignee may not be transferable or subject to commutation, and if the benefits are payable periodically or at stated times, the same exemptions contained in this section for the annuitant apply with respect to the beneficiary or assignee.   (3) An annuity contract within the meaning of this section is any obligation to pay certain sums at stated times during life or lives or for a specified term or terms, issued for a valuable consideration, regardless of whether or not the sums are payable to one or more persons, jointly or otherwise, but does not include payments under life insurance contracts at stated times during life or lives or for a specified term or terms.   History: En. Sec. 294, Ch. 286, L. 1959; R.C.M. 1947, 40-3737; amd. Sec. 1193, Ch. 56, L. 2009.  
  33-15-601. Definitions. As used in this part, the following definitions apply:   (1) "Delivered by electronic means", "delivery by electronic means", or "electronic delivery" means:   (a) delivery to an electronic mail address at which a party has consented to receive notices or documents; or   (b) (i) posting on an electronic network or site accessible by the internet through use of a mobile application, computer, mobile device, tablet, or any other electronic device; and   (ii) sending separate notice of the posting to the electronic mail address at which the party has consented to receive notice of the posting or using any other delivery method to which the party has consented.   (2) "Party" means a recipient of a notice or document required as part of an insurance transaction and includes an applicant, insured, policyholder, certificate holder, or annuity contract holder.   History: En. Sec. 1, Ch. 369, L. 2015.  
  33-15-602. Electronic delivery permitted. (1) Subject to the requirements of Title 30, chapter 18, 33-19-202(7)(c), and this part, a notice to a party or any other document that is required in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means.   (2) Electronic delivery of a notice or document as provided in this part is equivalent to any delivery method otherwise required by law, including delivery by first-class mail, first-class mail postage prepaid, certified mail, or certificate of mailing.   (3) A requirement in law that a notice or document provided to a party expressly requires verification or acknowledgment of receipt of the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt.   (4) If an insurer has reason to believe that a party is not receiving notices or documents that the insurer attempts to deliver by electronic means, including if the insurer attempts delivery by electronic means and receives a notice that the delivery by electronic means has failed, the insurer shall deliver the notices or documents by first-class mail or by any other delivery method required for the notices or documents.   (5) An insurer may not impose on a party a fee or charge because the party:   (a) refuses to consent to delivery of a notice or a document by electronic means; or   (b) withdraws consent to delivery of a notice or a document by electronic means.   History: En. Sec. 2, Ch. 369, L. 2015.  
  33-15-603. Conditions for electronic delivery. (1) An insurer may use electronic delivery of a notice or a document to a party under this part if the insurer meets the requirements of subsection (2) and the party:   (a) has affirmatively consented to the electronic delivery method and has not withdrawn the consent;   (b) is provided, before or at the time of giving consent, with a clear and conspicuous statement informing the party of:   (i) the right of the party at any time to have the notice or the document provided or made available in paper form or by another nonelectronic form;   (ii) the right of the party at any time to withdraw consent to have a notice or document delivered by electronic means and any conditions or consequences imposed if consent is withdrawn;   (iii) the specific notice or document or categories of notices or documents that may be delivered by electronic means during the course of the relationship between the insurer and the party;   (iv) the means, after consent is given, by which a party may obtain a paper copy of a notice or document delivered by electronic means; and   (v) the procedures for a party to follow to update information needed to contact the party electronically and to withdraw consent to have a notice or a document delivered by electronic means; and   (c) is provided, before or at the time of giving consent, with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means. The party shall provide electronic consent to the hardware and software requirements or confirm consent electronically in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means.   (2) After the party consents as provided in subsection (1), if a change occurs in hardware or software needed to access or retain a notice or document delivered by electronic means that creates a material risk that the party will not be able to access or retain a notice or document to which the consent applies, the insurer shall provide the party with a statement that:   (a) provides information regarding the revised hardware or software requirements for access to and retention of a notice or document delivered by electronic means; and   (b) recognizes the right of the party to withdraw consent without the imposition of any condition or consequence that was not disclosed under subsection (1)(b)(ii).   (3) Consent to delivery by electronic means remains in effect following a policy modification or renewal if the original consent makes clear that consent continues after a policy modification or renewal.   History: En. Sec. 3, Ch. 369, L. 2015.  
  33-15-604. Withdrawal of consent to electronic delivery. (1) Withdrawal of consent to electronic delivery does not affect the legal effectiveness, validity, or enforceability of a notice or a document that is delivered by electronic means to a party before the withdrawal of consent is effective.   (2) (a) Except as provided in subsection (2)(b), withdrawal of consent by a party becomes effective 15 days after the insurer receives notice of the withdrawal pursuant to the insurer's noticed procedures.   (b) Except as provided in 33-15-603(2) or if a party updates contact information pursuant to the insurer's noticed procedures, a withdrawal becomes effective immediately upon the insurer learning that the electronic delivery method currently used is no longer an effective delivery mechanism with respect to the party.   (3) Failure by an insurer to comply with 33-15-603(2) may be treated, at the election of the party, as a withdrawal of consent, but the party shall communicate the withdrawal pursuant to the insurer's noticed procedures.   History: En. Sec. 4, Ch. 369, L. 2015.  
  33-15-605. Protection of information. An insurer delivering a notice or a document by electronic means shall take appropriate and necessary measures reasonably calculated to ensure that the system for furnishing the notices or documents:   (1) results in actual receipt of transmitted information; and   (2) protects the confidentiality of personal information as defined in 33-19-104.   History: En. Sec. 5, Ch. 369, L. 2015.  
  33-15-606. Validity of electronic delivery. The legal effectiveness, validity, or enforceability of a contract or policy of insurance executed by a party may not be denied solely because the contract or policy was delivered by electronic means if the insurer has obtained the electronic consent of the party as required in 33-15-603.   History: En. Sec. 6, Ch. 369, L. 2015.  
  33-15-607 through 33-15-609 reserved.  
  33-15-610. Application to other laws. The provisions of this part do not affect requirements related to content or timing of a notice or document required by laws affecting insurance policies, notices, or documents.   History: En. Sec. 7, Ch. 369, L. 2015.  
  33-15-611. Rulemaking. The commissioner may adopt rules necessary to implement the provisions of this part.   History: En. Sec. 8, Ch. 369, L. 2015.  
  33-16-101. Purpose and intent. (1) The purpose of this chapter is to promote the public welfare by regulating insurance rates as herein provided to the end that they shall not be excessive, inadequate, or unfairly discriminatory, to authorize the existence and operation of qualified rating organizations and advisory organizations and require that specified rating services of such rating organizations be generally available to all admitted insurers, and to authorize cooperation between insurers in ratemaking and other related matters.   (2) It is the express intent of this chapter to permit and encourage competition between insurers on a sound financial basis, and nothing in this chapter is intended to give the commissioner power to fix and determine a rate level by classification or otherwise.   History: En. Sec. 1, Ch. 362, L. 1969; R.C.M. 1947, 40-3634.  
  33-16-102. Definitions. In this chapter, the following definitions apply:   (1) "Advisory organization" means each person, other than an admitted insurer, whether located within or outside this state, who prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems or who collects and furnishes to admitted insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a ratemaking, capacity. A licensed attorney, acting in the usual course of the profession, may not be considered an advisory organization.   (2) "Dividend" means:   (a) a noncontractual and nonrecoverable payment or credit declared by an insurer's board of directors and paid out or credited out of earned surplus to policyholders, members, or subscribers; or   (b) in the absence of earned surplus, a noncontractual and nonrecoverable payment or credit declared by an insurer's board of directors and paid to policyholders, members, or subscribers with the written permission of the commissioner. The commissioner may grant permission only if the payment of the dividend or credit will not reduce the insurer's capital and surplus below an amount three times the minimum capital required under 33-2-109.   (3) "Member" means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.   (4) "Rating organization" means each person, other than an admitted insurer, whether located within or outside this state, with the object or purpose of making rates, rating plans, or rating systems. Two or more admitted insurers who act in concert for the purpose of making rates, rating plans, or rating systems and who do not operate within the specific authorizations contained in 33-16-105, 33-16-302, 33-16-304, 33-16-305, and 33-16-307 must be considered a rating organization. A single insurer may not be considered a rating organization.   (5) "Subscriber" means an insurer who is furnished at its request with rates and rating manuals by a rating organization of which the insurer is not a member or with advisory services by an advisory organization of which it is not a member.   (6) "Willful" or "willfully", in relation to an act or omission that constitutes a violation of this chapter, means with actual knowledge or belief that the act or omission constitutes a violation and with specific intent to commit the violation.   History: En. Secs. 2, 3, 4, 5, Ch. 362, L. 1969; R.C.M. 1947, 40-3635, 40-3636, 40-3637, 40-3638; amd. Sec. 27, Ch. 472, L. 1999; amd. Sec. 42, Ch. 227, L. 2001.  
  33-16-103. Application. This chapter applies to all insurers and all kinds of insurance, except that nothing contained in this chapter applies to:   (1) life insurance;   (2) disability insurance, except medicare supplement insurance subject to the provisions of chapter 22, part 9;   (3) reinsurance, except joint reinsurance as provided in 33-16-307;   (4) insurance against loss of or damage to aircraft, their hulls, accessories, and equipment, or against liability, other than workers' compensation and employers' liability, arising out of the ownership, maintenance, or use of aircraft;   (5) insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies; or   (6) surplus lines insurance as defined in 33-2-301.   History: En. Sec. 6, Ch. 362, L. 1969; amd. Sec. 1, Ch. 558, L. 1977; R.C.M. 1947, 40-3639; amd. Sec. 1, Ch. 126, L. 1981; amd. Sec. 1, Ch. 400, L. 1989; amd. Sec. 1, Ch. 682, L. 1989.  
  33-16-104. Payment of dividends, savings, or unabsorbed premium deposits not prohibited or regulated -- plan for payment not rating system. Nothing in this chapter may be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers may not be considered a rating plan or system. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers does not relieve the insurer from complying with any requirements of this chapter regarding rating plans or systems.   History: En. Sec. 33, Ch. 362, L. 1969; R.C.M. 1947, 40-3666; amd. Sec. 28, Ch. 472, L. 1999.  
  33-16-105. Maintenance of records. Every insurer, rating organization, or advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys or inspections made or used by it so that such records will be available at all reasonable times to enable the commissioner to determine whether such organization, insurer, group, or association and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it complies with the provisions of this chapter applicable to it. The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of such organization. Such records shall be maintained in an office within this state or shall be made available for examination or inspection within this state by the commissioner at any time upon reasonable notice.   History: En. Sec. 21, Ch. 362, L. 1969; amd. Sec. 1, Ch. 469, L. 1977; R.C.M. 1947, 40-3654(1).  
  33-16-106. Examination by commissioner of rating organizations, admitted insurers, officers, managers, insurance producers, and employees -- expense. (1) (a) The commissioner may, as often as may be reasonable and necessary, make or cause to be made an examination of each licensed rating organization. The commissioner may, as often as may be reasonable and necessary, make or cause to be made an examination of any advisory organization or group, association, or other organization of insurers that engages in joint underwriting or joint reinsurance.   (b) In lieu of an examination, the commissioner may accept the report of an examination made by the insurance supervisory official of another state or by the national association of insurance commissioners.   (c) In examining any organization, group, or association pursuant to this section, the commissioner shall ascertain whether an organization, group, or association and, in the case of a rating organization, any rate or rating system made or used by it, complies with the requirements and standards of this chapter applicable to it.   (2) The commissioner may, at any reasonable time, make or cause to be made an examination of every admitted insurer transacting any class of insurance to which the provisions of this chapter are applicable to ascertain whether the insurer and every rate and rating system used by it for every class of insurance complies with the requirements and standards of this chapter applicable to it. The examination may not be a part of a periodic general examination participated in by representatives of more than one state.   (3) The officers, managers, insurance producers, and employees of any organization, group, association, or insurer may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation, together with all data, statistics, and information of every kind and character collected or considered by an organization, group, association, or insurer in the conduct of the operations to which the examination relates.   (4) The reasonable cost of any examination authorized by this article must be paid by the organization, group, association, or insurer to be examined.   History: En. Secs. 22, 23, 24, 25, Ch. 362, L. 1969; R.C.M. 1947, 40-3655, 40-3656, 40-3657, 40-3658; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 19, Ch. 451, L. 1993.  
  33-16-107. Information not to be willfully withheld. No person, insurer, or organization shall willfully withhold information from or knowingly give false or misleading information to the commissioner or to any rating organization, advisory organization, insurer, or group, association, or other organization of insurers which will affect the rates, rating systems, or premiums for the classes of insurance to which the provisions of this chapter are applicable.   History: En. Sec. 32, Ch. 362, L. 1969; R.C.M. 1947, 40-3665(a).  
  33-16-108 through 33-16-110 reserved.  
  33-16-111. Issuance of order -- suspension or revocation of certificate of authority or license. If, after a hearing pursuant to 33-16-206, the commissioner finds:   (1) that an insurer, a rating organization, an advisory organization, or a group, association, or other organization of insurers that engages in joint underwriting or joint reinsurance is in violation of the provisions of this chapter applicable to it, other than the provisions dealing with rates, rating plans, or rating systems, the commissioner may issue an order to the insurer, organization, group, or association that has been the subject of the hearing, specifying in what respects the violation exists and requiring compliance within a reasonable time;   (2) that the violation of any of the provisions of this chapter applicable to it by any insurer or rating organization that has been the subject of hearing was willful, the commissioner may suspend or revoke, in whole or in part, the certificate of authority of the insurer or the license of the rating organization with respect to the class of insurance that has been the subject matter of the hearing;   (3) that any rating organization has willfully engaged in any fraudulent or dishonest act or practices, the commissioner may suspend or revoke, in whole or in part, the license of the organization, in addition to any other penalty provided in this chapter.   History: En. Sec. 29, Ch. 362, L. 1969; R.C.M. 1947, 40-3662(part); amd. Sec. 1194, Ch. 56, L. 2009.  
  33-16-112. Failure to comply with order -- suspension or revocation of license or certificate. In addition to other penalties provided in this code, the commissioner may suspend or revoke, in whole or in part, the license of any rating organization or the certificate of authority of any insurer with respect to the class or classes of insurance specified in the order that fails to comply within the time limited by the order or any extension of the order that the commissioner may grant, with an order of the commissioner lawfully made pursuant to 33-16-111 and 33-16-211 and effective pursuant to 33-16-113.   History: En. Sec. 30, Ch. 362, L. 1969; R.C.M. 1947, 40-3663; amd. Sec. 1195, Ch. 56, L. 2009.  
  33-16-113. Appeal from order or decision of commissioner. Any person, insurer, or rating organization aggrieved by any order or decision made by the commissioner under this chapter may appeal to the district court of the county where the aggrieved party may reside or has a principal place of business in this state or to the district court of Lewis and Clark County, Montana. The appeal must be taken within 30 days from the making and filing of the order or decision by filing in the office of the commissioner a notice of the appeal in writing. The commissioner shall, within 20 days after filing of the notice, make and return to the district court a full and complete certified transcript of the finding and order appealed from and of all parts relative to the finding and order on file in the commissioner's office, including the notice of appeal. Upon filing of the certified transcript, all matters involved in the appeal must be brought on for trial upon the merits at the next term of the court after the filing of the transcript unless otherwise ordered by the court. Upon the trial, the findings of fact on which the order is based must be prima facie evidence of the matters stated. During the pendency of the proceedings upon review, the order of the commissioner is suspended, but in the event of a final determination against any insurer, any overcharge by the insurer during review must be refunded to the persons entitled to the refund.   History: En. Sec. 31, Ch. 362, L. 1969; R.C.M. 1947, 40-3664; amd. Sec. 1196, Ch. 56, L. 2009.  
  33-16-114. Penalty. (1) A person, insurer, organization, group, or association that fails to comply with a final order of the commissioner under this chapter is liable to the state in an amount not exceeding $50. If the failure is willful, the person or entity is liable to the state in an amount not exceeding $5,000 for the failure. The commissioner shall collect the amount payable and may bring an action in the name of the people of the state of Montana to enforce collection. The penalties may be in addition to any other penalties provided by law.   (2) A willful violation of the provisions of this chapter by any person is a misdemeanor.   History: En. Sec. 32, Ch. 362, L. 1969; R.C.M. 1947, 40-3665(b), (c); amd. Sec. 1197, Ch. 56, L. 2009.  
  33-16-115. Acts done by authority of chapter not violation of other laws. No act done, action taken, or agreement made pursuant to the authority conferred by this chapter shall constitute a violation of or grounds for prosecution or civil proceedings under any other law of this state heretofore or hereafter enacted which does not specifically refer to insurance.   History: En. Sec. 34, Ch. 362, L. 1969; R.C.M. 1947, 40-3667.  
  33-16-116. Administration or enforcement -- supplementation or modification. The administration and enforcement of this chapter shall be governed solely by the provisions of this chapter. Except as provided in this chapter, no other law relating to insurance and no other provisions in this code heretofore or hereafter enacted shall apply to or be construed as supplementing or modifying the provisions of this chapter unless such other law or other provision expressly so provides and specifically refers to the sections of this chapter which it intends to supplement or modify.   History: En. Sec. 35, Ch. 362, L. 1969; R.C.M. 1947, 40-3668.  
  33-16-1001. Declaration of policy and purpose. (1) It is declared that the public welfare is served by the making of advisory premium rates for workers' compensation insurance coverage in concert.   (2) It is the purpose of this part to:   (a) authorize such ratemaking in concert and the operating of rating organizations thereto; and   (b) establish the general bases and standards for the making of such rates.   History: En. Sec. 1, Ch. 329, L. 1969; amd. Sec. 3, Ch. 558, L. 1977; R.C.M. 1947, 40-5601.  
  33-16-1002. Applicability of part. This part, together and in conjunction with parts 1 through 4 of this chapter, applies to the making of premium rates for workers' compensation insurance issued under compensation plan No. 2 and plan No. 3 of the Workers' Compensation Act, Title 39, chapter 71, part 22 and part 23, respectively, or related employer's liability insurance, but does not apply to reinsurance.   History: En. Sec. 2, Ch. 329, L. 1969; amd. Sec. 4, Ch. 558, L. 1977; R.C.M. 1947, 40-5602; amd. Sec. 21, Ch. 186, L. 1995; amd. Sec. 8, Ch. 320, L. 2015.  
  33-16-1003. Certain reciprocal insurers excluded. This part shall not apply as to any reciprocal insurer transacting workers' compensation insurance only and insuring solely the hazards or perils of its subscribers exclusively associated with a single industry.   History: En. Sec. 3, Ch. 329, L. 1969; R.C.M. 1947, 40-5603.  
  33-16-1004. Repealed. Sec. 29, Ch. 186, L. 1995.   History: En. Secs. 4, 5, 6, Ch. 329, L. 1969; R.C.M. 1947, 40-5604, 40-5605, 40-5606; amd. Sec. 1, Ch. 480, L. 1991.  
  33-16-1005. Repealed. Sec. 29, Ch. 186, L. 1995.   History: En. Sec. 16, Ch. 329, L. 1969; amd. Sec. 5, Ch. 558, L. 1977; R.C.M. 1947, 40-5616; amd. Sec. 3, Ch. 232, L. 1987; amd. Sec. 53, Ch. 613, L. 1989; amd. Sec. 14, Ch. 630, L. 1993.  
  33-16-1006. Repealed. Sec. 5, Ch. 114, L. 1981.   History: En. Sec. 17, Ch. 329, L. 1969; R.C.M. 1947, 40-5617.  
  33-16-1007. Renumbered 33-16-1011. Code Commissioner, 1981.  
  33-16-1008. Definitions. As used in this part, the following definitions apply:   (1) "Accepted actuarial standards" means the standards adopted by the casualty actuarial society in its Statement of Principles Regarding Property and Casualty Insurance Ratemaking and the Standards of Practice adopted by the actuarial standards board.   (2) (a) "Advisory organization" means a person or organization that either has two or more member insurers or is controlled either directly or indirectly by two or more insurers and that assists insurers in ratemaking-related activities.   (b) The term does not include a joint underwriting association, any actuarial or legal consultant, or any employee of an insurer or insurers under common control or management or their employees or manager. For the purposes of this subsection (2)(b), two or more insurers who have a common ownership or operate in this state under common control or management constitute a single insurer.   (3) "Classification system" means the plan, system, or arrangement for recognizing differences in exposure to hazards among industries, occupations, or operations of insurance policyholders.   (4) "Contingencies" means provisions in rates to recognize the uncertainty of the estimates of losses, loss adjustment expenses, other operating expenses, and investment income and profit that comprise those rates. The provisions may be explicit, including but not limited to a specific charge to reflect systematic variations of estimated costs from expected costs, or implicit, including but not limited to a consideration in selecting a single estimate from a reasonable range of estimates, or both.   (5) "Developed losses" means adjusted losses, including loss adjustment expenses, using accepted actuarial standards to eliminate the effect of differences between current payment or reserve estimates and those needed to provide actual ultimate loss payments, including loss adjustment expense payments.   (6) "Expenses" means the portion of a rate that is attributable to acquisition, filed supervision and collection expenses, general expenses and taxes, licenses, or fees.   (7) "Experience rating" means a rating procedure using past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder's loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit, or unity modification.   (8) "Insurer" means a person licensed to write workers' compensation insurance as a plan No. 2 insurer or plan No. 3, the state fund, under the laws of the state.   (9) "Loss trending" means a procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective, including loss ratio trending.   (10) "Market" means the interaction in this state between buyers and plan No. 2 sellers of workers' compensation and employer's liability insurance pursuant to the provisions of this part.   (11) (a) "Prospective loss costs" means historical aggregate losses and loss adjustment expenses, including all assessments that are loss-based and excluding any separately stated policyholder surcharges, projected through development to their ultimate value and through trending to a future point in time and ascertained by accepted actuarial standards.   (b) The term does not include provisions for profit or expenses other than loss adjustment expenses and assessments that are loss-based.   (12) "Pure premium rate" means the portion of the rate that represents the loss cost per unit of exposure, including loss adjustment expense.   (13) (a) "Rate" or "rates" means rate of premium, policy and membership fee, or any other charge made by an insurer for or in connection with a contract or policy of workers' compensation and employer's liability insurance, prior to application of individual risk variations based on loss or expense considerations.   (b) The term does not include minimum premiums.   (14) "Reserve estimates" means provisions for insurer obligations for future payments of loss or loss adjustment expenses.   (15) "Statistical plan" means the plan, system, or arrangement that is used in collecting data.   (16) "Supplementary rate information" means a manual or plan of rates, statistical plan, classification system, minimum premium, policy fee, rating rule, rate-related underwriting rule, and any other information needed to determine the applicable premium for an individual insured that is consistent with the purposes of this part and with rules prescribed by rule of the commissioner.   (17) "Supporting information" means the experience and judgment of the filer and the experience or data of other insurers or advisory organizations relied on by the filer, the interpretation of any statistical data relied on by the filer, descriptions of methods used in making the rates, and any other similar information required to be filed by the commissioner.   History: En. Sec. 1, Ch. 186, L. 1995; amd. Sec. 2, Ch. 284, L. 1997; amd. Sec. 9, Ch. 320, L. 2015.  
  33-16-1009 and 33-16-1010 reserved.  
  33-16-1011. Classification review committee -- membership -- term. (1) There is a classification review committee.   (2) The committee is composed of five voting members, consisting of:   (a) two representatives of private insurance carriers writing workers' compensation insurance in Montana. The members must be appointed by the Montana commissioner of insurance.   (b) one licensed independent insurance producer who resides in Montana, appointed by the commissioner of insurance;   (c) one representative of the state compensation insurance fund who is an employee of the state fund and who is appointed by the executive director of the state fund; and   (d) one representative of an employer who is insured by either a private insurance carrier or the state compensation insurance fund, appointed by the commissioner of insurance.   (3) Each member shall hold office for a period of 3 years. An appointee who fills the vacancy of a member whose term has not expired shall fill only the remaining term and may be reappointed for a full term.   (4) Before appointments are to be made by the commissioner of insurance under subsections (2)(a), (2)(b), and (2)(d), established private organizations representing insurance carriers, independent insurance producers, and employers may submit names of individuals they recommend for appointments. The commissioner of insurance shall consider the names submitted before appointments are made. However, the commissioner of insurance is not required to appoint any person from the names submitted.   (5) The committee must be staffed by the advisory organization designated under 33-16-1023 and be funded by the advisory organization. Committee members may, if they request, be paid their actual and necessary travel expenses.   (6) Documents and other information concerning the committee's actions must be made available for public review in the office of the commissioner of insurance.   History: En. Sec. 18, Ch. 329, L. 1969; amd. Sec. 6, Ch. 558, L. 1977; R.C.M. 1947, 40-5618; amd. Sec. 1, Ch. 114, L. 1981; MCA 1979, 33-16-1007; redes. 33-16-1011 by Code Commissioner, 1981; amd. Sec. 54, Ch. 613, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1, Ch. 528, L. 1993; amd. Sec. 14, Ch. 630, L. 1993; amd. Sec. 22, Ch. 186, L. 1995; amd. Sec. 2, Ch. 290, L. 1995.  
  33-16-1012. Functions and powers of classification review committee -- hearings -- rulemaking. (1) The classification review committee shall:   (a) meet not less than semiannually to conduct its business;   (b) make the final determination regarding the establishment or revision of all classifications in accordance with the procedures set forth in Title 2, chapter 4, part 3;   (c) publish material and pamphlets as it considers appropriate;   (d) act as a review committee concerning objections filed by a policyholder or insurer in relation to classifications assigned to a policyholder according to rules governing the issuance or application of classifications; and   (e) make rules as may be necessary for the conduct of any business that is subject to notice and hearings. The rules must be published and adopted as provided in Title 2, chapter 4, part 3, and must be published in the Administrative Rules of Montana as part of the rules promulgated by the commissioner of insurance.   (2) (a) The initial hearing conducted by the committee pursuant to subsection (1)(d) must be informal and nonbinding upon the parties and must be conducted pursuant to rules of procedure that the committee considers to be appropriate. The committee shall issue its written advisory decision within 30 days of the conclusion of the hearing and send a written copy of the decision by first-class mail, postage prepaid, to each party. Each party to the informal hearing shall notify the committee and each other party of the notifying party's intent to be bound or not bound by the committee's advisory decision, and the notice must be made within 30 days of the date the committee mails the written copy of the decision to the parties.   (b) A party who is aggrieved by the advisory decision of the committee, or by the refusal of a party to be bound by the committee's advisory decision rendered after a hearing conducted pursuant to subsection (2)(a) may, within 30 days after the expiration of the 30-day notice deadline specified in subsection (2)(a), initiate an informal contested case proceeding pursuant to 2-4-604 before the committee, and the committee shall hear the matter in a de novo administrative proceeding as provided in Title 2, chapter 4, part 6. The committee may, in its discretion or at the request of any party, appoint a hearings examiner. If a hearings examiner is appointed, the examiner shall take evidence and prepare proposed findings of fact and conclusions of law that the committee may accept, reject, or modify, in whole or in part, based on the evidence produced during the informal contested case proceeding.   (c) A party who is aggrieved by a decision of the committee rendered after a hearing conducted pursuant to subsection (2)(b) may petition the workers' compensation court for judicial review of the decision pursuant to Title 2, chapter 4, part 7.   (3) The committee is subject to the provisions of Title 2, chapter 3, parts 1 and 2.   History: En. Sec. 2, Ch. 114, L. 1981; amd. Sec. 2, Ch. 528, L. 1993; amd. Sec. 23, Ch. 186, L. 1995; amd. Sec. 3, Ch. 290, L. 1995.  
  33-16-1013 through 33-16-1019 reserved.  
  33-16-1020. Competitive market -- hearing. (1) A competitive market is presumed to exist unless the commissioner, after hearing, issues an order stating that a reasonable degree of competition does not exist in the market. The order may not expire later than 1 year after issuance.   (2) In determining whether a reasonable degree of competition exists, the commissioner shall consider the following factors:   (a) the number of insurers actively engaged in providing coverage;   (b) market shares and changes in market shares;   (c) ease of entry into the market;   (d) market concentration among plan No. 2 insurers as measured by the Herfindahl-Hirschman index;   (e) whether long-term profitability for insurers in the market is unreasonably high in relation to the risks being insured;   (f) whether long-term profitability for insurers in the market is reasonable in relation to industries of comparable business risks; and   (g) generally accepted and relevant tests relating to competitive market structure, market performance, and market conduct.   (3) The workers' compensation insurance market may not be determined to be noncompetitive if the market concentration of the 50 largest insurers writing workers' compensation insurance under plan No. 2 satisfied the U.S. department of justice merger guidelines for an unconcentrated market.   (4) The commissioner's determinations must be made on the basis of findings of fact and conclusions of law.   History: En. Sec. 2, Ch. 186, L. 1995.  
  33-16-1021. Ratemaking standards -- review by commissioner. (1) Rates may not be excessive, inadequate, or unfairly discriminatory.   (2) (a) Except as provided in subsection (2)(b), rates in a competitive market are not excessive. Rates in a noncompetitive market are excessive if they are likely to produce a long-run profit that is unreasonably high in relation to services rendered.   (b) Rates for the state fund may not be determined to be excessive unless the rate clearly is likely to produce an excess of assets over what is reasonably necessary to pay developed losses, contingencies, expenses, and a reasonable level of surplus.   (3) A rate may not be determined to be inadequate unless:   (a) the rate is clearly insufficient to sustain projected losses and expenses;   (b) the rate is unreasonably low and the use of the rate by the insurer has had or, if continued, will tend to create a monopoly in the market; or   (c) funds equal to the full, ultimate cost of anticipated losses and loss adjustment expenses are not produced when prospective loss costs are applied to anticipated payrolls.   (4) Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with different loss exposures or expense levels.   (5) In determining whether rates comply with standards under subsection (1), consideration must be given to:   (a) past and prospective loss experience within and outside Montana, in accordance with accepted actuarial principles;   (b) catastrophe hazards and contingencies;   (c) past and prospective expenses within and outside Montana;   (d) loadings for leveling premium rates over time for dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;   (e) a reasonable margin for underwriting profit; and   (f) all other relevant factors within and outside Montana.   (6) The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of any other insurer or group of insurers to reflect the requirements of the operating methods of the insurer or group of insurers.   (7) The rate may contain provisions of contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of a profit, consideration must be given to all investment income attributable to premiums and the reserves associated with those premiums.   (8) The commissioner may investigate and determine whether rates in Montana are excessive, inadequate, or unfairly discriminatory. In any investigation and determination, the commissioner shall also consider the factors specified in 33-16-1020.   History: En. Sec. 3, Ch. 186, L. 1995; amd. Sec. 29, Ch. 472, L. 1999; amd. Sec. 10, Ch. 320, L. 2015.  
  33-16-1022. Dividends -- regulation or prohibition. (1) An advisory organization may not adopt a rule that would regulate or prohibit the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.   (2) A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers is not a rating plan or system. A plan for the payment of dividends, savings, or unabsorbed premium deposits does not relieve an insurer from complying with any requirement of this chapter regarding rating plans or systems.   (3) It is an unfair trade practice under 33-18-1003 to make the payment of a dividend or any portion of it conditioned upon renewal of the policy or contract.   History: En. Sec. 4, Ch. 186, L. 1995; amd. Sec. 30, Ch. 472, L. 1999.  
  33-16-1023. Membership in advisory organization. (1) The commissioner shall designate one workers' compensation advisory organization to assist the commissioner in gathering, compiling, and reporting relevant statistical information. Each workers' compensation insurer shall record and report its workers' compensation experience to the designated advisory organization as set forth in the uniform statistical plan approved by the commissioner.   (2) Each workers' compensation insurer must be a member or subscriber of the designated workers' compensation advisory organization. Each workers' compensation insurer may adhere to the policy forms filed by the advisory organization.   (3) Each workers' compensation insurer shall adhere to a uniform classification system and uniform experience rating plan that has been filed by the designated advisory organization with the commissioner and approved by the commissioner.   (4) Each workers' compensation insurer shall use the forms and adhere to the rules that the designated advisory organization shall develop and file with the commissioner. The forms and rules must be reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, the uniform experience rating plan, and the uniform classification system.   (5) The methodology of the experience rating plan required under subsection (3) must be based on:   (a) reasonable eligibility standards;   (b) incentives for loss prevention; and   (c) a premium differential to encourage safety.   (6) The designated advisory organization or an insurer may file rating plans with the commissioner that provide for prospective or retrospective premium adjustment based on an insured's expected or actual loss experience, including but not limited to scheduled rating adjustments, retrospective rating plans, optional deductible plans under 39-71-435, a construction industry premium credit plan under 39-71-2211, or other plans as authorized by statute or approved by the commissioner.   History: En. Sec. 5, Ch. 186, L. 1995.  
  33-16-1024. Repealed. Sec. 22, Ch. 320, L. 2015.   History: En. Sec. 6, Ch. 186, L. 1995; amd. Sec. 5, Ch. 276, L. 1997.  
  33-16-1025. Interchange of rating plan -- data exchange -- cooperative action in ratemaking -- violation of part. (1) Reasonable rules and plans may be adopted by the commissioner for the interchange of data necessary for the application of rating plans.   (2) To ensure conformity in administering rate regulatory laws, the commissioner, each insurer, and the advisory organization designated by the commissioner may exchange information and experience data with insurance regulatory officials, insurers, and advisory organizations in other states and may consult with them with respect to ratemaking and the application of rating systems.   (3) Cooperation among advisory organizations or among insurers and advisory organizations in ratemaking or in other matters within the scope of this part is authorized, but the filings resulting from the cooperation are subject to all provisions of this part.   (4) The commissioner may review the cooperative activities and practices. If, after hearing, any cooperative activity or practice is found to violate the provisions of this part, a written order may be issued specifying that the activity or practice violates the provision of this part and requiring the discontinuance of the activity or practice.   History: En. Sec. 7, Ch. 186, L. 1995.  
  33-16-1026. Rate filings. (1) A workers' compensation advisory organization shall file with the commissioner:   (a) workers' compensation rates and rating plans that are limited to prospective loss costs;   (b) each workers' compensation policy form to be used by its members or subscribers;   (c) the uniform classification plan and rules of the advisory organization;   (d) the uniform experience rating plan and rules of the advisory organization; and   (e) any other information that the commissioner requests and is entitled to receive under this part.   (2) Each insurer shall file with the commissioner all rates, supplementary rate information, and any changes and amendments made by it for use in this state as required by the commissioner under 33-16-1027(2).   (3) An insurer may establish rates and supplementary rate information based upon the factors in 33-16-1021. An insurer may adopt by reference, with or without deviation, the prospective loss costs filed by the advisory organization designated under 33-16-1023 or the rates and supplementary rate information filed by another insurer.   (4) An insurer may not make or issue a contract or policy of insurance under this part, except in accordance with the filings that are in effect for the insurer as provided in this part.   (5) In addition to other prohibitions in this part, an advisory organization may not file rates, supplementary rate information, or supporting information on behalf of an insurer.   (6) If each rate in a schedule of workers' compensation rates for specific classifications of risks filed by an insurer is not lower than the prospective loss costs contained in the schedule of workers' compensation rates for those classifications filed by the designated advisory organization under subsection (1), the schedule of rates filed by the insurer is not subject to 33-16-1027(1) but becomes effective upon filing.   History: En. Sec. 8, Ch. 186, L. 1995; amd. Sec. 146, Ch. 42, L. 1997.  
  33-16-1027. Rate filing review. (1) The commissioner shall review each insurance filing to ensure compliance with the following guidelines:   (a) The effective date of each workers' compensation insurer or advisory organization filing must be the date specified in the filing. The effective date of the filing may not be earlier than 30 days after the date on which the filing is received by the commissioner or the date of receipt of the information furnished in support of the filing, if the supporting information is required by the commissioner.   (b) Upon written application of the insurer or advisory organization, the commissioner may authorize a filing that becomes effective before the expiration of the period described in subsection (1)(a).   (c) A filing is considered to have met the requirements of this part unless disapproved by the commissioner within the period described in subsection (1)(a) or any extension of the period.   (2) Whenever a filing is not accompanied by the information required under this section, the commissioner shall inform the filer of the deficiency within 30 days of the initial filing. The filing is considered made when the required information is furnished or when the filer certifies to the commissioner that the additional information requested by the commissioner is not maintained or cannot be provided.   History: En. Sec. 9, Ch. 186, L. 1995; amd. Sec. 23, Ch. 531, L. 1997.  
  33-16-1028. Improper rates -- hearing. (1) If the commissioner finds that a rate is not in compliance with 33-16-1021 or that a rate has been set in violation of 33-16-1032, the commissioner shall order that its use be discontinued for any policy issued or renewed after the date of the order, and the order may prospectively provide for premium adjustment of any policy then in force.   (2) The order must be issued within 30 days after the close of a hearing, if one is requested by the insurer, or within a reasonable time fixed by the commissioner. The order expires 1 year after its effective date unless rescinded earlier by the commissioner.   (3) If the commissioner disapproves a rate under subsection (1), disapproval must take effect not less than 15 days after the commissioner's order and the last previous rate in effect for the insurer must be reimposed for a period of 1 year unless the commissioner approves a rate under the provisions of subsection (5) or (6).   (4) A determination made by the commissioner under this section must be in accordance with accepted actuarial standards on the basis of findings of fact and conclusions of law.   (5) For a period of 1 year after the effective date of a disapproval order under subsection (1), a rate adopted to replace one disapproved under the order may not be used until it has been filed with the commissioner and approved within 30 days.   (6) Whenever an insurer does not have legally effective rates pursuant to subsection (1), the commissioner shall, on the insurer's request, specify interim rates for the insurer that are adequate to protect the interests of all parties. The commissioner may order that a specified portion of the premiums be placed in a special reserve established by the insurer. When new rates become legally effective, the commissioner shall order the reserved funds or any overcharge in the interim rates to be distributed appropriately, except that minimal adjustments may not be required.   History: En. Sec. 10, Ch. 186, L. 1995.  
  33-16-1029. Restrictions on certain insurers -- waiting period. (1) The commissioner may require that a particular insurer file any of its rates and supplementary rate information 30 days prior to the effective date of the rates, if the commissioner finds after a hearing that the protection of the interests of the insurer's insureds and the public in this state requires closer supervision of the insurer's rates.   (2) Upon written application by an insurer, the commissioner, following review, may authorize a filing, which is effective before the expiration of the period described in subsection (1).   (3) The filing must be approved or disapproved during the waiting period and, if not disapproved before the expiration of the waiting period, is considered to have met the requirements of this section.   (4) An insurer aggrieved by the commissioner's actions under this section may request a rehearing by the commissioner after the expiration of 12 months from the date of the commissioner's initial order.   History: En. Sec. 11, Ch. 186, L. 1995.  
  33-16-1030. Delay of rates in noncompetitive market. (1) A 30-day waiting period may be implemented or extended under one of the following circumstances:   (a) after finding that the market is not competitive under 33-16-1020, the commissioner adopts a rule requiring that any subsequent changes in rates or supplementary information must be filed with the commissioner at least 30 days before the changes become effective;   (b) the commissioner extends the waiting period under this section for a period not exceeding 30 additional days by written notice to the filer before the first 30-day period expires;   (c) upon written application by an insurer or advisory organization, the commissioner, following review, authorizes a filing, which becomes effective before the expiration of the period described in subsection (1)(a) or (1)(b); or   (d) the filing is approved or disapproved during the waiting period and, if not disapproved before the expiration of the waiting period, is considered to have met the requirements of this section.   (2) If a rule is adopted under subsection (1), the commissioner may require the filing of supporting data as to classes of risks or combinations of risk classes that the commissioner considers necessary for the proper functioning of the rate monitoring and regulating process. The supporting data must include:   (a) the experience and judgment of the filer and, to the extent that the filer wishes or the commissioner requires, the experience and judgment of other insurers or the advisory organization designated under 33-16-1023;   (b) the interpretation of any statistical data upon which the filer relied;   (c) a description of the actuarial and statistical methods used in setting the rate; and   (d) any other relevant matter required by the commissioner.   (3) A rule adopted under this section expires 1 year after adoption unless renewed by the commissioner after hearings and appropriate findings under this section.   (4) Whenever a filing is not accompanied by the information that the commissioner has required under subsection (2), the commissioner shall inform the insurer within 10 days of the initial filing. The filing is considered made when the required information is furnished.   History: En. Sec. 12, Ch. 186, L. 1995.  
  33-16-1031. Consent to rate. Notwithstanding any other provision of this part, upon the written consent of the insured, filed with the commissioner, a rate in excess of that determined in accordance with the other provisions of this part may be used on any specific risk.   History: En. Sec. 13, Ch. 186, L. 1995.  
  33-16-1032. Acts reducing competition prohibited. (1) In this section, the word "insurer" includes two or more affiliated insurers engaged in joint or cooperative underwriting, investment management, marketing, servicing, or administration of their business and affairs as insurers and:   (a) under common management; or   (b) under common controlling ownership or under other common effective legal control.   (2) An insurer or advisory organization may not:   (a) monopolize or attempt to monopolize or combine or conspire with any other person or persons to monopolize the business of insurance of any kind, subdivision, or class;   (b) agree with any other insurer or advisory organization to charge or adhere to any rate or rating plan other than the uniform experience rating plan or rating rules of the advisory organization, except as needed to comply with the requirements of 33-16-1026;   (c) make an agreement with any other insurer, advisory organization, or other person to unreasonably restrain trade or substantially lessen competition in the business of insurance of any kind, subdivision, or class; or   (d) make an agreement with any other insurer or advisory organization to refuse to deal with any person in connection with the sale of insurance.   (3) The fact that two or more insurers, whether they are members or subscribers of a common advisory organization, use consistently or intermittently the same advisory organization rules or insurer guidelines, rating plans, rating schedules, rating rules, policy forms, rate classifications, underwriting rules, surveys, or inspections or similar materials is not sufficient in itself to support a finding that an agreement exists.   (4) An advisory organization or member or subscriber of an advisory organization may not interfere with the right of any insurer to establish its rates independently of that advisory organization or to charge rates different from the rates made by that advisory organization.   (5) Except as required by 33-16-1026, an advisory organization may not have or adopt any rule or exact any agreement or formulate or engage in any program that would require any member, subscriber, or other insurer to:   (a) adhere to its rates; or   (b) prevent any insurer from acting independently.   History: En. Sec. 14, Ch. 186, L. 1995.  
  33-16-1033. Advisory organization -- permitted activity. An advisory organization may:   (1) develop statistical plans, including class definitions;   (2) collect statistical data from members, subscribers, or any other source;   (3) prepare and distribute pure premium rate data, adjusted for loss development and loss trending, in accordance with its statistical plan. The data and adjustments must be in sufficient detail to permit insurers to modify pure premiums based upon their own rating methods or interpretations of underlying data.   (4) prepare and distribute manuals for rating rules and rating schedules that do not contain any rules or schedules, including final rates, without information outside the manuals;   (5) distribute information that is filed with the commissioner and open to public inspection;   (6) conduct research and collect statistics in order to discover, identify, and classify information relating to causes or prevention of losses;   (7) prepare and file policy forms and endorsements and consult with members, subscribers, and others relative to their use and application;   (8) collect, compile, and distribute past and current prices of individual insurers, if the information is made available to the general public;   (9) conduct research and collect information to determine the impact of benefit level changes on pure premium rates;   (10) prepare and distribute rules and rating values for the uniform experience rating plan; and   (11) calculate and disseminate individual risk premium modification factors. Individual risk premium modification factors may only be disseminated to:   (a) a licensed producer or an insurer for the business of insurance only; and   (b) the department of labor and industry for regulatory purposes only. Individual employer payroll and loss information may be provided to a person other than the current licensed producer or an insurer only after obtaining the employer's written permission.   History: En. Sec. 15, Ch. 186, L. 1995; amd. Sec. 11, Ch. 320, L. 2015.  
  33-16-1034. Advisory organization -- prohibited activity. In addition to other prohibitions in this part, except as specifically permitted under 33-16-1033, an advisory organization may not compile or distribute recommendations relating to rates that include expenses, other than loss adjustment expenses, or profit.   History: En. Sec. 16, Ch. 186, L. 1995.  
  33-16-1035. Penalties -- suspension of license. (1) The commissioner may impose upon a person or organization that violates 33-16-1020 through 33-16-1023 or 33-16-1025 through 33-16-1036 a penalty of not more than $500 for each violation.   (2) If the commissioner determines that the violation is willful, the commissioner may impose a penalty of not more than $1,000 for each violation in addition to any other penalty provided by law.   (3) The commissioner may suspend the license of an insurer or an advisory organization that fails to comply with any order within the time set by the order or extension granted by the commissioner. The commissioner may not suspend a license for failure to comply with an order until the time prescribed for appeal from the order has expired or, if appealed, until the order has been affirmed. The commissioner may determine the period of a suspension, which remains in effect for the period unless modified or rescinded or until the order upon which the suspension is based is modified, rescinded, or reversed.   (4) Unless a consent decree has been entered, a penalty may not be imposed nor may a license be suspended or revoked unless the commissioner, following a hearing, issues a written order with findings of fact. The hearing must be held at least 10 days after written notice to the person or organization specifying the alleged violation.   (5) A party aggrieved by an order or decision of the commissioner may, within 30 days after receiving the commissioner's notice, make a written request for a hearing.   History: En. Sec. 17, Ch. 186, L. 1995; amd. Sec. 147, Ch. 42, L. 1997; amd. Sec. 12, Ch. 320, L. 2015.  
  33-16-1036. Appeals from commissioner. (1) An order, decision, or act of the commissioner under this part may be appealed to district court upon petition of a person aggrieved.   (2) A petition for review must be filed within 60 days from notice of the order, decision, or act. The commencement of the proceeding does not affect enforcement or validity of the commissioner's action unless the court determines, after notice to the commissioner, that a stay of enforcement until further direction of the court will not injure the interests of the public.   History: En. Sec. 18, Ch. 186, L. 1995.  
  33-16-201. Standards applicable to rates. The following standards apply to the making and use of rates pertaining to all classes of insurance to which the provisions of this chapter are applicable:  (1) (a) Rates may not be excessive or inadequate, and they may not be unfairly discriminatory.   (b) A rate may not be held to be excessive unless the rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which the rate is applicable.   (c) A rate may not be held to be inadequate unless the rate is unreasonably low for the insurance provided and the continued use of the rate endangers the solvency of the insurer using the rate or unless the rate is unreasonably low for the insurance provided and the use of the rate by the insurer has, or if continued will have, the effect of destroying competition or creating a monopoly.   (2) (a) Consideration must be given, when applicable, to past and prospective loss experience within and outside this state, to revenue and profits from reserves, to conflagration and catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses, both countrywide and those specially applicable to this state, and to all other factors, including judgment factors, considered relevant within and outside this state. In the case of fire insurance rates, consideration may be given to the experience of the fire insurance business during the most recent 5-year period for which experience is available.   (b) Consideration may also be given in the making and use of rates to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.   (3) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the operating methods of the insurer or group with respect to any kind of insurance or with respect to any subdivision or combination of insurance.   (4) (a) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for separate risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. The standards may measure any difference among risks that have a probable effect upon losses or expenses. Classifications or modifications of classifications of risks may be established, based on size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations.   (b) Special risk classifications may be established for private passenger automobile policies. Special risk classifications may be based on favorable aspects of an insured individual's claims history. Special risk classifications may not be established based on adverse information contained in an insured individual's driving record that is 3 years old or older.   (c) Special risk classifications may be established for commercial automobile policies. Special risk classifications for commercial automobile policies may be based on favorable aspects of an insured's claims history. Special risk classifications for commercial automobile policies may not be established based on adverse information contained in an insured's claims history or driving records that is 5 years old or older.   (d) Special risk classifications may be established for personal homeowner policies. Special risk classifications may be based on favorable aspects of an insured individual's claims history. Special risk classifications may not be established based on adverse information contained in an insured individual's claims history that is 7 years old or older.   (e) Classifications and modifications apply to all risks under the same or substantially the same circumstances or conditions.   (f) As used in subsection (4)(b), "private passenger automobile policy" means an automobile insurance policy issued to individuals or families but does not include policies known as commercial automobile policies.   (g) As used in subsection (4)(d), "personal homeowner policies" means property insurance under 33-1-210 that is sold by an insurer for personal, family, or household purposes.   History: En. Sec. 7, Ch. 362, L. 1969; amd. Sec. 1, Ch. 54, L. 1973; amd. Sec. 1, Ch. 104, L. 1973; R.C.M. 1947, 40-3640; amd. Sec. 1, Ch. 320, L. 1995; amd. Sec. 1, Ch. 239, L. 2011; amd. Sec. 1, Ch. 129, L. 2021; amd. Sec. 1, Ch. 174, L. 2021. 
  33-16-202. Recording and reporting of loss and expense experience. (1) The commissioner may promulgate and may modify reasonable rules and statistical plans, reasonably adapted to each of the rating systems used, which must be used by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually in form and detail as necessary to aid the commissioner in determining whether rates comply with the applicable standards of this chapter. The rules and plans may also provide for the recording and reporting of expense experience items that are specially applicable to this state and are not susceptible of determination by a prorating of countrywide expense experience.   (2) In promulgating rules and plans, the commissioner shall give consideration to the rating systems in use in this state and, in order that the rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for rating systems in other states. An insurer may not be required to record or report its loss experience on a classification basis that is inconsistent with the rating system used by it.   (3) The commissioner may designate one or more rating organizations or other agencies to assist in gathering and making compilations of loss and expense experience, and the compilations must be made available, subject to reasonable rules promulgated by the commissioner, to insurers and rating organizations.   History: En. Sec. 36, Ch. 362, L. 1969; R.C.M. 1947, 40-3669; amd. Sec. 47, Ch. 379, L. 1995.  
  33-16-203. Rates filed. (1) Every insurer, rating organization, or advisory organization shall file with the commissioner all rates intended for use within this state, together with supporting data sufficient to substantiate the filing. The filing required by this subsection may be made by rating organizations on behalf of their members and subscribers. However, this provision does not prohibit a member or subscriber from filing rates on its own behalf. Any deviations from a rating organization's rates by a member or subscriber must be filed with the commissioner and must be accompanied by supporting data.   (2) Rates filed must provide for a premium reduction to:   (a) qualified insured operators 55 years of age or older in accordance with 33-16-222; or   (b) qualified members of the Montana national guard in accordance with 33-16-230.   History: En. Sec. 21, Ch. 362, L. 1969; amd. Sec. 1, Ch. 469, L. 1977; R.C.M. 1947, 40-3654(2); amd. Sec. 1, Ch. 241, L. 1979; amd. Sec. 7, Ch. 49, L. 1987; amd. Sec. 2, Ch. 576, L. 2005.  
  33-16-204. Review of rates on request by aggrieved person. (1) A person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer or rating organization may request the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded the person. The request may be made by the person's authorized representative and must be written.   (2) If the request is not granted within 30 days after it is made, the requester may treat it as rejected.   (3) Any person aggrieved by the action of an insurer or rating organization in refusing the review requested or in failing or refusing to grant all or part of the relief requested may file a written complaint and request for hearing with the commissioner, specifying the grounds relied upon. If the commissioner has information concerning a similar complaint, the commissioner may deny the hearing. If the commissioner believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, the commissioner shall deny the hearing. Otherwise, and if the commissioner finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, the commissioner shall proceed as provided in 33-16-205.   History: En. Sec. 26, Ch. 362, L. 1969; R.C.M. 1947, 40-3659; amd. Sec. 1198, Ch. 56, L. 2009.  
  33-16-205. Noncompliance of rates -- notice. If, after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers that engages in joint underwriting or joint reinsurance or upon the basis of other information or upon sufficient complaint as provided in 33-16-204, the commissioner has good cause to believe that the insurer, organization, group, or association or any rate, rating plan, or rating system made or used by the insurer or rating organization does not comply with the requirements and standards of this chapter applicable to it, the commissioner shall, unless the commissioner has good cause to believe that the noncompliance is willful, give notice, in writing, to the insurer, organization, group, or association stating in what manner and to what extent the noncompliance is alleged to exist and specifying a reasonable time, not less than 10 days after receipt, in which the noncompliance may be corrected.   History: En. Sec. 27, Ch. 362, L. 1969; R.C.M. 1947, 40-3660; amd. Sec. 9, Ch. 416, L. 1999.  
  33-16-206. Hearings -- notice -- subject of hearing. (1) If the commissioner has good cause to believe the noncompliance to be willful or if within the period prescribed by the commissioner in the notice required by 33-16-205 the insurer, organization, group, or association does not make changes that may be necessary to correct the noncompliance specified by the commissioner or establish to the satisfaction of the commissioner that the specified noncompliance does not exist, then the commissioner may hold a public hearing in connection with the noncompliance, provided that within a reasonable period of time, which may not be less than 10 days before the date of hearing, the commissioner mails written notice specifying the matters to be considered at the hearing to the insurer, organization, group, or association. If notice has not been given as provided in 33-16-205, the notice must state in what manner and to what extent noncompliance is alleged to exist.   (2) The hearing may not include any additional subjects not specified in the notices required by 33-16-205 or this section.   History: En. Sec. 28, Ch. 362, L. 1969; R.C.M. 1947, 40-3661; amd. Sec. 1199, Ch. 56, L. 2009.  
  33-16-207 through 33-16-210 reserved.  
  33-16-211. Order prohibiting use of rate or rating system. If, after a hearing pursuant to 33-16-206, the commissioner finds that any rate, rating plan, or rating system violates the provisions of this chapter applicable to it, the commissioner may issue an order to the insurer or rating organization that has been the subject of the hearing, specifying in what respects the violation exists and stating when, within a reasonable period of time, the further use of the rate or rating system by the insurer or rating organization in contracts of insurance made after that time is prohibited.   History: En. Sec. 29, Ch. 362, L. 1969; R.C.M. 1947, 40-3662(part); amd. Sec. 1200, Ch. 56, L. 2009.  
  33-16-212 through 33-16-220 reserved.  
  33-16-221. Short title. Sections 33-16-221 through 33-16-225 may be cited as the "Mature Defensive Driving Act".   History: En. Sec. 1, Ch. 49, L. 1987.  
  33-16-222. Requirement for rate reduction. (1) Any rates, rating schedules, or rating manuals for liability, bodily injury, or collision coverages of a motor vehicle insurance policy filed with the insurance department must provide for an appropriate premium reduction as determined by the insurer for an insured operator of a covered vehicle who is 55 years of age or older and who has successfully completed a highway traffic safety program as provided by 61-2-102 and 61-2-103.   (2) In addition to providing a premium reduction, an insurer may reimburse the fee for participating in the highway traffic safety program.   (3) The premium reduction used by the insurer is presumed appropriate unless credible data demonstrates otherwise.   History: En. Sec. 2, Ch. 49, L. 1987; amd. Sec. 11, Ch. 469, L. 2005.  
  33-16-223. Effective period of reduction. (1) The premium reduction required by 33-16-222 is effective for an insured for a 3-year period after successful completion of the approved course. Each person shall take an approved course every 3 years in order to continue to be eligible for the reduction in premium required by 33-16-222.   (2) An insurer may require, as a condition of maintaining the discount, any or all of the following:   (a) that the insured not be involved in an accident in which the insured is at fault;   (b) that the insured not be convicted of or plead guilty or nolo contendere to a moving traffic violation; or   (c) that the insured not have forfeited bail or collateral for a moving traffic violation.   History: En. Secs. 3, 6, Ch. 49, L. 1987; amd. Sec. 1201, Ch. 56, L. 2009; amd. Sec. 1, Ch. 111, L. 2019.  
  33-16-224. Certificate. The organization offering the approved course shall issue a certificate to each person who successfully completes the course that qualifies the person for the premium discount required by 33-16-222.   History: En. Sec. 4, Ch. 49, L. 1987; amd. Sec. 1202, Ch. 56, L. 2009.  
  33-16-225. When discount not applicable. The provisions of 33-16-222 do not apply if the approved course is taken as punishment specified by a court or other governmental entity for a moving traffic violation.   History: En. Sec. 5, Ch. 49, L. 1987.  
  33-16-226 through 33-16-229 reserved.  
  33-16-230. Rate reduction for military defensive drivers -- effective period -- exclusions. (1) (a) Any rates, rating schedules, or rating manuals for liability, bodily injury, or collision coverages of a motor vehicle insurance policy filed with the insurance department must provide for an appropriate premium reduction as determined by the insurer for a member of the Montana national guard who is an insured operator of a covered nonmilitary vehicle and who has successfully completed a defensive driving course referred to in 61-2-102(2).   (b) Any discount used by the insurer is presumed appropriate unless credible data demonstrates otherwise.   (2) The premium reduction required under subsection (1)(a) is effective for an insured for 3 years after successful completion of the approved course. Each person shall successfully complete a defensive driving course referred to in 61-2-102(2) every 3 years to remain eligible for the reduction provided in subsection (1)(a).   (3) Subsection (1)(a) does not apply if the approved course is taken as punishment specified by a court or other governmental entity for a moving traffic violation.   (4) An insurer may deny the discount under subsection (1)(a) if within 3 years prior to the insured's application for the rate reduction or during the period for which the rate reduction is provided:   (a) the insured was convicted of or plead guilty or nolo contendere to a moving traffic violation;   (b) the insured has forfeited bail or collateral for a moving traffic violation; or   (c) the insured was convicted by a court or found at fault in a motor vehicle accident.   History: En. Sec. 1, Ch. 576, L. 2005; amd. Sec. 2, Ch. 111, L. 2019.  
  33-16-231. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 2, Ch. 400, L. 1989.  
  33-16-232. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 3, Ch. 400, L. 1989.  
  33-16-233. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 4, Ch. 400, L. 1989.  
  33-16-234. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 5, Ch. 400, L. 1989.  
  33-16-235. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 6, Ch. 400, L. 1989.  
  33-16-236. Repealed. Sec. 1, Ch. 79, L. 1995.   History: En. Sec. 7, Ch. 400, L. 1989.  
  33-16-301. Insurers authorized to act in concert. Subject to and in compliance with the provisions of this chapter authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research.   History: En. Sec. 8, Ch. 362, L. 1969; R.C.M. 1947, 40-3641.  
  33-16-302. Insurers with common ownership or cosureties on bond -- acting in concert. With respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research, two or more admitted insurers having a common ownership or operating in this state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer, and to the extent that such matters relate to cosurety bonds, two or more admitted insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.   History: En. Sec. 9, Ch. 362, L. 1969; R.C.M. 1947, 40-3642.  
  33-16-303. Use of rates, rating systems, underwriting rules, and policy or bond forms of rating or advisory organizations -- agreements to adhere to. (1) Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules, or policy or bond forms of those organizations, either consistently or intermittently, but, except as provided in 33-16-105, 33-16-302, 33-16-305, 33-16-307, 33-16-1008, 33-16-1020 through 33-16-1023, and 33-16-1025 through 33-16-1036, may not agree with each other or rating organizations or others to adhere to the organizations' rates, systems, rules, or policy or bond forms.   (2) The fact that two or more admitted insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization or the underwriting rules or policy or bond forms prepared by a rating or advisory organization is not sufficient in itself to support a finding that an agreement prohibited under subsection (1) exists and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any agreement.   History: En. Sec. 10, Ch. 362, L. 1969; amd. Sec. 2, Ch. 558, L. 1977; R.C.M. 1947, 40-3643; amd. Sec. 19, Ch. 186, L. 1995; amd. Sec. 7, Ch. 320, L. 2015.  
  33-16-304. Exchange of information or experience data -- consultation with rating organizations and insurers. Licensed rating organizations and admitted insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.   History: En. Sec. 11, Ch. 362, L. 1969; R.C.M. 1947, 40-3644.  
  33-16-305. Agreements for apportionment of casualty insurance -- approval of commissioner -- review of practices of adherents -- revocation of approval. (1) Agreements may be made among admitted insurers with respect to the equitable apportionment among them of casualty insurance that may be afforded applicants who are in good faith entitled to but who are unable to procure the insurance through ordinary methods and with respect to the use of reasonable rate modifications for the insurance. The agreements are subject to the approval of the commissioner.   (2) All agreements must be submitted in writing to the commissioner for consideration and approval, together with information that the commissioner may reasonably require. The commissioner shall approve only agreements that are found to contemplate:   (a) the use of rates that meet the standards prescribed by this chapter; and   (b) activities and practices that are not unfair, unreasonable, or otherwise inconsistent with the provisions of this chapter.   (3) At any time after the agreements are in effect, the commissioner may review the practices and activities of the parties to the agreements and if, after a hearing upon not less than 10 days' notice to the parties, the commissioner finds that any practice or activity is unfair or unreasonable or is otherwise inconsistent with the provisions of this chapter, the commissioner may issue a written order to the parties to any agreement, specifying in what respects the act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of the activity or practice. For good cause and after hearing upon not less than 10 days' notice to the parties, the commissioner may revoke approval of any agreement referred to in this section.   History: En. Sec. 12, Ch. 362, L. 1969; R.C.M. 1947, 40-3645; amd. Sec. 1203, Ch. 56, L. 2009.  
  33-16-306. Joint underwriters and reinsurers -- compliance. Upon compliance with the provisions of this chapter applicable thereto, any rating organization, advisory organization, and any group, association, or other organization of admitted insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof may conduct operations in this state. As respects insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with the provisions of this chapter applicable to it.   History: En. Sec. 13, Ch. 362, L. 1969; R.C.M. 1947, 40-3646.  
  33-16-307. Joint underwriting and joint reinsurance -- application -- restrictions on operations. (1) Every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance through such group, association, or organization or by standing agreement among the members thereof, shall file with the commissioner:   (a) a copy of its constitution, its articles of incorporation, agreement, or association, and of its bylaws and rules governing its activities, all duly certified by the custodian of the originals thereof;   (b) a list of its members; and   (c) the name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served.   (2) Every such group, association, or other organization shall notify the commissioner promptly of every change in its constitution, its articles of incorporation, agreement, or association, and its bylaws and rules governing the conduct of its business; its list of members; and the name and address of the resident of this state designated by it upon whom notices or orders of the commissioner or process affecting such group, association, or organization may be served.   (3) No such group, association, or organization shall engage in any unfair or unreasonable practice with respect to such activities.   History: En. Sec. 20, Ch. 362, L. 1969; R.C.M. 1947, 40-3653.  
  33-16-308. Advisory organizations -- application -- requisites -- restrictions on operations. (1) No advisory organization shall conduct its operations in this state unless and until it has filed with the commissioner:   (a) a copy of its constitution, articles of incorporation, agreement, or association, and of its bylaws or rules governing its activities, all duly certified by the custodian of the originals thereof;   (b) a list of its members and subscribers; and   (c) the name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served.   (2) Every such advisory organization shall notify the commissioner promptly of every change in its constitution, its articles of incorporation, agreement, or association, and of its bylaws and rules governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this state designated by it upon whom notices or orders of the commissioner or process affecting such organization may be served.   (3) No such advisory organization shall engage in any unfair or unreasonable practice with respect to such activities.   History: En. Sec. 19, Ch. 362, L. 1969; R.C.M. 1947, 40-3652.  
  33-16-401. Rating organizations -- compliance -- application. (1) No rating organization shall conduct its operations in this state without first filing with the commissioner a written application for and securing a license to act as a rating organization. Any rating organization may make application for and obtain a license as a rating organization if it shall meet the requirements for license set forth in this chapter.   (2) Every such rating organization shall file with its application:   (a) a copy of its constitution, its articles of incorporation, agreement, or association, and of its bylaws and rules governing the conduct of its business, all duly certified by the custodian or the originals thereof;   (b) a list of its members and subscribers;   (c) the name and address of a resident of this state upon whom notices or orders of the commissioner or process affecting such rating organization may be served; and   (d) a statement of its qualifications as a rating organization.   History: En. Sec. 14, Ch. 362, L. 1969; R.C.M. 1947, 40-3647.  
  33-16-402. Evidence prerequisite to license. To obtain and retain a license, a rating organization shall provide satisfactory evidence to the commissioner that it will:   (1) permit any admitted insurer to become a member of or a subscriber to such rating organization at a reasonable cost and without discrimination or withdraw therefrom;   (2) neither have nor adopt any rule or exact any agreement, the effect of which would be to require any member or subscriber, as a condition to membership or subscribership, to adhere to its rates, rating plans, rating systems, underwriting rules, or policy or bond forms;   (3) neither adopt any rule nor exact any agreement, the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;   (4) neither practice nor sanction any plan or act of boycott, coercion, or intimidation;   (5) neither enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the insurance business;   (6) notify the commissioner promptly of every change in its constitution, its articles of incorporation, agreement, or association, and of its bylaws and rules governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this state designated by it upon whom notices or orders of the commissioner or process affecting such organization may be served;   (7) comply with the provisions of 33-16-105 and 33-16-203.   History: En. Sec. 15, Ch. 362, L. 1969; R.C.M. 1947, 40-3648.  
  33-16-403. Examination of application and investigation of applicant -- issuance of license -- fee. (1) The commissioner shall examine each application for a license to act as a rating or advisory organization pursuant to this part or a workers' compensation advisory organization pursuant to part 10 and the documents filed with the application and may make a further investigation of the applicant, its affairs, and its proposed plan of business as the commissioner considers appropriate.   (2) The commissioner shall issue the license applied for within 60 days of its filing if, from the examination and investigation, the commissioner is satisfied that:   (a) the business reputation of the applicant and its officers is good;   (b) the facilities of the applicant are adequate to enable it to furnish the services it proposes to furnish; and   (c) the applicant and its proposed plan of operation conform to the requirements of this chapter.   (3) Otherwise, but only after a hearing upon notice, the commissioner shall, in writing, deny the application and notify the applicant of the decision and the reasons for the denial.   (4) The commissioner may grant an application in part only and issue a license to act as a rating, advisory, or workers' compensation advisory organization for one or more of the classes of insurance or subdivisions of the classes of insurance or class of risk, or a part or combination of a class of risk as are specified in the application, if the applicant qualifies for only a portion of the classes applied for.   (5) (a) Except as provided in subsection (5)(b), licenses issued pursuant to this section remain in effect until revoked as provided in this chapter. The fee for the license is $100 annually and must be deposited in the state special revenue fund to the credit of the state auditor's office.   (b) Each workers' compensation advisory organization is required to renew its license annually.   History: En. Sec. 16, Ch. 362, L. 1969; amd. Sec. 1, Ch. 206, L. 1973; R.C.M. 1947, 40-3649; amd. Sec. 20, Ch. 186, L. 1995; amd. Sec. 43, Ch. 227, L. 2001; amd. Sec. 19, Ch. 380, L. 2003.  
  33-16-404. Rules governing eligibility for membership. Subject to the approval of the commissioner, licensed rating organizations may make reasonable rules governing eligibility for membership.   History: En. Sec. 17, Ch. 362, L. 1969; R.C.M. 1947, 40-3650.  
  33-16-405. Insurers with common ownership or management. If two or more insurers having a common ownership or operating in this state under common management are admitted for the classes or types of insurance for which a rating organization is licensed to make rates, the rating organization may require as a condition to membership or subscribership of one or more that all such insurers shall become members or subscribers.   History: En. Sec. 18, Ch. 362, L. 1969; R.C.M. 1947, 40-3651.  
  33-17-101. Scope of chapter. (1) The purpose of this chapter is to govern the qualifications and procedures for licensing insurance producers.   (2) Except as provided in subsection (3), this chapter applies to all stock, mutual, and reciprocal insurers and to all kinds of insurance and annuities.   (3) Except as provided in 33-17-401 and 33-17-408(2), this chapter does not apply to surplus lines producers.   History: En. Sec. 145, Ch. 286, L. 1959; R.C.M. 1947, 40-3301; amd. Sec. 17, Ch. 713, L. 1989; amd. Sec. 2, Ch. 106, L. 2001.  
  33-17-102. Definitions. As used in this chapter, the following definitions apply:  (1) (a) "Adjuster" means a person who, on behalf of the insurer, for compensation as an independent contractor or as the employee of an independent contractor or for a fee or commission investigates and negotiates the settlement of claims arising under insurance contracts or otherwise acts on behalf of the insurer.   (b) The term does not include a:   (i) licensed attorney who is qualified to practice law in this state;   (ii) salaried employee of an insurer or of a managing general agent;   (iii) licensed insurance producer who adjusts or assists in adjustment of losses arising under policies issued by the insurer;   (iv) licensed third-party administrator who adjusts or assists in adjustment of losses arising under policies issued by the insurer; or   (v) claims examiner as defined in 39-71-116.   (2) "Adjuster license" means a document issued by the commissioner that authorizes a person to act as an adjuster or a public adjuster.   (3) (a) "Administrator" means a person who collects charges or premiums from residents of this state in connection with life, disability, property, or casualty insurance or annuities or who adjusts or settles claims on these coverages.   (b) The term does not include:   (i) an employer on behalf of its employees or on behalf of the employees of one or more subsidiaries of affiliated corporations of the employer;   (ii) a union on behalf of its members;   (iii) (A) an insurer that is either authorized in this state or acting as an insurer with respect to a policy lawfully issued and delivered by the insurer in and pursuant to the laws of a state in which the insurer is authorized to transact insurance; or   (B) a health service corporation as defined in 33-30-101;   (iv) a pharmacy benefit manager as defined in 33-2-2402 that is licensed pursuant to 33-2-2403;   (v) a life, disability, property, or casualty insurance producer who is licensed in this state and whose activities are limited exclusively to the sale of insurance;   (vi) a creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;   (vii) a trust established in conformity with 29 U.S.C. 186 or the trustees, agents, and employees of the trust;   (viii) a trust exempt from taxation under section 501(a) of the Internal Revenue Code or the trustees and employees of the trust;   (ix) a custodian acting pursuant to a custodian account that meets the requirements of section 401(f) of the Internal Revenue Code or the agents and employees of the custodian;   (x) a bank, credit union, or other financial institution that is subject to supervision or examination by federal or state banking authorities;   (xi) a company that issues credit cards and that advances for and collects premiums or charges from the company's credit card holders who have authorized the company to do so, if the company does not adjust or settle claims;   (xii) a person who adjusts or settles claims in the normal course of the person's practice or employment as an attorney and who does not collect charges or premiums in connection with life or disability insurance or annuities; or   (xiii) a person appointed as a managing general agent in this state whose activities are limited exclusively to those described in 33-2-1501(10) and Title 33, chapter 2, part 16.   (4) (a) "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.   (b) The term does not include an individual.   (5) "Consultant" means an individual who for a fee examines, appraises, reviews, evaluates, makes recommendations, or gives advice regarding an insurance policy, annuity, or pension contract, plan, or program.   (6) "Consultant license" means a document issued by the commissioner that authorizes an individual to act as an insurance consultant.   (7) "Exchange" means a health benefit exchange established by the state of Montana or an exchange established by the United States department of health and human services in accordance with 42 U.S.C. 18031.   (8) "Home state" means the District of Columbia or any state or territory of the United States in which a person licensed under this chapter maintains a principal place of residence or a principal place of business.   (9) "Individual" means a natural person.   (10) "Insurance producer", except as provided in 33-17-103, means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.   (11) "Lapse" means the expiration of the license for failure to renew by the biennial renewal date.   (12) "License" means a document issued by the commissioner that authorizes a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create actual, apparent, or inherent authority in the holder to represent or commit an insurer to a binding agreement.   (13) "Limited line credit insurance" includes credit life insurance, credit disability insurance, credit property insurance, credit unemployment insurance, involuntary unemployment insurance, mortgage life insurance, mortgage guaranty insurance, mortgage disability insurance, gap insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing the credit obligation and that the commissioner determines should be designated as a form of limited line credit insurance.   (14) "Limited line credit insurance producer" means a person who sells, solicits, or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group, or individual policy.   (15) "Limited lines insurance" means those lines of insurance that the commissioner finds necessary to recognize for the purposes of complying with 33-17-401(3).   (16) "Limited lines producer" means a person authorized by the commissioner to sell, solicit, or negotiate limited lines insurance.   (17) "Lines of authority" means any kind of insurance as defined in Title 33.   (18) "Navigator" means a person certified by the commissioner under 33-17-241 and selected to perform the activities and duties identified in 42 U.S.C. 18031, et seq.   (19) "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract if the person engaged in negotiation either sells insurance or obtains insurance from insurers for purchasers.   (20) "Person" means an individual or a business entity.   (21) (a) "Public adjuster" means an adjuster retained by and representing the interests of the insured.   (b) The term does not include a person who provides an estimate of work to an insurer on behalf of an insured as long as the insured is notified of all communications between the person and the insurer related to the estimates.   (22) "Sell" means to exchange a contract of insurance by any means, for money or the equivalent, on behalf of an insurance company.   (23) "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance.   (24) "Suspend" means to bar the use of a person's license for a period of time.   History: En. Secs. 146, 147, 148, 150, Ch. 286, L. 1959; R.C.M. 1947, 40-3302, 40-3303(part), 40-3304, 40-3306; amd. Sec. 5, Ch. 518, L. 1983; amd. Sec. 1, Ch. 409, L. 1987; amd. Sec. 18, Ch. 713, L. 1989; amd. Sec. 25, Ch. 798, L. 1991; amd. Sec. 49, Ch. 379, L. 1995; amd. Sec. 24, Ch. 531, L. 1997; amd. Sec. 3, Ch. 106, L. 2001; amd. Sec. 10, Ch. 427, L. 2003; amd. Sec. 1, Ch. 140, L. 2005; amd. Sec. 12, Ch. 469, L. 2005; amd. Sec. 4, Ch. 313, L. 2009; amd. Sec. 11, Ch. 169, L. 2013; amd. Sec. 6, Ch. 245, L. 2013; amd. Sec. 3, Ch. 139, L. 2015; amd. Sec. 17, Ch. 151, L. 2017; amd. Sec. 13, Ch. 501, L. 2021. 
  33-17-103. Exemptions from definition of insurance producer. The definition of insurance producer does not include:   (1) an individual who is a regularly salaried officer or employee of an insurer and who is engaged in the performance of usual and customary executive, administrative, or clerical duties and whose duties do not include the negotiation, sale, or solicitation of insurance;   (2) an individual who is a salaried employee in the office of an insurance producer and who devotes the individual's full time to clerical and administrative services, including the incidental taking of insurance applications and receipt of premiums in the office of the individual's employer, if the individual does not receive any commissions on the applications and the individual's compensation is not varied by the volume of applications or premiums the individual takes or receives;   (3) a person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, or group or blanket accident and disability insurance or for the purpose of enrolling individuals under those plans, issuing certificates under those plans, or otherwise assisting in administering those plans if a commission is not paid for the service;   (4) an employer, the employer's officers or employees, or the trustees of an employee trust plan, to the extent that the employer, officers, employees, or trustees are engaged in the administration or operation of a program of employee benefits for their own employees or the employees of their subsidiaries or affiliates if the program involves the use of insurance issued by an insurer and the employer, officers, employees, or trustees are not compensated in any manner, directly or indirectly, by the insurer issuing the contracts;   (5) a person who is:   (a) an employee of an insurer or of an organization employed by an insurer, which insurer or organization is engaged in the inspection, rating, or classification of insurance risks or in the supervision of the training of insurance producers; and   (b) not individually engaged in the selling, solicitation, or negotiation of insurance policies and contracts;   (6) an attorney advising a client on general insurance matters, provided the attorney does not sell, solicit, or negotiate insurance;   (7) a salaried full-time employee who counsels or advises the employer or the subsidiaries or affiliates of the employer about the life insurance or annuities if the employee does not sell or solicit insurance or receive a commission or fee;   (8) a person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of this state if the person does not sell, solicit, or negotiate insurance contracts with respect to risks located in this state; or   (9) a person who is not a resident of this state who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks with respect to an insured with risks located in more than one state that are insured under the contract if the person is licensed in the state where the insured maintains its principal place of business and the contract insures risks located in that state.   History: En. Sec. 149, Ch. 286, L. 1959; R.C.M. 1947, 40-3305; amd. Sec. 6, Ch. 518, L. 1983; amd. Sec. 19, Ch. 713, L. 1989; amd. Sec. 11, Ch. 427, L. 2003.  
  33-17-1001. Suspension, revocation, or refusal of license. (1) The commissioner may suspend, revoke, refuse to renew, or refuse to issue a license under this chapter, may levy a civil penalty in accordance with 33-1-317, or may choose any combination of actions when a licensee or applicant for licensure has:   (a) engaged or is about to engage in an act or practice for which issuance of the license could have been refused;   (b) obtained or attempted to obtain a license through misrepresentation or fraud, including but not limited to providing incorrect, misleading, incomplete, or materially untrue information in the license application or in the continuing education affidavit;   (c) violated or failed to comply with a provision of this code or has violated a rule, subpoena, or order of the commissioner or of the commissioner of any other state;   (d) improperly withheld, misappropriated, or converted to the licensee's or applicant's own use money or property belonging to policyholders, insurers, beneficiaries, or others and received in conduct of business under the license;   (e) been convicted of a felony;   (f) in the conduct of the affairs under the license, used fraudulent, coercive, or dishonest practices or the licensee or applicant is incompetent, untrustworthy, financially irresponsible, or a source of injury and loss to the public;   (g) misrepresented the terms of an actual or proposed insurance contract or application for insurance;   (h) been found guilty of an unfair trade practice or fraud prohibited by Title 33, chapter 18;   (i) had a similar license denied, suspended, or revoked in any other state;   (j) forged another's name to an application for insurance or to any document related to an insurance transaction;   (k) cheated on an examination for a license;   (l) knowingly accepted insurance business from a person who is not licensed;   (m) failed to comply with a final administrative or court order imposing a child support obligation; or   (n) failed to pay state income tax determined to be delinquent or to comply with any final administrative or court order directing payment of state income tax.   (2) The license of a business entity may be suspended, revoked, refused, or denied if a reason listed in subsection (1) applies to an individual designated in the license to exercise its powers.   (3) The commissioner retains the authority to enforce the provisions of and impose any penalty or remedy authorized by the insurance code against any person who is under investigation for or charged with a violation of the insurance code even if the person's license or registration has been surrendered, suspended, revoked, refused, or denied or has lapsed.   History: En. Sec. 173, Ch. 286, L. 1959; R.C.M. 1947, 40-3329; amd. Sec. 6, Ch. 395, L. 1983; amd. Sec. 12, Ch. 409, L. 1987; amd. Sec. 28, Ch. 537, L. 1987; amd. Sec. 49, Ch. 713, L. 1989; amd. Sec. 2, Ch. 164, L. 1993; amd. Sec. 8, Ch. 622, L. 1993; amd. Sec. 45, Ch. 227, L. 2001; amd. Sec. 20, Ch. 427, L. 2003; amd. Sec. 14, Ch. 271, L. 2009; amd. Sec. 7, Ch. 313, L. 2009; amd. Sec. 7, Ch. 139, L. 2015.  
  33-17-1002. Procedure following suspension or revocation. (1) Upon suspension, revocation, or refusal of a license, the commissioner shall notify the licensee or applicant by mail addressed to the licensee or applicant at the last-known address contained in the records of the commissioner. Notice is effectuated when mailed.   (2) The commissioner may reissue a license that has lapsed if the licensee has paid the lapsed license reinstatement fee pursuant to 33-2-708 and has filed certification of completion of continuing education requirements for the preceding biennium within 1 year of the lapse occurring.   (3) The commissioner may not again issue a license under this code to a person whose license has been revoked until after expiration of 1 year and until the person again qualifies for a license in accordance with this code. If the commissioner revokes a person's license, the commissioner may refuse to issue a license to the person for up to 5 years after the revocation. A person whose license has been revoked twice is not again eligible for any license under this code.   (4) If the license of a business entity is suspended or revoked, a member, officer, or director of the business entity may not be licensed or be designated in a license to exercise the business entity's powers during the period of the suspension or revocation unless the commissioner determines upon substantial evidence that the member, officer, or director was not personally at fault and did not acquiesce in the matter on account of which the license was suspended or revoked.   History: En. Sec. 174, Ch. 286, L. 1959; R.C.M. 1947, 40-3330; amd. Sec. 13, Ch. 409, L. 1987; amd. Sec. 50, Ch. 713, L. 1989; amd. Sec. 21, Ch. 427, L. 2003; amd. Sec. 15, Ch. 271, L. 2009; amd. Sec. 8, Ch. 139, L. 2015.  
  33-17-1003. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 175, Ch. 286, L. 1959; R.C.M. 1947, 40-3331; amd. Sec. 51, Ch. 713, L. 1989.  
  33-17-1004. Acting without license. In addition to the requirements and penalties described in 33-17-201 and 33-17-411, a person who, in this state, acts without having authority to do so by virtue of a license issued and in force pursuant to this chapter is subject to the provisions of 33-1-317 and 33-1-318.   History: En. 40-3332 by Sec. 1, Ch. 256, L. 1967; R.C.M. 1947, 40-3332; amd. Sec. 22, Ch. 198, L. 1979; amd. Sec. 7, Ch. 395, L. 1983; amd. Sec. 14, Ch. 409, L. 1987; amd. Sec. 52, Ch. 713, L. 1989; amd. Sec. 6, Ch. 493, L. 2003; amd. Sec. 9, Ch. 139, L. 2015; amd. Sec. 26, Ch. 396, L. 2017.  
  33-17-1005. Restrictions on acting as legal guardian of insured or policyholder. (1) Except as otherwise approved by the commissioner or court order, an insurance producer may not act as a legal guardian of an insured or policyholder if the insurance producer conducts insurance business with the insured or policyholder when the insurance business includes but is not limited to the solicitation, offer, sale, or replacement of insurance or a contract.   (2) This section does not apply to immediate family members.   History: En. Sec. 1, Ch. 493, L. 2003.  
  33-17-1101. Place of business -- display of license -- records. (1) A resident insurance producer shall maintain a place or places of business in this state accessible to the public. A nonresident insurance producer may maintain a place or places of business in this state. An insurance producer's place or places of business must be a place in which transactions are conducted under the insurance producer's license. The address of the primary place of business must appear on the license. This section does not prohibit the maintenance of a place of business in a licensee's place of residence.   (2) The license or, if the insurance producer has more than one place of business, a copy of the license must be conspicuously displayed in a part of the place of business customarily open to the public.   (3) The insurance producer shall keep at a place of business complete records pertaining to transactions under the license for a period of at least 3 years after completion of the respective transactions, except that a title insurance producer, as defined in 33-25-105, shall retain records as provided in 33-25-214 and 33-25-216.   History: En. Sec. 167, Ch. 286, L. 1959; R.C.M. 1947, 40-3323; amd. Sec. 10, Ch. 345, L. 1979; amd. Sec. 20, Ch. 519, L. 1985; amd. Sec. 15, Ch. 409, L. 1987; amd. Sec. 53, Ch. 713, L. 1989; amd. Sec. 1, Ch. 261, L. 1997; amd. Sec. 16, Ch. 169, L. 2013.  
  33-17-1102. Reporting and accounting for premiums -- misappropriation. (1) All insurance premiums or return premiums received by an insurance producer must be held in a separate trust account. The insurance producer shall at all times act in a fiduciary capacity and shall, in the applicable regular course of business, account for and pay the insurance premiums or return premiums the insurance producer receives to the insured, insurer, or insurance producer entitled to them. Except for a title insurance producer as defined in 33-25-105, an insurance producer may deposit and commingle in the same separate deposit all funds belonging to others so long as the amount of the deposit held for each respective person is reasonably ascertainable from the records and accounts of the licensee.   (2) Any insurance producer not lawfully entitled to the funds may not divert or appropriate the funds or any portion of the funds to the insurance producer's own use.   History: En. Sec. 168, Ch. 286, L. 1959; amd. Sec. 51, Ch. 359, L. 1977; R.C.M. 1947, 40-3324; amd. Sec. 21, Ch. 519, L. 1985; amd. Sec. 16, Ch. 409, L. 1987; amd. Sec. 54, Ch. 713, L. 1989; amd. Sec. 22, Ch. 380, L. 2003; amd. Sec. 27, Ch. 396, L. 2017.  
  33-17-1103. Accepting and paying commissions, fees, or consideration. (1) An insurer or insurance producer may not pay, directly or indirectly, a commission, service fee, brokerage fee, or other valuable consideration to a person for services as an insurance producer unless the person performing the service holds a valid license with regard to the kind or kinds of insurance for which the service was rendered at the time the service was performed. A person not properly licensed in accordance with this chapter at the time the person performs the service as an insurance producer may not accept a commission, service fee, brokerage fee, or other valuable consideration for the service. This section does not prevent payment or receipt of renewal or other deferred commissions to or by a person entitled to receive the payment under this section.   (2) An insurance producer may not directly or indirectly share the insurance producer's commissions or other compensation received or to be received by the insurance producer on account of a transaction under the insurance producer's license with any person not also licensed under this chapter as to the same kind or kinds of insurance involved in the transactions. This provision does not affect payment of the regular salaries due to employees of the licensee, the distribution in regular course of business of compensation and profits among members or stockholders if the licensee is a business entity, or use of funds for family or personal purposes.   (3) Surplus lines producers may share commissions with a property and casualty insurance producer pursuant to 33-2-306.   History: En. Sec. 169, Ch. 286, L. 1959; R.C.M. 1947, 40-3325; amd. Sec. 11, Ch. 345, L. 1979; amd. Sec. 17, Ch. 409, L. 1987; amd. Sec. 55, Ch. 713, L. 1989; amd. Sec. 46, Ch. 227, L. 2001; amd. Sec. 8, Ch. 399, L. 2007; amd. Sec. 16, Ch. 271, L. 2009.  
  33-17-1104. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 170, Ch. 286, L. 1959; R.C.M. 1947, 40-3326; amd. Sec. 18, Ch. 409, L. 1987.  
  33-17-1105 and 33-17-1106 reserved.  
  33-17-1107. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 1, Ch. 699, L. 1991.  
  33-17-1108 through 33-17-1110 reserved.  
  33-17-1111. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 67, Ch. 286, L. 1959; amd. Sec. 1, Ch. 72, L. 1963; R.C.M. 1947, 40-2822; amd. Sec. 12, Ch. 345, L. 1979; amd. Sec. 2, Ch. 395, L. 1983; amd. Sec. 56, Ch. 713, L. 1989.  
  33-17-1112. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 68, Ch. 286, L. 1959; R.C.M. 1947, 40-2823; amd. Sec. 57, Ch. 713, L. 1989.  
  33-17-1113. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 69, Ch. 286, L. 1959; R.C.M. 1947, 40-2824; amd. Sec. 58, Ch. 713, L. 1989.  
  33-17-1114. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 70, Ch. 286, L. 1959; R.C.M. 1947, 40-2825; amd. Sec. 59, Ch. 713, L. 1989.  
  33-17-1201. Short title. This part may be cited as the "Insurance Producer, Adjuster, and Consultant Continuing Education Act".   History: En. Sec. 1, Ch. 622, L. 1993; amd. Sec. 1, Ch. 38, L. 2005.  
  33-17-1202. Purpose. The purposes of this part are to:   (1) protect insurance consumers and dedicated insurance producers, adjusters, public adjusters, and consultants by requiring continuing education for insurance producers, adjusters, public adjusters, and consultants;   (2) better educate insurance producers, adjusters, public adjusters, and consultants about changes in insurance law, products, ethical conduct as an insurance producer, adjuster, or consultant, marketing, and management; and   (3) provide standards for the qualification of instructors, courses, and materials.   History: En. Sec. 2, Ch. 622, L. 1993; amd. Sec. 2, Ch. 38, L. 2005; amd. Sec. 10, Ch. 139, L. 2015.  
  33-17-1203. Continuing education -- basic requirements -- exceptions. (1) Unless exempt under subsection (3):   (a) an individual licensed to act as an insurance producer, adjuster, public adjuster, or consultant other than an individual licensed only for surety bail bonds or for limited lines credit insurance shall, during each 24-month period, complete at least 24 credit hours of approved continuing education, including at least 3 hours of ethics credits and at least 1 credit hour on changes in Montana insurance statutes and administrative rules;   (b) an individual licensed to act as an insurance producer only for surety bail bonds, prepaid legal insurance, or limited lines credit insurance shall, during each biennium, complete 5 credit hours of approved continuing education, including at least 1 credit hour on changes in Montana insurance statutes and administrative rules and the remaining credit hours in the areas of insurance law, ethics, or topics specific to surety bail bonds, prepaid legal insurance, or limited lines credit insurance.   (2) The commissioner may, for good cause, grant an extension of time, not to exceed 1 year, during which the requirements imposed by subsection (1) may be completed.   (3) The minimum continuing education requirements do not apply to:   (a) an individual holding a temporary license issued under 33-17-216; or   (b) an insurance producer, adjuster, public adjuster, or consultant otherwise exempted by the commissioner.   History: En. Sec. 3, Ch. 622, L. 1993; amd. Sec. 2, Ch. 98, L. 1995; amd. Sec. 1, Ch. 456, L. 1997; amd. Sec. 27, Ch. 531, L. 1997; amd. Sec. 35, Ch. 472, L. 1999; amd. Sec. 37, Ch. 7, L. 2001; amd. Sec. 7, Ch. 106, L. 2001; amd. Sec. 22, Ch. 427, L. 2003; amd. Sec. 3, Ch. 38, L. 2005; amd. Sec. 18, Ch. 469, L. 2005; amd. Sec. 8, Ch. 313, L. 2009; amd. Sec. 1, Ch. 398, L. 2009; amd. Sec. 2, Ch. 324, L. 2013; amd. Sec. 11, Ch. 139, L. 2015.  
  33-17-1204. Review and approval of continuing education courses by commissioner -- advisory council. (1) The commissioner shall, after review by and at the recommendations of the advisory council established under subsection (2), approve only those continuing education courses, lectures, seminars, and instructional programs that the commissioner determines would improve the product knowledge, management, ethics, or marketing capability of the licensee. Course content, instructors, material, instructional format, and the sponsoring organization must be approved and periodically reviewed by the commissioner. The fee for approval of a course, lecture, seminar, or instructional program is listed in 33-2-708(2). The commissioner shall also determine the number of credit hours to be awarded for completion of an approved continuing education activity.   (2) The commissioner shall appoint an advisory council, pursuant to 2-15-122, consisting of at least one representative of the independent insurance agents of Montana, one representative of the national association of insurance and financial advisors - Montana, one representative of the professional insurance agents of Montana, one representative of the Montana state adjusters association, one title insurance producer, two public members who are not directly employed by the insurance industry, one insurance producer or consultant not affiliated with any of the three listed organizations, and a nonvoting presiding officer from the department who will be appointed by the commissioner as a representative of the department. The members of the council shall serve a term of 2 years, except that the initial term of the representative from each organization is 3 years. The commissioner shall consult with the council in formulating rules and standards for the approval of continuing education activities and prior to approving specific education activities. The provisions of 2-15-122(9) and (10) do not apply to this council.   (3) In conducting periodic review of course content, instructors, material, instructional format, or a sponsoring organization, the commissioner may exercise any investigative power of the commissioner provided for in 33-1-311 or 33-1-315.   (4) If after review or investigation the commissioner determines an approved continuing education activity is not being operated in compliance with the standards established under this section, the commissioner may revoke approval, place the activity under probationary approval, or issue a cease and desist order under 33-1-318.   History: En. Sec. 4, Ch. 622, L. 1993; amd. Sec. 16, Ch. 316, L. 1999; amd. Sec. 47, Ch. 227, L. 2001; amd. Sec. 23, Ch. 380, L. 2003; amd. Sec. 4, Ch. 38, L. 2005; amd. Sec. 17, Ch. 271, L. 2009.  
  33-17-1205. Compliance -- failure to comply -- rulemaking authority. (1) Each individual subject to the requirements of 33-17-1203 shall file biennially in a format supplied by the commissioner certification as to the approved courses, lectures, seminars, and instructional programs successfully completed by that individual during the preceding biennium.   (2) If an individual fails to comply with this section, the individual's license lapses. An individual with a lapsed license may not conduct insurance business under another person's license, including a business entity license affiliation.   (3) In the continuing education affidavit, an insurance producer, adjuster, or public adjuster shall report to the commissioner the final disposition of any administrative action or the final disposition of any criminal action taken against the insurance producer, adjuster, or public adjuster in another jurisdiction or by another governmental agency in this state. As used in this subsection, "final disposition of any criminal action" means a plea agreement or sentence and judgment.   (4) Each person providing approved courses, lectures, seminars, and instructional programs, including insurance company education programs, shall file annually with the commissioner an alphabetical list of the names and addresses of all individuals who have successfully completed an approved continuing education activity during the preceding calendar year.   (5) The commissioner may, following the process provided for in 33-1-314, withdraw approval of all courses, lectures, seminars, and instructional programs of any person that fails to comply with subsection (4). The commissioner may, after having conducted a hearing pursuant to 33-1-701, impose a fine upon a person that has failed to comply with subsection (4). The fine may not exceed the penalty permitted by 33-1-317.   (6) The commissioner may adopt rules establishing the requirements for biennial filing and reporting of continuing education credits.   History: En. Sec. 5, Ch. 622, L. 1993; amd. Sec. 17, Ch. 316, L. 1999; amd. Sec. 23, Ch. 427, L. 2003; amd. Sec. 5, Ch. 38, L. 2005; amd. Sec. 19, Ch. 469, L. 2005; amd. Sec. 12, Ch. 139, L. 2015.  
  33-17-1206. Rulemaking authority. The commissioner may adopt rules to implement this part.   History: En. Sec. 6, Ch. 622, L. 1993.  
  33-17-1207. Funding for continuing education program. All continuing education filing fees collected by the commissioner and fees paid to the commissioner for the review of initial applications for approval of continuing education courses or the periodic review of these courses must be turned over promptly to the state treasurer who shall place the money in the state special revenue fund to the credit of the state auditor's office to be used for the continuing education program. The funds allocated by this section to the state special revenue fund may be used only to defray the expenses of the state auditor's office in discharging its duties as prescribed by this part, subject to the applicable laws relating to the appropriation of state funds and to the deposit and expenditure of state money. The state auditor is responsible for the proper expenditure of this money as provided by law.   History: En. Sec. 9, Ch. 622, L. 1993; amd. Sec. 24, Ch. 427, L. 2003.  
  33-17-1401. Definitions. As used in this part, the following definitions apply:   (1) "Administrator" means an administrator as defined in 33-17-102.   (2) "Limited lines travel insurance producer" means a:   (a) managing general agent or third-party administrator; or   (b) licensed insurance producer, including a limited lines producer, designated by an insurer as the travel insurance supervising entity as set forth in 33-17-1404.   (3) "Offer and disseminate" means providing general information, including a description of coverage and price, as well as processing applications, collecting premiums, and performing other activities not requiring licensure by the state.   (4) (a) "Travel insurance" means insurance coverage for personal risks incident to planned travel, including but not limited to:   (i) interruption or cancellation of a trip or event;   (ii) loss of baggage or personal effects;   (iii) damages to accommodations or rental vehicles; and   (iv) sickness, accident, disability, or death occurring during travel.   (b) The term does not include major medical plans that provide comprehensive medical protection for travelers on trips lasting 6 months or longer, including those working overseas and military personnel being deployed.   (5) "Travel retailer" means a business entity that makes, arranges, or offers travel services and that may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a limited lines travel insurance producer.   History: En. Sec. 1, Ch. 359, L. 2013.  
  33-17-1402. Requirements to offer and disseminate travel insurance -- fees -- types of policies -- rulemaking. (1) A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer business entity license only if the following conditions are met:   (a) the limited lines travel insurance producer or travel retailer provides purchasers of travel insurance with:   (i) a description of the material terms or the actual material terms of the insurance coverage;   (ii) a description of the process for filing a claim;   (iii) a description of the review or cancellation process for the travel insurance policy; and   (iv) the identity and contact information of the insurer and the limited lines travel insurance producer;   (b) at the time of licensure, the limited lines travel insurance producer establishes and maintains a registry on a form prescribed by the commissioner of each travel retailer that offers travel insurance on the limited lines travel insurance producer's behalf. The registry must be maintained and updated annually by the limited lines travel insurance producer and must include the name, address, and contact information of each travel retailer and of an officer or person who directs or controls each travel retailer's operations, the travel retailer's federal tax identification number, and a statement that the travel retailer has not been convicted of a violation of 18 U.S.C. 1033. The limited lines travel insurance producer shall submit its registry to the commissioner within 10 business days of the commissioner's request. The commissioner shall require a fee for filing the registry that is commensurate with the cost of maintaining a file for all registries filed with the commissioner.   (c) the limited lines travel insurance producer designates an employee who is an individual licensed producer as the designated responsible producer responsible for the limited lines travel insurance producer's compliance with the applicable insurance laws and rules of this state;   (d) the designated responsible producer, president, secretary, treasurer, and any other officer or person who directs or controls the limited lines travel insurance producer's insurance operations have complied with the fingerprinting requirements in the resident state of the limited lines travel insurance producer;   (e) the limited lines travel insurance producer has paid all applicable insurance producer licensing fees required pursuant to 33-2-708 or other applicable state law; and   (f) the limited lines travel insurance producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which may be subject to review by the commissioner. The training material must, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers.   (2) A travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:   (a) provide the identity and contact information of the insurer and the limited lines travel insurance producer;   (b) explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and   (c) explain that a travel retailer employee or authorized representative who is not licensed as an insurance producer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.   (3) A travel retailer's employees or authorized representatives who are not licensed as insurance producers may not:   (a) evaluate or interpret the technical terms, benefits, and conditions of the offered travel insurance coverage;   (b) evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or   (c) hold themselves out as licensed insurers, licensed producers, or insurance experts.   (4) Travel insurance may be provided under an individual policy or under a group or master policy.   (5) The commissioner may adopt rules to implement the provisions of this part.   History: En. Sec. 2, Ch. 359, L. 2013.  
  33-17-1403. Authorization. Upon a limited lines travel insurance producer meeting the requirements provided for in 33-17-1402, a travel retailer is authorized to offer and disseminate travel insurance and receive related compensation when the travel retailer's insurance-related activities and those of its employees and authorized representatives are limited to offering and disseminating travel insurance on behalf of and under the direction of the limited lines travel insurance producer.   History: En. Sec. 3, Ch. 359, L. 2013.  
  33-17-1404. Responsibility -- enforcement -- penalties. (1) The limited lines travel insurance producer is the supervising entity responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with the provisions of this part.   (2) A limited lines travel insurance producer and any travel retailer offering and disseminating travel insurance under the limited lines travel insurance producer's license are subject to the applicable unfair trade practices provisions of Title 33, chapter 18, including penalty provisions, and to other enforcement provisions applicable to insurance producers generally.   History: En. Sec. 4, Ch. 359, L. 2013.  
  33-17-1501. Definitions. As used in this part, the following definitions apply:   (1) "Customer service representative" means an employee of a rental vehicle entity.   (2) "Present rental vehicle insurance information" means to present the option to acquire rental vehicle insurance to a renter.   (3) "Rental agreement" means a written agreement setting forth the terms and conditions governing the use of a vehicle that is provided by a rental vehicle entity for the rental or lease of a rental vehicle for a period of not more than 90 days.   (4) "Rental vehicle" means a motor vehicle that is designated as:   (a) a private passenger motor vehicle, including an automobile, a passenger van, a minivan, or a sport utility vehicle; or   (b) a cargo vehicle, including a cargo van, a pickup truck, or a truck with a gross weight of less than 26,000 pounds that does not require the operator to possess a commercial driver's license.   (5) "Rental vehicle entity" means an entity in the business of providing rental vehicles to the public under a rental agreement.   (6) "Rental vehicle insurance" means insurance that a renter purchases from a rental vehicle entity as part of the rental agreement in conjunction with the use of a rental vehicle.   (7) "Renter" means a person who obtains the use of a rental vehicle from a rental vehicle entity under the terms of a rental agreement.   History: En. Sec. 1, Ch. 409, L. 2003.  
  33-17-1502. Rental vehicle entity license -- customer service representative requirements -- recordkeeping. (1) A rental vehicle entity may obtain a business entity insurance producer license.   (2) A rental vehicle entity shall designate an individual licensed insurance producer who is responsible for the rental vehicle entity's compliance with the insurance laws of this state.   (3) A rental vehicle entity or customer service representative may not present rental vehicle insurance information to renters unless the rental vehicle entity is licensed and the customer service representative has been trained as required under 33-17-1503.   (4) A customer service representative may present rental vehicle insurance information only on behalf of a rental vehicle entity.   (5) A rental vehicle entity shall supervise a customer service representative who provides rental vehicle insurance under the provisions of this part.   (6) A rental vehicle entity shall submit to the commissioner an annual report listing each customer service representative presenting rental vehicle insurance information to the public.   History: En. Sec. 2, Ch. 409, L. 2003; amd. Sec. 20, Ch. 469, L. 2005; amd. Sec. 14, Ch. 63, L. 2015.  
  33-17-1503. Training of customer service representative. (1) A rental vehicle entity shall provide a training program for each customer service representative prior to allowing that customer service representative to present rental vehicle insurance information to renters.   (2) The rental vehicle entity shall present the training program to the commissioner for approval.   (3) The training may be in an electronic or video format and must cover the following areas:   (a) rental vehicle insurance;   (b) specific instruction that information may not be presented either by statement or conduct, express or implied, that would lead the renter to believe:   (i) that the purchase of rental vehicle insurance is required to rent a vehicle;   (ii) that the renter does not have a personal automobile insurance policy in place that provides coverage; or   (iii) that the customer service representative is qualified to evaluate the adequacy of the renter's existing insurance coverage.   (4) The training and education program must be submitted for review and approval pursuant to 33-17-1204 and 33-17-1205.   History: En. Sec. 3, Ch. 409, L. 2003.  
  33-17-1504. Rental vehicle entity requirements. A rental vehicle entity may not solicit, negotiate, or sell rental vehicle insurance unless:   (1) at every location where rental vehicle agreements are executed, the rental vehicle entity prominently displays and makes readily available written material to each renter who may purchase rental vehicle insurance that:   (a) summarizes the material terms, exclusions, limitations, and conditions of coverage offered to renters, including the identity of the insurer;   (b) describes the process for filing claims in the event that the renter elects to purchase the coverage, including a toll-free telephone number to report a claim;   (c) provides the rental vehicle entity's name, address, telephone number, and business entity license number, as well as the commissioner's consumer hotline telephone number;   (d) informs the renter that the rental vehicle entity may provide a duplication of coverage already provided by a renter's automobile insurance policy;   (e) informs the renter that the purchase by the renter of the rental vehicle insurance is not required in order to rent a vehicle; and   (f) informs the renter that neither the rental vehicle entity nor the customer service representative is qualified to evaluate the adequacy of the renter's existing insurance coverage.   (2) Evidence of the rental vehicle insurance coverage must be stated in the rental agreement.   (3) The cost of the rental vehicle insurance must be separately itemized in the rental agreement, unless preselection of coverage is made in a master, corporate, or group agreement.   History: En. Sec. 4, Ch. 409, L. 2003.  
  33-17-1505. Recordkeeping and trust fund requirements. (1) A rental vehicle entity shall keep records of insurance transactions pursuant to 33-17-1101.   (2) The commissioner may not require a rental vehicle entity to hold rental vehicle insurance premium in a separate trust account pursuant to 33-17-1102 if the premium for rental vehicle insurance is itemized as part of the rental agreement.   History: En. Sec. 5, Ch. 409, L. 2003.  
  33-17-201. License required of insurance producer -- forms -- background examinations. (1) A person may not sell, solicit, or negotiate insurance or act as an insurance producer in this state unless licensed as an insurance producer under this chapter.   (2) The commissioner may prescribe by rule and make available the forms required in connection with application for, issuance, continuation, suspension, or termination of a license.   (3) All resident applicants shall undergo prelicensing background examinations. The applicant or insurer shall pay the cost of the background examinations.   History: En. Secs. 147, 151, Ch. 286, L. 1959; R.C.M. 1947, 40-3303(part), 40-3307; amd. Sec. 7, Ch. 518, L. 1983; amd. Sec. 17, Ch. 11, Sp. L. March 1986; amd. Sec. 2, Ch. 409, L. 1987; amd. Sec. 2, Ch. 480, L. 1987; amd. Sec. 12, Ch. 285, L. 1989; amd. Sec. 20, Ch. 713, L. 1989; (6)En. Sec. 4, Ch. 713, L. 1989; amd. Sec. 12, Ch. 427, L. 2003.  
  33-17-202. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 152, Ch. 286, L. 1959; amd. Sec. 7, Ch. 44, L. 1969; amd. Sec. 5, Ch. 423, L. 1971; R.C.M. 1947, 40-3308; amd. Sec. 3, Ch. 409, L. 1987; amd. Sec. 13, Ch. 285, L. 1989; amd. Sec. 6, Ch. 509, L. 1989.  
  33-17-203. Repealed. Sec. 19, Ch. 409, L. 1987.   History: En. Sec. 153, Ch. 286, L. 1959; amd. Sec. 8, Ch. 44, L. 1969; R.C.M. 1947, 40-3309; amd. Sec. 19, Ch. 198, L. 1979; amd. Sec. 1, Ch. 400, L. 1983.  
  33-17-204. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 154, Ch. 286, L. 1959; amd. Sec. 9, Ch. 44, L. 1969; R.C.M. 1947, 40-3310; amd. Sec. 1, Ch. 345, L. 1979; amd. Sec. 4, Ch. 409, L. 1987.  
  33-17-205. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 155, Ch. 286, L. 1959; amd. Sec. 10, Ch. 44, L. 1969; R.C.M. 1947, 40-3311.  
  33-17-206. Repealed. Sec. 36, Ch. 451, L. 1993.   History: En. Sec. 165, Ch. 286, L. 1959; amd. Sec. 12, Ch. 44, L. 1969; R.C.M. 1947, 40-3321; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 35, Ch. 798, L. 1991.  
  33-17-207. Repealed. Sec. 4, Ch. 98, L. 1995.   History: En. Sec. 1, Ch. 509, L. 1989; amd. Sec. 1, Ch. 713, L. 1989.  
  33-17-208. Repealed. Sec. 4, Ch. 98, L. 1995.   History: En. Sec. 2, Ch. 509, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 36, Ch. 16, L. 1991; amd. Sec. 7, Ch. 798, L. 1991.  
  33-17-209. Repealed. Sec. 4, Ch. 98, L. 1995.   History: En. Sec. 3, Ch. 509, L. 1989; amd. Sec. 1, Ch. 713, L. 1989.  
  33-17-210. Centralized producer license registry -- rules. (1) The commissioner may participate, in whole or in part, with the national association of insurance commissioners, or any affiliates or subsidiaries that the national association of insurance commissioners oversees, in a centralized producer license registry in which insurance producer licenses and appointments may be centrally or simultaneously effected for all states that participate in the registry and that require an insurance producer license.   (2) If the commissioner finds that participation in the centralized producer license registry is in the public interest, the commissioner may adopt by rule any uniform standards and procedures necessary to participate in the registry, including the central collection of all fees for licenses or appointments that are processed through the registry.   History: En. Sec. 1, Ch. 106, L. 2001.  
  33-17-211. General qualifications -- application for license. (1) An individual applying for a license shall apply in a form approved by the commissioner and declare under penalty of refusal, suspension, or revocation of the license that statements made in the application are true, correct, and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall verify that the individual:   (a) is 18 years of age or older;   (b) has not committed an act that is a ground for refusal, suspension, or revocation as set forth in 33-17-1001;   (c) has paid the license fees stated in 33-2-708;   (d) has successfully passed the examinations for each kind of insurance for which the individual has applied within 12 months of application;   (e) is a resident of this state or of another state that grants similar privileges to residents of this state. Licenses issued based upon Montana state residency terminate if the licensee relocates to another state.   (f) is competent, trustworthy, and of good reputation;   (g) has experience or training or otherwise is qualified in the kind or kinds of insurance for which the applicant applies to be licensed and is reasonably familiar with the provisions of this code that govern the applicant's operations as an insurance producer;   (h) if applying for a license as to life or disability insurance, except as permitted by 33-20-1501(1)(c)(ii):   (i) is not a funeral director, undertaker, or mortician operating in this or any other state;   (ii) is not an officer, employee, or representative of a funeral director, undertaker, or mortician operating in this or any other state; or   (iii) does not hold an interest in or benefit from a business of a funeral director, undertaker, or mortician operating in this or any other state; and   (i) has completed a background examination pursuant to 33-17-220.   (2) A resident or nonresident business entity acting as an insurance producer is required to obtain an insurance producer's license. Application must be made in a form approved by the commissioner. To approve the application, the commissioner shall verify that:   (a) the business entity has paid the appropriate fee; and   (b) the business entity has designated an individual licensed insurance producer who is responsible for the business entity's compliance with the insurance laws of this state.   (3) A person acting as an insurance producer shall obtain a license. A person shall apply for a license in a form approved by the commissioner. Before approving the application, the commissioner shall verify that:   (a) the person meets the requirements listed in subsection (1);   (b) the person has paid the licensing fees stated in 33-2-708 for each individual licensed in conjunction with the person's license. A licensed person shall promptly notify the commissioner of each change relating to an individual listed in the license.   (c) the person has designated a licensed officer to be responsible for the person's compliance with the insurance laws and rules of this state;   (d) each member, employee, officer, director, or stockholder of a business entity who is acting as an insurance producer in this state has obtained a license;   (e) (i) with respect to a business entity, the transaction of insurance business is within the purposes stated in the partnership agreement, the articles of incorporation, or other organizational documents; and   (ii) with respect to a corporation, the secretary of state has issued a certificate of existence or registration under 35-14-128 or filed articles of incorporation under 35-14-203.   (4) (a) The commissioner may license as a resident insurance producer an association of licensed Montana insurance producers, whether or not incorporated, formed and existing substantially for purposes other than insurance.   (b) The license must be used solely for the purpose of enabling the association to place, as a resident insurance producer, insurance of the properties, interests, and risks of the state of Montana and of other public agencies, bodies, and institutions and to receive the customary commission for the placement.   (c) The president and secretary of the association shall apply for the license in the name of the association, and the commissioner shall issue the license to the association in the association's name alone.   (d) The fee for the license is the same as that required by 33-2-708(1)(a).   (e) The commissioner may, after a hearing with notice to the association, revoke the license if the commissioner finds that continuation of the license is not in the public interest or that a ground listed in 33-17-1001 exists.   (5) An insurance producer using an assumed business name shall register the name with the commissioner before using the name.   History: En. Sec. 156, Ch. 286, L. 1959; amd. Sec. 19, Ch. 535, L. 1975; R.C.M. 1947, 40-3312; amd. Sec. 20, Ch. 198, L. 1979; amd. Sec. 2, Ch. 345, L. 1979; amd. Sec. 82, Ch. 370, L. 1987; amd. Sec. 5, Ch. 409, L. 1987; amd. Sec. 7, Ch. 509, L. 1989; amd. Sec. 21, Ch. 713, L. 1989; amd. Sec. 210, Ch. 368, L. 1991; amd. Sec. 170, Ch. 411, L. 1991; amd. Sec. 50, Ch. 379, L. 1995; amd. Sec. 8, Ch. 316, L. 1999; amd. Sec. 36, Ch. 7, L. 2001; amd. Sec. 13, Ch. 427, L. 2003; amd. Sec. 13, Ch. 469, L. 2005; amd. Sec. 4, Ch. 399, L. 2007; amd. Sec. 4, Ch. 507, L. 2007; amd. Sec. 9, Ch. 271, L. 2009; amd. Sec. 238, Ch. 271, L. 2019.  
  33-17-212. Examination required -- exceptions -- fees. (1) Except as provided in subsection (6), an individual applying for a license is required to pass a written examination. The examination must test the knowledge of the individual concerning each kind of insurance listed in subsection (5) for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and rules of this state. The examination must be developed and conducted under rules adopted by the commissioner.   (2) (a) The commissioner may conduct the examination or make arrangements, including contracting with an outside testing service, for administering the examination. The commissioner may arrange for the testing service to recover the cost of the examination from the applicant.   (b) The commissioner may not charge a fee for an applicant taking an examination pertaining to prepaid legal insurance. However, the commissioner may contract with an outside testing service for administering the examination, and the commissioner may arrange for the testing service to recover the cost of the examination from the applicant.   (3) An individual who fails to appear for the examination as scheduled or fails to pass the examination may reapply for an examination and shall remit all forms before being rescheduled for another examination.   (4) Except as provided in subsection (6), if the applicant is a business entity, each individual who is to be named in the license as having authority to act for the applicant in its insurance transactions under the license must meet the qualifications provided for in this section.   (5) Examination of an applicant for a license must cover only the kinds of insurance for which the applicant has applied to be licensed, as constituted by any one or more of the following classifications:   (a) life insurance;   (b) disability insurance;   (c) property insurance, which for the purposes of this provision includes marine insurance;   (d) casualty insurance;   (e) surety insurance;   (f) limited lines credit insurance;   (g) title insurance;   (h) prepaid legal insurance as provided for in 33-1-215.   (6) This section does not apply to and an examination is not required of:   (a) an individual lawfully licensed as an insurance producer as to the kind or kinds of insurance to be transacted as of or immediately prior to January 1, 1961, and who continues to be licensed;   (b) an applicant for a license covering the same kind or kinds of insurance as to which the applicant was licensed in this state, other than under a temporary license, within the 12 months immediately preceding the date of application unless the commissioner has suspended, revoked, or terminated the previous license;   (c) an applicant for a license as a nonresident insurance producer;   (d) a limited lines travel insurance producer and those registered under the limited lines travel insurance producer's license pursuant to 33-17-1402;   (e) an association applying for a license under 33-17-211; or   (f) a casualty insurance producer for the purposes of a separate exam for prepaid legal insurance if the casualty insurance producer sells prepaid legal insurance as of April 26, 2013, and continues to maintain a license in good standing as a casualty insurance producer.   (7) (a) Subject to the provisions of subsection (7)(b), an individual who applies for a nonresident insurance producer license in this state and who was previously licensed for the same lines of authority in another state may not be required to complete any prelicensing education or examination.   (b) The exemption in subsection (7)(a) is available only if the individual is currently licensed in the other state or the individual's application is received within 90 days of the cancellation of the individual's previous license and if the other state issues a certification that, at the time of the cancellation, the individual was in good standing in that state or the state's database records, maintained by the national association of insurance commissioners or any of the association's affiliates or subsidiaries that the association oversees, indicate that the insurance producer is or was licensed in good standing for the lines of authority requested.   History: En. Sec. 157, Ch. 286, L. 1959; amd. Sec. 11, Ch. 44, L. 1969; R.C.M. 1947, 40-3313; amd. Sec. 3, Ch. 345, L. 1979; amd. Sec. 1, Ch. 211, L. 1981; amd. Sec. 18, Ch. 519, L. 1985; amd. Sec. 6, Ch. 409, L. 1987; amd. Sec. 1, Ch. 480, L. 1987; amd. Sec. 22, Ch. 713, L. 1989; amd. Sec. 25, Ch. 531, L. 1997; amd. Sec. 9, Ch. 316, L. 1999; amd. Sec. 31, Ch. 472, L. 1999; amd. Sec. 4, Ch. 106, L. 2001; amd. Sec. 14, Ch. 427, L. 2003; amd. Sec. 10, Ch. 271, L. 2009; amd. Sec. 5, Ch. 313, L. 2009; amd. Sec. 1, Ch. 324, L. 2013; amd. Sec. 5, Ch. 359, L. 2013.  
  33-17-213. Conduct of examinations. (1) The commissioner shall make any examination required under 33-17-212 available to applicants with reasonable frequency and at places in this state reasonably accessible to the applicants.   (2) The commissioner shall assure that the examinations are conducted in a fair and impartial manner and without unfair discrimination as between individuals examined.   (3) The commissioner may require a reasonable waiting period before reexamination of an applicant who has failed to pass a previous examination covering the same kind or kinds of insurance.   (4) The examination of a title insurance producer, as defined in 33-25-105, must include but is not limited to questions pertaining to the search and examination of title to real property, insurance principles relating to title insurance, and the fiduciary duties and procedures of escrows, settlements, and closings of real estate transactions.   History: En. Sec. 158, Ch. 286, L. 1959; amd. Sec. 1, Ch. 156, L. 1969; R.C.M. 1947, 40-3314; amd. Sec. 21, Ch. 198, L. 1979; amd. Sec. 19, Ch. 519, L. 1985; amd. Sec. 7, Ch. 409, L. 1987; amd. Sec. 23, Ch. 713, L. 1989.  
  33-17-214. Issuance of license -- insurance producer lines of authority -- license data -- lapse of license -- change of address. (1) A person who has met the requirements of 33-17-211 and 33-17-212 must be issued a license unless that person has been denied a license pursuant to 33-17-1001.   (2) An insurance producer may receive a license qualifying the insurance producer in one or more of the following lines of authority:   (a) life insurance coverage on human lives, including benefits of endowment and annuities, and the coverage may include:   (i) funeral insurance as defined in 33-20-1501;   (ii) benefits in the event of death or dismemberment by accident; and   (iii) benefits for disability income;   (b) accident and health or sickness insurance coverage providing for sickness, bodily injury, or accidental death, and the coverage may provide benefits for disability income;   (c) property insurance coverage for the direct or consequential loss or damage to property of every kind;   (d) casualty insurance coverage against legal liability, including liability for death, injury, or disability or damage to real or personal property;   (e) variable life and variable annuity products insurance coverage provided under variable life insurance contracts and variable annuities;   (f) personal lines of property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;   (g) limited line credit insurance; or   (h) any other line of insurance permitted under Title 33.   (3) The license must state the name and primary business address of the licensee, personal identification number, date of issuance, general conditions relative to expiration or termination, kind of insurance covered, and other information that the commissioner considers necessary.   (4) The license of a business entity must also state the name of each individual authorized to exercise the license powers.   (5) Each license remains in effect unless it is suspended, revoked, or terminated or the license lapses.   (6) (a) A person shall inform the commissioner in writing within 30 days of:   (i) a change of address or a change of business e-mail address;   (ii) the final disposition resulting in disciplinary action taken against or a conviction of the insurance producer in any state or federal jurisdiction or by another governmental agency in this state of:   (A) any administrative action related to transacting insurance;   (B) any action taken against any type of securities license; and   (C) any criminal action, excluding traffic violations.   (b) (i) As used in this subsection (6), "final disposition" includes but is not limited to a settlement agreement, consent order, plea agreement, sentence and judgment, or order.   (ii) The term does not include an action that is dismissed or that results in an acquittal, for which a report is not necessary.   History: En. Sec. 159, Ch. 286, L. 1959; R.C.M. 1947, 40-3315; amd. Sec. 4, Ch. 345, L. 1979; amd. Sec. 24, Ch. 713, L. 1989; amd. Sec. 10, Ch. 316, L. 1999; amd. Sec. 5, Ch. 106, L. 2001; amd. Sec. 15, Ch. 427, L. 2003; amd. Sec. 5, Ch. 399, L. 2007; amd. Sec. 5, Ch. 507, L. 2007; amd. Sec. 11, Ch. 271, L. 2009; amd. Sec. 6, Ch. 313, L. 2009; amd. Sec. 12, Ch. 169, L. 2013.  
  33-17-215. Repealed. Sec. 14, Ch. 345, L. 1979.   History: En. Sec. 160, Ch. 286, L. 1959; R.C.M. 1947, 40-3316.  
  33-17-216. Temporary insurance producer license. (1) The commissioner may issue a temporary license to or with respect to an individual qualified for the temporary license only as to age, residence, and trustworthiness and without requiring the individual to take an examination, in the following cases:   (a) to the surviving spouse or next of kin or to the administrator or executor, or the employee of the administrator or executor, of a licensed insurance producer upon the insurance producer's death;   (b) to the spouse, next of kin, employee, or legal guardian of a licensed insurance producer disabled by injury or physical or mental illness;   (c) to an employee of a partnership, or officer or employee of a corporation, licensed as an insurance producer, upon the death or disability of an individual designated in the license to exercise the powers of an insurance producer;   (d) to the designee of a licensed insurance producer entering upon active service in the armed forces of the United States of America;   (e) in any other circumstance in which the commissioner finds that the public interest will best be served by issuing a temporary license.   (2) The temporary license must be issued upon application filed with the commissioner in the form and containing the information as the commissioner may reasonably require.   (3) The temporary license must be for a period of not over 90 days, subject to extension at the commissioner's discretion for an additional period of not more than 90 days, except that a temporary license issued pursuant to subsection (1)(a) may be continued until the executor or administrator disposes of the insurance business, but not to exceed a period of 15 months. A temporary license issued to the next of kin under subsection (1)(a) may not be extended for an additional term after the appointment and qualification of the administrator or executor.   History: En. Sec. 163, Ch. 286, L. 1959; R.C.M. 1947, 40-3319; amd. Sec. 27, Ch. 198, L. 1979; amd. Sec. 5, Ch. 345, L. 1979; amd. Sec. 25, Ch. 713, L. 1989; amd. Sec. 11, Ch. 316, L. 1999.  
  33-17-217. Limitations and rights under temporary license. (1) The commissioner may not issue more than one temporary license, to or with respect to the same individual to be licensed, within any 12-month period.   (2) The temporary license may cover the same kinds of insurance for which the insurance producer being replaced was licensed.   (3) As to a temporary insurance producer's license issued on account of the death or disability of an insurance producer, the licensee may represent all of the insurers last represented by the deceased or disabled insurance producer, but the licensee may not be licensed for an additional kind of insurance under the temporary license.   (4) A temporary licensee has the same license powers and duties as under a permanent license.   History: En. Sec. 164, Ch. 286, L. 1959; R.C.M. 1947, 40-3320; amd. Sec. 26, Ch. 713, L. 1989.  
  33-17-218. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 172, Ch. 286, L. 1959; amd. Sec. 13, Ch. 44, L. 1969; R.C.M. 1947, 40-3328; amd. Sec. 2, Ch. 344, L. 1979; amd. Sec. 6, Ch. 345, L. 1979.  
  33-17-219. Inactive status -- insurance producers serving in armed forces. (1) The commissioner may place an insurance producer on inactive status if the insurance producer enters active service in the armed forces of the United States.   (2) An insurance producer may not transact the business of insurance while on inactive status.   (3) The commissioner shall waive the continuing education requirements in 33-17-1205 and the fee in 33-2-708 while an insurance producer is on inactive status.   (4) In order to be placed on inactive status, an insurance producer shall notify the commissioner when called to active service.   (5) In order to be taken off inactive status, an insurance producer shall notify the commissioner when discharged from active service.   History: En. Sec. 1, Ch. 427, L. 2003.  
  33-17-220. Licensing background examination -- action by commissioner. (1) (a) Each applicant for a producer's license or navigator certification shall obtain a complete background examination. The applicant or insurer shall pay the cost of the background examination. The background examination report must provide information to confirm:   (i) the applicant's:   (A) identity;   (B) current address;   (C) professional license certification; and   (D) military service; and   (ii) (A) existing or ongoing criminal investigations and court records relating to the applicant; and   (B) regulatory agencies' disciplinary actions concerning the applicant.   (b) The background examination is confidential and may not be held as part of the licensee's or navigator's public file.   (c) (i) The commissioner may, when initially making a decision regarding an applicant's navigator certification, consider the findings obtained from the background examination, including an existing or ongoing criminal investigation or any disciplinary action taken by a regulatory agency against the applicant that relates to the applicant's suitability for navigator certification.   (ii) The commissioner may not issue navigator certification to an applicant if the background examination discloses an act by the applicant that, under 33-17-1001, would allow the commissioner to suspend, revoke, refuse to renew, or refuse to issue an insurance producer's license.   (iii) If the commissioner initially approves an applicant's navigator certification while the applicant is the subject of a criminal investigation or is potentially subject to disciplinary action and the applicant is subsequently found to have committed an act that, under 33-17-1001, would allow the commissioner to suspend, revoke, refuse to renew, or refuse to issue an insurance producer's license, the commissioner may suspend or, pursuant to subsection (1)(c)(iv), shall revoke the navigator certification.   (iv) The commissioner shall immediately revoke a navigator's certification if the commissioner discovers that the navigator has committed an act that, under 33-17-1001, would allow the commissioner to suspend, revoke, refuse to renew, or refuse to issue an insurance producer's license.   (2) For the purpose of obtaining a state and a federal criminal records check pursuant to subsection (1), the commissioner may require a person applying for a license or navigator certification to submit a full set of fingerprints to the commissioner. The commissioner shall submit the fingerprints to the Montana department of justice. The Montana department of justice may exchange this fingerprint data with the federal bureau of investigation.   (3) The commissioner may require fingerprints to be collected and remitted in an electronic format to facilitate periodic resubmission of fingerprints.   (4) The commissioner may contract for the collection, transmission, and retention of fingerprints and may agree to a reasonable fee charged by a contractor for these services. If the commissioner contracts for services, the fee for collecting, transmitting, and retaining of fingerprints must be paid directly to the contractor by the applicant or insurer.   (5) The commissioner is authorized to receive criminal history record information in lieu of the Montana department of justice relating to fingerprints submitted to the federal bureau of investigation.   (6) The commissioner may adopt rules to further implement this section, including but not limited to rules on the length of time that a background examination is valid and rules for the electronic filing of fingerprints.   History: En. Sec. 2, Ch. 427, L. 2003; amd. Sec. 14, Ch. 469, L. 2005; amd. Sec. 7, Ch. 245, L. 2013; amd. Sec. 1, Ch. 346, L. 2015.  
  33-17-221. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 166, Ch. 286, L. 1959; R.C.M. 1947, 40-3322; amd. Sec. 27, Ch. 713, L. 1989; amd. Sec. 12, Ch. 316, L. 1999.  
  33-17-222 through 33-17-230 reserved.  
  33-17-231. Appointment of insurance producers -- continuation and termination. (1) Each insurer appointing an insurance producer in this state shall file with the commissioner the appointment, specifying the kinds of insurance to be transacted by the insurance producer for the insurer. The appointment may be electronically filed. The commissioner may adopt rules to implement electronic filing.   (2) Each appointment remains in effect until the insurance producer's license is revoked or otherwise terminated unless written notice of earlier termination of the appointment is filed with the commissioner by the insurer or the insurance producer. The written notice may be electronically filed. The commissioner may adopt rules to implement electronic filing. Termination of the insurer's authority in Montana also terminates the appointment.   (3) Subject to the insurance producer's contract rights, an insurer may terminate an insurance producer's appointment at any time. The insurer shall promptly give written notice of the termination to the commissioner and to the insurance producer. The commissioner may require reasonable proof that the insurer has given notice to the insurance producer.   (4) As part of the notice of termination given the commissioner, the insurer shall file with the commissioner a statement of the facts relative to the termination and the cause of termination. Any information or statement contained in the notice of termination is not admissible as evidence in any action or proceeding against the insurer or any representative of the insurer by or on behalf of any person affected by the termination.   (5) (a) An insurer that sells a qualified health plan in an exchange operating in this state shall appoint any producer who is certified by the commissioner pursuant to 33-17-243 and follows the appointment application process required by that insurer.   (b) To maintain the appointment, the producer shall maintain the producer's certification and license in good standing.   (6) An appointment by affiliation terminates automatically on termination of the affiliation.   History: En. Sec. 161, Ch. 286, L. 1959; R.C.M. 1947, 40-3317; amd. Sec. 3, Ch. 344, L. 1979; amd. Sec. 7, Ch. 345, L. 1979; amd. Sec. 8, Ch. 409, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 20, Ch. 451, L. 1993; amd. Sec. 2, Ch. 6, Sp. L. November 1993; amd. Sec. 13, Ch. 316, L. 1999; amd. Sec. 12, Ch. 271, L. 2009; amd. Sec. 8, Ch. 245, L. 2013; amd. Sec. 2, Ch. 38, L. 2017; amd. Sec. 1, Ch. 110, L. 2019.  
  33-17-232. Rights of insurance producer following termination of appointment. (1) Following termination of an agency appointment for property, casualty, title, or surety insurance and subject to the terms of an agreement between the insurance producer and the insurer, the insurance producer may continue to service and receive from the insurer commissions or other compensation relative to business written by the insurance producer for the insurer during the existence of the appointment.   (2) This section does not apply to:   (a) insurance producers of direct writing insurers; or   (b) insurance producers or insurers between whom the relationship of employer and employee exists.   History: En. Sec. 162, Ch. 286, L. 1959; R.C.M. 1947, 40-3318; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 6, Ch. 399, L. 2007.  
  33-17-233 through 33-17-235 reserved.  
  33-17-236. Appointments of insurance producers by insurers. (1) An insurance producer may not claim to be a representative of or an authorized or appointed insurance producer of or use another term implying a contractual relationship with a particular insurer unless the insurance producer is an appointed insurance producer of that insurer pursuant to this section. This does not prevent an insurance producer from obtaining and presenting a quotation from an insurer with whom the producer is not appointed. If the insurer consents, the insurer may bind coverage on a risk in accordance with 33-15-411 prior to the execution of an agency contract and policy issuance.   (2) The insurer shall, not later than 15 days from the date on which the agency contract is executed with an insurance producer, file with the commissioner a written notice of appointment on a form prescribed by the commissioner. The notice may be electronically filed pursuant to rules adopted by the commissioner.   (3) Upon receipt of the notice of appointment, the commissioner shall verify that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the commissioner shall notify the insurer of the determination.   (4) (a) An appointment is effective on the earlier of the date of the executed agency contract or the date on which the insurer files the notice of appointment with the commissioner, unless the appointment is disapproved by the commissioner.   (b) A disapproved appointment is void on the date the department provides notification to the insurer.   (c) An appointment of which notice is not filed within 15 days of execution of the agency contract is not effective until the date that the insurer files the notice of appointment with the commissioner.   (5) An appointment is perpetual until canceled by the insurer.   History: En. Sec. 5, Ch. 713, L. 1989; amd. Sec. 3, Ch. 6, Sp. L. November 1993; amd. Sec. 32, Ch. 472, L. 1999; amd. Sec. 3, Ch. 38, L. 2017; amd. Sec. 2, Ch. 110, L. 2019.  
  33-17-237. Notification of violation or appointment termination. (1) Upon the termination of an appointed insurance producer by an insurer, the insurer shall notify the insurance department within 30 days in the manner prescribed by the insurance department, which may include electronic filing.   (2) If the reason for the termination is any of the causes listed in 33-17-1001 or 33-25-301, the insurer shall immediately notify the insurance department of the reason.   (3) Whenever an insurance company or an employee or representative of the company has reasonable cause to believe that a person has violated 33-17-1001 or 33-25-301, it is the duty of that entity, upon acquiring the knowledge, to notify the insurance department and provide the insurance department with a complete statement of all relevant facts and circumstances.   (4) The insurer, employee, or representative shall, upon request of the insurance department, provide information, documents and records, or other data pertaining to the alleged violation or termination that may be used by the insurance department in any action taken pursuant to Title 33, chapter 17, part 10.   (5) Any information, documents, records, or other data provided pursuant to this section is privileged, and there is no liability on the part of nor may a cause of action of any nature arise against the insurance department, the insurance company, or an authorized representative of either so long as the privileged information is furnished in good faith.   History: En. Sec. 6, Ch. 713, L. 1989; amd. Sec. 21, Ch. 451, L. 1993; amd. Sec. 4, Ch. 6, Sp. L. November 1993.  
  33-17-238. Appointment by affiliation. (1) Unless prohibited by the insurer, a business entity insurance producer may satisfy the appointment requirements of 33-17-236(1) by affiliating with a business entity insurance producer that has been appointed directly by the insurer.   (2) A business entity insurance producer obtaining an appointment by affiliation under subsection (1) shall maintain a copy of each written affiliation agreement for 3 years following termination of the affiliation and make copies of the agreement available to the commissioner upon request.   (3) An appointment by affiliation under subsection (1) is effective on the date the business entity insurance producer enters into an affiliation agreement.   (4) A business entity insurance producer appointed by affiliation under this section is authorized to transact the kinds of insurance for which the business entity insurance producer directly appointed by the insurer is also authorized, except:   (a) a business entity insurance producer appointed by affiliation may not transact kinds of insurance for which the insurance producer is not otherwise authorized; and   (b) the insurer may specify in writing those kinds of insurance the business entity insurance producer may transact under the appointment.   History: En. Sec. 1, Ch. 38, L. 2017; amd. Sec. 3, Ch. 110, L. 2019.  
  33-17-239 and 33-17-240 reserved.  
  33-17-241. Navigator certification -- duties -- prohibitions. (1) An individual or an individual performing navigator duties on behalf of an organization serving as a navigator may not act in the capacity of a navigator unless the individual has met all of the following requirements, as applicable:   (a) is at least 18 years of age;   (b) has completed and submitted the application form provided for in 33-17-242 and has declared, under penalty of refusal, suspension, or revocation of the navigator's certification, that the statements made in the form are true, correct, and complete to the best of the applicant's knowledge and belief;   (c) has completed a background examination as described in 33-17-220;   (d) has successfully completed the navigator certification and training requirements adopted by the commissioner, as provided in 33-17-242; and   (e) has paid all fees required by 33-2-708.   (2) A navigator's duties may include any of the following:   (a) conducting public education activities to raise awareness of the availability of qualified health plans;   (b) distributing fair and impartial general information concerning how to enroll in any qualified health plan offered within the exchange and the availability of the premium tax credits under 26 U.S.C. 36B and the cost-sharing reductions provided under 42 U.S.C. 18071;   (c) assisting consumers in understanding how to enroll in a qualified health plan through an exchange or appropriate public programs offering health care coverage, without suggesting that the consumer purchase any particular plan; and   (d) referring consumers to the commissioner's office for assistance with complaints, appeals, or grievances or for general information about health insurance.   (3) A navigator may not do any of the following unless the navigator is otherwise licensed or authorized to do so under this chapter:   (a) sell, solicit, or negotiate health insurance;   (b) recommend, endorse, or offer opinions about the benefits, terms, or features of a particular health benefit plan or offer an opinion about which health benefit plan is better or worse for a particular individual or employer;   (c) provide any information or services related to a health benefit plan or another product not offered in the exchange;   (d) engage in any unfair method of competition or any fraudulent, deceptive, or dishonest act or practice; or   (e) enroll an individual or an employee in a qualified health plan offered through an exchange.   History: En. Sec. 2, Ch. 245, L. 2013; amd. Sec. 2, Ch. 346, L. 2015.  
  33-17-242. Commissioner's duties -- navigator certification and training program -- training for certified application counselors and others. (1) The commissioner shall:   (a) develop a navigator certification application form that requires an applicant to disclose potential conflicts of interest and any other information the commissioner considers relevant;   (b) establish a navigator certification and training program for a prospective navigator and the navigator's employees;   (c) approve courses and the number of hours required for the navigator certification and training program;   (d) approve courses for continuing education covering 10 hours in every 24-month period; and   (e) certify an applicant qualified under 33-17-241(1) upon the applicant's successful completion of the navigator certification and training program approved by the commissioner.   (2) The commissioner may suspend, revoke, or refuse to issue or renew the navigator certification of a person that has committed an act for which the grounds for denial, suspension, or revocation are described in 33-17-1001 regarding an insurance producer's license.   (3) The commissioner may not certify as a navigator an individual, organization, or business entity that is receiving financial compensation, including monetary or in-kind compensation, gifts, or grants, from an insurer. A navigator certification must be revoked if the navigator receives financial compensation as described in this subsection from an insurer.   (4) The navigator certification and training program established in subsection (1) must include:   (a) a background examination as provided in 33-17-220;   (b) initial training on compliance with all applicable state and federal laws affecting major medical health insurance, exchanges, and qualified health plans;   (c) continuing education as provided in subsection (1)(d); and   (d) an examination.   (5) The commissioner may prescribe training for an application counselor provided for in federal rule and other persons who while not part of the navigator program assist those who sign up for an exchange. The commissioner may require completion of the training before certification by the exchange. The training must be designed for those who assist applicants seeking to enroll in coverage through the exchange.   History: En. Sec. 3, Ch. 245, L. 2013.  
  33-17-243. Producer exchange training -- certification for exchange sales. (1) A producer may not sell, solicit, or negotiate insurance through an exchange on or after October 1, 2013, without first completing the initial producer exchange training and certification program provided for in this section as prescribed and approved by the commissioner.   (2) The producer exchange training and certification program required in this section must consist of topics related to health insurance offered within an exchange, including but not limited to:   (a) the levels of coverage provided in an exchange;   (b) the eligibility requirements for individuals to purchase insurance through an exchange;   (c) the eligibility requirements for employers to make insurance available to their employees through a small business health options program;   (d) the individual eligibility requirements for medicaid and the healthy Montana kids plan, as provided in Title 53; and   (e) the use of enrollment forms used in an exchange.   History: En. Sec. 4, Ch. 245, L. 2013; amd. Sec. 18, Ch. 151, L. 2017.  
  33-17-244. Lists of certified producers and navigators. (1) An exchange operating in this state shall maintain a current list of both of the following:   (a) licensed insurance producers that have met all of the producer exchange training and certification program requirements necessary to sell insurance through an exchange, as provided in 33-17-243; and   (b) individuals or entities that have met all the requirements to be certified by the commissioner as navigators.   (2) Upon request, the commissioner shall make available a list of insurance producers that are certified to sell a health benefit plan through an exchange and are operating near the requester's address. The commissioner shall also make available a list of certified navigators.   History: En. Sec. 5, Ch. 245, L. 2013.  
  33-17-301. Adjuster license -- qualifications -- catastrophe adjustments -- education and examination exemption. (1) A person may not act as or purport to be an adjuster in this state unless the person holds an adjuster license. A person shall apply to the commissioner for an adjuster license in a form approved by the commissioner. The commissioner shall issue the license to persons qualified to be licensed under this section.   (2) To be licensed as an individual adjuster, the applicant:   (a) must be an individual 18 years of age or older;   (b) (i) must be a resident of Montana or a resident of another state that permits residents of Montana regularly to act as adjusters in the other state; or   (ii) if not a resident of this state, shall designate a home state in which the adjuster does not maintain a place of business or residence if:   (A) the adjuster's principal state of business or residence does not offer adjuster licensure; and   (B) the adjuster qualifies for the license as if the adjuster were a resident of the designated home state;   (c) except as provided in subsection (4), shall pass an adjuster licensing examination as prescribed by the commissioner and pay the fee pursuant to 33-2-708;   (d) must be trustworthy and of good character and reputation;   (e) shall submit to a licensing background examination that meets the requirements provided in 33-17-220; and   (f) shall maintain in this state an office accessible to the public and shall keep in the office for not less than 5 years the usual and customary records pertaining to transactions under the license. This provision does not prohibit maintenance of the office in the home of the licensee.   (3) A business entity, whether or not organized under the laws of this state, may be licensed under this section if each individual who is to exercise the license powers is separately licensed or is named in the business entity license and is qualified for an individual license under this section.   (4) (a) Subject to the provisions of subsection (4)(b), an individual who applies for a nonresident license under this section in this state and who was previously licensed in another state may not be required to complete any prelicensing education or examination requirements.   (b) The exemption in subsection (4)(a) is available only if the individual is currently licensed in the other state or the individual's application is received within 90 days of the cancellation of the individual's previous license and the other state issues a certification or the state's database records indicate that, at the time of the cancellation, the individual was in good standing in that state.   (5) An adjuster license or qualifications are not required for an adjuster who is sent into this state by and on behalf of an insurer or adjusting business entity for the purpose of investigating or making adjustments of a particular loss under an insurance policy or for the adjustment of a series of losses resulting from a catastrophe common to all losses.   (6) A license issued under this section continues in force until lapsed, suspended, revoked, or terminated. The licensee shall renew the license by the biennial renewal date and pay the appropriate fee or the license will lapse. The biennial fee is established pursuant to 33-2-708.   (7) For purposes of this section, "adjuster" includes adjusters and public adjusters as defined in 33-17-102.   History: En. Sec. 171, Ch. 286, L. 1959; amd. Sec. 6, Ch. 423, L. 1971; R.C.M. 1947, 40-3327; amd. Sec. 28, Ch. 713, L. 1989; amd. Sec. 26, Ch. 531, L. 1997; amd. Sec. 14, Ch. 316, L. 1999; amd. Sec. 16, Ch. 427, L. 2003; amd. Sec. 15, Ch. 469, L. 2005; amd. Sec. 13, Ch. 271, L. 2009; amd. Sec. 13, Ch. 169, L. 2013; amd. Sec. 10, Ch. 406, L. 2013; amd. Sec. 4, Ch. 139, L. 2015; amd. Sec. 19, Ch. 151, L. 2017.  
  33-17-302. Public adjuster contracts -- financial disclosure. (1) A person licensed as a public adjuster may not act as a public adjuster unless the person has a written contract with the insured. Written contracts must be filed with the commissioner and must contain all of the following:   (a) legible full name of the adjuster signing the contract as specified in records held by the commissioner;   (b) business address and telephone number of the public adjuster;   (c) license number of the public adjuster;   (d) title specifying "public adjuster contract";   (e) insured's full name, street address, insurer name, and policy number, if known or upon notification;   (f) description of the loss and its location, if applicable;   (g) description of services to be provided to the insured;   (h) signatures of the public adjuster and the insured;   (i) date the contract was signed by the public adjuster and the date the contract was signed by the insured;   (j) attestation language stating that the public adjuster is fully bonded pursuant to state law; and   (k) full salary, fee, commission, compensation, or other consideration the public adjuster is to receive for services.   (2) A public adjuster contract may not contain any contract term that:   (a) allows the public adjuster's percentage fee to be collected when money is due from an insurer but not paid or that allows a public adjuster to collect the entire fee from the first payment issued by the insurer rather than as a percentage of each payment issued by an insurer;   (b) requires the insured to authorize an insurer to issue payment only in the name of the public adjuster;   (c) imposes collection costs or late fees; or   (d) precludes an insured from pursuing civil remedies.   (3) If the insurer either pays or commits in writing to pay the insured policy limits of the insurance policy within 72 hours after the date the loss is reported, the public adjuster may not:   (a) receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim; or   (b) inform the insured that loss recovery amount will likely not be increased by the insurer.   (4) A public adjuster shall provide the insured with a written disclosure document concerning any direct or indirect financial interest that the public adjuster has with any other party involved in any aspect of the claim or services rendered by the public adjuster. The document must include a disclosure of any ownership interest in an entity that performs work in conjunction with the claim on which the public adjuster is engaged, including but not limited to any:   (a) construction firm;   (b) salvage firm;   (c) building appraisal firm;   (d) motor vehicle repair shop; or   (e) other entity that provides estimates for work or that performs any work.   History: En. Sec. 5, Ch. 139, L. 2015.  
  33-17-303. Public adjuster standards of conduct. A public adjuster:   (1) is obligated to serve with objectivity and loyalty to the interest of the insured alone;   (2) may not solicit or attempt to solicit an insured during the progress of a loss-producing occurrence, as defined in the insured's insurance contract;   (3) may not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required;   (4) may not acquire any interest in the salvage of property subject to the contract with the insured without written permission from the insured;   (5) shall abstain from referring or directing the insured to any person with whom the public adjuster has a financial interest unless disclosed to the insured pursuant to 33-17-302(4).   History: En. Sec. 6, Ch. 139, L. 2015.  
  33-17-401. Nonresident insurance producer -- license. (1) A nonresident person, unless denied licensure pursuant to 33-17-1001, must be granted a license if:   (a) the person is currently licensed as a resident and is in good standing in the person's home state;   (b) the person has submitted the proper request for licensure and has paid the fees required by 33-2-708;   (c) the person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the person's home state or a completed application in a form approved by the commissioner; and   (d) the person's home state awards nonresident insurance producer licenses to residents of this state on the same basis.   (2) A person licensed as a surplus lines producer in that person's home state must receive a nonresident surplus lines producer license upon meeting the requirements of subsection (1). Except for subsection (1), this section does not amend or supersede any provision of the surplus lines insurance law established in Title 33, chapter 2, part 3.   (3) A person licensed as a limited line credit insurance producer or other type of limited lines producer in that person's home state must receive a nonresident limited lines producer license upon meeting the requirements of subsection (1), granting the same scope of authority as granted under the license issued by the producer's home state. For the purposes of this subsection, limited lines insurance is any authority granted by a nonresident's home state that restricts the authority of the licensee to less than the total authority prescribed in the associated major lines pursuant to 33-17-214(2)(a) through (2)(e).   (4) If a nonresident insurance producer's state of residence suspends, revokes, or terminates the insurance producer's insurance license in that state, the insurance producer's Montana nonresident license automatically terminates. The nonresident insurance producer shall notify the commissioner that the insurance producer's state of residence has suspended, revoked, or terminated the insurance producer's insurance license in that state.   History: En. Sec. 1, Ch. 44, L. 1969; R.C.M. 1947, 40-3333; amd. Sec. 8, Ch. 345, L. 1979; amd. Sec. 9, Ch. 409, L. 1987; amd. Sec. 29, Ch. 713, L. 1989; amd. Sec. 6, Ch. 106, L. 2001; amd. Sec. 16, Ch. 469, L. 2005.  
  33-17-402. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 2, Ch. 44, L. 1969; R.C.M. 1947, 40-3334.  
  33-17-403. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 3, Ch. 44, L. 1969; R.C.M. 1947, 40-3335.  
  33-17-404. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 4, Ch. 44, L. 1969; R.C.M. 1947, 40-3336; amd. Sec. 9, Ch. 345, L. 1979; amd. Sec. 1, Ch. 395, L. 1983; amd. Sec. 30, Ch. 713, L. 1989.  
  33-17-405. Service of process -- commissioner as agent. The commissioner shall act as a nonresident person's agent upon whom process in a legal proceeding against the nonresident person may be served. Service of process on the commissioner has the same legal force and validity as personal service of process upon the nonresident person. The commissioner shall, within 3 working days after receiving process, forward by certified mail, to the nonresident person's address of record, a copy of the process.   History: En. Sec. 5, Ch. 44, L. 1969; R.C.M. 1947, 40-3337; amd. Sec. 31, Ch. 713, L. 1989; amd. Sec. 51, Ch. 379, L. 1995.  
  33-17-406. Nonresident insurance producer subject to insurance code. A nonresident insurance producer is subject to the provisions of the Montana Insurance Code as though a resident of this state, unless otherwise provided.   History: En. Sec. 6, Ch. 44, L. 1969; R.C.M. 1947, 40-3338; amd. Sec. 32, Ch. 713, L. 1989.  
  33-17-407. Nonresident insurance producer to pay taxes -- annual report required. (1) A nonresident insurance producer is subject to personal income, business income, or corporate income taxes for all income earned on insurance policies issued to cover subjects or risks residing, located, or to be performed in Montana and written within the boundaries of this state.   (2) A nonresident insurance producer shall file annually a Montana income tax return as required in Title 15.   History: En. Sec. 3, Ch. 395, L. 1983; amd. Sec. 33, Ch. 713, L. 1989; amd. Sec. 35, Ch. 268, L. 2013.  
  33-17-408. Reciprocity -- nonresident insurance producer licensing and continuing education. (1) The commissioner shall waive any requirements, except for the requirements of 33-17-401, for a nonresident applicant for an insurance producer's license who has a valid license from the applicant's home state if the applicant's home state awards nonresident licenses to residents of this state on the same basis.   (2) A nonresident insurance producer's satisfaction of the insurance producer's home state's continuing education requirements for licensed insurance producers constitutes satisfaction of this state's continuing education requirements if the nonresident insurance producer's home state recognizes the satisfactions of its continuing education requirements imposed upon insurance producers from this state on the same basis.   History: En. Sec. 8, Ch. 106, L. 2001.  
  33-17-409. Status of nonresident insurance producers -- biennial renewal of license -- payment of fees. A nonresident insurance producer's license continues in force until lapsed, suspended, revoked, or terminated. The license lapses if the licensee fails to remit a biennial renewal fee.   History: En. Sec. 5, Ch. 427, L. 2003.  
  33-17-410 reserved.  
  33-17-411. Penalty. A nonresident insurance producer who violates a condition of the producer's Montana license or a provision of this part is subject to a fine by the commissioner of up to $50,000 for each violation and may, at the discretion of the commissioner, have the Montana nonresident license revoked or suspended for a period of up to 5 years.   History: En. Sec. 5, Ch. 395, L. 1983; amd. Sec. 34, Ch. 713, L. 1989; amd. Sec. 1204, Ch. 56, L. 2009.  
  33-17-501. Short title. This part may be cited as "The Montana Insurance Consultant Licensure Act".   History: En. 40-3339 by Sec. 1, Ch. 144, L. 1975; R.C.M. 1947, 40-3339.  
  33-17-502. Prohibition on representation as consultant -- receiving fee. (1) A person not licensed as an insurance consultant in this state who identifies or represents to the public that the person is an insurance consultant without having been licensed as an insurance consultant under this part or a person who uses any other designation or title that is likely to mislead the public and represents to the public that the person has particular insurance qualifications other than those for which the person may be otherwise licensed or otherwise qualified may be fined pursuant to 33-1-317.   (2) A person not licensed as an insurance consultant with respect to the relevant kinds of insurance who receives a fee for examining, appraising, reviewing, or evaluating any insurance policy, annuity or pension contract, plan, or program or who makes recommendations or gives advice with regard to any insurance policy, annuity or pension contract, plan, or program without first having been licensed by the commissioner as an insurance consultant may be fined pursuant to 33-1-317.   (3) This part does not apply to:   (a) licensed attorneys at law in this state acting in their professional capacity; or   (b) an actuary or a certified public accountant who provides information, recommendations, advice, or services in a professional capacity if neither the actuary nor the certified public accountant or the actuary's or certified public accountant's employer receives any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or part from that information, recommendation, advice, or services.   History: En. 40-3340, 40-3348 by Secs. 2, 10, Ch. 144, L. 1975; R.C.M. 1947, 40-3340, 40-3348; amd. Sec. 2, Ch. 86, L. 1979; amd. Sec. 40, Ch. 613, L. 1989; amd. Sec. 35, Ch. 713, L. 1989; amd. Sec. 44, Ch. 227, L. 2001; amd. Sec. 17, Ch. 427, L. 2003.  
  33-17-503. Application -- residency -- fee -- expiration. (1) Before a consultant license is issued or renewed, the prospective licensee shall:   (a) properly file with the office of the commissioner a written application in a form approved by the commissioner; and   (b) pay a fee pursuant to 33-2-708, which the commissioner shall forward to the state treasurer to be deposited in the state special revenue fund to the credit of the state auditor's office.   (2) To be licensed as a consultant, the prospective licensee:   (a) must be an individual 18 years of age or older; and   (b) (i) must be a resident of Montana or a resident of another state that permits residents of Montana regularly to act as consultants in the other state; or   (ii) if not a resident of this state, shall designate a home state in which the consultant does not maintain a place of business or residence if:   (A) the consultant's principal state of business or residence does not offer consultant licensure; and   (B) the consultant qualifies for the license as if the consultant were a resident of the designated home state.   (3) A consultant license continues in force until lapsed, suspended, revoked, or terminated.   History: En. 40-3341 by Sec. 3, Ch. 144, L. 1975; R.C.M. 1947, 40-3341; amd. Sec. 36, Ch. 713, L. 1989; amd. Sec. 52, Ch. 379, L. 1995; amd. Sec. 20, Ch. 380, L. 2003; amd. Sec. 17, Ch. 469, L. 2005; amd. Sec. 14, Ch. 169, L. 2013.  
  33-17-504. Issuing license -- limitations. The commissioner may issue a consultant license to an individual who has complied with the requirements of this chapter with respect to either life insurance, meaning all of those kinds of insurance authorized in 33-1-207, 33-1-208, 33-20-1001, 33-21-103, 33-22-501, and 33-22-601, or general insurance, meaning all of those kinds of insurance authorized in 33-1-206, 33-1-207, 33-1-209 through 33-1-212, 33-1-214 through 33-1-219, and 33-1-221 through 33-1-229, as specified in the license.   History: En. 40-3342 by Sec. 4, Ch. 144, L. 1975; R.C.M. 1947, 40-3342; amd. Sec. 13, Ch. 467, L. 1981; amd. Sec. 37, Ch. 713, L. 1989; amd. Sec. 19, Ch. 427, L. 2003.  
  33-17-505. Qualification examination -- background examination. (1) (a) In order to determine the competency of an applicant for a consultant license, the commissioner shall require the applicant to pass an examination.   (b) The commissioner may conduct the examination or make arrangements, including contracting with an outside testing service, for administering the examination and collecting the fees required by 33-17-503. The commissioner may arrange for the testing service to recover its cost of the examination from the applicant.   (2) The applicant shall submit to a licensing background examination that meets the requirements provided in 33-17-220.   History: En. 40-3343 by Sec. 5, Ch. 144, L. 1975; amd. Sec. 1, Ch. 146, L. 1977; R.C.M. 1947, 40-3343; amd. Sec. 1, Ch. 324, L. 1987; amd. Sec. 38, Ch. 713, L. 1989; amd. Sec. 15, Ch. 316, L. 1999; amd. Sec. 33, Ch. 472, L. 1999; amd. Sec. 15, Ch. 169, L. 2013.  
  33-17-506. Repealed. Sec. 29, Ch. 399, L. 2007.   History: En. 40-3344 by Sec. 6, Ch. 144, L. 1975; R.C.M. 1947, 40-3344(part); amd. Sec. 39, Ch. 713, L. 1989.  
  33-17-507. Repealed. Sec. 29, Ch. 399, L. 2007.   History: En. 40-3344 by Sec. 6, Ch. 144, L. 1975; R.C.M. 1947, 40-3344(part); amd. Sec. 40, Ch. 713, L. 1989; amd. Sec. 34, Ch. 472, L. 1999.  
  33-17-508 through 33-17-510 reserved.  
  33-17-511. Consideration for services only on written memorandum. A person licensed as an insurance consultant under this part may not receive a fee for examining, appraising, reviewing, or evaluating an insurance policy, a bond, an annuity, or a pension or profit-sharing contract, plan, or program or for making recommendations or giving advice with regard to any of the above unless the compensation is based upon a written memorandum that includes the insurance consultant's Montana insurance license number, is signed by the party to be charged, and specifies or clearly defines services to be provided and the amount or extent of the compensation. An insurance consultant shall retain a copy of every memorandum or contract for not less than 3 years after those services have been fully performed.   History: En. 40-3345 by Sec. 7, Ch. 144, L. 1975; R.C.M. 1947, 40-3345; amd. Sec. 41, Ch. 713, L. 1989; amd. Sec. 21, Ch. 380, L. 2003; amd. Sec. 7, Ch. 399, L. 2007.  
  33-17-512. Limitation on type of consideration. A licensed insurance consultant may not receive a commission, service fee, brokerage fee, or other valuable consideration for the sale or service of a line of insurance, annuity, security, or pension trust if the consultant has received compensation from the client for consulting services on the same line of insurance, annuity, security, or pension trust sold or serviced within the preceding 12 months.   History: En. 40-3346 by Sec. 8, Ch. 144, L. 1975; R.C.M. 1947, 40-3346; amd. Sec. 42, Ch. 713, L. 1989; amd. Sec. 1, Ch. 215, L. 1993.  
  33-17-513. Restrictions on insurers recommended by licensee. A person licensed as an insurance consultant under this part may not recommend or encourage the purchase of insurance, annuities, or securities from an authorized insurer in which the person or any member of the person's immediate family holds an executive position or holds a substantial interest.   History: En. 40-3347 by Sec. 9, Ch. 144, L. 1975; R.C.M. 1947, 40-3347; amd. Sec. 43, Ch. 713, L. 1989; amd. Sec. 1205, Ch. 56, L. 2009.  
  33-17-601. Repealed. Sec. 68, Ch. 713, L. 1989.   History: En. Sec. 1, Ch. 343, L. 1979; amd. Sec. 10, Ch. 409, L. 1987.  
  33-17-602. Written agreement required. (1) A person may not act as an administrator without a written agreement between the person and the insurer. The written agreement must be retained as part of the official records of both the administrator and the insurer for the duration of the agreement and for 5 years thereafter. The written agreement must contain provisions that include the requirements of 33-17-612 through 33-17-617 insofar as these requirements relate to the functions performed by the administrator.   (2) The agreement must contain a provision with respect to the underwriting or other standards pertaining to the business underwritten by the insurer.   (3) Whenever a policy is issued to a trustee, a copy of the trust agreement and any amendments to it must be furnished to the insurer by the administrator and be retained as part of the official records of both the administrator and the insurer for the duration of the policy and for 5 years thereafter.   History: En. Sec. 2, Ch. 343, L. 1979; amd. Sec. 11, Ch. 409, L. 1987; amd. Sec. 44, Ch. 713, L. 1989.  
  33-17-603. Certificate of registration. (1) Except as provided in 33-17-604, a person may not act as or represent to the public that the person is an administrator in this state unless the person holds a certificate of registration as an administrator.   (2) An application for a certificate of registration must be accompanied by a fee of $100. The commissioner shall issue the certificate unless the commissioner finds that the applicant is not competent, trustworthy, financially responsible, or of good personal and business reputation or that the applicant has had a previous application for a license denied for cause within 5 years.   (3) A certificate of registration must be renewed each year by the administrator paying a continuation fee of $100 on or before July 1. Upon payment, the certificate continues in force unless suspended, revoked, or otherwise terminated. The commissioner shall deposit the fee with the state treasurer to be credited to the general fund.   (4) A certificate of registration may be suspended or revoked if, after notice and hearing, the commissioner finds that the administrator has violated any of the requirements of this part or that the administrator is not competent, trustworthy, financially responsible, or of good personal and business reputation.   (5) Unless a certification requirement is waived, a person who acts as an administrator without a certificate of registration is subject to a fine of not less than $500 or more than $1,500.   History: En. Sec. 12, Ch. 343, L. 1979; amd. Sec. 45, Ch. 713, L. 1989; amd. Sec. 8, Ch. 798, L. 1991; amd. Sec. 53, Ch. 379, L. 1995; amd. Sec. 148, Ch. 42, L. 1997.  
  33-17-604. Waiver of certification requirements. The commissioner may waive the requirements of 33-17-603 for any person or class of persons. The factors taken into account in granting a waiver include but are not limited to:   (1) whether the person acting as an administrator is primarily in a business other than that of administrator;   (2) whether the financial strength and history of the organization indicates stability in its continuity of doing business;   (3) whether the regular duties being performed as an administrator are such that the covered persons are not likely to be injured by a waiver of the requirements.   History: En. Sec. 13, Ch. 343, L. 1979; amd. Sec. 46, Ch. 713, L. 1989.  
  33-17-605. Repealed. Sec. 19, Ch. 409, L. 1987.   History: En. Sec. 10, Ch. 343, L. 1979.  
  33-17-606 through 33-17-610 reserved.  
  33-17-611. Maintenance of information. For the duration of the agreement required by 33-17-602 and for 5 years thereafter, each administrator shall maintain at its principal administrative office adequate books and records of all transactions between the administrator, insurers, and insured persons. These books and records must be maintained in accordance with prudent standards of insurance recordkeeping. The commissioner shall have access to these books and records for examination, audit, or inspection. Any trade secrets contained in the books and records, including but not limited to the identity and addresses of policyholders and certificate holders, are confidential, except that the commissioner may use the information in any proceedings instituted against the administrator. The insurer retains the right to continuing access to those books and records of the administrator sufficient to permit the insurer to fulfill all of its contractual obligations to insured persons, subject to any restrictions in the written agreement between the insurer and the administrator.   History: En. Sec. 3, Ch. 343, L. 1979; amd. Sec. 47, Ch. 713, L. 1989.  
  33-17-612. Approval of advertising. An administrator may use only such advertising pertaining to the business underwritten by an insurer as is approved by the insurer in advance of its use.   History: En. Sec. 4, Ch. 343, L. 1979.  
  33-17-613. Collection of charges and premiums. (1) All insurance charges or premiums collected by an administrator on behalf of or for an insurer and return premiums received from the insurer are held by the administrator in a fiduciary capacity. These funds must be immediately remitted to the person entitled to them or must be deposited promptly in a fiduciary bank account established and maintained by the administrator. If deposited charges or premiums were collected on behalf of or for more than one insurer, the administrator shall require the bank in which the fiduciary account is maintained to keep records clearly recording the deposits in and withdrawals from the account on behalf of or for each insurer. The administrator shall promptly obtain and keep copies of all these records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to deposits and withdrawals on behalf of or for the insurer.   (2) The administrator may not pay a claim by withdrawals from the fiduciary account. Withdrawals from the fiduciary account must be made, as provided in the written agreement between the administrator and the insurer, for:   (a) remittance to an insurer entitled to the remittance;   (b) deposit in an account maintained in the name of the insurer;   (c) transfer to and deposit in a claims paying account, with claims to be paid as provided in 33-17-615;   (d) payment to a group policyholder for remittance to the insurer entitled to the payment;   (e) payment to the administrator of its commission, fees, or charges; or   (f) remittance of return premiums to the person entitled to the premium.   History: En. Sec. 5, Ch. 343, L. 1979; amd. Sec. 48, Ch. 713, L. 1989.  
  33-17-614. Treatment of payments. Whenever an insurer utilizes the services of an administrator under the terms of a written contract as required in 33-17-602, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured is considered to be received by the insurer and the payment of return premiums or claims by the insurer to the administrator is not considered payment to the insured or claimant until the payments are received by the insured or claimant. This section does not limit any right of the insurer against the administrator resulting from the administrator's failure to make payments to the insurer, insureds, or claimants.   History: En. Sec. 6, Ch. 343, L. 1979.  
  33-17-615. Payment of claims. All claims paid by the administrator from funds collected on behalf of the insurer shall be paid only on drafts of and as authorized by such insurer.   History: En. Sec. 7, Ch. 343, L. 1979.  
  33-17-616. Delivery of documents. Any policies, certificates, booklets, termination notices, or other written communications delivered by the insurer to the administrator for delivery to its policyholders shall be delivered by the administrator promptly after receipt of instructions from the insurer to do so.   History: En. Sec. 8, Ch. 343, L. 1979.  
  33-17-617. Claim adjustment and settlement. With respect to any policies where an administrator adjusts or settles claims, the compensation to the administrator with regard to the policies shall in no way be contingent on claim experience. This section does not prevent the compensation of an administrator from being based on premiums or charges collected or number of claims paid or processed.   History: En. Sec. 9, Ch. 343, L. 1979.  
  33-17-618. Insured persons to be notified of availability of administrator. Whenever the services of an administrator are utilized, the administrator shall provide a written notice, approved by the insurer, to insured individuals, advising them of the identity of and relationship between the administrator, the policyholder, and the insurer. Whenever an administrator collects funds, the administrator shall identify and state, separately in writing, to the person paying to the administrator any charge or premium for insurance coverage the amount of such charge or premium specified by the insurer for the insurance coverage.   History: En. Sec. 11, Ch. 343, L. 1979.  
  33-18-101. Purposes. The purpose of this chapter is to regulate trade practices in the business of insurance in accordance with the intent of congress as expressed in Public Law 79-15 (the McCarran-Ferguson Act, 15 U.S.C. 1011 through 1015), which was approved March 9, 1945, by defining or providing for determination of all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.   History: En. Sec. 203, Ch. 286, L. 1959; amd. Sec. 6, Ch. 320, L. 1977; R.C.M. 1947, 40-3501.  
  33-18-102. Unfair methods or deceptive practices prohibited -- refusal to renew. (1) No person shall engage in this state in any trade practice which is defined in this chapter as or determined pursuant to this chapter to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.   (2) Nothing in this chapter shall be construed to prevent an insurer owned or controlled by an association or organization, including a mutual insurer formed to provide insurance to the members of an association or organization, from refusing to renew a casualty or liability policy for nonpayment of dues to the association or organization if payment of dues is a condition for obtaining or continuing such insurance.   History: En. Sec. 204, Ch. 286, L. 1959; R.C.M. 1947, 40-3502; amd. Sec. 2, Ch. 319, L. 1981; amd. Sec. 1, Ch. 143, L. 1983.  
  33-18-103. Protection of active duty members of armed forces -- rulemaking authority. (1) (a) As used in this section, "life insurance product" means any product, including individual and group life insurance, funding agreements, and annuities, that provides insurance for which the probabilities of the duration of human life or the rate of mortality are an element or condition of insurance.   (b) The term includes the granting of:   (i) endowment benefits;   (ii) additional benefits in the event of death by accident or accidental means;   (iii) disability income benefits;   (iv) additional disability benefits that operate to safeguard the contract from lapse or to provide a special surrender value or special benefit in the event of total and permanent disability;   (v) benefits that provide payment or reimbursement for long-term home health care or long-term care in a nursing home or other related facility;   (vi) burial insurance; and   (vii) optional modes of settlement or proceeds of life insurance.   (c) The term does not include workers' compensation insurance, health insurance, disability insurance, property and casualty insurance, or life insurance products specifically contracted by or through the federal government.   (2) As provided in Public Law 109-290, in cooperation with the national association of insurance commissioners, the commissioner shall:   (a) work collectively with other states to develop and implement appropriate standards to protect active duty members of the armed forces from dishonest and predatory insurance sales practices;   (b) identify this state's role in promoting standards developed pursuant to subsection (2)(a); and   (c) work collectively with other states to implement a system to receive and disseminate reports of disciplinary actions taken by federal or state government entities or insurers against persons that sell or solicit the sale of any life insurance product to active duty members of the armed forces.   (3) (a) The commissioner may adopt rules for:   (i) written disclosures to be used in the sale or solicitation of any life insurance product to active duty members of the armed forces and their dependents to protect the members or the members' dependents from dishonest and predatory insurance sales practices while located in this state;   (ii) requiring insurers to implement a system to report to the commissioner:   (A) disciplinary actions taken by a federal or state government entity with respect to sales or solicitations of life insurance products to active duty members of the armed forces that the insurer knows or in the exercise of due diligence should have known were taken; and   (B) significant disciplinary action taken by the insurer with respect to sales or solicitations of life insurance products to active duty members of the armed forces of this state.   (b) Rules adopted by the commissioner must be consistent with and may not go beyond the scope of:   (i) any model regulations that are adopted by the national association of insurance commissioners in response to a directive from the United States congress in Public Law 109-290, directing that the states ensure implementation of appropriate standards to protect active duty members of the armed forces from dishonest and predatory insurance sales practices;   (ii) rules or regulations adopted by the secretary of defense pursuant to Public Law 109-290; and   (iii) the requirements of Public Law 109-290.   History: En. Sec. 1, Ch. 333, L. 2007.  
  33-18-1001. Complaint handling -- record. (1) An insurer shall maintain a complete record of all the complaints which it has received since the date of its last examination under 33-1-401. This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of the complaints, and the time it took to process each complaint.   (2) For purposes of this section, "complaint" means any written communication primarily expressing a grievance.   History: En. 40-3502.2 by Sec. 2, Ch. 320, L. 1977; R.C.M. 1947, 40-3502.2.  
  33-18-1002. Power of commissioner to examine insurers. The commissioner may examine and investigate the affairs of every person engaged in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this chapter.   History: En. 40-3502.3 by Sec. 3, Ch. 320, L. 1977; R.C.M. 1947, 40-3502.3.  
  33-18-1003. Undefined unfair practices -- procedures for determining and restraining. (1) If the commissioner believes that any person engaged in the insurance business is engaging in this state in any method of competition or in any act or practice in the conduct of the business that is not defined in this chapter but that the method of competition is unfair or that the act or practice is unfair or deceptive and that a proceeding by the commissioner in respect to the act or practice would be in the public interest, the commissioner shall, after a hearing of which notice of the hearing and of the charges against the person are given to the person, make a written report of the findings of fact relative to the charges and serve a copy of the report upon the person and any intervenor at the hearing.   (2) If the report charges a violation of this chapter and if the method of competition, act, or practice has not been discontinued, the commissioner may, through the attorney general of this state, at any time after the service of the report cause an action to be instituted to enjoin and restrain the person from engaging in the method, act, or practice. In the action, the court may grant a restraining order or injunction upon terms that may be just, but the people of this state may not be required to give security before the issuance of any order or injunction. If a stenographic record of the proceedings in the hearing before the commissioner was made, a certified transcript, including all evidence taken and the report and findings, must be received in evidence in the action.   (3) If the commissioner's report made under subsection (1) or order on hearing made under 33-18-1004 does not charge a violation of this chapter, then any intervenor in the proceedings may appeal from the report or order on hearing within the time and in the manner provided in this code for appeals from the commissioner generally.   History: En. Sec. 217, Ch. 286, L. 1959; R.C.M. 1947, 40-3515; amd. Sec. 1208, Ch. 56, L. 2009.  
  33-18-1004. Desist orders for prohibited practices. (1) If, after a hearing of the charges of which notice of the hearing and of the charges against the person was given to the person, the commissioner finds that a person in this state has engaged or is engaging in any act or practice defined in or prohibited under this chapter, the commissioner shall order the person to desist from the acts or practices.   (2) The desist order becomes final upon expiration of the time allowed for appeals from the commissioner's orders if an appeal is not taken or, in event of an appeal, upon final decision of the court if the court affirms the commissioner's order or dismisses the appeal. An intervenor in the hearing has the right to appeal as provided in 33-18-1003(3).   (3) In event of an appeal, to the extent that the commissioner's order is affirmed, the court shall issue its own order commanding obedience to the terms of the commissioner's order.   (4) An order of the commissioner pursuant to this section or order of court to enforce it does not in any way relieve or absolve a person affected by the order from any other liability, penalty, or forfeiture under law.   (5) This section may not be considered to affect or prevent the imposition of any penalty provided by this code or by other law for violation of any other provision of this chapter, whether or not the hearing is called or held or the desist order is issued.   History: En. Sec. 216, Ch. 286, L. 1959; amd. Sec. 7, Ch. 320, L. 1977; R.C.M. 1947, 40-3514; amd. Sec. 1209, Ch. 56, L. 2009.  
  33-18-1005. Penalty for violation of cease and desist orders. (1) Any person who violates a cease and desist order issued pursuant to 33-18-1004 is subject to a civil penalty not to exceed $1,000. Each day of violation constitutes a separate violation. The total penalty may not exceed a $10,000 aggregate. The department may institute and maintain in the name of the state any enforcement proceedings hereunder. Upon request of the department, the attorney general or the county attorney of the county in which the violation occurred shall petition the district court to impose, assess, and recover the civil penalty.   (2) An action under subsection (1) of this section is not a bar to enforcement of this chapter or rules or orders made under it by injunction or other appropriate remedies.   (3) Moneys collected hereunder shall be deposited in the state general fund.   History: En. 40-3514.1 by Sec. 4, Ch. 320, L. 1977; R.C.M. 1947, 40-3514.1.  
  33-18-1006. Desist orders for prohibited practices. Violations of 33-18-221 through 33-18-224 are subject to cease and desist orders of the commissioner issued under 33-18-1004.   History: En. Sec. 5, Ch. 554, L. 1993; amd. Sec. 37, Ch. 472, L. 1999; amd. Sec. 6, Ch. 526, L. 1999; amd. Sec. 6, Ch. 345, L. 2001; amd. Sec. 2, Ch. 407, L. 2005.  
  33-18-201. Unfair claim settlement practices prohibited. A person may not, with such frequency as to indicate a general business practice, do any of the following:   (1) misrepresent pertinent facts or insurance policy provisions relating to coverages at issue;   (2) fail to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;   (3) fail to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;   (4) refuse to pay claims without conducting a reasonable investigation based upon all available information;   (5) fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;   (6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;   (7) compel insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds;   (8) attempt to settle a claim for less than the amount to which a reasonable person would have believed the person was entitled by reference to written or printed advertising material accompanying or made part of an application;   (9) attempt to settle claims on the basis of an application that was altered without notice to or knowledge or consent of the insured;   (10) make claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;   (11) make known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;   (12) delay the investigation or payment of claims by requiring an insured, claimant, or physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;   (13) fail to promptly settle claims, if liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; or   (14) fail to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.   History: En. 40-3502.1 by Sec. 1, Ch. 320, L. 1977; R.C.M. 1947, 40-3502.1; amd. Sec. 1206, Ch. 56, L. 2009.  
  33-18-202. Misrepresentation and false advertising of policies prohibited. No person shall make, issue, circulate, or cause to be made, issued, or circulated any estimate, illustration, circular, sales presentation, omission, comparison, or statement which:   (1) misrepresents the benefits, advantages, conditions, or terms of any insurance policy;   (2) misrepresents the dividends or share of the surplus to be received on any insurance policy;   (3) makes any false or misleading statement as to the dividends or share of surplus previously paid on any insurance policy;   (4) is misleading or is a misrepresentation as to the financial condition of any person or as to the legal reserve system upon which any life insurer operates;   (5) uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof;   (6) is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy; or   (7) misrepresents any insurance policy as being shares of stock.   History: En. Sec. 205, Ch. 286, L. 1959; R.C.M. 1947, 40-3503; amd. Sec. 1, Ch. 9, L. 1979.  
  33-18-203. False or deceptive advertising prohibited. A person may not make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster or over any radio or television station or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of the person's insurance business that is untrue, deceptive, or misleading.   History: En. Sec. 206, Ch. 286, L. 1959; R.C.M. 1947, 40-3504; amd. Sec. 1207, Ch. 56, L. 2009.  
  33-18-204. Twisting prohibited. No person shall make or issue or cause to be made or issued any written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in any policy for the purpose of inducing or attempting or tending to induce the policyholder to lapse, forfeit, surrender, retain, exchange, or convert any insurance policy.   History: En. Sec. 207, Ch. 286, L. 1959; R.C.M. 1947, 40-3505.  
  33-18-205. Filing or publishing false financial statements or making false entries prohibited. (1) No person shall file with any supervisory or other public official or make, publish, disseminate, circulate, or deliver to any person or place before the public or cause, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public any false statement of financial condition of an insurer with intent to deceive.   (2) No person shall make any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs or any public official to whom such insurer is required by law to report or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omit to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of such insurer. Any person who aids or abets in any such violation of this section shall be punishable upon conviction by a fine of $1,000 or by imprisonment in the county jail for 6 months or both such fine and imprisonment.   History: En. Sec. 208, Ch. 286, L. 1959; amd. Sec. 1, Ch. 29, L. 1967; R.C.M. 1947, 40-3506.  
  33-18-206. Unfair discrimination prohibited -- life insurance, annuities, and disability insurance. (1) No person shall make or permit any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon or in any other of the terms and conditions of such contract.   (2) No person shall make or permit any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of disability insurance or in the benefits payable thereunder or in any of the terms or conditions of such contract or in any other manner whatever.   (3) An insurer may not refuse to consider an application for life or disability insurance on the basis of a genetic condition, developmental delay, or developmental disability.   (4) The rejection of an application or the determining of rates, terms, or conditions of a life or disability insurance contract on the basis of genetic condition, developmental delay, or developmental disability constitutes unfair discrimination unless the applicant's medical condition and history and either claims experience or actuarial projections establish that substantial differences in claims are likely to result from the genetic condition, developmental delay, or developmental disability.   (5) As used in this section, the following definitions apply:   (a) "Developmental delay" means a delay of at least 1 1/2 standard deviations from the norm.   (b) "Developmental disability" means the singular of developmental disabilities as defined in 53-20-202.   (c) "Genetic condition" means a specific chromosomal or single-gene genetic condition.   History: En. Sec. 211, Ch. 286, L. 1959; R.C.M. 1947, 40-3509; amd. Sec. 1, Ch. 318, L. 1991.  
  33-18-207. Preferred rates to fictitious groups prohibited -- approval of preferred group rates and forms. (1) No insurer, whether an authorized insurer or an unauthorized insurer, shall make available through any rating plan or form, property, casualty, or surety insurance to any firm, corporation, or association of individuals, any preferred rate or premium based upon any fictitious group of such firm, corporation, or association of individuals.   (2) No form or plan of insurance covering any group or combination of persons or risks shall be written or delivered within or outside this state to cover persons or risks in this state at any preferred rate or on any form other than as offered to persons not in such group or combination and to the public generally unless such form, plan of insurance, and the rates or premiums to be charged therefor have been submitted to and approved by the commissioner as being not unfairly discriminatory and as not otherwise being in conflict with subsection (1) above or with any provision of parts 1 through 4 of chapter 16 to the extent that parts 1 through 4 are, by their terms, applicable thereto.   (3) This section does not apply to life insurance, disability insurance, workers' compensation insurance written for industry or business associations, or annuity contracts. However, workers' compensation group insurance rates are subject to all applicable provisions of chapter 16, part 10.   History: En. Sec. 222, Ch. 286, L. 1959; amd. Sec. 1, Ch. 292, L. 1977; R.C.M. 1947, 40-3520.  
  33-18-208. Contract to contain agreements -- rebates prohibited -- life, disability, and annuity contracts. Except as otherwise expressly provided by law, no person shall knowingly:   (1) permit or offer to make or make any contract of life insurance, life annuity, or disability insurance or agreement as to such contract other than as plainly expressed in the contract issued thereon;   (2) pay or allow or give or offer to pay, allow, or give, directly or indirectly, as inducement to such insurance or annuity any rebate of premiums payable on the contract or any special favor or advantage in the dividends or other benefits thereon or any paid employment or contract for services of any kind or any valuable consideration or inducement whatever not specified in the contract;   (3) directly or indirectly give or sell or purchase or offer or agree to give, sell, purchase, or allow as inducement to such insurance or annuity or in connection therewith and whether or not to be specified in the policy or contract, any agreement of any form or nature promising returns and profits or any stocks, bonds, or other securities or interest present or contingent therein or as measured thereby of any insurance company or other corporation, association, or partnership or any dividends or profits accrued or to accrue thereon; or   (4) offer, promise, or give anything of value whatsoever not specified in the contract.   History: En. Sec. 212, Ch. 286, L. 1959; R.C.M. 1947, 40-3510.  
  33-18-209. Exceptions to discrimination and rebates provision. Nothing in 33-18-206 and 33-18-208 shall be construed as including within the definition of discrimination or rebates any of the following practices:   (1) in the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the insurer;   (2) in the case of life insurance policies issued on the industrial debit, preauthorized check, bank draft, or similar plans, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer or by preauthorized check, bank draft, or similar plans, in an amount which fairly represents the saving in collection expense;   (3) readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year;   (4) reduction of premium rate for policies of large amount but not exceeding savings in issuance and administration expenses reasonably attributable to such policies as compared with policies of similar plan issued in smaller amounts;   (5) issuing life or disability insurance policies on a salary savings or payroll deduction plan at reduced rate reasonably commensurate with the savings made by the use of such plan.   History: En. Sec. 213, Ch. 286, L. 1959; R.C.M. 1947, 40-3511.  
  33-18-210. Unfair discrimination and rebates prohibited for title, property, casualty, or surety insurance -- exceptions -- limitations. (1) Except as provided in subsections (3), (4), and (11)(a), a title, property, casualty, or surety insurer or an employee, representative, or insurance producer of an insurer may not, as an inducement to purchase insurance or after insurance has been effected, pay, allow, or give or offer to pay, allow, or give, directly or indirectly, a:  (a) rebate, discount, abatement, credit, or reduction of the premium named in the insurance policy;   (b) special favor or advantage in the dividends or other benefits to accrue on the policy; or   (c) valuable consideration or inducement not specified in the policy, except to the extent provided for in an applicable filing with the commissioner as provided by law.   (2) Except as provided in subsections (3), (4), and (11)(a), an insured named in a policy or an employee of the insured may not knowingly receive or accept, directly or indirectly, a:   (a) rebate, discount, abatement, credit, or reduction of premium;   (b) special favor or advantage; or   (c) valuable consideration or inducement.   (3) The prohibitions in subsections (1) and (2) do not apply to a benefit provided for by a telematics agreement as provided in 33-23-221 through 33-23-226.   (4) The prohibitions under subsections (1) and (2) do not apply to an active, retired, or honorably separated member of the United States armed forces as described in 33-18-217(1)(a) or to a spouse, surviving spouse, dependent, or heir of a United States armed forces member as provided in 33-18-217.   (5) An insurer may not make or permit unfair discrimination in the premium or rates charged for insurance, in the dividends or other benefits payable on insurance, or in any other of the terms and conditions of the insurance either between insureds or property having like insuring or risk characteristics or between insureds because of race, color, creed, religion, or national origin.   (6) This section may not be construed as prohibiting the payment of commissions or other compensation to licensed insurance producers or as prohibiting an insurer from allowing or returning lawful dividends, savings, or unabsorbed premium deposits to its participating policyholders, members, or subscribers.   (7) An insurer may not make or permit unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a property or casualty risk because of the geographic location of the risk, unless:   (a) the refusal, cancellation, or limitation is for a business purpose that is not a mere pretext for unfair discrimination; or   (b) the refusal, cancellation, or limitation is required by law or regulatory mandate.   (8) An insurer may not make or permit unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a residential property risk or on the personal property contained in the residential property, because of the age of the residential property, unless:   (a) the refusal, cancellation, or limitation is for a business purpose that is not a mere pretext for unfair discrimination; or   (b) the refusal, cancellation, or limitation is required by law or regulatory mandate.   (9) An insurer may not refuse to insure, refuse to continue to insure, or limit the amount of coverage available to an individual because of the sex or marital status of the individual. However, an insurer may take marital status into account for the purpose of defining persons eligible for dependents' benefits.   (10) An insurer may not terminate or modify coverage or refuse to issue or refuse to renew a property or casualty policy or contract of insurance solely because the applicant or insured or any employee of either is mentally or physically impaired. However, this subsection does not apply to accident and health insurance sold by a casualty insurer, and this subsection may not be interpreted to modify any other provision of law relating to the termination, modification, issuance, or renewal of any insurance policy or contract.   (11) (a) An insurer may not refuse to insure, refuse to continue to insure, charge higher rates, or limit the amount of coverage available to an individual under a private passenger automobile policy based solely on adverse information contained in an individual's claims history and driving record that is 3 years old or older. An insurer may provide discounts to an insured under a private passenger automobile policy based on favorable aspects of an insured's claims history.   (b) An insurer may not refuse to insure, refuse to continue to insure, charge higher rates, or limit the amount of coverage available under a commercial automobile policy based solely on adverse information contained in the loss experience or an insured's driving records that is 5 years old or older. An insurer may provide discounts to an insured under a commercial automobile policy based on favorable aspects of an insured's claims history.   (c) An insurer may not refuse to insure, refuse to continue to insure, charge higher rates, or limit the amount of coverage available under a personal homeowner policy based solely on adverse information contained in the loss experience that is 7 years old or older. An insurer may provide discounts to an insured under a personal homeowner policy based on favorable aspects of an insured's claims history.   (d) As used in subsection (11)(a), "private passenger automobile policy" means an automobile insurance policy issued to individuals or families but does not include policies known as commercial automobile policies.   (e) As used in subsection (11)(c), "personal homeowner policy" means property insurance under 33-1-210 that is sold by an insurer for personal, family, or household purposes.   (12) An insurer may not charge points or surcharge a private passenger motor vehicle policy because of a claim submitted under the insured's policy if the insured was not at fault.   (13) (a) An insurer that provides personal lines insurance for an insured may not consider the insured's inquiries or claims made to any insurer that did not result in a payment by any insurer in considering an application for, renewal of, or change in an insurance policy as defined in 33-15-102.   (b) This subsection (13) does not apply to an insurer's consideration of a claim that was the basis for a criminal or civil insurance fraud action by a state or regulatory enforcement entity.   (c) (i) For the purposes of this subsection (13), the term "personal lines insurance" means vehicle insurance under 33-1-206(1)(a) and property insurance under 33-1-210 that is sold by an insurer for personal, family, or household purposes.   (ii) The term does not include disability insurance or insurance for commercial, business, or professional services, products, or activities.   History: En. Sec. 214, Ch. 286, L. 1959; amd. Sec. 1, Ch. 191, L. 1969; amd. Sec. 5, Ch. 38, L. 1977; amd. Sec. 8, Ch. 320, L. 1977; R.C.M. 1947, 40-3512; amd. Sec. 19, Ch. 303, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 5, Ch. 699, L. 1991; amd. Sec. 35, Ch. 798, L. 1991; amd. Sec. 2, Ch. 320, L. 1995; amd. Sec. 1, Ch. 427, L. 1995; amd. Sec. 12, Ch. 363, L. 2005; amd. Sec. 2, Ch. 239, L. 2011; amd. Sec. 2, Ch. 98, L. 2015; amd. Sec. 7, Ch. 304, L. 2015; amd. Sec. 1, Ch. 178, L. 2017; amd. Sec. 2, Ch. 129, L. 2021; amd. Sec. 2, Ch. 174, L. 2021. 
  33-18-211. Stock operations and advisory board contracts. No person shall issue or deliver or permit its insurance producers, officers, or employees to issue or deliver agency company stock or other capital stock or benefit certificates or shares in any common-law corporation or any advisory board contract or other similar contract of any kind promising returns and profits as an inducement to insurance.   History: En. Sec. 215, Ch. 286, L. 1959; R.C.M. 1947, 40-3513; amd. Sec. 1, Ch. 713, L. 1989.  
  33-18-212. Illegal dealing in premiums -- improper charges for insurance. (1) A person may not willfully collect any sum as a premium or charge for insurance that is not then provided or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as authorized by this code.   (2) A person may not willfully collect as a premium or charge for insurance any sum in excess of or less than the premium or charge applicable to the insurance and, as specified in the policy, in accordance with the applicable classifications and rates filed with or approved by the commissioner; or in cases in which classifications, premiums, or rates are not required by this code to be filed or approved, the premiums and charges may not be in excess of or less than those specified in the policy and as fixed by the insurer. This provision may not prohibit the charging and collection, by surplus lines insurance producers licensed under chapter 2, part 3, of the amount of applicable state and federal taxes in addition to the premium required by the insurer. This provision may not prohibit the charging and collection, by a life insurer, of amounts actually to be expended for medical examination of an applicant for life insurance or for reinstatement of a life insurance policy.   (3) This section does not prohibit the charging and collection of a flat fee by a surplus lines insurance producer as specified in 33-2-320 for transaction of surplus lines insurance policies.   History: En. Sec. 221, Ch. 286, L. 1959; R.C.M. 1947, 40-3519; amd. Sec. 1, Ch. 86, L. 1979; amd. Sec. 29, Ch. 537, L. 1987; amd. Sec. 41, Ch. 613, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 54, Ch. 379, L. 1995; amd. Sec. 3, Ch. 223, L. 2015; amd. Sec. 28, Ch. 396, L. 2017.  
  33-18-213. Extension of credit to policyholder. Notwithstanding any other provision of law, an insurance producer, as defined in 33-17-102, may extend credit to a policyholder in connection with the issuance or servicing of any policy procured or negotiated by the insurance producer, but any credit so extended must satisfy one of the following requirements:   (1) if credit is extended to a policyholder for not more than 30 days from the date the premium is due and the credit is not evidenced by a written instrument, no interest may be charged; or   (2) if credit is extended to a policyholder for more than 30 days from the date the premium is due and the credit is not evidenced by a written instrument, interest may be charged for credit extended after 30 days at a rate not more than 1 1/2% a month on the unpaid balance; or   (3) if the extension of credit to a policyholder is evidenced by a written instrument signed by the policyholder, any interest charged for such credit shall be clearly stated in the instrument and may not exceed the legal rate of interest authorized in 31-1-107.   History: En. Sec. 1, Ch. 128, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-18-214. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 3, Ch. 357, L. 1995.  
  33-18-215. Postclaim underwriting prohibited -- condition. An insurer, health service corporation, or health maintenance organization may not place an elimination rider on or rescind coverage provided by a disability policy, certificate, or subscriber contract after a policy, certificate, or contract has been issued unless the insured has made a material misrepresentation or fraudulent misstatement on the application or has failed to pay the premium when due.   History: En. Sec. 1, Ch. 53, L. 1997.  
  33-18-216. Unfair discrimination against victims of abuse prohibited. (1) An insurer, health maintenance organization, or health service corporation may not unfairly discriminate against a victim of abuse.   (2) For purposes of this section, "abuse" means the occurrence between family members, current or former household members, or intimate partners of one or more of the following:   (a) purposely, knowingly, or recklessly subjecting another person, including a minor child, to bodily injury, severe emotional distress, psychological trauma, sexual assault, or sexual intercourse without consent;   (b) subjecting another person, including a minor child, to false imprisonment or unlawful restraint or confinement.   (3) For purposes of this section, "abuse" includes purposely or knowingly engaging in a course of conduct toward a family member, current or former household member, or intimate partner that constitutes stalking in violation of 45-5-220.   (4) The following acts, when based on the insured's status as a victim of abuse, are prohibited as unfairly discriminatory:   (a) denying, refusing to issue, renew, or reissue, canceling, or otherwise terminating an insurance policy, certificate of coverage delivered or issued for delivery in Montana, subscriber contract, or health care services agreement;   (b) restricting or excluding coverage under an insurance policy or certificate delivered or issued for delivery in Montana;   (c) adding a premium differential to any insurance policy or certificate delivered or issued for delivery in Montana on the basis that the applicant or insured has been the victim of abuse; or   (d) excluding or limiting coverage for losses or denying a claim.   (5) Upon written request of the insured or an applicant, an insurer that takes an underwriting action that adversely affects a victim of abuse on the basis of a medical condition or property or casualty risk that the insurer knows is related to abuse shall explain to the insured or applicant in writing the reason for the insurer's action.   (6) (a) This section does not prohibit an insurer from underwriting, classifying risk, or administering a contract of insurance as otherwise allowed by law based on property or casualty risk or medical information that the insurer knows is related to abuse as long as the insurer underwrites, classifies risk, or administers the contract of insurance on the basis of the applicant's or insured's property or casualty risk or medical condition and not on the applicant's or insured's status as a victim of abuse.   (b) This section does not prohibit or otherwise limit an insurer's ability to elicit information from or about an applicant or insured as otherwise provided by law.   (7) This section may not be construed to alter or modify any conditions, exclusions, or limitations clearly stated in an insurance policy or certificate delivered or issued for delivery in Montana that are not otherwise inconsistent with the provisions of subsection (4).   (8) An insurer may not be held civilly or criminally liable for the death of or physical injury to an insured that is related to acts of abuse resulting from any action taken in a good faith effort to comply with the requirements of this section.   History: En. Sec. 1, Ch. 304, L. 1997.  
  33-18-217. Military discount exception to rebate and discount prohibition for property or casualty insurance. (1) The prohibition against rebates or discounts provided for in 33-18-210 does not apply with respect to property or casualty insurance sales to:   (a) an active, retired, or honorably separated member of the United States armed forces, including a member of a reserve component as defined in 37-1-138; or   (b) a spouse, surviving spouse, dependent, or heir of a United States armed forces member referred to in subsection (1)(a).   (2) This section does not permit unfair discrimination based on rank or pay grade.   History: En. Sec. 1, Ch. 98, L. 2015.  
  33-18-218 through 33-18-220 reserved.  
  33-18-221. Designation of specific repair shops prohibited -- lists allowed. (1) An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in this state covering, in whole or part, a motor vehicle may not:   (a) require that a person insured under the policy use a particular company or location for providing automobile glass replacement, glass repair services, or glass products insured in whole or part by the policy; or   (b) engage in any act or practice of intimidation, coercion, or threat for or against an insured person to use a particular company or location to provide automobile glass replacement, glass repair services, or glass products insured, in whole or in part, under the terms of an insurance policy.   (2) (a) An insurance company may provide an insured with a list that includes the names of particular companies or locations providing automobile glass replacement, glass repair services, or glass products if some of the listed companies or locations are reasonably close and convenient to the insured. The insurance company may restrict the list to those companies or locations that meet reasonable standards of quality, service, and safety.   (b) The insured may use a nonlisted company or location at the insured's sole discretion, and subject to the provisions of subsections (2)(c) and (3), the insurance company will fully and promptly pay for the cost of automobile glass replacement, glass repair services, or glass products provided, less any deductible under the terms of the policy.   (c) If the insured does not use a list as provided in subsection (2)(a), the insurer may require the insured to obtain not more than three competitive bids to establish the cost of automobile glass replacement, glass repair services, or glass products provided.   (3) This section does not require an insurer to pay more for automobile glass replacement, glass repair services, or glass products than the market price as defined in 33-18-222.   (4) Notwithstanding the provisions of subsections (1) through (3), an insurance company may agree to pay the full cost of glass replacement or repair.   History: En. Sec. 1, Ch. 554, L. 1993; amd. Sec. 2, Ch. 526, L. 1999; amd. Sec. 2, Ch. 345, L. 2001; amd. Sec. 1, Ch. 192, L. 2009.  
  33-18-222. Market price. (1) For purposes of 33-18-221, 33-18-223, and 33-18-224, "market price" means the:   (a) price agreed upon between the insurer and the business; or   (b) prevailing competitive rate that is reasonable and necessary in the local area where the repairs are to be performed.   (2) The market price may not be less than cost as provided in 30-14-209.   History: En. Sec. 2, Ch. 554, L. 1993; amd. Sec. 3, Ch. 526, L. 1999; amd. Sec. 3, Ch. 345, L. 2001; amd. Sec. 2, Ch. 192, L. 2009.  
  33-18-223. Prohibited activities -- glass broker defined. (1) It is unlawful for an insurance company, individually or with others, to directly or indirectly:   (a) establish an agreement with any person to act as a glass broker for the insurance company under which the glass broker sets a price that must be met by a glass repair shop as a condition for doing glass replacement or glass repair work for the insurance company;   (b) establish an agreement with a glass broker that requires a glass repair shop to bill through that glass broker as a condition of doing glass replacement or glass repair work; or   (c) establish a price that must be met by a glass repair shop as a condition for doing glass replacement or glass repair work that is below the market price as provided in 33-18-222.   (2) As used in this section, "glass broker" means an automobile glass company that acts as a third-party agent for the insurer whenever the glass broker enters into agreements with other automobile glass dealers to perform glass replacement or glass repair work.   History: En. Sec. 3, Ch. 554, L. 1993; amd. Sec. 2, Ch. 207, L. 1997; amd. Sec. 4, Ch. 526, L. 1999; amd. Sec. 4, Ch. 345, L. 2001; amd. Sec. 3, Ch. 192, L. 2009.  
  33-18-224. Designation of specific automobile body repair businesses prohibited. (1) (a) An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in this state covering, in whole or in part, a motor vehicle may not:   (i) require that a claimant under the policy use a particular automobile body repair business or location for an estimate or a repair;   (ii) engage in any act or practice that intimidates, coerces, or threatens a claimant or that provides an incentive or inducement for a claimant to use a particular automobile body repair business or location; or   (iii) unilaterally disregard a repair operation or cost identified by an estimating system that the insurer and an automobile body repair business or location have agreed to utilize in determining the cost of repair.   (b) An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in this state covering, in whole or in part, a motor vehicle may have access to the motor vehicle for purposes of preparing a competitive estimate.   (2) (a) Except as provided in subsection (2)(b), if an insurance company has direct repair programs with automobile body repair businesses or locations, the insurance company may not limit the number of automobile body repair businesses or locations with whom it maintains direct repair programs.   (b) An insurance company may limit the number of automobile body repair businesses or locations participating in the insurance company's direct repair program to those automobile body repair businesses or locations that comply with the provisions of subsection (2)(c). An insurance company is not required to establish a direct repair program in a particular market area in which the insurance company's number of policyholders does not support establishing a direct repair program with any automobile body repair business or location.   (c) Upon request, the insurance company shall provide, without prejudice or bias, the claimant with a list that includes all automobile body repair businesses or locations that are reasonably close or convenient to the claimant and willing to provide services and that meet the insurance company's criteria regarding whether the automobile body repair business or location:   (i) possesses the equipment necessary to undertake repairs;   (ii) undertakes training of management and technical personnel with respect to repair information and the claims process;   (iii) agrees to perform quality repairs at the market price and that meet reasonable industry repair standards;   (iv) agrees to warrant the quality of work, including refinishing, in writing to the claimant, for a period of not less than 1 year from the date of repair;   (v) agrees to inspection of its repairs and services by the insurance company and agrees that the insurance company may terminate the direct repair program with the automobile body repair business or location if the repairs and services are below the standards of quality required by the insurance company; and   (vi) if requested, agrees to execute an agreement with the insurance company that may contain additional criteria that are not designed to unfairly limit the number of automobile body repair businesses or locations with whom the insurance company maintains direct repair programs. The additional criteria may include criteria determined to be necessary by the insurance company and designed to ensure that the automobile body repair business or location has the necessary estimating systems and programs and equipment to communicate electronically with the insurance company and that the automobile body repair business or location has taken steps to ensure the privacy of the insurance company and the claimant.   (d) If the claimant requests the list provided for in subsection (2)(c), the insurance company shall inform the claimant that the claimant may use an automobile body repair business or location at the sole discretion of the claimant.   (3) For the purposes of this section, an incentive or inducement does not include:   (a) providing a claimant with the list provided for in subsection (2)(c); or   (b) referring to a warranty issued by an automobile body repair business or location.   (4) The claimant may use an automobile body repair business or location at the claimant's sole discretion, and the insurance company shall pay for the reasonable and necessary cost of the automobile body repair services for covered damages, less any deductible under the terms of the policy. This section does not require an insurer to pay more for automobile body repair services than the market price, as defined in 33-18-222.   (5) If the claimant uses an automobile body repair business or location that is not on a list provided for in subsection (2)(c), the insurance company may not be held liable for any repair work performed by the automobile body repair business or location chosen by the claimant.   (6) It is unlawful for an automobile body repair business or location to charge or agree to charge a claimant more than an uninsured customer for any automobile body repair service.   (7) An insurance company that contracts with an independent adjuster may not be held liable for the independent adjuster's failure to comply with the terms of this section.   (8) For purposes of this section:   (a) "automobile body repair business or location" does not include a business or location that exclusively provides automobile glass replacement, glass repair services, or glass products;   (b) "claimant" means the person seeking repair of a motor vehicle whether that person is the insured person or a third party making a claim against the insurer.   History: En. Sec. 1, Ch. 292, L. 1997; amd. Sec. 5, Ch. 526, L. 1999; amd. Sec. 5, Ch. 345, L. 2001; amd. Sec. 1, Ch. 407, L. 2005; amd. Sec. 1, Ch. 339, L. 2007; amd. Sec. 4, Ch. 192, L. 2009; amd. Sec. 1, Ch. 290, L. 2011.  
  33-18-225. Designation of specific car rental business prohibited. (1) An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in this state covering, in whole or in part, a motor vehicle may not:   (a) require that a person, whether or not insured by the insurance company, for whom the insurance company is obligated to provide a car rental while the person's own car is being repaired use a particular car rental business; or   (b) engage in any act or practice that intimidates, coerces, or threatens a person to use a particular car rental business.   (2) (a) An insurance company that is subject to the provisions of this section and that provides for direct payment to any one or more car rental businesses in this state must provide for direct payment to any car rental business selected by a person described in subsection (1)(a).   (b) For the purposes of this section, "direct payment" means a method by which an insurance company makes a direct payment on behalf of an insured or a third party either through electronic means or by check to a car rental business.   (c) The insurance company may approve the daily rate to be paid by the insurance company based on the car classification.   (d) The insurance company is not obligated to pay more to the car rental business than is provided in the insured's policy limits pursuant to 33-23-203.   (3) This section does not require an insurer to pay more for a comparable car rental than the lowest price negotiated between a car rental business and the insurer.   (4) This section does not prohibit an insurer, its producers, or its adjusters from providing to a customer the name of a car rental business with which arrangements may have been made to provide car rental services as long as the ultimate choice is left to the person described in subsection (1)(a).   History: En. Sec. 1, Ch. 251, L. 2005.  
  33-18-226 through 33-18-230 reserved.  
  33-18-231. State administrative process to provide timely payment of medical benefits -- definitions. In 33-18-231 through 33-18-235 the following definitions apply:   (1) "Claim documentation" means standard claims forms or other documentation routinely accepted by insurers as proof of loss.   (2) "Insurer" means any insurer as that term is defined by this title, including any fraternal benefit society, hospital service nonprofit corporation, health service corporation, nonprofit medical service corporation, nonprofit health care corporation, health maintenance organization, self-insurer, or third-party administrator or any other public or private, profit or nonprofit, governmental or nongovernmental individual, group, or organization that sells or offers for sale insurance policies, subscriber contracts, certificates, or agreements by which the offerer promises to pay medical benefits in any form in this state.   (3) "Proof of loss" means any claim documentation received by an insurer upon which payment of claims is requested.   History: En. Sec. 1, Ch. 300, L. 1983; amd. Sec. 1, Ch. 378, L. 2003.  
  33-18-232. Time for payment of claims. (1) An insurer shall pay or deny a claim within 30 days after receipt of a proof of loss unless the insurer makes a reasonable request for additional information or documents in order to evaluate the claim. If an insurer makes a reasonable request for additional information or documents, the insurer shall pay or deny the claim within 60 days of receiving the proof of loss unless the insurer has notified the insured, the insured's assignee, or the claimant of the reasons for failure to pay the claim in full or unless the insurer has a reasonable belief that insurance fraud has been committed and the insurer has reported the possible insurance fraud to the commissioner. This section does not eliminate an insurer's right to conduct a thorough investigation of all the facts necessary to determine payment of a claim.   (2) If an insurer fails to comply with this section and the insurer is liable for payment of the claim, the insurer shall pay an amount equal to the amount of the claim due plus 10% annual interest calculated from the date on which the claim was due. For purposes of calculating the amount of interest, a claim is considered due 30 days after the insurer's receipt of the proof of loss or 60 days after receipt of the proof of loss if the insurer made a reasonable request for information or documents. Interest payments must be made to the person who receives the claims payment. Interest is payable under this subsection only if the amount of interest due on a claim exceeds $5.   (3) A private cause of action under 33-18-201 or 33-18-242 may not be based on the compliance or noncompliance with the requirements of this section and evidence of compliance or noncompliance with this section is not admissible in any private action based on 33-18-201 or 33-18-242.   History: En. Sec. 2, Ch. 300, L. 1983; amd. Sec. 2, Ch. 378, L. 2003; amd. Sec. 21, Ch. 469, L. 2005.  
  33-18-233. Administrative penalty for failure to pay promptly. (1) The commissioner may, after a hearing, impose an administrative fine as provided in 33-1-317 on an insurer if the commissioner finds that the insurer as a general course of business practice in this state fails to:   (a) use due diligence in processing all claims;   (b) pay claims in a timely manner;   (c) provide proper notice, when required, with respect to the reasons for the insurer's failure to make claim payments when due;   (d) pay, without just cause, proper claims arising under coverage provided by its policies, whether the claims are in favor of an insured, in favor of a third person with respect to the liability of an insured to the third person, or in favor of any other person entitled to the benefits of a policy; or   (e) pay interest pursuant to 33-18-232(2).   (2) If an insurer can demonstrate that it has consistently paid 90% of the total dollar amount outstanding in claims to each claimant within 20 working days and all of the amount within 30 working days of receipt of claims during the 6-month period immediately preceding the hearing date, the insurer is not subject to the fine described in subsection (1).   History: En. Sec. 3, Ch. 300, L. 1983; amd. Sec. 3, Ch. 378, L. 2003.  
  33-18-234. Right of privacy guaranteed. Nothing in 33-18-231 through 33-18-235 requires the commissioner to disclose information in violation of the Insurance Information and Privacy Protection Act.   History: En. Sec. 4, Ch. 300, L. 1983.  
  33-18-235. Rulemaking authority. The commissioner may adopt rules, under the Montana Administrative Procedure Act, necessary to implement 33-18-231 through 33-18-234.   History: En. Sec. 5, Ch. 300, L. 1983; amd. Sec. 9, Ch. 399, L. 2007.  
  33-18-236 through 33-18-240 reserved.  
  33-18-241. Repealed. Sec. 2, Ch. 278, L. 1987.   History: En. Sec. 1, Ch. 504, L. 1985.  
  33-18-242. Independent cause of action -- burden of proof. (1) An insured or a third-party claimant has an independent cause of action against an insurer for actual damages caused by the insurer's violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201.   (2) In an action under this section, a plaintiff is not required to prove that the violations were of such frequency as to indicate a general business practice.   (3) An insured who has suffered damages as a result of the handling of an insurance claim may bring an action against the insurer for breach of the insurance contract, for fraud, or pursuant to this section, but not under any other theory or cause of action. An insured may not bring an action for bad faith in connection with the handling of an insurance claim.   (4) In an action under this section, the court or jury may award such damages as were proximately caused by the violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201. Exemplary damages may also be assessed in accordance with 27-1-221.   (5) An insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.   (6) (a) An insured may file an action under this section, together with any other cause of action the insured has against the insurer. Actions may be bifurcated for trial where justice so requires.   (b) A third-party claimant may not file an action under this section until after the underlying claim has been settled or a judgment entered in favor of the claimant on the underlying claim.   (7) The period prescribed for commencement of an action under this section is:   (a) for an insured, within 2 years from the date of the violation of 33-18-201; and   (b) for a third-party claimant, within 1 year from the date of the settlement of or the entry of judgment on the underlying claim.   (8) As used in this section, an insurer includes a person, firm, or corporation utilizing self-insurance to pay claims made against them.   History: En. Sec. 3, Ch. 278, L. 1987.  
  33-18-243 and 33-18-244 reserved.  
  33-18-245. Prompt payment of motor vehicle damage claims. (1) Except for providers who are prepaid or agree to a different payment schedule, an insurer shall make an offer to pay or shall pay all approved claims for covered services or damages that solely involve the recovery of property damages in an amount of $2,500 or less arising out of the ownership, maintenance, or use of a motor vehicle within 30 working days of receipt of a proof of loss that is correctly completed and submitted to the insurer.   (2) Subsection (1) does not apply to an insurer who has notified the insured or the insured's assignee of the reasons for the insurer's failure to pay the claim in full or to an insurer that has made a reasonable request for additional information or documents.   History: En. Sec. 4, Ch. 378, L. 2003.  
  33-18-246 reserved. 
  33-18-247. Unfair discrimination prohibited -- anatomical gifts, organ transplants, and related treatment. (1) An insurer that provides coverage for anatomical gifts, organ transplants, or related treatment and services may not:  (a) deny coverage under an insurance policy to a covered person solely on the basis of the person's disability;   (b) deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under an insurance policy, solely for the purpose of avoiding the requirements of this section;   (c) penalize or otherwise reduce or limit the reimbursement of an attending provider or provide monetary or nonmonetary incentives to an attending provider to induce the provider to provide care to an insured or enrollee in a manner inconsistent with this section; or   (d) reduce or limit coverage benefits to a patient for the medical services or other services related to organ transplantation performed pursuant to this section as determined in consultation with the attending physician and patient.   (2) In the case of an insurance policy maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers, any plan amendment made pursuant to a collective bargaining agreement that amends the plan solely to conform to a requirement imposed pursuant to this section may not be treated as a termination of the collective bargaining agreement.   (3) Nothing in this section may be construed to require a health insurance issuer to provide coverage for a medically inappropriate organ transplant.   History: En. Sec. 5, Ch. 487, L. 2021. 
  33-18-301. Prohibited relations with mortuaries. (1) A life insurer and its board of directors, officers, employees, or representatives that sell any life insurance, other than funeral insurance as defined in 33-20-1501(1)(c)(ii), may not own, manage, supervise, operate, or maintain any mortuary, funeral, or undertaking establishment in Montana.   (2) (a) A life insurer may not contract or agree with any funeral director, mortician, or undertaker that the funeral director, mortician, or undertaker shall conduct the funeral or be named beneficiary of any person insured by the insurer.   (b) A life insurer may not sell, solicit, or negotiate life insurance, except stand-alone funeral insurance as provided in 33-20-1501, through a funeral director, mortician, undertaker, or any employee of a mortuary or undertaker.   (c) A life insurer that sells, solicits, or negotiates funeral insurance, as defined in 33-20-1501(1)(c)(ii), through a funeral director, mortician, undertaker, or any employee of a mortuary or undertaker shall comply with the provisions of 33-20-1501 and 33-20-1502.   (3) A funeral insurance policy or certificate and any solicitation material for the policy must comply with 33-20-1501.   (4) An attempt by the insurer or its representative to require the insured to designate a specific beneficiary, including but not limited to a funeral director, mortician, mortuary, or undertaker, constitutes a violation of this section punishable as a misdemeanor pursuant to subsection (5).   (5) A funeral director, mortician, or undertaker or any employee of a mortuary or undertaker who seeks to sell, solicit, or negotiate funeral insurance shall comply with this code, including the requirements of Title 33, chapter 17, and Title 33, chapter 20, part 15.   (6) Each violation of this section constitutes a misdemeanor punishable by a fine of not more than $1,000 or by imprisonment for not more than 6 months, or both.   History: En. Sec. 223, Ch. 286, L. 1959; R.C.M. 1947, 40-3521; amd. Sec. 23, Ch. 198, L. 1979; amd. Sec. 1, Ch. 229, L. 1981; amd. Sec. 55, Ch. 379, L. 1995; amd. Sec. 36, Ch. 472, L. 1999; amd. Sec. 6, Ch. 507, L. 2007; amd. Sec. 20, Ch. 151, L. 2017.  
  33-18-302. Defaming insurer prohibited. No person shall make, publish, disseminate, or circulate, directly or indirectly, or aid, abet, or encourage the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false or maliciously critical of or derogatory to the financial condition of an insurer or of an organization proposing to become an insurer and which is calculated to injure any person engaged or proposing to engage in the business of insurance.   History: En. Sec. 209, Ch. 286, L. 1959; R.C.M. 1947, 40-3507.  
  33-18-303. Boycott, coercion, or intimidation prohibited. No person shall enter into any agreement to commit or by any concerted action commit any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of or monopoly in the business of insurance.   History: En. Sec. 210, Ch. 286, L. 1959; R.C.M. 1947, 40-3508.  
  33-18-304. Interlocking ownership and management -- restrictions. (1) Any insurer may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer or insurers or have a common management with any other insurer or insurers unless such retention, investment, acquisition, or common management is inconsistent with any other provision of this code or unless by reason thereof the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly therein.   (2) Any person otherwise qualified may be director of two or more insurers which are competitors unless the effect thereof is to lessen substantially competition between insurers generally or tends materially to create a monopoly.   History: En. Sec. 219, Ch. 286, L. 1959; R.C.M. 1947, 40-3517.  
  33-18-305. Political contributions prohibited -- penalty. (1) No insurer shall directly or indirectly pay or use or offer, consent, or agree to pay or use any money or property for or in aid of any political party, committee, or organization or for or in aid of any corporation or other body organized or maintained for political purposes or for or in aid of any candidate for political office or for nomination for such office or for any political purpose whatsoever or for the reimbursement or indemnification of any person for money or property so used.   (2) Any officer, director, stockholder, attorney, or insurance producer of any insurer which violates any of the provisions of this section, who participates in, aids, abets, or advises or consents to any such violation and any person who solicits or knowingly receives any money or property in violation of this section shall be guilty of a misdemeanor and be punished by imprisonment for not more than 1 year and a fine of not more than $1,000; and any officer or director aiding or abetting in any contribution made in violation of this section shall be liable to the insurer for the amount so contributed.   History: En. Sec. 220, Ch. 286, L. 1959; R.C.M. 1947, 40-3518; amd. Sec. 1, Ch. 713, L. 1989.  
  33-18-401. Repealed. Sec. 32, Ch. 396, L. 2017.   History: En. Sec. 224, Ch. 286, L. 1959; R.C.M. 1947, 40-3522; amd. Sec. 60, Ch. 713, L. 1989; amd. Sec. 3, Ch. 562, L. 2005.  
  33-18-501. Lenders -- restrictions on solicitation, rejection, charges, and disclosure -- favoring insurance producer prohibited. (1) No person may require as a condition precedent to the lending of money or extension of credit or any renewal thereof that the person to whom such money or credit is extended or whose obligation a creditor is to acquire or finance negotiate any contract of insurance or renewal thereof through a particular insurer or group of insurers or insurance producer or group of insurance producers.   (2) No person who lends money or extends credit may:   (a) solicit insurance for the protection of real property, after a person indicates interest in securing a first-mortgage credit extension, until such person has received a commitment in writing from the lender as to a loan or credit extension;   (b) unreasonably reject a contract of insurance furnished by the borrower for the protection of the property securing the credit or lien. A rejection is not unreasonable if it is based on reasonable standards, uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards may not discriminate against any particular type of insurer or call for rejection of an insurance contract because the contract contains coverage in addition to that required by the credit transaction.   (c) require that any borrower, mortgagor, purchaser, insurer, or insurance producer pay a separate charge in connection with the handling of any contract of insurance required as security for a loan on real estate or pay a separate charge to substitute the insurance policy of one insurer for that of another. This subsection (2)(c) does not include the interest which may be charged on premium loans or premium advancements in accordance with the terms of the loan or credit document.   (d) use or disclose information relative to a contract of insurance which is required by the credit transaction:   (i) for the purpose of replacing such insurance; and   (ii) without the prior written consent of the borrower;   (e) require any procedures or conditions of licensed insurance producers or insurers not customarily required of those insurance producers or insurers affiliated or in any way connected with the person who lends money or extends credit.   (3) Each person who lends money or extends credit and who solicits insurance on real and personal property subject to subsection (2) of this section must explain to the borrower in writing that the insurance related to such credit extension may be purchased from an insurer or insurance producer of the borrower's choice, subject only to the lender's right to reject a given insurer or insurance producer as provided in subsection (2)(b). Compliance with disclosures as to insurance required by truth-in-lending laws or comparable state laws shall be compliance with this subsection.   (4) The commissioner may examine and investigate those insurance-related activities of any person which may be in violation of this section. Any affected person may submit to the commissioner a complaint or material pertinent to the enforcement of this section.   (5) Nothing herein prevents a person who lends money or extends credit from placing insurance on real or personal property in the event the mortgagor, borrower, or purchaser has failed to provide required insurance in accordance with the terms of the loan or credit document.   (6) Nothing contained in this section applies to credit life or credit accident and health insurance.   History: En. 40-3516.1 by Sec. 5, Ch. 320, L. 1977; R.C.M. 1947, 40-3516.1; amd. Sec. 1, Ch. 281, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 35, Ch. 798, L. 1991.  
  33-18-502. Prohibited relations with long-term care facility. An insurance producer that owns, manages, supervises, operates, maintains, or works in a long-term care facility, as defined in 37-9-101, may not solicit, negotiate with, or sell a life or disability policy or certificate of insurance to a resident of a long-term care facility.   History: En. Sec. 5, Ch. 227, L. 2001.  
  33-18-601. Short title. This part may be cited as the "Montana Use of Credit Information in Personal Insurance Act".   History: En. Sec. 1, Ch. 363, L. 2005.  
  33-18-602. Purpose. The purpose of this part is to regulate the use of credit information for personal insurance so that consumers are afforded certain protections with respect to the use of credit information.   History: En. Sec. 2, Ch. 363, L. 2005.  
  33-18-603. Scope. This part applies to personal insurance and not to commercial insurance. For purposes of this part, "personal insurance" means private passenger automobile, home owners, motorcycle, mobile home owners, and noncommercial dwelling fire insurance policies and boat, personal watercraft, snowmobile, and recreational vehicle policies. These policies must be individually underwritten for personal, family, or household use. Other types of insurance may not be included as personal insurance for the purpose of this part.   History: En. Sec. 3, Ch. 363, L. 2005.  
  33-18-604. Definitions. For the purposes of this part, the following definitions apply:   (1) "Adverse action" means, in regard to the terms of coverage or amount of coverage of any insurance, existing or applied for, in connection with the underwriting of personal insurance, any of the following:   (a) denial, nonrenewal, or cancellation of coverage;   (b) an increase in any charge for coverage;   (c) failure to give an otherwise available credit-related discount; or   (d) a reduction or any other adverse or unfavorable change in the terms of coverage or the amount of coverage.   (2) "Affiliate" means a company that controls, is controlled by, or is under common control with another company.   (3) "Applicant" means an individual who has applied to be covered by a personal insurance policy with an insurer.   (4) "Consumer" means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or of an applicant for a personal insurance policy.   (5) "Consumer reporting agency" means any entity that, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.   (6) "Credit information" means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. Information that is not credit-related may not be considered credit information regardless of whether it is contained in a credit report or in an application or is used to calculate an insurance score.   (7) "Credit report" means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, or credit capacity that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement.   (8) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured.   History: En. Sec. 4, Ch. 363, L. 2005.  
  33-18-605. Use of credit information. (1) An insurer authorized to do business in this state that uses credit information to underwrite or rate risks may not:   (a) use an insurance score that is calculated using income, gender, address, zip code, ethnic group, religion, marital status, or nationality of the consumer as a factor;   (b) deny, cancel, or not renew a policy of personal insurance on the basis of credit information without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by subsection (1)(a);   (c) base an insured's renewal rates for personal insurance upon credit information without consideration of any other applicable factor independent of credit information;   (d) take an adverse action against a consumer because the consumer does not have a credit card account without consideration of any other applicable factor independent of credit information;   (e) consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance unless the insurer does one of the following:   (i) treats the consumer as otherwise approved by the commissioner if the insurer presents information that the absence or inability relates to the risk for the insurer;   (ii) treats the consumer as if the consumer had neutral credit information, as defined by the insurer; or   (iii) excludes the use of credit information as a factor and uses only other underwriting criteria;   (f) take an adverse action against a consumer based on credit information unless an insurer obtains and uses a credit report issued or an insurance score calculated within 90 days from the date that the policy is first written or renewal is issued;   (g) use credit information unless not later than every 36 months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report. Regardless of the requirements of this subsection (1)(g):   (i) at annual renewal, upon the request of a consumer or the consumer's agent, the insurer shall reunderwrite and rerate the policy based upon a current credit report or insurance score. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once in a 12-month period.   (ii) the insurer has the discretion to obtain current credit information upon any renewal before the 36 months provided for in this subsection (1)(g) if consistent with its underwriting guidelines;   (iii) an insurer may but does not have to obtain current credit information for an insured, despite the requirements of subsection (1)(g)(i), if one of the following applies:   (A) the insurer is treating the consumer as otherwise approved by the commissioner;   (B) the insured is in the most favorably priced tier of the insurer within a group of affiliated insurers;   (C) credit was not used for underwriting or rating the insured when the policy was initially written;   (D) the insurer reevaluates the insured beginning not later than 36 months after inception and at similar succeeding times based upon other underwriting or rating factors, excluding credit information.   (h) use a credit report or an insurance score that treats any of the following as a negative factor for the purpose of underwriting or rating a policy of personal insurance:   (i) credit inquiries not initiated by the consumer or inquiries requested by the consumer for the consumer's own credit information;   (ii) inquiries relating to insurance coverage, if so identified on a consumer's credit report;   (iii) collection accounts with a medical industry code, if so identified on the consumer's credit report;   (iv) multiple-lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered;   (v) multiple-lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered;   (vi) the number of credit inquiries;   (vii) the consumer's use of a particular type of credit card, charge card, or debit card or the number of credit cards obtained by a consumer;   (viii) a loan if information from the credit report makes it evident that the loan is for the purchase of an automobile or a personal residence. However, an insurer may consider the bill payment history of any loan, the total number of loans, or both.   (ix) the consumer's total available line of credit or total debt. However, an insurer may consider:   (A) the consumer's bill payment history on the debt; or   (B) the total amount of outstanding debt if the outstanding debt exceeds the total line of credit.   (2) (a) An insurer shall, on written request from an applicant or an insured, provide reasonable underwriting or rating exceptions for a consumer whose credit report has been directly affected by an extraordinary event.   (b) An insurer may require reasonable written and independently verifiable documentation of the event and the effect of the event on the consumer's credit before granting an exception. An insurer is not required to consider repeated extraordinary events or extraordinary events the insurer reconsidered previously.   (c) An insurer may also consider granting an exception to a consumer for an extraordinary event not listed in this section.   (d) An insurer may not be considered to be out of compliance with its filed rules and rates as a result of granting an exception pursuant to this subsection (2).   (e) As used in this subsection (2), "extraordinary event" means:   (i) expenses related to a catastrophic injury or illness;   (ii) temporary loss of employment;   (iii) death of an immediate family member;   (iv) theft of identity pursuant to 45-6-332; or   (v) military service overseas.   History: En. Sec. 5, Ch. 363, L. 2005; amd. Sec. 12, Ch. 227, L. 2011; amd. Sec. 1, Ch. 314, L. 2011.  
  33-18-606. Dispute resolution and error correction. If it is determined through the dispute resolution process set forth in the federal Fair Credit Reporting Act, 15 U.S.C. 1681i(a)(5), that the credit information of a current insured was incorrect or incomplete and if the insurer receives notice of that determination from either the consumer reporting agency or the insured, the insurer shall reunderwrite and rerate the consumer within 30 days of receiving the notice. After reunderwriting or rerating the insured, the insurer shall make any adjustments necessary consistent with its underwriting and rating guidelines. If an insurer determines that the insured has overpaid the premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last 12 months of coverage or the actual policy period.   History: En. Sec. 6, Ch. 363, L. 2005.  
  33-18-607. Initial notification. (1) If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer or its agent shall disclose, either on the insurance application or at the time that the insurance application is taken, that it may obtain credit information in connection with the application. The disclosure must be either written or provided to an applicant in the same medium as the application for insurance. The insurer does not have to provide the disclosure statement required under this section to any insured on a renewal policy if the consumer has previously been provided a disclosure statement.   (2) Use of the following disclosure statement constitutes compliance with this section: "In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score."   History: En. Sec. 7, Ch. 363, L. 2005.  
  33-18-608. Adverse action notification. If an insurer takes an adverse action based upon credit information, the insurer shall:   (1) provide notification to the consumer that an adverse action has been taken, in accordance with the requirements of the federal Fair Credit Reporting Act, 15 U.S.C. 1681m(a); and   (2) provide notification to the consumer explaining the reason for the adverse action. The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take an adverse action. The notification must include a description of up to four factors that were the primary influences of the adverse action. The use of generalized terms, such as "poor credit history", "poor credit rating", or "poor insurance score", does not meet the explanation requirements of this subsection. Standardized credit explanations provided by consumer reporting agencies or other third-party vendors are considered to comply with this section.   History: En. Sec. 8, Ch. 363, L. 2005.  
  33-18-609. Filing. (1) Insurers that use insurance scores to underwrite or rate risks shall file their scoring models or other scoring processes with the commissioner. A third party may file scoring models on behalf of insurers.   (2) A filing relating to credit information is considered a trade secret under the laws of this state.   History: En. Sec. 9, Ch. 363, L. 2005; amd. Sec. 21, Ch. 151, L. 2017.  
  33-18-610. Indemnification. An insurer shall indemnify, defend, and hold insurance producers harmless from and against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of an insurance producer that obtains or uses credit information or insurance scores for an insurer if the insurance producer follows the instructions of or procedures established by the insurer and complies with any applicable law or regulation. This section may not be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this section.   History: En. Sec. 10, Ch. 363, L. 2005.  
  33-18-611. Sale of policy term information by consumer reporting agency. (1) A consumer reporting agency may not provide or sell data or lists that include any information that in whole or in part was submitted in conjunction with an insurance inquiry about a consumer's credit information or a request for a credit report or insurance score. This information includes but is not limited to the expiration dates of an insurance policy or any other information that may identify time periods during which a consumer's insurance may expire and the terms and conditions of the consumer's insurance coverage.   (2) The restrictions provided in subsection (1) do not apply to data or lists that the consumer reporting agency supplies to the insurance producer from whom information was received, the insurer on whose behalf the insurance producer acted, or the insurer's affiliates or holding companies.   (3) This section may not be construed to restrict any insurer from being able to obtain a claims history report or a motor vehicle report.   History: En. Sec. 11, Ch. 363, L. 2005.  
  33-18-612. Refund for expunged record. An insurance company that charges an additional premium based on insurance points assessed against a policyholder as a result of a charge or conviction that was expunged because of identity theft pursuant to 46-24-219 shall refund the additional premiums to the policyholder upon notification and verification of the expungement.   History: En. Sec. 5, Ch. 195, L. 2007.  
  33-18-901. Definitions. Unless the context indicates otherwise, the following definitions apply to this part:   (1) "Genetic information" means, unless otherwise provided by Public Law 104-191, information derived from genetic testing or medical evaluation to determine the presence or absence of variations or mutations, including carrier status, in an individual's genetic material or genes that are scientifically or medically believed to cause a disease, disorder, or syndrome or are associated with a statistically increased risk of developing a disease, disorder, or syndrome that is asymptomatic at the time of testing.   (2) "Genetic testing" or "genetic test" means a test used to diagnose a presymptomatic genetic factor, including analysis of human deoxyribonucleic acid or ribonucleic acid, chromosomes, proteins, or metabolites. The term does not include a routine physical examination or a chemical, blood, or urine analysis, unless conducted or analyzed purposefully or knowingly to obtain genetic information, or a family history.   (3) "Genetic trait" means any medically or scientifically identified genetic factor, known or presumed to be present in the individual or a biological relative but not presently associated with any manifestations of the disorder in the individual, that could cause a disorder or be statistically associated with an increased risk of development of a disorder.   (4) "Group policy" includes:   (a) the group insurance program authorized by Title 2, chapter 18, part 7;   (b) the state employee group insurance program required by Title 2, chapter 18, part 8; and   (c) a self-funded multiple employer welfare arrangement that is not regulated pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.   History: En. Sec. 3, Ch. 334, L. 1999.  
  33-18-902. Requirement for genetic testing -- limitations. (1) An insurer, health service corporation, health maintenance organization, fraternal benefit society, or other issuer of an individual or group policy or certificate of insurance may not require an individual to obtain a genetic test unless the test is otherwise required by law for reasons including but not limited to the following:   (a) to establish parentage;   (b) to determine the presence of metabolic disorders in a newborn by testing conducted pursuant to newborn screening and protocols;   (c) in connection with a criminal investigation or prosecution; or   (d) for remains identification.   (2) This section does not apply to transactions of life, disability income, or long-term care insurance.   History: En. Sec. 4, Ch. 334, L. 1999.  
  33-18-903. Discrimination on basis of genetic traits prohibited. (1) Unless otherwise required by law, an insurer, health service corporation, health maintenance organization, fraternal benefit society, or other issuer of an individual or group policy or certificate of insurance may not, on the basis of a person's genetic traits:   (a) fail or refuse to accept an application for a policy or certificate of insurance;   (b) fail or refuse to issue a policy or certificate of insurance to an applicant;   (c) cancel a policy or certificate of insurance;   (d) refuse to renew a policy or certificate of insurance;   (e) charge a higher rate or premium for a policy or certificate of insurance; or   (f) offer or provide different terms, conditions, or benefits or place a limitation on coverage under a policy or certificate of insurance.   (2) An insurer, health service corporation, health maintenance organization, fraternal benefit society, or other issuer of an individual or group policy or certificate of insurance may not underwrite or condition coverage on the basis of:   (a) a requirement or agreement that the individual undergo genetic testing; or   (b) genetic information about a member of the individual's family.   (3) Discrimination may not be made in the fees or commissions of agents or brokers for writing or renewing an individual or group policy of insurance on the basis of an individual's genetic traits.   (4) This section does not apply to transactions of life, disability income, or long-term care insurance.   (5) This section does not prohibit an insurer, health service corporation, health maintenance organization, fraternal benefit society, or other issuer of an individual or group policy or certificate of insurance from discriminating as otherwise allowed by law on the basis of other factors unrelated to genetic traits.   History: En. Sec. 5, Ch. 334, L. 1999.  
  33-18-904. Seeking genetic information for nontherapeutic purposes prohibited. (1) An insurer, health service corporation, health maintenance organization, fraternal benefit society, or other issuer of an individual or group policy or certificate of insurance may not seek genetic information about an individual for a purpose that is:   (a) unrelated to assessing or managing the individual's current health;   (b) inappropriate in an asymptomatic individual; or   (c) unrelated to research in which a subject is not personally identifiable.   (2) This section does not apply to transactions of life, disability income, or long-term care insurance.   History: En. Sec. 6, Ch. 334, L. 1999.  
  33-19-101. Short title. This chapter may be cited as the "Insurance Information and Privacy Protection Act".   History: En. Sec. 1, Ch. 580, L. 1981.  
  33-19-102. Purpose. The purpose of this chapter is to establish standards for the collection, use, and disclosure of information gathered in connection with insurance transactions by insurance institutions, insurance producers, or insurance-support organizations; to maintain a balance between the need for information by those conducting the business of insurance and the public's need for fairness in insurance information practices, including the need to minimize intrusiveness; to establish a regulatory mechanism to enable natural persons to ascertain what information is being or has been collected about them in connection with insurance transactions and to have access to that information for the purpose of verifying or disputing its accuracy; to limit the disclosure of information collected in connection with insurance transactions; and to enable insurance applicants and policyholders to obtain the reasons for any adverse underwriting decision. The purpose of this chapter is also to provide privacy protection consistent with federal regulations governing the privacy of medical records when this chapter is consistent with those federal regulations. In those instances in which this chapter and the federal privacy regulations are inconsistent and this chapter provides privacy protection beyond that offered by the federal regulations, the purpose of this chapter is to provide that additional privacy protection.   History: En. Sec. 2, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1, Ch. 341, L. 2001.  
  33-19-103. Scope. (1) The obligations imposed by this chapter apply to those insurance institutions, insurance producers, or insurance-support organizations that, on or after July 1, 1982:   (a) in the case of life, health, or disability insurance:   (i) collect, receive, or maintain information in connection with insurance transactions that pertains to natural persons who are residents of this state; or   (ii) engage in insurance transactions with applicants, individuals, or policyholders who are residents of this state; and   (b) in the case of property or casualty insurance:   (i) collect, receive, or maintain information in connection with insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state; or   (ii) engage in insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state.   (2) The rights granted by this chapter extend to:   (a) in the case of life, health, or disability insurance, the following persons who are residents of this state:   (i) natural persons who are the subject of information collected, received, or maintained in connection with insurance transactions; and   (ii) applicants, individuals, or policyholders who engage in or seek to engage in insurance transactions; and   (b) in the case of property or casualty insurance, the following persons:   (i) natural persons who are the subject of information collected, received, or maintained in connection with insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state; and   (ii) applicants, individuals, or policyholders who engage in or seek to engage in insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state.   (3) For the purposes of this section, a person is considered a resident of this state if the person's last-known mailing address, as shown in the records of the insurance institution, insurance producer, or insurance-support organization, is located in this state.   (4) This chapter does not apply to information collected from the public records of a governmental authority and maintained by an insurance institution or its representatives for the purpose of insuring the title to real property located in this state.   History: En. Sec. 3, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-104. Definitions. As used in this chapter, the following definitions apply:   (1) (a) "Adverse underwriting decision" means any of the following actions with respect to insurance transactions involving insurance coverage that are individually underwritten:   (i) a declination of insurance coverage;   (ii) a termination of insurance coverage;   (iii) failure of an insurance producer to apply for insurance coverage with a specific insurance institution that the insurance producer represents and that is requested by an applicant;   (iv) in the case of a property or casualty insurance coverage:   (A) placement by an insurance institution or insurance producer of a risk with a residual market mechanism, an unauthorized insurer, or an insurance institution that specializes in substandard risks; or   (B) the charging of a higher rate on the basis of information that differs from that which the applicant or policyholder furnished;   (v) in the case of a life, health, or disability insurance coverage, an offer to insure at higher than standard rates.   (b) The following actions are not adverse underwriting decisions, but the insurance institution or insurance producer responsible for their occurrence shall nevertheless provide the applicant or policyholder with the specific reason or reasons for their occurrence:   (i) the termination of an individual policy form on a class or statewide basis;   (ii) a declination of insurance coverage solely because the coverage is not available on a class or statewide basis; or   (iii) the rescission of a policy.   (2) "Affiliate" or "affiliated" means a person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with another person.   (3) "Applicant" means a person who seeks to contract for insurance coverage other than a person seeking group insurance that is not individually underwritten.   (4) "Consumer report" means any written, oral, or other communication of information bearing on a natural person's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living that is used or expected to be used in connection with an insurance transaction.   (5) "Consumer reporting agency" means a person who:   (a) regularly engages, in whole or in part, in the practice of assembling or preparing consumer reports for a monetary fee;   (b) obtains information primarily from sources other than insurance institutions; and   (c) furnishes consumer reports to other persons.   (6) "Control", including the terms "controlled by" or "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.   (7) "Declination of insurance coverage" means a denial, in whole or in part, by an insurance institution or insurance producer of requested insurance coverage.   (8) "Individual" means a natural person who:   (a) regarding property or casualty insurance, is a past, present, or proposed named insured or certificate holder;   (b) regarding life, health, or disability insurance, is a past, present, or proposed principal insured or certificate holder;   (c) is a past, present, or proposed policyowner;   (d) is a past or present applicant;   (e) is a past or present claimant; or   (f) derived, derives, or is proposed to derive insurance coverage under an insurance policy or certificate subject to this chapter.   (9) "Institutional source" means a person or governmental entity that provides information about an individual to an insurance producer, insurance institution, or insurance-support organization, other than:   (a) an insurance producer;   (b) the individual who is the subject of the information; or   (c) a natural person acting in a personal capacity rather than a business or professional capacity.   (10) "Insurance function" means claims administration, claims adjustment and management, fraud investigation, fraud prevention, underwriting, loss control, ratemaking functions, reinsurance, risk management, case management, disease management, quality assessment, quality improvement, provider credentialing verification, utilization review, peer review activities, subrogation, grievance procedures, insurance transactions, internal administration of compliance and policyholder service functions, and technical, administrative, or professional services related to the provision of the functions described in this subsection.   (11) (a) "Insurance institution" means a corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, or other person engaged in the business of insurance, including health maintenance organizations, and health service corporations as defined in 33-30-101.   (b) Insurance institution does not include insurance producers or insurance-support organizations.   (12) "Insurance producer" means an insurance producer as defined in 33-17-102 and 33-30-311.   (13) (a) "Insurance-support organization" means a person who assembles or collects information about natural persons for the purpose of providing the information to an insurance institution or insurance producer for insurance transactions, including:   (i) the furnishing of consumer reports or investigative consumer reports to an insurance institution or insurance producer for use in connection with an insurance transaction; or   (ii) the collection of personal information from insurance institutions, insurance producers, or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation, or material nondisclosure in connection with insurance underwriting or insurance claim activity.   (b) The following persons are not insurance-support organizations for purposes of this chapter: insurance producers, government institutions, medical care institutions, and medical professionals.   (14) "Insurance transaction" means a transaction involving insurance primarily for personal, family, or household needs, rather than for business or professional needs, that entails:   (a) the determination of an individual's eligibility for an insurance coverage, benefit, or payment; or   (b) the servicing of an insurance application, policy, contract, or certificate.   (15) "Investigative consumer report" means a consumer report or portion of a consumer report containing information about a natural person's character, general reputation, personal characteristics, or mode of living obtained through personal interviews with the person's neighbors, friends, associates, acquaintances, or others who may have knowledge concerning this type of information.   (16) "Licensee" means:   (a) an insurance institution, insurance producer, or other person who is licensed or required to be licensed, authorized or required to be authorized, or registered or required to be registered pursuant to this title; or   (b) a surplus lines insurer.   (17) "Medical care institution" means a facility or institution that is licensed to provide health care services to natural persons, including but not limited to health maintenance organizations, home health agencies, hospitals, medical clinics, public health agencies, rehabilitation agencies, and skilled nursing facilities.   (18) "Medical professional" means a person who is licensed or certified to provide health care services to natural persons, including but not limited to a chiropractor, clinical dietitian, clinical psychologist, dentist, nurse, occupational therapist, optometrist, pharmacist, physical therapist, physician, podiatrist, psychiatric social worker, or speech-language pathologist.   (19) "Medical record information" means personal information that:   (a) relates to an individual's physical or mental condition, medical history, medical claims history, or medical treatment; and   (b) is obtained from a medical professional or medical care institution, from the individual, or from the individual's spouse, parent, or legal guardian.   (20) "Person" means a natural person, corporation, association, partnership, or other legal entity.   (21) "Personal information" means any individually identifiable information gathered in connection with an insurance transaction from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health, or any other personal characteristics. Personal information includes an individual's name and address and medical record information but does not include privileged information.   (22) "Policyholder" means a person who:   (a) in the case of individual property or casualty insurance, is a present named insured;   (b) in the case of individual life, health, or disability insurance, is a present policyowner; or   (c) in the case of group insurance that is individually underwritten, is a present group certificate holder.   (23) "Pretext interview" means an interview during which a person, in an attempt to obtain information about a natural person, performs one or more of the following acts:   (a) pretends to be someone else;   (b) pretends to represent a person not in fact being represented;   (c) misrepresents the true purpose of the interview; or   (d) refuses to provide identification upon request.   (24) "Privileged information" means any individually identifiable information that:   (a) relates to a civil or criminal proceeding involving an individual; and   (b) is collected in connection with or in reasonable anticipation of a claim for insurance benefits or civil or criminal proceeding involving an individual. Information otherwise meeting the requirements of privileged information under this subsection is considered personal information under this chapter if it is disclosed in violation of 33-19-306.   (25) "Residual market mechanism" means an association, organization, or other entity defined or described in 61-6-144.   (26) "Separate, written authorization" means an individual's written authorization that is:   (a) obtained by the recipient of personal or privileged information that has been disclosed to the recipient pursuant to 33-19-306(10), (11), (14), (15), and (17); and   (b) separate from any written authorization obtained by the disclosing insurance institution, insurance producer, or insurance-support organization.   (27) "Termination of insurance coverage" or "termination of an insurance policy" means either a cancellation or nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure to pay a premium as required by the policy.   (28) "Unauthorized insurer" means an insurance institution that has not been granted a certificate of authority by the commissioner to transact the business of insurance in this state.   History: En. Sec. 4, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 149, Ch. 42, L. 1997; amd. Sec. 1, Ch. 258, L. 1997; amd. Sec. 1, Ch. 212, L. 1999; amd. Sec. 2, Ch. 341, L. 2001; amd. Sec. 1, Ch. 385, L. 2003.  
  33-19-105. Exemption based on federal standards for privacy of individually identifiable health information -- notice to commissioner required -- rules. (1) The obligations imposed under this chapter do not apply to a licensee that is a covered entity under the provisions of federal regulations that are part of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), 45 CFR, parts 160 and 164, standards for privacy of individually identifiable health information or security standards for the protection of electronic health information as to any use or disclosure of personal information that is covered under the HIPAA privacy and security regulations, except for the following provisions:   (a) A notice of insurance information practices described as a notice of privacy practices for protected health information under HIPAA privacy regulations must be delivered as provided for in 33-19-202(1).   (b) To the extent that an insurer collects, discloses, or uses personal information that is not covered under the HIPAA notice of privacy practices, a separate Montana specific notice must be delivered pursuant to the provisions of 33-19-202.   (c) A disclosure authorization remains valid for a period that does not exceed 24 months, as provided for in 33-19-206(2).   (d) The reasons for an adverse underwriting decision must be specified, as provided for in 33-19-303.   (e) Disclosure of underwriting information is required, as provided for in 33-19-308.   (2) The commissioner may adopt rules regarding the exceptions from the exemption provisions described in subsection (1), including additional exceptions that embody substantive provisions of this chapter but would not be preempted by HIPAA privacy regulations.   (3) If a licensee considers itself exempt from a provision of this chapter for the reason provided in subsection (1), the licensee shall give written notice to the commissioner of that exemption and a brief statement describing why the licensee is a HIPAA-covered entity.   (4) A licensee may claim an exemption only for those lines of business that are subject to HIPAA privacy regulations. All other lines of business are subject to this chapter.   (5) A business associate, as defined in the HIPAA privacy regulations, 45 CFR 160.103, that is a party to a valid business associate agreement required by HIPAA privacy regulations is exempt from the provisions of this chapter, but only as to the scope of that particular agreement. Any activity of the business associate that falls outside of the scope of that agreement is subject to the provisions of this chapter.   (6) The commissioner retains the authority to conduct complete market conduct examinations of the licensee as to the privacy policies and practices that are subject to state privacy laws.   (7) Beginning July 1, 2011:   (a) if a licensee is subject to and in compliance with a federal regulation that is part of the federal health insurance portability and accountability privacy and security regulations, 45 CFR, parts 160 and 164, and the federal regulation with which the licensee complies is inconsistent with a provision of this chapter and not less protective of consumer privacy, the licensee is exempt from compliance with the inconsistent provision of this chapter;   (b) if a licensee considers itself exempt from a provision of this chapter for the reason provided in subsection (7)(a), the licensee shall give written notice to the commissioner of that exemption unless the requirements of this subsection (7) are preempted by HIPAA privacy regulations. The notice must include a statement of the reason for the claimed exemption.   History: En. Sec. 3, Ch. 341, L. 2001; amd. Sec. 2, Ch. 385, L. 2003; amd. Sec. 22, Ch. 469, L. 2005; amd. Sec. 10, Ch. 399, L. 2007; amd. Sec. 18, Ch. 271, L. 2009; amd. Sec. 22, Ch. 151, L. 2017.  
  33-19-106. Rulemaking authorized. The commissioner may adopt rules to carry out the provisions of this chapter.   History: En. Sec. 4, Ch. 341, L. 2001.  
  33-19-201. Pretext interviews prohibited -- exception. (1) Except as provided in subsection (2), an insurance institution, insurance producer, or insurance-support organization may not use or authorize the use of pretext interviews to obtain information in connection with an insurance transaction.   (2) A pretext interview may be undertaken to obtain information from a person or institution that does not have a generally or statutorily recognized privileged relationship with the person about whom the information relates for the purpose of investigating a claim when based upon specific information available for review by the commissioner that there is a reasonable basis for suspecting criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with the claim.   History: En. Sec. 5, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-202. Notice of insurance information practices -- delivery of notice. A licensee shall provide a clear and conspicuous notice of information practices that accurately reflects its privacy policies and practices to individuals about whom personal information is collected and disclosed by the licensee in connection with insurance transactions as follows:   (1) (a) Except as provided in subsection (2), in the case of a policyholder or certificate holder, a notice must be delivered by an insurance institution:   (i) in the case of policies issued after July 1, 2001, no later than at the time of the delivery of the insurance policy or certificate, unless the notice delivered to the policyholder or certificate holder pursuant to subsection (5)(a) when the policyholder or certificate holder was an applicant is still accurate; and   (ii) within 60 days after any material change, other than typographical, in the insurance institution's privacy policies or practices.   (b) When a policyholder or certificate holder obtains a new insurance product or service or when a policy is reinstated and any notices already provided are no longer accurate with respect to the new product, service, or reinstatement, a new or revised and accurate notice must be delivered to the policyholder or certificate holder no later than the time that the product or service is provided by the licensee or at the time of reinstatement.   (2) (a) An insurance institution is not required to meet the requirements of this section with respect to certificate holders until the insurance institution has personally identifiable information regarding the certificate holder.   (b) Until the notice requirements of subsection (1) are met, a third-party administrator or other agent or representative of an insurance institution may not disclose personal information, except as allowed in 33-19-306(2).   (3) The notice required in subsection (1) must be in writing and must state:   (a) the categories of personal information that may be collected from persons other than the individual or individuals covered;   (b) if a licensee discloses personal or privileged information to a third party without an authorization pursuant to an exception in 33-19-306 or 33-19-307, a separate description of the categories of information and the categories of third parties to whom the licensee discloses personal information;   (c) the categories of personal information about a former policyholder or certificate holder that the licensee discloses pursuant to 33-19-306 and 33-19-307 and the categories of persons to whom the disclosure may be made;   (d) any disclosure that the licensee makes pursuant to section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act, 15 U.S.C. 1681, et seq.; and   (e) the licensee's policies and practices with respect to protecting the confidentiality and security of personal and privileged information.   (4) The following information must be contained in the initial notice delivered at the time of application and in any subsequent notice:   (a) a description of the rights established under 33-19-301 and 33-19-302 and the manner in which those rights may be exercised;   (b) that information obtained from a report prepared by an insurance-support organization may be retained by the insurance-support organization and disclosed to other persons if the licensee collects or uses information from or discloses personal information to an insurance-support organization; and   (c) that an individual is entitled to receive, upon written request to the licensee, a record of any subsequent disclosures of medical record information, as described in 33-19-301, made by the licensee pursuant to 33-19-306 and 33-19-307.   (5) In the case of individuals who are not policyholders or certificate holders:   (a) except as provided in subsection (8), in the case of an applicant, an insurance institution shall provide a notice as described in subsection (3) when the applicant submits an application;   (b) for all other individuals, a notice must be given when a licensee seeks an authorization pursuant to 33-19-306(2) to make a disclosure that is not allowed by a disclosure exception provided for in 33-19-306(3) through (24) or 33-19-307. A notice given pursuant to this subsection (5)(b) may be in an abbreviated form and must state that:   (i) personal information may be collected from persons other than the individual or individuals proposed for coverage;   (ii) the information as well as other personal or privileged information subsequently collected by the insurance institution or insurance producer may in certain circumstances be disclosed to third parties without authorization;   (iii) a right of access and correction exists with respect to all personal information collected; and   (iv) the notice prescribed in subsection (3) must be furnished upon request. The abbreviated notice provided for in this subsection (5)(b) must explain a reasonable means by which an individual may obtain that notice.   (6) The obligations imposed by this section upon a licensee may be satisfied:   (a) by another licensee authorized to act on its behalf;   (b) by sending a notice to the primary policyholder of an individual policy or to the primary certificate holder.   (7) A licensee shall provide a notice required by this section so that an intended recipient can reasonably be expected to receive actual notice in writing or, if the intended recipient agrees, electronically, as follows:   (a) by hand-delivering a printed copy of the notice to the intended recipient;   (b) by mailing a printed copy of the notice to the last-known address of the individual separately or in a policy, billing, or other written communication; or   (c) for an individual who has agreed to conduct transactions electronically, as provided in applicable law, by posting the notice on the electronic site and requiring the individual to acknowledge receipt of the notice as a necessary step to obtaining a particular insurance product or service.   (8) An insurance institution may provide the notice required in subsection (5)(a) telephonically if an application is submitted by telephone. A telephone notice under this subsection may be in abbreviated form as provided for in subsections (5)(b)(i) through (5)(b)(iv).   (9) A licensee may satisfy the notice requirements in this section through the use of combined or separate notices. If more than one notice form is used, the licensee shall refer the individual to state specific notice forms that may be used. Any national notice form must give individuals clear and conspicuous notice that when state law is more protective of individuals than federal privacy law, the licensee will protect information in accordance with state law.   History: En. Sec. 6, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 2, Ch. 212, L. 1999; amd. Sec. 5, Ch. 341, L. 2001; amd. Sec. 3, Ch. 385, L. 2003; amd. Sec. 23, Ch. 151, L. 2017.  
  33-19-203. Marketing and research surveys. An insurance institution or insurance producer shall clearly specify the questions that are designed to obtain information from an individual in connection with an insurance transaction solely for marketing or research purposes.   History: En. Sec. 7, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-204. Repealed. Sec. 11, Ch. 341, L. 2001.   History: En. Sec. 8, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 3, Ch. 212, L. 1999.  
  33-19-205. Investigative consumer reports. (1) An insurance institution, insurance producer, or insurance-support organization may not prepare or request an investigative consumer report about an individual in connection with an insurance transaction involving an application for insurance, a policy renewal, a policy reinstatement, or a change in insurance benefits unless the insurance institution or insurance producer informs the individual:   (a) that the individual may request to be interviewed in connection with the preparation of the investigative consumer report; and   (b) that upon a request pursuant to 33-19-301, the individual is entitled to receive a copy of the investigative consumer report.   (2) If an investigative consumer report is to be prepared by an insurance institution or insurance producer, the insurance institution or insurance producer shall institute reasonable procedures to conduct a personal interview requested by an individual.   (3) If an investigative consumer report is to be prepared by an insurance-support organization, the insurance institution or insurance producer desiring the report shall inform the insurance-support organization as to whether a personal interview has been requested by the individual. The insurance-support organization shall institute reasonable procedures to conduct the interview, if requested.   History: En. Sec. 9, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1210, Ch. 56, L. 2009.  
  33-19-206. Disclosure authorizations -- content -- conditions prohibited. If a disclosure authorization is required by this chapter, the following requirements apply:   (1) A valid authorization to disclose personal information must be in written form, or in electronic form as provided by applicable law, and must contain the following:   (a) the identity of the individual who is the subject of the personal information;   (b) a description of the types of personal information to be disclosed;   (c) a description of the entity or type of entity to which the licensee discloses personal information, the purpose of the disclosure, and how the information will be used;   (d) the signature of the individual who is the subject of the personal information or the individual who may by law allow the disclosure and the date on which the authorization is signed; and   (e) notice of the length of time for which the authorization is valid, notice that the individual may revoke the authorization at any time, and notice of the procedure for revocation.   (2) An authorization remains valid for a period stated in the authorization that does not exceed 24 contiguous months.   (3) An individual who is the subject of personal information and has signed an authorization may revoke the authorization at any time.   (4) A licensee shall retain the original authorization or a copy of it in the record of the individual who is the subject of personal information.   (5) A licensee may not condition enrollment, coverage, benefits, or rates on an individual's signing of a disclosure authorization unless the disclosure sought through the authorization is necessary for the licensee to perform an insurance function.   History: En. Sec. 6, Ch. 341, L. 2001.  
  33-19-301. Access to recorded personal information. (1) If an individual, after proper identification, submits a written request to an insurance institution, insurance producer, or insurance-support organization for access to recorded personal information about the individual that is reasonably described by the individual and reasonably locatable and retrievable by the insurance institution, insurance producer, or insurance-support organization, the insurance institution, insurance producer, or insurance-support organization shall, within 30 business days from the date that the request is received:   (a) inform the individual of the nature and substance of the recorded personal information in writing, by telephone, or by other oral communication, whichever the insurance institution, insurance producer, or insurance-support organization prefers;   (b) permit the individual to see and copy, in person, the recorded personal information pertaining to the individual or to obtain a copy of the recorded personal information by mail, whichever the individual prefers. If the recorded personal information is in coded form, an accurate translation in plain language must be provided in writing.   (c) except for the tracking of disclosures of medical record information that must be recorded and disclosed under subsection (2), disclose to the individual the identity, if recorded, of those persons to whom the insurance institution, insurance producer, or insurance-support organization has disclosed the personal information within 2 years prior to the request and, if the identity is not recorded, the names of those insurance institutions, insurance producers, insurance-support organizations, or other persons to whom the information is normally disclosed; and   (d) provide the individual with a summary of the procedures that the individual may use to request correction, amendment, or deletion of recorded personal information.   (2) (a) If an individual, after proper identification, submits a written request to a licensee for a record of disclosures of medical record information, the licensee shall provide to the individual a record of all disclosures of medical record information made by the licensee pursuant to 33-19-306(8), (9), other than disclosures made to law enforcement authorities, (10)(b), (12)(a)(iii), (13), (14), only as to medical record information that has not been deidentified, (15), (21), only as to medical record information that has not been deidentified, or (22) or 33-19-307. The record of those disclosures must include:   (i) the name, address, and institutional affiliation, if any, of each person receiving or examining the medical information during the preceding 2 years;   (ii) the date of the receipt or examination; and   (iii) to the extent practicable, a description of the information disclosed.   (b) If an individual submits a written request to a licensee for a record of disclosures of medical record information and the licensee may have made medical record information disclosures pursuant to 33-19-306(4)(b), (5), (11), (12)(a)(i), (12)(a)(ii), (12)(b), (16), (18), or (19), the licensee shall provide the individual with a description of the types of medical record information that the licensee may disclose under those exceptions, along with a general description of the usual recipients of that information. Individual tracking of each disclosure of medical record information is not required.   (3) Personal information provided pursuant to subsection (1) must identify the source of the information if the source is an institutional source.   (4) Medical record information supplied by a medical care institution or medical professional and requested under subsection (1), together with the identity of the medical professional or medical care institution that provided the information, must be supplied either directly to the individual or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurance institution, insurance producer, or insurance-support organization prefers. If it elects to disclose the information to a medical professional designated by the individual, the insurance institution, insurance producer, or insurance-support organization shall notify the individual, at the time of the disclosure, that it has provided the information to the medical professional. The medical professional may review and interpret the information and, at the request of the affected individual, shall consult with the affected individual.   (5) Except for personal information provided under 33-19-303, an insurance institution, insurance producer, or insurance-support organization may charge a reasonable fee to cover the costs incurred in providing a copy of recorded personal information to individuals.   (6) The obligations imposed by this section upon an insurance institution or insurance producer may be satisfied by another insurance institution or insurance producer authorized to act on its behalf. With respect to the copying and disclosure of recorded personal information pursuant to a request under subsection (1), an insurance institution, insurance producer, or insurance-support organization may make arrangements with an insurance-support organization or a consumer reporting agency to copy and disclose recorded personal information on its behalf.   (7) The rights granted to individuals in this section extend to all natural persons to the extent information about them is collected, maintained, and disclosed by an insurance institution, insurance producer, or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection do not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or civil or criminal proceeding involving them, except for the tracking of medical record information as provided for in subsection (2).   (8) For the purposes of this section, the term "insurance-support organization" does not include "consumer reporting agency".   History: En. Sec. 10, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 4, Ch. 385, L. 2003.  
  33-19-302. Correction, amendment, or deletion of recorded personal information. (1) Within 30 business days from the date of receipt of a written request from an individual to correct, amend, or delete any recorded personal information in its possession about the individual, an insurance institution, insurance producer, or insurance-support organization shall either:   (a) correct, amend, or delete the portion of the recorded personal information in dispute; or   (b) notify the individual of:   (i) its refusal to make the correction, amendment, or deletion;   (ii) the reasons for the refusal; and   (iii) the individual's right to file a statement as provided in subsection (3).   (2) If the insurance institution, insurance producer, or insurance-support organization corrects, amends, or deletes recorded personal information in accordance with subsection (1)(a), the insurance institution, insurance producer, or insurance-support organization shall notify the individual in writing about the action that it has taken and furnish the correction, amendment, or fact of deletion to:   (a) any person specifically designated by the individual who may have, within the preceding 2 years, received recorded personal information about the individual;   (b) any insurance-support organization whose primary source of personal information is insurance institutions if the insurance-support organization has systematically received recorded personal information from the insurance institution within the preceding 7 years, but the correction, amendment, or fact of deletion need not be furnished if the insurance-support organization no longer maintains recorded personal information about the individual; and   (c) any insurance-support organization that furnished the personal information that has been corrected, amended, or deleted.   (3) Whenever an individual disagrees with an insurance institution's, insurance producer's, or insurance-support organization's refusal to correct, amend, or delete recorded personal information, the individual may file with the insurance institution, insurance producer, or insurance-support organization:   (a) a concise statement setting forth what the individual thinks is the correct, relevant, or fair information; and   (b) a concise statement of the reasons why the individual disagrees with the insurance institution's, insurance producer's, or insurance-support organization's refusal to correct, amend, or delete recorded personal information.   (4) If an individual files either statement described in subsection (3), the insurance institution, insurance producer, or insurance-support organization shall:   (a) file the statement with the disputed personal information and provide a means by which anyone reviewing the disputed personal information will be made aware of the individual's statement and have access to it;   (b) in any subsequent disclosure by the insurance institution, insurance producer, or insurance-support organization of the recorded personal information that is the subject of disagreement, clearly identify the matter in dispute and provide the individual's statement along with the recorded personal information being disclosed; and   (c) furnish the statement to the persons in the manner specified in subsection (2).   (5) The commissioner may review a refusal by an insurance institution, insurance producer, or insurance-support organization to correct, amend, or delete recorded personal information in order to determine if the information is correct. The commissioner may order the insurance institution, insurance producer, or insurance-support organization to correct, amend, or delete information that the commissioner determines is erroneous in an individual's recorded information file.   (6) The rights granted individuals by this section extend to all natural persons to the extent information about them is collected and maintained by an insurance institution, insurance producer, or insurance-support organization in connection with an insurance transaction. The rights granted to natural persons by this subsection do not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or civil or criminal proceeding involving them.   (7) For the purposes of this section, the term "insurance-support organization" does not include a consumer reporting agency.   History: En. Sec. 11, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 2, Ch. 258, L. 1997.  
  33-19-303. Reasons for adverse underwriting decisions. (1) If an adverse underwriting decision is made, the insurance institution or insurance producer responsible for the decision shall:   (a) either provide the applicant, policyholder, or individual proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing or advise the person that upon written request, the person may receive the specific reason or reasons in writing; and   (b) provide the applicant, policyholder, or individual proposed for coverage with a summary of the rights established under subsection (2) and 33-19-301 and 33-19-302.   (2) If a written request is received within 90 business days from the date of the mailing of notice or other communication of an adverse underwriting decision to an applicant, policyholder, or individual proposed for coverage, the insurance institution or insurance producer shall within 21 business days from the date of receipt of the written request furnish the person:   (a) the specific reason or reasons for the adverse underwriting decision, in writing, if the information was not initially furnished in writing pursuant to subsection (1)(a);   (b) the specific items of personal and privileged information that support those reasons; however:   (i) the insurance institution or insurance producer is not required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the commissioner, that the applicant, policyholder, or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation, or material nondisclosure; and   (ii) specific items of medical record information supplied by a medical care institution or medical professional must be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurance institution or insurance producer prefers; and   (c) the names and addresses of the institutional sources that supplied the specific items of information pursuant to subsection (2)(b), except that the identity of any medical professional or medical care institution must be disclosed either directly to the individual or to the designated medical professional, whichever the insurance institution or insurance producer prefers.   (3) The obligations imposed by this section upon an insurance institution or insurance producer may be satisfied by another insurance institution or insurance producer that is authorized to act on its behalf.   (4) When an adverse underwriting decision results solely from an oral request or inquiry, the explanation of reasons and summary of rights required by subsection (1) may be given orally but must be made in writing at the request of the applicant, policyholder, or individual.   History: En. Sec. 12, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 3, Ch. 258, L. 1997.  
  33-19-304. Information concerning previous adverse underwriting decisions. An insurance institution, insurance producer, or insurance-support organization may not seek information in connection with an insurance transaction concerning:   (1) any previous adverse underwriting decision experienced by an individual unless the inquiry also requests the reasons for any previous adverse underwriting decision and the individual is advised of the source of the information; or   (2) any previous insurance coverage obtained by an individual through a residual market mechanism unless the inquiry also requests the reasons why insurance coverage was previously obtained through a residual market mechanism and the individual is advised of the source of information.   History: En. Sec. 13, Ch. 580, L. 1981; amd. Sec. 8, Ch. 518, L. 1983; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-305. Previous adverse underwriting decisions. An insurance institution or insurance producer may not base an adverse underwriting decision in whole or in part:   (1) on the fact of a previous adverse underwriting decision or on the fact that an individual previously obtained insurance coverage through a residual market mechanism, but an insurance institution or insurance producer may base an adverse underwriting decision on further information obtained from an insurance institution or insurance producer responsible for a previous adverse underwriting decision;   (2) on personal information received from an insurance-support organization whose primary source of information is insurance institutions, but an insurance institution or insurance producer may base an adverse underwriting decision on further personal information obtained as the result of information received from such insurance-support organization.   History: En. Sec. 14, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-306. Disclosure limitations and conditions. (1) Except as provided in this section, a licensee may not disclose personal or privileged information about an individual collected or received in connection with an insurance transaction.   (2) Disclosure may be made with the written authorization of the individual. The authorization must be in the form provided in 33-19-206.   (3) Disclosure limited to that which is reasonably necessary may be made to a person to enable the person to provide information to the disclosing licensee for the purpose of detecting or preventing criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with an insurance transaction. A person to whom information is disclosed pursuant to this subsection shall agree in writing not to further disclose the information, but this requirement for an agreement does not prevent disclosure of information that is necessary to obtain further information for the purposes set forth in this subsection.   (4) (a) Disclosure may be made between licensees if the information disclosed is limited to that which is reasonably necessary:   (i) to detect or prevent criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with insurance transactions; or   (ii) for either the disclosing or receiving licensee to perform its insurance function.   (b) A licensee receiving information pursuant to this subsection (4) may not further disclose the information unless otherwise permitted by this section.   (5) Disclosure may be made to a medical care institution, a medical professional, or the individual to whom the information pertains if that information is reasonably necessary for the following purposes:   (a) verifying insurance coverage or benefits;   (b) informing an individual of a medical problem of which the individual may not be aware;   (c) conducting an operations or services audit; or   (d) determining the reasonableness or necessity of medical services.   (6) Disclosure:   (a) may be made to an insurance regulatory authority;   (b) must be made as required by law; and   (c) must be or may be made to the commissioner as required or permitted by law.   (7) Disclosure may be made by a licensee or an insurance-support organization to a law enforcement or other government authority or to an insurance regulatory agency:   (a) to protect the interests of a licensee in preventing, investigating, or prosecuting the perpetration of fraud upon a licensee;   (b) if the licensee or insurance-support organization reasonably believes that illegal activities have been conducted by the individual; or   (c) as provided in 61-6-157.   (8) Disclosure that is limited to that which is reasonably necessary may be made as otherwise permitted or required by law.   (9) Disclosure that is limited to that which is reasonably necessary may be made in response to a facially valid administrative or judicial order, including a search warrant or subpoena.   (10) (a) Except as provided in subsection (10)(b), disclosure that is limited to that which is reasonably necessary may be made for the purpose of conducting actuarial or research studies if:   (i) an individual is not identified in any actuarial or research report;   (ii) materials allowing the individual to be identified are returned or destroyed as soon as they are no longer needed; and   (iii) the actuarial or research organization agrees not to further disclose the information without the individual's separate, written authorization.   (b) Disclosure of information may be made for:   (i) health research that is subject to the approval of an institutional review board and the requirements of federal law and regulations governing biomedical research; or   (ii) epidemiological or drug therapy outcomes research that requires information that has been made anonymous to protect the identity of the patient through coding or encryption.   (11) Disclosure may be made to a party or a representative of a party to a proposed sale, transfer, merger, or consolidation of all or part of the business of the licensee or insurance-support organization if:   (a) prior to the consummation of the sale, transfer, merger, or consolidation only information that is reasonably necessary to enable the recipient to make business decisions about the purchase, transfer, merger, or consolidation is disclosed; and   (b) the recipient agrees not to further disclose the information without the individual's separate, written authorization.   (12) (a) Disclosure that is limited to that which is reasonably necessary may be made to a licensee's affiliate as follows:   (i) to allow use of the information in connection with an audit of the licensee;   (ii) to enable a licensee to perform an insurance function; or   (iii) as allowed by 33-19-307.   (b) A licensee disclosing pursuant to this section must have a written agreement with the affiliate that the affiliate will not use or further disclose information received except to carry out the purposes set forth in subsection (12)(a) and that if further disclosure is necessary to meet those purposes, the disclosure will be made only to the licensee or to a person who agrees in writing to be bound by the same prohibition on use and disclosure. A disclosure allowed by 33-19-307 is governed by that section.   (13) Disclosure that is limited to that which is reasonably necessary may be made to an insurance-support organization to perform insurance-support services for the licensee. The insurance-support organization may redisclose the information to the extent necessary to provide its services to its member or subscriber licensees and other insurance-support organizations or as otherwise permitted by law, but not for a marketing purpose.   (14) Disclosure may be made to a group policyholder for the purpose of reporting claims experience or conducting an audit of the licensee's operations or services if the information disclosed is reasonably necessary for the group policyholder to conduct the review or audit and the group policyholder agrees not to further disclose the information without the individual's separate, written authorization. Medical record information disclosed pursuant to this subsection must be edited to prevent the identification of the applicant, policyholder, or certificate holder. Employer audits that are required by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq., as amended, are not subject to the provisions of this subsection.   (15) Disclosure that is limited to that which is reasonably necessary may be made to a professional peer review organization for the purpose of reviewing the service or conduct of a medical care institution or medical professional if the professional peer review organization agrees not to further disclose the information without the individual's separate, written authorization.   (16) Disclosure that is limited to that which is reasonably necessary may be made to a governmental authority as required by federal or state law or for the purpose of determining the individual's eligibility for health benefits for which the governmental authority may be liable.   (17) Disclosure that is limited to that which is reasonably necessary may be made to a certificate holder or policyholder for the purpose of providing information regarding the status of an insurance transaction. Disclosure pursuant to this subsection may not be made to a group policyholder without a separate, written authorization from the individual.   (18) Disclosure may be made to a person contractually engaged to provide services to enable a licensee to perform an insurance function, or to perform an insurance function on behalf of a licensee, if the person agrees in writing that the person will not use or further disclose information obtained or developed pursuant to the engagement except to carry out the limited purpose of the engagement and that if further disclosure is necessary to perform the insurance function, that disclosure will be made only to the licensee or to a person who agrees in writing to be bound by the same prohibitions on use and disclosure.   (19) If a licensee has to disclose personal or privileged information in order to perform an insurance function and disclosure is not permitted under another exception in this section, disclosure may be made to a person other than a licensee if the disclosure is limited to that which is reasonably necessary to enable the person to perform services or an insurance function for the disclosing licensee and if the person is notified by the licensee that the person is prohibited from:   (a) using the information other than to carry out the limited purpose for which the information is disclosed; and   (b) disclosing the information other than to the licensee and as allowed in subsection (3).   (20) Disclosure may be made to a lienholder, mortgagee, assignee, lessor, or other person shown on the records of an insurance institution or insurance producer as having a legal interest in a policy of insurance if:   (a) medical record information is not disclosed; and   (b) the information disclosed is limited to that which is reasonably necessary to permit the person with a legal interest in the policy to protect that person's interests in that policy.   (21) Disclosure may be made to provide information to insurance rate advisory organizations, guaranty funds or agencies, agencies that are rating a licensee, persons that are assessing the licensee's compliance with industry standards, and the licensee's attorneys, accountants, and auditors if the disclosure is limited to that which is reasonably necessary to enable the person or entity to perform services or an insurance function for the disclosing licensee and if the person or entity is notified by the licensee that the person or entity is prohibited from using the information, other than to carry out the limited purpose for which the information is disclosed.   (22) Notwithstanding any other provision of this chapter, disclosure for a marketing purpose may be made only as allowed by 33-19-307.   (23) This section may not be construed to prevent the disclosure of personal information that is otherwise discoverable pursuant to the Montana Rules of Civil Procedure.   (24) The commissioner may adopt rules creating additional exceptions to disclosure restrictions for the purpose of allowing a licensee or insurance-support organization to carry out a necessary insurance function. The commissioner shall adopt rules establishing the methods that must be used by licensees to prevent identification as described in subsection (14).   History: En. Sec. 15, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 4, Ch. 212, L. 1999; amd. Sec. 7, Ch. 341, L. 2001; amd. Sec. 5, Ch. 385, L. 2003; amd. Sec. 6, Ch. 413, L. 2009.  
  33-19-307. Personal information used for marketing purposes -- restrictions. (1) Except as permitted in this section, a licensee may not use or disclose personal information for a marketing purpose. For the purposes of this section, an insurance producer who describes to the producer's clients products or services available through the producer is not engaged in marketing.   (2) A licensee may use or disclose to another licensee personal information that is reasonably necessary to enable the licensee to market insurance products or services. A licensee may use or disclose to another licensee personal information, excluding medical record information, that is reasonably necessary to enable the licensee to market financial products and services. A licensee that receives personal information under this section from a disclosing licensee may not further disclose the information or use the information for any purpose other than marketing insurance and financial products and services.   (3) A licensee may disclose personal information that is reasonably necessary to enable an affiliate that is not a licensee to market insurance products and services. A licensee may disclose to an affiliate that is not a licensee personal information, excluding medical record information, that is reasonably necessary to enable the affiliate to market financial products and services. Disclosures under this subsection may be made only with a written agreement with the affiliate that the affiliate will not further disclose the information and will use it only for marketing insurance or financial products and services.   (4) A licensee may disclose personal information that is reasonably necessary to enable a person contractually engaged to provide services for or on behalf of the licensee to market insurance or financial products or services if the person agrees in writing that the person will not use or further disclose information obtained or developed pursuant to the engagement except to carry out the limited purpose of the engagement. A licensee shall adopt and maintain policies and procedures reasonably designed to ensure that third parties with whom the licensee contracts under this subsection comply with the requirements of this section.   (5) A licensee may use or disclose personal information for purposes other than those specified in subsections (2) through (4) only with an individual's written authorization as described in 33-19-306(2). In addition to meeting the requirements of 33-19-206, the authorization must:   (a) clearly and conspicuously state that the disclosed information is intended to be used for marketing purposes;   (b) specify each entity or type of entity to which the licensee intends to disclose the information;   (c) specify what information the licensee intends to disclose; and   (d) specify the type of marketing that the individual might receive pursuant to the disclosure.   History: En. Sec. 8, Ch. 341, L. 2001; amd. Sec. 6, Ch. 385, L. 2003.  
  33-19-308. Disclosure of underwriting information. (1) An insurance institution or insurance-support organization shall, within 30 days of receiving a written request from an entity listed in subsection (2) that it provides coverage for, disclose to that entity the following information that the entity specifically requests about the entity's coverage:   (a) total premiums collected from the entity for the policy year; and   (b) total losses paid out with respect to the entity for the policy year.   (2) Any of the following entities may request information about the entity's coverage pursuant to this section:   (a) an association having a group health insurance program for its members;   (b) a group purchasing cooperative;   (c) a group health plan that is a multiple employer welfare arrangement;   (d) a self-insured group; and   (e) a business that provides group health insurance for its employees, except that a business with between 2 and 50 employees is not subject to the provisions of this section.   (3) Information disclosed pursuant to this section may not include any personal information pertaining to an individual covered by a group plan that has been obtained or administered by an entity listed in subsection (2).   (4) Information that is obtainable pursuant to the provisions of this section may not be requested more than once during any calendar year.   (5) An association provided for in subsection (2)(a) must be provided with reasonable information by its insurance institution or insurance-support organization to enable the association to receive a bid or quote for coverage from other insurance entities.   History: En. Sec. 1, Ch. 471, L. 2001.  
  33-19-309 through 33-19-320 reserved.  
  33-19-321. Computer security breach. (1) Any licensee or insurance-support organization that conducts business in Montana and that owns or licenses computerized data that includes personal information shall provide notice of any breach of the security of the system following discovery or notice of the breach of the security of the system to any individual whose unencrypted personal information was or is reasonably believed to have been acquired by an unauthorized person. The notice must be made without unreasonable delay, consistent with the legitimate needs of law enforcement, as provided in subsection (3), or consistent with any measures necessary to determine the scope of the breach and restore the reasonable integrity of the data system.   (2) Any person to whom personal information is disclosed in order for the person to perform an insurance function pursuant to this part that maintains computerized data that includes personal information shall notify the licensee or insurance-support organization of any breach of the security of the system in which the data is maintained immediately following discovery of the breach of the security of the system if the personal information was or is reasonably believed to have been acquired by an unauthorized person.   (3) The notice required by this section may be delayed if a law enforcement agency determines that the notice will impede a criminal investigation and requests a delay of notice. The notice required by this section must be made after the law enforcement agency determines that the notice will not compromise the investigation.   (4) Licensees, insurance-support organizations, and persons to whom personal information is disclosed pursuant to this part shall develop and maintain an information security policy for the safeguarding of personal information and security breach notice procedures that provide expedient notice to individuals as provided in subsection (1).   (5) Any licensee or insurance-support organization that is required to issue a notification pursuant to this section shall simultaneously submit an electronic copy of the notification and a statement providing the date and method of distribution of the notification to the commissioner, excluding any information that personally identifies any individual who is entitled to receive notification. If a notification is made to more than one individual, a single copy of the notification must be submitted that indicates the number of individuals in the state who received notification.   (6) For purposes of this section, the following definitions apply:   (a) "Breach of the security of the system" means unauthorized acquisition of computerized data that compromises the security, confidentiality, or integrity of personal information maintained by a licensee, insurance-support organization, or person to whom information is disclosed pursuant to this part. Acquisition of personal information by a licensee, insurance-support organization, or employee or agent of a person as authorized pursuant to this part is not a breach of the security of the system.   (b) (i) "Personal information" means an individual's first name or first initial and last name in combination with any one or more of the following data elements, when the name and the data elements are not encrypted:   (A) social security number;   (B) driver's license number, state identification card number, or tribal identification card number;   (C) account number or credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual's financial account;   (D) medical record information;   (E) a taxpayer identification number; or   (F) an identity protection personal identification number issued by the United States internal revenue service.   (ii) Personal information does not include publicly available information that is lawfully made available to the general public from federal, state, or local government records.   History: En. Sec. 9, Ch. 518, L. 2005; amd. Sec. 4, Ch. 180, L. 2007; amd. Sec. 4, Ch. 62, L. 2015.  
  33-19-401. Power of the commissioner. (1) The commissioner has the power to examine and investigate the affairs of every insurance institution or insurance producer doing business in this state to determine whether the insurance institution or insurance producer has been or is engaged in any conduct in violation of this chapter.   (2) The commissioner has the power to examine and investigate the affairs of every insurance-support organization acting on behalf of an insurance institution or insurance producer that either transacts business in this state or transacts business outside this state which has an effect on a person residing in this state in order to determine whether such insurance-support organization has been or is engaged in any conduct in violation of this chapter.   History: En. Sec. 16, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-402. Repealed. Sec. 11, Ch. 341, L. 2001.   History: En. Sec. 17, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-403. Service of process -- insurance-support organizations. For the purpose of this chapter, an insurance-support organization transacting business outside this state that has an effect on a person residing in this state is considered to have appointed the commissioner to accept service of process on its behalf. The party seeking service and the commissioner shall follow the procedure in 33-1-606 to effectuate service.   History: En. Sec. 18, Ch. 580, L. 1981; amd. Sec. 10, Ch. 60, L. 2019.  
  33-19-404. Repealed. Sec. 11, Ch. 341, L. 2001.   History: En. Sec. 19, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-405. Civil penalty. A person who violates this chapter is subject to the civil penalty provided in 33-1-317.   History: En. Sec. 20, Ch. 580, L. 1981; amd. Sec. 4, Ch. 101, L. 1985; amd. Sec. 9, Ch. 341, L. 2001.  
  33-19-406. Repealed. Sec. 11, Ch. 341, L. 2001.   History: En. Sec. 21, Ch. 580, L. 1981; amd. Sec. 5, Ch. 101, L. 1985.  
  33-19-407. Individual remedies. (1) If any insurance institution, insurance producer, or insurance-support organization fails to comply with 33-19-301, 33-19-302, or 33-19-303 with respect to the rights granted under those sections, any person whose rights are violated may apply to the district court of this state or any other court of competent jurisdiction for appropriate equitable relief.   (2) An insurance institution, insurance producer, or insurance-support organization that discloses information in violation of 33-19-306 or 33-19-307 is liable for damages sustained by the individual to whom the information relates. However, an individual is not entitled to a monetary award that exceeds the actual damages sustained by the individual as a result of a violation of 33-19-306 or 33-19-307.   (3) In an action brought pursuant to this section, the court may award the cost of the action and reasonable attorney fees to the prevailing party.   (4) An action under this section must be brought within 2 years from the date the alleged violation is or should have been discovered.   (5) Except as specifically provided in this section, there is no remedy or recovery available to individuals, in law or in equity, for occurrences constituting a violation of any provision of this chapter.   History: En. Sec. 22, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 10, Ch. 341, L. 2001.  
  33-19-408. Immunity. A cause of action or claim for relief in the nature of defamation, invasion of privacy, or negligence does not arise against any person for disclosing personal or privileged information in accordance with this chapter, nor does such a cause of action or claim for relief arise against any person for furnishing personal or privileged information to an insurance institution, insurance producer, or insurance-support organization. However, this section does not provide immunity for disclosing or furnishing false information with malice or willful intent to injure any person.   History: En. Sec. 23, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-409. Obtaining information under false pretenses. Any person who knowingly and willfully obtains information about an individual from an insurance institution, insurance producer, or insurance-support organization under false pretenses shall be fined not more than $10,000 or imprisoned for not more than 1 year, or both.   History: En. Sec. 24, Ch. 580, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-19-410. Repealed. Sec. 32, Ch. 396, L. 2017.   History: En. Sec. 5, Ch. 276, L. 2007.  
  33-2-101. Certificate of authority required. (1) Except as expressly otherwise provided in this code, a person acting as an insurer and an insurer transacting insurance in this state must have a subsisting certificate of authority issued by the commissioner.   (2) An insurer that has or maintains in Montana any office, representative, or facility for the solicitation or servicing of any kind of insurance in any other state must be authorized to transact the same kind of insurance in this state.   History: En. Sec. 46, Ch. 286, L. 1959; R.C.M. 1947, 40-2801; amd. Sec. 1, Ch. 562, L. 2005; amd. Sec. 18, Ch. 396, L. 2017.  
  33-2-102. Exceptions to certificate of authority requirement. A certificate of authority shall not be required of an insurer, not otherwise authorized in this state, as to the following transactions:   (1) transactions relative to its policies lawfully written in Montana or liquidation of assets and liabilities of the insurer (other than collection of new premiums), all as resulting from its former authorized operations in Montana;   (2) transactions relative thereto subsequent to issuance of a policy covering only subjects of insurance not resident, located, or expressly to be performed in Montana at time of issuance, and which coverage was lawfully solicited, written, and delivered outside Montana;   (3) transactions pursuant to surplus lines coverages lawfully written pursuant to part 3 of this chapter;   (4) reinsurance, except as to domestic reinsurers.   History: En. Sec. 47, Ch. 286, L. 1959; R.C.M. 1947, 40-2802.  
  33-2-103. Admission for investment only. A foreign insurer may transact business in this state without certificate of authority for the purpose and to the extent only of investing its funds in Montana real estate or in securities secured thereby by complying with the applicable laws of this state other than this code. Such an insurer shall not be subject to any other provision of this code.   History: En. Sec. 48, Ch. 286, L. 1959; R.C.M. 1947, 40-2803.  
  33-2-104. Representing or aiding unauthorized insurer prohibited. (1) A person may not directly or indirectly act as insurance producer in this state for, or otherwise represent or aid on behalf of another, any insurer not authorized to transact insurance in this state in the solicitation, negotiation, or effectuation of insurance or of annuity contracts, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or any other transaction of insurance with respect to subjects of insurance resident, located or to be performed in this state.   (2) This section does not apply to:   (a) acceptance of service of process by the commissioner under 33-1-613; or   (b) surplus lines insurance and other transactions for which a certificate of authority is not required of an insurer as stated in 33-2-102.   History: En. Sec. 176, Ch. 286, L. 1959; R.C.M. 1947, 40-3401; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 2, Ch. 562, L. 2005; amd. Sec. 19, Ch. 396, L. 2017; amd. Sec. 4, Ch. 62, L. 2019.  
  33-2-105. Suits by unauthorized insurers prohibited. Except as to transactions permitted under 33-2-102, no unauthorized insurer shall institute or file or cause to be instituted or filed any suit, action, or proceeding in this state to enforce any right, claim, or demand arising out of any insurance transaction in this state until such insurer has obtained a certificate of authority to transact such insurance in this state.   History: En. Sec. 177, Ch. 286, L. 1959; R.C.M. 1947, 40-3402; amd. Sec. 8, Ch. 198, L. 1979.  
  33-2-106. General eligibility of insurers. (1) To qualify for and hold authority to transact insurance in this state, an insurer must be otherwise in compliance with this code and with its charter powers and must be an incorporated stock insurer, an incorporated mutual insurer, or a reciprocal insurer, all of the same general type as may hereafter be formed as a domestic insurer under this code.   (2) No foreign insurer shall be authorized to transact insurance in Montana which does not maintain reserves as required by part 5 of this chapter applicable to the kind or kinds of insurance transacted by such insurer, wherever transacted in the United States, or which transacts business anywhere in the United States on the assessment plan, stipulated premium plan, or any similar plan.   (3) No foreign insurer which is directly or indirectly owned or controlled in whole or in substantial part by any government or governmental agency shall be authorized to transact insurance in Montana unless it was so owned and first so authorized prior to January 1, 1957. Membership or subscribership in a mutual or reciprocal insurer by virtue of being a policyholder thereof, ownership of stock or other security which does not have voting rights with respect to the management of the insurer, or supervision of an insurer by public authority shall not be deemed to be an ownership or control of the insurer for the purposes of this provision.   History: En. Sec. 49, Ch. 286, L. 1959; R.C.M. 1947, 40-2804.  
  33-2-107. Name -- dissimilar. (1) No insurer shall be authorized to transact insurance in this state which has or uses a name so similar to that of another insurer already so authorized as likely to mislead the public.   (2) No life insurer shall be authorized which has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding 10 years if life insurance policies originally issued by such other insurer are still outstanding in this state.   (3) No insurer shall be so authorized which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer.   (4) In case of conflict of names between two insurers or a conflict otherwise prohibited under the foregoing subsections of this section, the commissioner may permit or require the more recently authorized insurer to use in Montana such supplementation or modification of its name or such business name as may reasonably be necessary to avoid such conflict.   History: En. Sec. 50, Ch. 286, L. 1959; R.C.M. 1947, 40-2805.  
  33-2-108. Combinations of insuring powers. (1) Except as provided in subsections (2), (3), and (4) and 33-25-213, an insurer which otherwise qualifies therefor may be authorized to transact any one kind or combination of kinds of insurance as defined in 33-1-205 through 33-1-212.   (2) A life insurer may also grant annuities but shall not be authorized to transact any other kind of insurance other than disability, except that if the insurer is otherwise qualified therefor, the commissioner shall continue to so authorize any life insurer which, immediately prior to January 1, 1961, was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life and disability.   (3) A reciprocal insurer shall not transact life insurance.   (4) A title insurer shall be a stock insurer.   History: En. Sec. 51, Ch. 286, L. 1959; R.C.M. 1947, 40-2806; amd. Sec. 16, Ch. 519, L. 1985.  
  33-2-109. Capital or surplus funds required. (1) To qualify for authority to transact any one kind of insurance, as defined in 33-1-205 through 33-1-212, or combinations of kinds of insurance as shown below, an insurer shall possess and maintain unimpaired paid-in capital stock, if a stock insurer, or surplus, if a mutual or foreign reciprocal insurer, in an amount not less than is applicable under the schedules below and shall possess when first authorized to transact insurance any additional funds as surplus as required under 33-2-110:   (a) Kind or kindsMinimum capital or   of insurancesurplus required   Life  $200,000   Disability  200,000   Life and disability  300,000   Credit life and disability   50,000   Property  400,000   Marine  400,000   Casualty    All lines, except workers' compensation  400,000    All lines, including workers' compensation  600,000   Surety  500,000   Title  200,000   Multiple lines, two or more of property, marine,    casualty, or surety  800,000   (b) For insurers licensed on or after October 1, 1999:   Kind or kinds Minimum capital or   of insurance surplus required   Life  $600,000   Disability  500,000   Life and disability  750,000   Credit life and disability  150,000   Property  500,000   Marine  500,000   Casualty    All lines, except workers' compensation  500,000    All lines, including workers' compensation  750,000   Surety  500,000   Title  500,000   Multiple lines, two or more of property, marine,    casualty, or surety  1,000,000   (2) Surplus requirements for qualification to transact one or more kinds of insurance for domestic mutual insurers are governed by Title 33, chapter 3, and surplus requirements for domestic reciprocal insurers are governed by Title 33, chapter 5.   (3) Capital and surplus requirements must be based upon all the kinds of insurance actually transacted or to be transacted by the insurer in any areas in which it operates, whether or not only a portion of the kinds are to be transacted in this state.   (4) A life insurer may also grant annuities without additional capital or additional surplus.   (5) For a credit life and disability insurer that is not a resident domestic insurer as defined in 33-1-201 and 33-1-202, the capital or surplus required by this section is an amount equal to four times the minimum capital or surplus required for credit life and disability pursuant to subsection (1).   History: En. Sec. 52, Ch. 286, L. 1959; amd. Sec. 1, Ch. 319, L. 1977; R.C.M. 1947, 40-2807(part); amd. Sec. 2, Ch. 303, L. 1981; amd. Sec. 3, Ch. 202, L. 1983; amd. Sec. 12, Ch. 472, L. 1999.  
  33-2-110. Special surplus required. In addition to the minimum paid-in capital stock (stock insurers) or minimum surplus (mutual and reciprocal insurers) required by 33-2-109, special surplus shall be possessed by insurers as follows:   (1) All stock insurers and mutual and foreign reciprocal insurers which have actively transacted insurance in their state of domicile as an authorized insurer for less than 5 years or, if an alien insurer, have transacted insurance as an authorized insurer in at least one state of the United States for less than 5 years when first authorized to transact insurance in this state shall have a surplus or additional surplus equal to not less than 100% of the paid-in capital stock (if a stock insurer) or surplus (if a mutual or foreign reciprocal) otherwise required under 33-2-109 for the kinds of insurance to be transacted.   (2) Insurers that have actively transacted insurance as authorized insurers in one or more states of the United States for more than 5 years shall possess, when first authorized in this state, surplus or additional surplus equal to not less than 50% of the paid-in capital stock (if a stock insurer) or surplus (if a mutual or foreign reciprocal insurer) otherwise required under 33-2-109.   (3) Insurers authorized to transact multiple lines of insurance in this state shall at all times have and maintain surplus of not less than $100,000, in addition to the capital (if a stock insurer) or surplus (if a mutual or foreign reciprocal insurer) required by 33-2-109. The amount of such surplus shall be included within the surplus required of newly authorized insurers pursuant to subsections (1) and (2) of this section.   History: En. Sec. 53, Ch. 286, L. 1959; R.C.M. 1947, 40-2808; amd. Sec. 3, Ch. 303, L. 1981.  
  33-2-111. Deposit requirement. (1) An insurer may not be authorized to transact insurance in this state unless it makes and maintains in trust in this state through the commissioner for the protection of all its policyholders or of all its policyholders and creditors a deposit of cash or securities eligible for deposit under 33-2-603 in an amount not less than the minimum paid-in capital stock, if a stock insurer, or minimum surplus, if a mutual or reciprocal insurer, other than special surplus, required to be maintained for authority to transact the kinds of insurance to be transacted, except as to:   (a) title insurers, the deposit must be in the amount of $100,000;   (b) foreign insurers, in lieu of the deposit or part of the deposit in this state, the commissioner shall accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part of a deposit by the insurer is being maintained in public custody in that state in trust for the purpose, among other reasonable purposes of protection of policyholders or creditors, or both, of the protection of all its policyholders or creditors, or both, in Montana;   (c) alien insurers, in lieu of the deposit or part of the deposit in this state, the commissioner shall accept evidence satisfactory to the commissioner that the insurer maintains within the United States by way of trust deposits with public depositaries or in trust institutions approved by the commissioner assets available for discharge of its United States insurance obligations. The assets must be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States, together with the larger of the following sums:   (i) the largest deposit required by this code to be made by foreign insurers transacting like kinds of insurance; or   (ii) $300,000.   (2) Deposits of foreign or alien insurers in another state must be in cash or securities, or both, of substantially the same quality as those eligible for deposit in this state under 33-2-603.   (3) Deposits of reserves by domestic life insurers must be made as provided in 33-2-416.   (4) Deposits made in this state are subject to the provisions of part 6 of this chapter.   History: En. Sec. 54, Ch. 286, L. 1959; R.C.M. 1947, 40-2809; amd. Sec. 1, Ch. 238, L. 1979; amd. Sec. 1070, Ch. 56, L. 2009.  
  33-2-112. Management qualifications and affiliations. The commissioner may not grant or continue authority to transact insurance in this state as to any insurer the principal management personnel of which is found by the commissioner to be untrustworthy or not of good character or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or to its stockholders or that the commissioner has good reason to believe is affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relations with any person or persons whose business operations, to the detriment of insurers, stockholders, or creditors, are or have been marked by manipulation of assets, accounts, or reinsurance or by bad faith.   History: En. Sec. 55, Ch. 286, L. 1959; R.C.M. 1947, 40-2810; amd. Sec. 1071, Ch. 56, L. 2009.  
  33-2-113 and 33-2-114 reserved.  
  33-2-115. Application for certificate of authority. To apply for an original certificate of authority, an insurer shall file with the commissioner its application accompanied by the applicable fees as specified in 33-2-708, showing its name, location of its home office or principal office in the United States, if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, and any additional information that the commissioner may reasonably require. The application must be accompanied by the following documents, as applicable:   (1) if a foreign insurer, a copy of its corporate charter or articles of incorporation, with all amendments, certified by the public officer with whom the originals are on file in the state or country of domicile;   (2) if a mutual insurer, a copy of its bylaws as amended, certified by its secretary or other officer having custody of the bylaws;   (3) if a reciprocal insurer, copies of the power of attorney of its attorney-in-fact and of its subscribers' agreement, if any, certified by its attorney-in-fact;   (4) a copy of its financial statement as of the preceding December 31, sworn to by at least two executive officers of the insurer or certified by the public insurance supervisory official of the insurer's state of domicile or of entry into the United States;   (5) a copy of report of last examination, if any, made of the insurer, certified by the insurance supervisory official of its state of domicile or of entry into the United States;   (6) if a foreign or alien insurer, appointment of a registered agent to receive service of legal process pursuant to 33-1-605;   (7) if a foreign or alien insurer, a certificate of the public official having supervision of insurance in its state or country of domicile or state of entry into the United States, showing that it is authorized to transact the kinds of insurance proposed to be transacted in this state;   (8) if an alien insurer, a copy of the appointment and authority of its United States manager, certified by its officer having custody of its records;   (9) if a foreign insurer, certificate as to deposit if to be tendered pursuant to 33-2-111;   (10) if a domestic insurer, specimen copies of policies proposed to be offered in this state, together with premiums or premium rates applicable, or a declaration that the rates as applicable will be those promulgated by designated rating organizations authorized to file the rates in this state on behalf of the insurer.   History: En. Sec. 56, Ch. 286, L. 1959; R.C.M. 1947, 40-2811; amd. Sec. 9, Ch. 380, L. 2003; amd. Sec. 5, Ch. 60, L. 2019.  
  33-2-116. Issuance or refusal of certificate of authority -- state ownership of certificate. (1) If upon completion of an insurer's application for a certificate of authority the commissioner finds that the insurer has met the requirements for a certificate of authority under this code, the commissioner shall issue to the insurer a proper certificate of authority. If the commissioner does not find that the insurer is entitled to a certificate of authority, the commissioner shall issue an order refusing to issue a certificate. The commissioner shall act upon an application for a certificate of authority within 180 days after its completion.   (2) The certificate, if issued, must specify the kind or kinds of insurance the insurer is authorized to transact in Montana. At the insurer's request, the commissioner may issue a certificate of authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance as defined in 33-1-205 through 33-1-212.   (3) Although issued to the insurer, the certificate of authority is at all times the property of the state of Montana. Upon any expiration or termination of the certificate of authority, the insurer shall promptly deliver the certificate of authority to the commissioner.   History: En. Sec. 57, Ch. 286, L. 1959; R.C.M. 1947, 40-2812; amd. Sec. 4, Ch. 303, L. 1981; amd. Sec. 1072, Ch. 56, L. 2009; amd. Sec. 2, Ch. 271, L. 2009.  
  33-2-117. Renewal, expiration, reinstatement, and amendment of certificate of authority. (1) A certificate of authority issued or renewed under this code must continue in force as long as the insurer is entitled under this code and until suspended, revoked, or otherwise terminated. A certificate is subject to renewal by the insurer each year by payment on or prior to March 1 of the fee provided for in 33-2-708.   (2) If not continued by the insurer, the certificate of authority expires at midnight on May 31 following failure of the insurer to continue it in force. The commissioner shall promptly notify the insurer of its failure to pay the fee that can result in the expiration of its certificate of authority.   (3) The commissioner may reinstate a certificate of authority that the insurer has inadvertently permitted to expire after the insurer cures any failures resulting in expiration and upon payment of a fee of $100 for reinstatement. Otherwise, the insurer may be granted another certificate of authority only after filing an application and meeting all other requirements for an original certificate of authority in this state.   (4) The commissioner may amend a certificate of authority at any time to accord with changes in the insurer's charter of insuring powers.   History: En. Sec. 58, Ch. 286, L. 1959; R.C.M. 1947, 40-2813; amd. Sec. 1, Ch. 139, L. 1987; amd. Sec. 7, Ch. 379, L. 1995; amd. Sec. 1, Ch. 316, L. 1999; amd. Sec. 7, Ch. 63, L. 2015.  
  33-2-118. Mandatory revocation or suspension of certificate of authority. (1) The commissioner shall suspend or revoke an insurer's certificate of authority if:   (a) such action is required by any provision of this code;   (b) the insurer no longer meets the requirements for the authority originally granted, on account of deficiency of assets or otherwise; or   (c) the insurer's authority to transact insurance is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer.   (2) Except in cases of insolvency or impairment of required capital or surplus or suspension or revocation by another state as referred to in subsection (1)(c) above, the commissioner shall give the insurer at least 15 days' notice in advance of any such suspension or revocation under this section.   History: En. Sec. 59, Ch. 286, L. 1959; R.C.M. 1947, 40-2814.  
  33-2-119. Suspension or revocation for violations and special grounds. (1) The commissioner may suspend or revoke an insurer's certificate of authority if, after a hearing, the commissioner finds that the insurer has:   (a) violated any lawful order of the commissioner or any provision of this code other than those for which suspension or revocation is mandatory;   (b) reinsured more than 90% of its risks resident, located, or to be performed in Montana, in another insurer. In considering suspension or revocation, the commissioner shall consider all relevant factors, including whether:   (i) after the reinsurance transaction all parties will be in compliance with Montana law; and   (ii) the transaction will substantially reduce protection and service to Montana policyholders.   (2) The commissioner shall, after a hearing, suspend or revoke an insurer's certificate of authority if the commissioner finds that the insurer:   (a) is in unsound condition or in a condition or using methods or practices in the conduct of its business that render its further transaction of insurance in Montana injurious or hazardous to its policyholders or to the public;   (b) has refused to be examined or to produce its accounts, records, and files for examination or if any of its officers have refused to give information with respect to its affairs, when required by the commissioner;   (c) has failed to pay any final judgment rendered against it in Montana within 30 days after the judgment became final;   (d) with such frequency as to indicate its general business practice in Montana, has without just cause refused to pay a proper claim arising under its policies, whether the claim is in favor of an insured or is in favor of a third person with respect to the liability of an insured to the third person, or without just cause compels the insured or claimant to accept less than the amount due the claimant or to employ attorneys or to bring suit against the insurer or insured to secure full payment or settlement of the claims;   (e) is affiliated with and under the same general management or interlocking directorate or ownership as another insurer that transacts direct insurance in Montana without having a certificate of authority, except as permitted as to a surplus lines insurer under part 3 of this chapter.   (3) The commissioner may, without advance notice or a hearing, immediately suspend the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state.   History: En. Sec. 60, Ch. 286, L. 1959; R.C.M. 1947, 40-2815; amd. Sec. 5, Ch. 303, L. 1981; amd. Sec. 2, Ch. 518, L. 1983; amd. Sec. 25, Ch. 537, L. 1987; amd. Sec. 46, Ch. 613, L. 1989; amd. Sec. 1, Ch. 620, L. 1989; amd. Sec. 2, Ch. 310, L. 1997.  
  33-2-120. Notice of suspension or revocation -- effect upon producer's authority. (1) Upon suspending or revoking an insurer's certificate of authority, the commissioner shall give notice to the insurer and to its insurance producers in this state of record in the commissioner's office.   (2) The suspension or revocation must automatically suspend or revoke, as the case may be, the authority of all insurance producers to act as insurance producers of the insurer in this state, and the commissioner shall state that requirement in the notice to insurance producers provided for in subsection (1).   (3) The commissioner may also publish notice of revocation in one or more newspapers of general circulation published in this state.   History: En. Sec. 61, Ch. 286, L. 1959; R.C.M. 1947, 40-2816; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1073, Ch. 56, L. 2009.  
  33-2-121. Duration of suspension -- insurer's obligations -- reinstatement. (1) Suspension of an insurer's certificate of authority must be for a period fixed by the commissioner in the order of suspension and must continue until rescinded or otherwise removed by the commissioner. During the suspension, the commissioner may shorten the period by further order.   (2) During the period of the suspension the insurer shall file its annual statement and pay fees, licenses, and taxes as required under this code as if the certificate had continued in full force.   (3) If within the period of suspension the certificate of authority has not been terminated, the insurer's certificate of authority may be reinstated if the commissioner finds that the causes of the suspension have been removed or that the insurer is otherwise in compliance with the requirements of this code.   (4) Upon reinstatement of the insurer's certificate of authority, the authority of its insurance producers in this state to represent the insurer is reinstated.   (5) The commissioner shall forthwith notify both the insurer and its insurance producers in this state, as shown by the commissioner's records, of the reinstatement.   History: En. Sec. 62, Ch. 286, L. 1959; R.C.M. 1947, 40-2817; amd. Sec. 1, Ch. 534, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1074, Ch. 56, L. 2009.  
  33-2-122. Rights and duties of foreign insurer. Except as otherwise provided in this chapter, a foreign insurer which has a certificate of authority under this chapter shall, until its certificate is revoked or withdrawn, enjoy the same but no greater rights and privileges as a domestic insurer and shall be subject to the same duties, restrictions, penalties, and liabilities imposed upon a domestic insurer of like character.   History: En. Sec. 1, Ch. 345, L. 1987.  
  33-2-123 through 33-2-125 reserved.  
  33-2-126. Admission as domestic insurer -- conversion to foreign insurer. (1) An insurer organized under the laws of any other state and admitted to do business in this state for the purposes of writing insurance may become a domestic insurer by complying with all of the laws relative to the organization and licensing of a domestic insurer of the same type, and designating its principal place of business in this state. An insurer complying with this subsection is entitled to a certificate of redomestication and a certificate of authority to transact business in this state, is subject to the authority and jurisdiction of this state, and has the same rights and obligations as other domestic insurers.   (2) A domestic insurer may, upon approval of the commissioner, transfer its domicile to any other state in which it is admitted to transact insurance. If the insurer is otherwise qualified, the commissioner shall approve a proposed transfer unless the commissioner determines a transfer is not in the interest of the policyholders of this state. Upon a transfer, the insurer ceases to be a domestic insurer.   History: En. Sec. 1, Ch. 132, L. 1991; amd. Sec. 2, Ch. 316, L. 1999.  
  33-2-127. Effects of transfer of domicile. The certificate of authority, producers' appointments and licenses, policy forms, rates, and other items that the commissioner allows that are in existence at the time an insurer admitted to transact insurance in this state transfers its corporate domicile to this or any other state continue in effect upon transfer if the insurer remains qualified to transact insurance in this state. All rates and outstanding policies of a transferring insurer remain in effect, and policies need not be endorsed as to the new name of the company or its domicile unless required by the commissioner. A transferring insurer either shall file new policy forms for use in this state with the commissioner on or before the effective date of the transfer or may use existing policy forms with the appropriate endorsements as allowed by the commissioner. A transferring insurer shall notify the commissioner of the proposed transfer and shall promptly file any resulting amendments to corporate documents required to be filed with the commissioner.   History: En. Sec. 2, Ch. 132, L. 1991; amd. Sec. 1075, Ch. 56, L. 2009.  
  33-2-128. Authority to promulgate rules and regulations. The commissioner may promulgate rules and regulations to carry out the purposes of 33-2-126 and 33-2-127.   History: En. Sec. 3, Ch. 132, L. 1991.  
  33-2-1001. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 2, Ch. 269, L. 1967; R.C.M. 1947, 40-5502(part).  
  33-2-1002. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 3, Ch. 269, L. 1967; R.C.M. 1947, 40-5503.  
  33-2-1003. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 4, Ch. 269, L. 1967; R.C.M. 1947, 40-5504.  
  33-2-1004. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 5, Ch. 269, L. 1967; R.C.M. 1947, 40-5505.  
  33-2-1005. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 6, Ch. 269, L. 1967; R.C.M. 1947, 40-5506.  
  33-2-1006. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 7, Ch. 269, L. 1967; R.C.M. 1947, 40-5507.  
  33-2-1007. Repealed. Sec. 1, Ch. 239, L. 1979.   History: En. Sec. 8, Ch. 269, L. 1967; R.C.M. 1947, 40-5508.  
  33-2-1101. Definitions. As used in this part, the following definitions apply unless the context requires otherwise:  (1) An "affiliate" of or person "affiliated" with a specific person is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the person specified.   (2) "Control", including the terms "controlling", "controlled by", and "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person. This power may be evidenced through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by 33-2-1112 that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.   (3) "Enterprise risk" means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole. The term includes but is not limited to anything that would cause the insurer's risk-based capital to fall into a company action level, as provided in 33-2-1904, or that would cause the insurer to be in hazardous financial condition as determined by the commissioner pursuant to 33-2-1321.   (4) "Groupwide supervisor" means the regulatory official authorized to engage in conducting and coordinating groupwide supervision activities who is determined or acknowledged by the commissioner under 33-2-1140 to have sufficient significant contacts with the internationally active insurance group.   (5) "Group capital calculation instructions" means the group capital calculation instructions as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.   (6) "Insurance holding company system" means two or more affiliated persons, one or more of which is an insurer.   (7) "Insurer" has the meaning provided in 33-1-201, except that the term does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.   (8) "Internationally active insurance group" means an insurance holding company system that includes an insurer registered under 33-2-1111 and meets the following criteria:   (a) premiums are written in at least three countries;   (b) the percentage of gross premiums written outside the United States is at least 10% of the insurance holding company system's total gross written premiums; and   (c) based on a 3-year rolling average, the total assets of the insurance holding company system are at least $50 billion or the total gross written premiums of the insurance holding company system are at least $10 billion.   (9) "NAIC" means the national association of insurance commissioners.   (10) "NAIC liquidity stress test framework" means a separate NAIC publication that includes a history of the NAIC's development of regulatory liquidity stress testing, the scope criteria applicable for a specific data year, and the liquidity stress test instructions and reporting templates for a specific data year, the scope criteria, instructions, and reporting template as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.   (11) (a) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert.   (b) The term does not include any securities broker performing no more than the usual and customary broker's function.   (12) The "scope criteria", as detailed in the NAIC liquidity stress test framework, are the designated exposure bases along with minimum magnitudes thereof for the specified data year, used to establish a preliminary list of insurers considered scoped into the NAIC liquidity stress test framework for that data year.   (13) A "securityholder" of a specified person is one who owns any security of that person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.   (14) A "subsidiary" of a specified person is an affiliate controlled by that person directly or indirectly through one or more intermediaries.   (15) "Voting security" means any security convertible into or evidencing a right to acquire a voting security.   History: En. Sec. 1, Ch. 64, L. 1971; R.C.M. 1947, 40-5509(part); amd. Sec. 23, Ch. 370, L. 2015; amd. Sec. 1, Ch. 344, L. 2021. 
  33-2-1102. Authorization of subsidiaries. Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged in the following kinds of business:   (1) any kind of insurance business authorized by the jurisdiction in which it is incorporated;   (2) acting as an insurance broker or as an insurance producer for its parent or for any of its parent's insurer subsidiaries;   (3) investing, reinvesting, or trading in securities for its own account, that of its parent, any subsidiary of its parent, or any affiliate or subsidiary;   (4) management of any investment company subject to or registered pursuant to the Investment Company Act of 1940, as amended, including related sales and services;   (5) acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, as amended;   (6) rendering investment advice to governments, government agencies, corporations, or other organizations or groups;   (7) rendering other services related to the operations of an insurance business, including but not limited to actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;   (8) ownership and management of assets which the parent corporation could itself own or manage;   (9) acting as administrative agent for a governmental instrumentality which is performing an insurance function;   (10) financing of insurance premiums, insurance producers, and other forms of consumer financing;   (11) any other business activity determined by the commissioner to be reasonable ancillary to an insurance business;   (12) owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in this section.   History: En. Sec. 2, Ch. 64, L. 1971; R.C.M. 1947, 40-5510(a); amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-1103. Additional investment authority -- exemption from other investment restrictions -- determination of qualification -- divestiture. (1) In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under this part, a domestic insurer may also:   (a) invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of 10% of the insurer's assets or 50% of the insurer's surplus as regards policyholders, provided that after the investments the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of the investments, there must be included total net money or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities, and all amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation.   (b) if the insurer's total liabilities, as calculated for national association of insurance commissioners annual statement purposes, are less than 10% of assets, invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, provided that after the investment the insurer's surplus as regards policyholders, considering the investment as if it were a disallowed asset, will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;   (c) invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, provided that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in this section. The total investment of the insurer must include:   (i) any direct investment by the insurer in an asset;   (ii) the insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which is calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership of such subsidiary.   (d) with the approval of the commissioner, invest a greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries, provided that after the investment, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.   (2) Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to subsection (1) are not subject to any of the otherwise applicable restrictions or prohibitions contained in this part applicable to such investments of insurers.   (3) Whether any investment pursuant to subsection (1) meets the applicable requirements thereof is to be determined immediately after the investment is made, taking into account the then outstanding principal balance on all previous investments in debt obligations and the value of all previous investments in equity securities as of the date they were made.   (4) If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within 3 years from the time of the cessation of control or within such further time as the commissioner may prescribe, unless at any time after the investment is made, the investment meets the requirements for investment under any other section of this part and the insurer has notified the commissioner thereof.   History: En. Sec. 2, Ch. 64, L. 1971; R.C.M. 1947, 40-5510(b) thru (e); amd. Sec. 12, Ch. 198, L. 1979; amd. Sec. 142, Ch. 575, L. 1981; amd. Sec. 2, Ch. 620, L. 1989.  
  33-2-1104. Acquisition or divestiture of control of or merger with domestic insurer -- filing requisites. (1) (a) A person other than the issuer may not make a tender offer for or a request or invitation for tenders of or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation of the transaction, the person would, directly or indirectly or by conversion or by exercise of any right to acquire, be in control of the insurer.   (b) A person may not enter into an agreement to merge with or otherwise to acquire control of a domestic insurer unless, at the time any offer, request, or invitation is made or any agreement is entered into or prior to the acquisition of the securities if an offer or agreement is not involved, the person has filed with the commissioner and has sent to the insurer, and the insurer has sent to its shareholders, a statement as provided in subsection (3) containing the information required by this section and the offer, request, invitation, agreement, or acquisition has been approved by the commissioner in the manner prescribed in this section.   (2) (a) A controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer in any manner shall file a statement as provided in subsection (3) with the commissioner for approval of its proposed divestiture at least 30 days prior to the cessation of control.   (b) The information in the notice must remain confidential until the conclusion of the transaction unless the commissioner, at the commissioner's discretion, determines confidential treatment will interfere with enforcement of this section.   (3) The statement to be filed with the commissioner must be made under oath or affirmation and must contain the following:   (a) the name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (1) is to be effected, who is called the "acquiring party":   (i) if the person is an individual, the principal occupation and all offices and positions held during the past 5 years and any conviction of crimes other than minor traffic violations during the past 10 years;   (ii) if the person is not an individual:   (A) a report of the nature of its business operations during the past 5 years or for a lesser period that the person and any predecessors have been in existence;   (B) an informative description of the business intended to be done by the person and the person's subsidiaries; and   (C) a list of all individuals who are or who have been selected to become directors or executive officers of the person or who perform or will perform functions appropriate to the positions. The list must include for each individual the information required by subsection (3)(a)(i).   (b) the source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction in which funds were or are to be obtained for any purpose, and the identity of persons furnishing the consideration, provided that when a source of consideration is a loan made in the lender's ordinary course of business, the identity of the lender must remain confidential if the person filing the statement requests;   (c) fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding 5 fiscal years of each acquiring party, or for a lesser period that the acquiring party and any predecessors have been in existence, and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement;   (d) any plans or proposals that each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;   (e) the number of shares of any security referred to in subsection (1) that each acquiring party proposes to acquire and the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (1) and a statement as to the method by which the fairness of the proposal was arrived at;   (f) the amount of each class of any security referred to in subsection (1) that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;   (g) a full description of any contracts, arrangements, or understandings with respect to any security referred to in subsection (1) in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description must identify the persons with whom the contracts, arrangements, or understandings have been entered into.   (h) a description of the purchase of any security referred to in subsection (1) by an acquiring party during the 12 calendar months preceding the filing of the statement, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid for the security;   (i) a description of any recommendations to purchase any security referred to in subsection (1) during the 12 calendar months preceding the filing of the statement made by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party;   (j) copies of all tender offers for, requests or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (1) and, if distributed, of additional soliciting material relating to the offers or agreements;   (k) the terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities referred to in subsection (1) for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard to the solicitation;   (l) an agreement by which the person required to file the statement referred to in subsection (1) agrees to provide the annual enterprise risk report for as long as control exists;   (m) an acknowledgment by the person required to file the statement referred to in subsection (1) that the person and all affiliates within its control in the insurance holding company system agree to provide information to the commissioner upon request if the commissioner determines the information is necessary to evaluate enterprise risk to the insurer; and   (n) additional information that the commissioner may by rule prescribe as necessary or appropriate for the protection of policyholders and securityholders of the insurer or in the public interest.   (4) If the person required to file the statement referred to in subsection (1) is a partnership, limited partnership, syndicate, or other group, the commissioner may require that the information called for by subsection (3) must be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member, or person is a corporation or the person required to file the statement referred to in subsection (1) is a corporation, the commissioner may require that the information required by subsection (3) be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of the corporation.   (5) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment describing the change, together with copies of all documents and other material relevant to the change, must be filed with the commissioner and sent to the insurer within 2 business days after the person learns of the change. The insurer shall send the amendment to its shareholders.   (6) If any offer, request, invitation, agreement, or acquisition referred to in subsection (1) is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934 or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (1) may use the documents in furnishing the information called for by that statement.   (7) As used in this section:   (a) "domestic insurer" includes any person controlling a domestic insurer unless the person, as determined by the commissioner, is either directly or through its affiliates primarily engaged in a business other than the business of insurance;   (b) "person" does not include a securities broker holding, in the usual and customary broker's function, less than 20% of the voting securities of an insurance company or of any person who controls an insurance company.   History: En. Sec. 3, Ch. 64, L. 1971; R.C.M. 1947, 40-5511(a) thru (c); amd. Sec. 1090, Ch. 56, L. 2009; amd. Sec. 24, Ch. 370, L. 2015; amd. Sec. 11, Ch. 9, L. 2017.  
  33-2-1105. Approval by commissioner -- hearings -- notice. (1) The commissioner shall approve any merger or other acquisition or divestiture of control referred to in 33-2-1104 unless, after a public hearing, the commissioner finds that:   (a) after the change of control, the domestic insurer referred to in 33-2-1104 would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which the domestic insurer is presently licensed;   (b) the effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly;   (c) the financial condition of any acquiring party might jeopardize the financial stability of the insurer or prejudice the interest of the insurer's policyholders or the interests of any remaining securityholders who are unaffiliated with the acquiring party;   (d) the terms of the offer, request, invitation, agreement, or acquisition referred to in 33-2-1104 are unfair and unreasonable to the securityholders of the insurer;   (e) the plans or proposals that the acquiring party has to liquidate the insurer, to sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer and not in the public interest;   (f) the competence, experience, and integrity of those persons who would control the operation of the insurer are of the nature that the change in control would not be in the interest of policyholders of the insurer and of the public; or   (g) the acquisition is likely to be hazardous or prejudicial to the insurance-buying public.   (2) The public hearing referred to in subsection (1) must be held within 30 days after the statement required by 33-2-1104(1) is filed, and at least 20 days' notice of the hearing must be given by the commissioner to the person filing the statement. Not less than 7 days' notice of the public hearing must be given by the person filing the statement to the insurer and to other persons as may be designated by the commissioner. The insurer shall give notice to its securityholders. The commissioner shall make a determination within 30 days after the conclusion of the hearing. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interests may be affected has the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and to conduct discovery proceedings in the same manner that is presently allowed in the district court of this state. All discovery proceedings must be concluded not later than 3 days prior to the commencement of the public hearing.   (3) All statements, amendments, or other material filed pursuant to 33-2-1104(1) through (5) and all notices of public hearings held pursuant to subsection (1) of this section must be mailed by the insurer to its shareholders within 5 business days after the insurer has received the statements, amendments, other material, or notices. The expenses of mailing must be borne by the person making the filing. As security for the payment of the expenses, the person shall file with the commissioner an acceptable bond or other deposit in an amount to be determined by the commissioner.   (4) The commissioner may retain at the expense of the acquiring or divesting party any attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.   History: En. Sec. 3, Ch. 64, L. 1971; R.C.M. 1947, 40-5511(d), (e); amd. Sec. 3, Ch. 620, L. 1989; amd. Sec. 1091, Ch. 56, L. 2009; amd. Sec. 25, Ch. 370, L. 2015; amd. Sec. 12, Ch. 9, L. 2017.  
  33-2-1106. Exemptions -- violations -- jurisdiction. (1) The provisions of 33-2-1104 and 33-2-1105 do not apply to an offer, request, invitation, agreement, or acquisition that the commissioner by order exempts from those sections as:   (a) not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer; or   (b) otherwise not comprehended within the purposes of 33-2-1104 and 33-2-1105.   (2) The following are violations of 33-2-1104 or 33-2-1105:   (a) the failure to file any statement, amendment, or other material required to be filed pursuant to 33-2-1104(1) through (5);   (b) the effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger with a domestic insurer unless the commissioner has given approval.   (3) The courts of this state are vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the commissioner under 33-2-1104 and over all actions involving the person arising out of violations of 33-2-1104 or 33-2-1105. Each person is considered to have performed acts equivalent to and constituting an appointment of the commissioner to be the person's attorney upon whom may be served all lawful process in any action, suit, or proceeding arising out of violations of this section. Copies of all lawful process must be served on the commissioner and transmitted by certified mail by the commissioner to the person at the person's last-known address.   History: En. Sec. 3, Ch. 64, L. 1971; R.C.M. 1947, 40-5511(f) thru (h); amd. Sec. 4, Ch. 620, L. 1989; amd. Sec. 1092, Ch. 56, L. 2009; amd. Sec. 26, Ch. 370, L. 2015; amd. Sec. 5, Ch. 62, L. 2019.  
  33-2-1107 through 33-2-1110 reserved.  
  33-2-1111. Registration of insurers -- requisites -- termination. (1) (a) An insurer authorized to do business in this state that is a member of an insurance holding company system shall register with the commissioner, except that a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile that are substantially similar to those contained in this section is not required to register.  (b) Any insurer subject to registration under this section shall register within 15 days after becoming subject to registration, unless the commissioner for good cause extends the time for registration.   (c) The commissioner may require any authorized insurer that is a member of a holding company system that is not subject to registration under this section to furnish a copy of the registration statement or other information filed by the insurance company with the insurance regulatory authority in the jurisdiction where the company is domiciled.   (2) An insurer subject to registration shall file with the commissioner, on or before April 30 each year, a registration statement on a form provided by the commissioner that must contain current information about:   (a) the capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;   (b) the identity and relationship of every member of the insurance holding company system;   (c) transactions currently outstanding or that occurred during the last calendar year between the insurer and its affiliates and the following agreements that are in force:   (i) loans, other investments, or purchases, sales, or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;   (ii) purchases, sales, or exchanges of assets;   (iii) transactions not in the ordinary course of business;   (iv) guaranties or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;   (v) management and service contracts and cost-sharing arrangements;   (vi) reinsurance agreements;   (vii) dividends and other distributions to shareholders; and   (viii) consolidated tax allocation agreements;   (d) a pledge of the insurer's stock, including stock of a subsidiary or controlling affiliate for a loan made to a member of the insurance holding company system;   (e) if requested by the commissioner, financial statements of or within an insurance holding company system, including all affiliates, which may include annual audited financial statements filed with the U.S. securities and exchange commission pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the most recently filed parent corporation financial statements filed with the U.S. securities and exchange commission;   (f) statements that the insurer's board of directors is responsible for and oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, have implemented, and continue to maintain and monitor corporate governance and internal control procedures;   (g) all matters concerning transactions between registered insurers and any affiliates as may be included from time to time in registration forms adopted or approved by the commissioner; and   (h) any other information required by the commissioner by rule.   (3) A registration statement must contain a summary outlining each item in the current registration statement that represents a change from the prior registration statement.   (4) Information need not be disclosed on the registration statement filed pursuant to subsection (2) if the information is not material for the purposes of this section. Unless the commissioner by rule or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, or investments involving 1/2 of 1% or less of an insurer's admitted assets as of the prior December 31 are not material for purposes of this section. The definition of materiality provided in this subsection does not apply for purposes of the group capital calculation of the liquidity stress test framework.   (5) A person within an insurance holding company system subject to registration shall provide complete and accurate information to an insurer if the information is reasonably necessary to enable the insurer to comply with Title 33, chapter 2, part 11.   (6) Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on amendment forms provided by the commissioner within 15 days after the end of the month in which the registered insurer learns of each change or addition.   (7) (a) The ultimate controlling person of every insurer subject to registration under this section shall also file an annual enterprise risk report. The report must identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer to the best of the controlling person's knowledge and belief. The report must be filed with the lead state commissioner of the insurance holding company system, as determined by the procedures within the financial analysis handbook adopted by rule of the commissioner.   (b) Except as provided in this section, the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation as directed by the lead state commissioner. The report must be completed in accordance with the NAIC group capital calculation instructions, which may permit the lead state commissioner to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. The report must be filed with the lead state commissioner of the insurance holding company system as determined by the commissioner in accordance with the procedures within the financial analysis handbook adopted by the NAIC. Insurance holding company systems described below are exempt from filing the group capital calculation:   (i) an insurance holding company system that has only one insurer within its holding company structure, that only writes business and is only licensed in its domestic state, and assumes no business from any other insurer;   (ii) an insurance holding company system that is required to perform a group capital calculation specified by the United States federal reserve board. The lead state commissioner shall request the calculation from the federal reserve board under the terms of information-sharing agreements in effect. If the federal reserve board cannot share the calculation with the lead state commissioner, the insurance holding company system is not exempt from the group capital calculation filing.   (iii) an insurance holding company system whose non-U.S. groupwide supervisor is located within a reciprocal jurisdiction as described in 33-2-1216 that recognizes the U.S. state regulatory approach to group supervision and group capital;   (iv) an insurance holding company system:   (A) that provides information to the lead state that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the groupwide supervisor, who has determined such information is satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC financial analysis handbook; and   (B) whose non-U.S. groupwide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as specified by the commissioner in regulation, the group capital calculation as the worldwide group capital assessment for U.S. insurance groups who operate in that jurisdiction;   (v) notwithstanding the provisions of subsections (7)(b)(iii) and (7)(b)(iv), a lead state commissioner shall require the group capital calculation for U.S. operations of any non-U.S. based insurance holding company system where, after any necessary consultation with other supervisors or officials, it is deemed appropriate by the lead state commissioner for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace;   (vi) notwithstanding the exemptions from filing the group capital calculation stated in subsections (7)(b)(i) through (7)(b)(iv), the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing or report in accordance with criteria as specified by the commissioner in regulation;   (vii) if the lead state commissioner determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the group capital calculation under this section, the insurance holding company system shall file the group capital calculation at the next annual filing date unless given an extension by the lead state commissioner based on reasonable grounds shown;   (c) The ultimate controlling person of every insurer subject to registration and also scoped into the NAIC liquidity stress test framework shall file the results of a specific year's liquidity stress test. The filing must be made to the lead state insurance commissioner of the insurance holding company system as determined by the procedures within the financial analysis handbook adopted by the NAIC:   (i) The NAIC liquidity stress test framework includes scope criteria applicable to a specific data year. These scope criteria are reviewed at least annually by the financial stability task force or its successor. Any change to the NAIC liquidity stress test framework or to the data year for which the scope criteria are to be measured are effective on January 1 of the year following the calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope criteria are considered scoped into the NAIC liquidity stress test framework for the specified data year unless the lead state insurance commissioner, in consultation with the NAIC financial stability task force or its successor, determines the insurer should not be scoped into the framework for that data year. Similarly, insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC liquidity stress test framework for the specified data year, unless the lead state insurance commissioner, in consultation with the NAIC financial stability task force or its successor, determines the insurer should be scoped into the framework for that data year.   (ii) Regulators wish to avoid having insurers scoped in and out of the NAIC liquidity stress test framework on a frequent basis. The lead state insurance commissioner, in consultation with the financial stability task force or its successor, will assess this concern as part of the determination for an insurer.   (iii) The performance of, and filing of the results from, a specific year's liquidity stress test must comply with the NAIC liquidity stress test framework's instructions and reporting templates for that year and any lead state insurance commissioner determinations, in conjunction with the financial stability task force or its successor, provided within the framework.   (8) The commissioner shall terminate the registration of any insurer that demonstrates that the insurer no longer is a member of an insurance holding company system.   (9) The commissioner may require or allow two or more affiliated insurers subject to registration under this section to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements.   (10) The commissioner may allow an insurer that is authorized to do business in this state and that is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (1) and to file all information and material required to be filed under this section.   History: En. Sec. 4, Ch. 64, L. 1971; R.C.M. 1947, 40-5512(a) thru (g); amd. Sec. 5, Ch. 620, L. 1989; amd. Sec. 45, Ch. 596, L. 1993; amd. Sec. 26, Ch. 379, L. 1995; amd. Sec. 27, Ch. 370, L. 2015; amd. Sec. 13, Ch. 9, L. 2017; amd. Sec. 2, Ch. 344, L. 2021. 
  33-2-1112. Exemptions -- disclaimer -- violations. (1) The provisions of 33-2-1111 and this section do not apply to any insurer, information, or transaction to the extent that the commissioner by rule or order has exempted that insurer, information, or transaction from the provisions of 33-2-1111 and this section.   (2) (a) Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer, or a disclaimer may be filed by an insurer or any member of an insurance holding company system. The disclaimer must fully disclose all material relationships and bases for affiliation between the person and the insurer that is the object of the disclaimer as well as the basis for disclaiming the affiliation.   (b) The commissioner shall approve or deny a disclaimer within 30 days of filing. If the commissioner denies a disclaimer under this section, the disclaiming party may request a hearing, which must be granted. The disclaiming party is not required to register under this section if the commissioner approves the disclaimer.   (3) The failure to file a registration statement, any summary of the registration statement, an enterprise risk report, or any amendment to the registration statement or enterprise risk report, as required by 33-2-1111 and this section, within the time specified for filing is a violation of 33-2-1111 and this section.   History: En. Sec. 4, Ch. 64, L. 1971; R.C.M. 1947, 40-5512(h) thru (j); amd. Sec. 28, Ch. 370, L. 2015; amd. Sec. 14, Ch. 275, L. 2017.  
  33-2-1113. Transactions with affiliates -- standards. (1) Material transactions by registered insurers with their affiliates are subject to the following standards:   (a) The terms must be fair and reasonable.   (b) Charges or fees for services performed must be reasonable.   (c) Expenses incurred and payments received must be allocated to the insurer in conformity with customary insurance accounting practices consistently applied.   (d) The books, accounts, and records of each party must clearly and accurately disclose the precise nature and details of the transactions, including any accounting information necessary to support the reasonableness of the charges or fees to the respective parties.   (e) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates must be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.   (2) (a) The following transactions involving a domestic insurer and a person in its holding company system, including amendments or modifications to affiliate agreements previously filed under this section, may not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into a transaction within at least 30 days prior to the transaction, or a shorter period as the commissioner may permit, and the commissioner does not disapprove the transaction:   (i) sales, purchases, exchanges, loans or extensions of credit, guaranties, or investments if, as of the prior December 31, the transactions are equal to or exceed:   (A) with respect to insurers other than life insurers, the lesser of 3% of the insurer's admitted assets or 25% of its surplus as regards policyholders; and   (B) with respect to life insurers, 3% of the insurer's admitted assets;   (ii) loans or extensions of credit to a person who is not an affiliate if the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in an affiliate of the insurer making the loans or extensions of credit if the transactions, as of the prior December 31, are equal to or exceed:   (A) with respect to insurers other than life insurers, the lesser of 3% of the insurer's admitted assets or 25% of its surplus as regards policyholders;   (B) with respect to life insurers, 3% of the insurer's admitted assets;   (iii) reinsurance agreements or modifications to reinsurance agreements, including:   (A) reinsurance pooling agreements;   (B) agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next 3 years, equals or exceeds 5% of the insurer's surplus regarding policyholders as of the prior December 31; and   (C) those agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate if an agreement or understanding exists between the insurer and nonaffiliate that a portion of the assets will be transferred to one or more affiliates of the insurer;   (iv) all management agreements, service contracts, tax allocation agreements, guarantees, and cost-sharing arrangements;   (v) direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount that, together with its present holdings in such investments, exceeds 2.5% of the insurer's surplus to policyholders; and   (vi) any material transactions, specified by rule, that the commissioner determines may adversely affect the interests of the insurer's policyholders.   (b) Nothing in this subsection (2) is considered to authorize or permit a transaction that, in the case of an insurer that is not a member of the same holding company system, would otherwise be contrary to law.   (3) A domestic insurer may not enter into a transaction that is part of a plan or series of like transactions with a person within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount review. If the commissioner determines that the separate transactions were entered into over a 12-month period for the purpose of evading review, the commissioner may exercise authority under 33-2-1120.   (4) The commissioner, in reviewing a transaction pursuant to subsection (2), shall consider whether the transaction complies with the standards set forth in subsection (1) and whether the transaction may adversely affect the interests of a policyholder.   (5) The commissioner must be notified within 30 days of an investment by a domestic insurer in a corporation if the total investment in the corporation by the insurance holding company system exceeds 10% of the corporation's voting securities.   (6) For purposes of this section, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to the insurer's financial needs, the following factors, among others, must be considered:   (a) the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;   (b) the extent to which the insurer's business is diversified among the several lines of insurance;   (c) the number and size of risks insured in each line of business;   (d) the extent of the geographical dispersion of the insurer's insured risks;   (e) the nature and extent of the insurer's reinsurance program;   (f) the quality, diversification, and liquidity of the insurer's investment portfolio;   (g) the recent past and projected future trend in the size of the insurer's surplus as regards policyholders;   (h) the surplus as regards policyholders maintained by other comparable insurers;   (i) the adequacy of the insurer's reserves;   (j) the quality and liquidity of investments in affiliates made pursuant to 33-2-1104 and 33-2-1105. The commissioner may treat any investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in the commissioner's judgment the investment so warrants.   History: En. Sec. 5, Ch. 64, L. 1971; R.C.M. 1947, 40-5513(a), (b); amd. Sec. 6, Ch. 620, L. 1989; amd. Sec. 10, Ch. 451, L. 1993; amd. Sec. 29, Ch. 370, L. 2015; amd. Sec. 14, Ch. 9, L. 2017; amd. Sec. 6, Ch. 62, L. 2019.  
  33-2-1114. Dividends and other distributions -- commissioner approval. (1) An insurer subject to registration under 33-2-1111 and 33-2-1112 may not pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until 30 days after the commissioner has received notice of the declaration of the dividend or distribution and has not within the period disapproved the payment or the commissioner has approved payment within the 30-day period.   (2) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property whose fair market value together with that of other dividends or distributions made within the preceding 12 months exceeds 10% of the insurer's surplus as regards policyholders as of December 31 next preceding, but may not include pro rata distributions of any class of the insurer's own securities.   (3) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval, and the declaration may not confer rights upon shareholders until the commissioner has approved the payment of the dividend or distribution or the commissioner has not disapproved the payment within the 30-day period referred to in subsection (1).   (4) An insurer subject to subsection (1) may not pay any other dividend or make any other distribution to its shareholders unless the insurer has notified the commissioner of the payment 15 days prior to the payment date. The notice must be kept confidential until the payment date of the dividend. The commissioner may order that a dividend not be paid if the commissioner finds that the insurer's surplus as regards policyholders, following the payment to shareholders, would be inadequate or could lead the insurer to a hazardous financial condition.   History: En. Sec. 5, Ch. 64, L. 1971; R.C.M. 1947, 40-5513(c); amd. Sec. 5, Ch. 534, L. 1987; amd. Sec. 46, Ch. 596, L. 1993.  
  33-2-1115. Examination. (1) (a) In addition to the powers under Title 33, chapter 1, part 4, relating to the examination of insurers, the commissioner also has the power to order any insurer registered under 33-2-1111 to produce the records, books, or other information papers in the possession of the insurer or its affiliates that the commissioner determines are necessary to ascertain the financial condition or legality of conduct of the insurer.   (b) The information that the commissioner may request under subsection (1)(a) includes information necessary to ascertain the enterprise risk to the insurer by the ultimate controlling party or by any entity or combination of entities within the insurance holding company system or by the insurance holding company system on a consolidated basis.   (c) If the insurer fails to comply with the order, the commissioner may examine the affiliates to obtain the information.   (2) The commissioner may retain at the registered insurer's expense attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff that may be reasonably necessary to assist in the conduct of the examination under subsection (1). Any persons retained are under the direction and control of the commissioner and are retained to act in a purely advisory capacity.   (3) Each registered insurer producing for examination records, books, and papers pursuant to subsection (1) is liable for and shall pay the expense of the examination.   (4) In the event the insurer fails to comply with an order, the commissioner may examine the affiliates to obtain the information.   (5) Nothing in this section limits the authority of the commissioner under 33-1-315 through 33-1-318 to issue subpoenas, administer oaths, examine under oath any person, compel testimony, issue penalties, or seek injunctions or other remedies to determine and ensure compliance with this section.   History: En. Sec. 6, Ch. 64, L. 1971; R.C.M. 1947, 40-5514; amd. Sec. 47, Ch. 596, L. 1993; amd. Sec. 30, Ch. 370, L. 2015; amd. Sec. 15, Ch. 9, L. 2017.  
  33-2-1116. Confidentiality of information. (1) (a) Documents, materials, and other information in the possession or control of the commissioner that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to 33-2-1115 and all other information provided to the department of insurance pursuant to 33-2-1104(3)(l), 33-2-1104(3)(m), 33-2-1111, and 33-2-1113 are confidential information as provided in 2-6-1002 and Title 2, chapter 6, part 10, are recognized by this state as being proprietary and contain trade secrets, and are confidential by law and privileged, are not subject to subpoena or discovery, and are not admissible in evidence in any private civil action. The commissioner is authorized to use the documents, materials, and other information to further any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner may not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which the documents, materials, or other information pertains unless the commissioner, after giving notice and an opportunity to be heard to the insurer and the insurer's affiliates who would be affected, determines that the interest of policyholders, shareholders, or the public would be served by the publication. On a determination that the interest of policyholders, shareholders, or the public would be served, the commissioner may publish all or any part of the documents, materials, or other information in a manner that the commissioner considers appropriate.  (b) For purposes of the information reported and provided to the department of insurance pursuant to 33-2-1111(7)(b), the commissioner shall maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company supervised by the federal reserve board or any U.S. groupwide supervisor.   (c) For purposes of the information reported and provided to the department pursuant to 33-2-1111(7)(c), the commissioner shall maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company supervised by the federal reserve board and non-U.S. groupwide supervisors.   (2) Neither the commissioner nor any person who receives documents, materials, or other information while acting under the authority of the commissioner, or with whom the documents, materials, or other information is shared under Title 33, chapter 2, part 4, and this section, may be required or permitted to testify in a private civil action concerning any confidential documents, materials, or information subject to subsection (1).   (3) To assist in the performance of the commissioner's duties, the commissioner:   (a) may, subject to subsection (3)(b), share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (1), including proprietary and trade secret documents and materials, with other state, federal, and international regulatory agencies, with the NAIC, with any third-party consultants designated by the commissioner, and with state, federal, and international law enforcement authorities, including members of a supervisory college. To receive the shared documents, materials, or other information, the recipient shall verify in writing that the recipient has the legal authority to maintain confidentiality and agree in writing to maintain the confidentiality and privileged status of the documents, materials, or other information.   (b) may share confidential and privileged documents, materials, or other information reported pursuant to 33-2-1111(7) only with insurance regulators of states having statutes or regulations substantially similar to subsection (1) and only if the respective insurance regulators have agreed in writing not to disclose the documents, materials, or other information;   (c) may receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or other information, including proprietary and trade-secret information, from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions; and   (d) shall maintain as confidential or privileged any document, materials, or other information received under subsection (3)(c) with notice or the understanding that the document, materials, or other information is confidential or privileged under the laws of the jurisdiction that is the source of the document, materials, or information.   (4) (a) The commissioner shall enter into written agreements with the NAIC and any third-party consultant designated by the commissioner governing the sharing and use of information provided pursuant to Title 33, chapter 2, part 4, and this section.   (b) An agreement with the NAIC under this subsection (4) must:   (i) specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant designated by the commissioner pursuant to Title 33, chapter 2, part 4, and this section, including procedures and protocols for sharing by the NAIC with other state, federal, or international regulators. The agreement must provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;   (ii) specify that ownership information shared with the NAIC or a third-party consultant pursuant to Title 33, chapter 2, part 4, and this section remains with the commissioner and that the NAIC's or a third-party consultant's, as designated by the commissioner, use of the information is subject to the direction of the commissioner;   (iii) excluding documents, material, or information reported pursuant to 33-2-1111, prohibit the NAIC or third-party consultant designated by the commissioner from storing the information shared pursuant to this chapter in a permanent database after the underlying analysis is completed;   (iv) require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant designated by the commissioner pursuant to Title 33, chapter 2, part 4, and this section is subject to a request or a subpoena to the NAIC or a third-party consultant designated by the commissioner for disclosure or production;   (v) require the NAIC or a third-party consultant designated by the commissioner to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant designated by the commissioner may be required to disclose confidential information about the insurer that has been shared with the NAIC and its affiliates and subsidiaries pursuant to Title 33, chapter 2, part 4, and this section; and   (vi) for documents, material, or information reporting pursuant to 33-2-1111(7)(c) in the case of an agreement involving a third-party consultant, provide for notification of the identity of the consultant to the applicable insurers.   (5) The sharing of information by the commissioner pursuant to Title 33, chapter 2, part 4, and this section does not constitute a delegation of regulatory authority or rulemaking. The commissioner is solely responsible for the administration, execution, and enforcement of the provisions of Title 33, chapter 2, part 4, and this section.   (6) Disclosure to the commissioner of information under this section or as a result of sharing of confidential information authorized under subsections (3) and (4) does not constitute a waiver of any applicable privilege or claim of confidentiality related to the information obtained under Title 33, chapter 2, part 4, and this section.   (7) Documents, materials, and other information in the possession or control of the NAIC or a third-party consultant designated by the commissioner pursuant to Title 33, chapter 2, part 4, and this section are confidential information as provided in 2-6-1002 and privileged, are not admissible in evidence in a private civil action, and are not subject to subpoena or discovery.   (8) The group capital calculation and resulting group capital ratio required under 33-2-1111 and the liquidity stress test along with its results and supporting disclosures required under 33-2-1111 are regulatory tools for assessing group risks and capital adequacy and group liquidity risks, respectively, and are not intended as a means to rank insurers or insurance holding company systems generally. Therefore, except as otherwise may be required under the provisions of this title, the making, publishing, disseminating, circulating, or placing before the public, or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited. However, if any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of such statement or the inappropriateness, as the case may be, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false statement.   History: En. Sec. 7, Ch. 64, L. 1971; R.C.M. 1947, 40-5515; amd. Sec. 7, Ch. 416, L. 1999; amd. Secs. 70, 71, Ch. 348, L. 2015; amd. Sec. 31, Ch. 370, L. 2015; amd. Sec. 3, Ch. 344, L. 2021. 
  33-2-1117. Rules. The commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules and orders as shall be necessary to carry out the provisions of this part.   History: En. Sec. 8, Ch. 64, L. 1971; R.C.M. 1947, 40-5516.  
  33-2-1118. Injunctions. Whenever it appears to the commissioner that any insurer or any director, officer, employee, or insurance producer thereof has committed or is about to commit a violation of this part or of any rule or order issued by the commissioner hereunder, the commissioner may apply to the district court for the county in which the principal office of the insurer is located or if such insurer has no such office in this state then to the district court for Lewis and Clark County for an order enjoining such insurer or such director, officer, employee, or insurance producer thereof from violating or continuing to violate this part or any such rule or order and for such other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders or the public may require.   History: En. Sec. 9, Ch. 64, L. 1971; R.C.M. 1947, 40-5517(a); amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-1119. Voting of securities -- prohibition -- injunction -- sequestration. (1) No security which is the subject of any agreement or arrangement regarding acquisition or which is acquired or to be acquired in contravention of the provisions of this part or of any rule or order issued by the commissioner hereunder may be voted at any shareholders' meeting or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of such securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered.   (2) If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this part or of any rule or order issued by the commissioner hereunder, the insurer or the commissioner may apply to the district court for Lewis and Clark County or to the district court for the county in which the insurer has its principal place of business to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of 33-2-1113 or any rule or order issued by the commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders or the public may require.   (3) In any case where a person has acquired or is proposing to acquire any voting securities in violation of this part or any rule or order issued by the commissioner hereunder, the district court for Lewis and Clark County or the district court for the county in which the insurer has its principal place of business may, on such notice as the court deems appropriate, upon the application of the insurer or the commissioner seize or sequester any voting securities of the insurer owned directly or indirectly by such person and issue such orders with respect thereto as may be appropriate to effectuate the provisions of this part. Notwithstanding any other provisions of law, for the purposes of this part the situs of the ownership of the securities of domestic insurers shall be deemed to be in this state.   History: En. Sec. 9, Ch. 64, L. 1971; R.C.M. 1947, 40-5517(b), (c).  
  33-2-1120. Registration, transaction, and reporting requirements -- administrative or civil penalties. (1) An insurer failing without just cause to file a registration statement as required in 33-2-1111 shall, after notice and hearing, pay a penalty of $100 for each day of delinquency. The maximum penalty under this subsection is $25,000. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.   (2) A director or an officer of an insurance holding company system who knowingly violates, participates in, or assents to a transaction or who knowingly permits an officer or insurance producer of the insurer to engage in a transaction or make an investment that has not been properly reported or submitted pursuant to 33-2-1111 or 33-2-1113 or that violates any other provision of Title 33, chapter 2, part 11, shall, after notice and hearing, pay, in the director's or officer's individual capacity, a fine of not more than $5,000 for each violation. To determine the amount of the fine, the commissioner shall consider the appropriateness of the fine with respect to the gravity of the violation, the history of previous violations, and other matters that justice may require.   (3) If the commissioner determines that an insurer subject to Title 33, chapter 2, part 11, or a director, officer, employee, or insurance producer of the insurer has engaged in a transaction or entered into a contract that is subject to 33-2-1113 and that would not have been approved had approval been requested, the commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the commissioner may also order the insurer to void the contract and restore the status quo if that action is in the best interest of policyholders, creditors, or the public.   (4) Withholding of information required under 33-2-1104, if lack of that information prevents a full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, is a violation of 33-2-1104 and may serve as an independent basis for:   (a) disapproving dividends or distributions; or   (b) placing the insurer under supervision as provided in 33-2-1321.   (5) Any insurer that willfully violates this part may be fined not more than $25,000.   History: En. Sec. 10, Ch. 64, L. 1971; R.C.M. 1947, 40-5518; amd. Sec. 7, Ch. 620, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1093, Ch. 56, L. 2009; amd. Sec. 32, Ch. 370, L. 2015; amd. Sec. 21, Ch. 396, L. 2017.  
  33-2-1121. Receivership. Whenever it appears to the commissioner that any person has committed a violation of this part which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the commissioner may proceed to take possession of the property of such domestic insurer and to conduct the business thereof.   History: En. Sec. 11, Ch. 64, L. 1971; R.C.M. 1947, 40-5519.  
  33-2-1122. Revocation, suspension, or nonrenewal of insurer's license. Whenever it appears to the commissioner that any person has committed a violation of this part that makes the continued operation of an insurer contrary to the interests of policyholders or the public, the commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state for a period that the commissioner finds is required for the protection of policyholders or the public. Any determination must be accompanied by specific findings of fact and conclusions of law.   History: En. Sec. 12, Ch. 64, L. 1971; R.C.M. 1947, 40-5520; amd. Sec. 1094, Ch. 56, L. 2009.  
  33-2-1123. Judicial review -- mandamus. (1) Any person aggrieved by any act, determination, rule, or order or any other action of the commissioner pursuant to this part may appeal therefrom to the district court for Lewis and Clark County. The court shall conduct its review without a jury and by trial de novo, except that if all parties, including the commissioner, so stipulate, the review shall be confined to the record. Portions of the record may be introduced by stipulation into evidence in a trial de novo as to those parties so stipulating.   (2) The filing of an appeal pursuant to this section shall stay the application of any such rule, order, or other action of the commissioner to the appealing party unless the court, after giving such party notice and an opportunity to be heard, determines that such a stay would be detrimental to the interests of policyholders, shareholders, creditors, or the public.   (3) Any person aggrieved by any failure of the commissioner to act or make a determination required by this part may petition the district court for Lewis and Clark County for a writ in the nature of a mandamus or a peremptory mandamus directing the commissioner to act or make such determination forthwith.   History: En. Sec. 13, Ch. 64, L. 1971; R.C.M. 1947, 40-5521.  
  33-2-1124. Conflict with other laws. All laws and parts of laws of this state inconsistent with this part are hereby superseded with respect to matters covered by this part.   History: En. Sec. 14, Ch. 64, L. 1971; R.C.M. 1947, 40-5522.  
  33-2-1125. Recovery of dividends. (1) If an order for liquidation or rehabilitation of an insurer domiciled in this state has been entered, the receiver appointed under the order has a right to recover on behalf of the insurer:   (a) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on its capital stock; or   (b) any payment in the form of a bonus, termination settlement, or extraordinary lump-sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, when the distribution or payment pursuant to subsection (1)(a) or this subsection is made at any time during the year preceding the petition for liquidation, conservation, or rehabilitation, as the case may be, subject to the limitations of subsections (2) through (4).   (2) A distribution is not recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.   (3) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time that the distributions were paid is liable up to the amount of distributions or payments that the person received. Any person who otherwise controlled the insurer at the time that the distributions were declared is liable up to the amount of distributions the person would have received if the person had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.   (4) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.   (5) To the extent that any person liable under subsection (3) is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid is jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.   History: En. Sec. 48, Ch. 596, L. 1993.  
  33-2-1126 through 33-2-1129 reserved.  
  33-2-1130. Short title. Sections 33-2-1130 through 33-2-1138 may be cited as the "Own Risk and Solvency Assessment Act".   History: En. Sec. 1, Ch. 370, L. 2015.  
  33-2-1131. Purpose. The purpose of sections 33-2-1130 through 33-2-1138 is to provide:   (1) requirements for maintaining a risk management framework and completing an own risk and solvency assessment; and   (2) guidance and instructions for filing an ORSA summary report with the commissioner.   History: En. Sec. 2, Ch. 370, L. 2015.  
  33-2-1132. Definitions. For the purposes of 33-2-1130 through 33-2-1138, the following definitions apply:   (1) "Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in 33-2-1101.   (2) "NAIC" means the national association of insurance commissioners.   (3) "ORSA guidance manual" means the current version of the own risk and solvency assessment guidance manual developed and adopted by the NAIC as of April 30, 2015, or as subsequently adopted by rule by the commissioner. A change to the ORSA guidance manual is effective on January 1 following the calendar year in which the commissioner adopts the changed manual by rule.   (4) "ORSA summary report" means a confidential, high-level summary of an insurer's or insurance group's ORSA.   (5) "Own risk and solvency assessment" or "ORSA" means a confidential, internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by an insurer or insurance group, of the material and relevant risks associated with the insurer or the insurance group's current business plan and of the sufficiency of the insurer's or insurance group's capital resources to support those risks.   (6) "Risk management framework" means a study of the elements used to assist an insurer or insurance group to identify, assess, monitor, manage, and report on material and relevant risk of the insurer or the insurance group.   History: En. Sec. 3, Ch. 370, L. 2015.  
  33-2-1133. Risk management framework required. All Montana insurers and insurance groups shall maintain a risk management framework. This requirement is satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.   History: En. Sec. 4, Ch. 370, L. 2015.  
  33-2-1134. Own risk and solvency assessment required. Subject to the exemptions in 33-2-1136, an insurer or an insurance group of which the insurer is a member shall conduct an own risk and solvency assessment consistent with a process comparable to the ORSA guidance manual. The own risk and solvency assessment must be conducted no less than annually and at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.   History: En. Sec. 5, Ch. 370, L. 2015.  
  33-2-1135. ORSA summary report. (1) No more than once a year, the commissioner may request and an insurer or its insurance group shall provide to the commissioner, as provided in subsection (2), an ORSA summary report or any combination of reports that together contain the information described in the ORSA guidance manual as applicable to the insurer and the insurance group of which the insurer is a member.   (2) (a) If the insurer is a member of an insurance group, the insurer shall submit any report required under this section to the commissioner when the commissioner is the lead state regulator for that insurance group.   (b) If the insurer is not a member of an insurance group, the insurer shall submit any report required under this section to the commissioner.   (c) An insurer that is a member of an insurance group may voluntarily submit the report to a requesting insurance regulator who is not the lead state regulator for the insurer's insurance group.   (3) (a) The report must be prepared consistent with the ORSA guidance manual and subsection (3)(b). Documentation and supporting information must be maintained and made available for an examination on request of the commissioner.   (b) The review of the ORSA summary report and any additional requests for information must be made using similar procedures currently used in the analysis and examination of multistate or global insurers and insurance groups.   (4) (a) The report must include the signature of the chief risk officer of the insurer or insurance group or of another executive charged with overseeing the enterprise risk management process for the insurer or the insurance group.   (b) The signature of the chief risk officer or other executive charged with overseeing the enterprise risk management is an attestation that to the best of the officer's or executive's knowledge the insurer or insurance group applies the enterprise risk management process described in the ORSA summary report and that a copy of the report has been provided to the board of directors of the insurer or the insurance group or to the appropriate committee of the board of directors.   (5) An insurer may comply with this section by providing the most recent and substantially similar report provided by the insurer or another member of an insurance group of which the insurer is a member to the insurance regulator of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA guidance manual. A report in a language other than English must be accompanied by a translation of the report into English.   History: En. Sec. 6, Ch. 370, L. 2015.  
  33-2-1136. ORSA exemptions -- conditions -- waiver -- override. (1) Except as provided in subsection (5), an insurer is exempt from the requirements of 33-2-1130 through 33-2-1138 if:   (a) (i) the insurer has an annual direct written and unaffiliated assumed premium of less than $500 million. This total includes international direct and assumed premiums. The total excludes premiums reinsured through the federal crop insurance corporation and the federal flood program.   (ii) the insurer's insurance group has annual direct written and unaffiliated assumed premiums of less than $1 billion. This total includes international direct and assumed premiums. The total excludes premiums reinsured through the federal crop insurance corporation and the federal flood program.   (b) the insurer provides the most recent and similar report provided by the insurer or another group member of an insurance group of which the insurer is a member to the insurance regulator of another state or to an insurance supervisor or insurance regulator of a foreign jurisdiction.   (2) If an insurer qualifies for exemption pursuant to subsection (1)(a)(i) but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subsection (1)(a)(ii), the ORSA summary report must include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA summary report for any combination of insurers as long as each combination of reports includes every insurer within the insurance group.   (3) If an insurer does not qualify for exemption pursuant to (1)(a)(i) but the insurance group of which the insurer is a member qualifies for exemption pursuant to subsection (1)(a)(ii), the only required ORSA summary report is the report applicable to that insurer.   (4) (a) An insurer that does not qualify for exemption under this section may apply to the commissioner for a waiver from the requirements of 33-2-1130 through 33-2-1138 based on unique circumstances.   (b) In deciding whether to grant an insurer's request for a waiver, the commissioner may consider the type and volume of business written, ownership, organizational structure, and any other factor the commissioner considers relevant to the insurer or to the insurance group of which the insurer is a member.   (c) If the insurer is part of an insurance group with insurers domiciled in more than one state, the commissioner may coordinate with the lead state regulator and with the other domiciliary insurance regulators in considering whether to grant the insurer's request for a waiver.   (5) (a) The commissioner may override the exemptions provided under this section:   (i) based on unique circumstances, which may include the type and volume of business written, ownership, organizational structure, federal agency requests, or international supervisor requests;   (ii) if the insurer has risk-based capital that meets a company action level event as provided in 33-2-1904;   (iii) if the insurer is in hazardous financial condition as described in 33-2-1321; or   (iv) if the insurer exhibits the qualities of a troubled insurer as determined by the commissioner.   (b) If the commissioner determines that an override of the exemptions as provided in subsection (5)(a) is necessary, the commissioner may require an insurer to maintain a risk management framework, conduct an own risk and solvency assessment, and file an ORSA summary report.   (6) If an insurer qualifies for an exemption pursuant to subsection (1) but subsequently no longer qualifies for that exemption because of changes in premium as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer has 1 year following the year in which the threshold was exceeded to comply with the requirements of 33-2-1130 through 33-2-1138.   History: En. Sec. 7, Ch. 370, L. 2015.  
  33-2-1137. Confidentiality. (1) Information provided or developed under 33-2-1130 through 33-2-1138 for an own risk and solvency assessment or ORSA summary report and in the possession of or control of the commissioner or any other person under 33-2-1130 through 33-2-1138 is recognized as proprietary and containing trade secrets. The information is confidential information as provided in 2-6-1002 and privileged, is not admissible in evidence in any civil action, and is not subject to subpoena, discovery, or the provisions of the Freedom of Information Act, 5 U.S.C. 552.   (2) The commissioner may use information in an ORSA summary report in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.   (3) The commissioner and any person who receives ORSA-related information while operating under the authority of the commissioner or with whom information is shared pursuant to an own risk and solvency assessment may not testify in any private civil action concerning the ORSA-developed information.   (4) To assist in the commissioner's regulatory duties, the commissioner:   (a) may, on request, share ORSA-related information, including proprietary and trade secret documents and materials, with other state, federal, and international financial regulatory agencies, including with members of any supervisory college, the NAIC, or third-party consultants designated by the commissioner. A person with whom the ORSA-related information is shared shall agree in writing to maintain the confidentiality and privileged status of the ORSA-related information and shall verify in writing that the recipient has legal authority to maintain confidentiality.   (b) may receive ORSA-related information, including otherwise confidential and privileged documents, materials, or other information that may include proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, supervisory college members, and the NAIC. Received information is confidential as provided in this section.   (c) shall enter into a written agreement with the NAIC or a third-party consultant governing sharing and use of the information provided pursuant to an ORSA, consistent with this subsection (4).   (5) The written agreement required under subsection (4)(c) must:   (a) specify procedures and protocols regarding the confidentiality of the information, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers;   (b) provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the information and that the recipient has verified the legal authority to maintain confidentiality;   (c) specify that ownership of shared information remains with the commissioner. Use of the information by the NAIC or a third-party consultant is subject to the direction of the commissioner.   (d) prohibit the recipient from storing the shared information in a permanent database after any underlying analysis is completed;   (e) require prompt notice to be given to an insurer whose information in the possession of the recipient is subject to a request or subpoena to the recipient for disclosure or production;   (f) require the recipient to consent to intervention by an insurer in any judicial or administrative action in which the recipient may be required to disclose confidential information about the insurer that is received under an ORSA; and   (g) require the insurer's consent when entering into an agreement with a third-party consultant.   (6) The sharing of information pursuant to 33-2-1130 through 33-2-1138 does not constitute a delegation of regulatory authority or rulemaking, and the commissioner remains solely responsible for the administration, execution, and enforcement of the provisions of 33-2-1130 through 33-2-1138.   (7) Disclosure of information under this section to or from the commissioner does not constitute a waiver of any applicable privilege or claim of confidentiality related to the information obtained under 33-2-1130 through 33-2-1138.   (8) Information in the possession of or control of the NAIC or a third-party consultant pursuant to 33-2-1130 through 33-2-1138 is confidential information as provided in 2-6-1002 and privileged, is not admissible in evidence in any private civil action, and is not subject to subpoena or discovery.   (9) For the purposes of this section, "information" means documents, materials, or other ORSA-related information, including the ORSA summary report, that is in the possession of or control of the commissioner or any other person under 33-2-1130 through 33-2-1138.   History: En. Sec. 8, Ch. 370, L. 2015; amd. Secs. 67, 68, Ch. 348, L. 2015.  
  33-2-1138. Penalty. (1) Any insurer failing to timely file the ORSA summary report shall be fined no more than $500 for each day's delay, up to a maximum penalty of $25,000.   (2) The commissioner shall collect the fine and deposit the money in the state general fund.   History: En. Sec. 9, Ch. 370, L. 2015.  
  33-2-1139 reserved. 
  33-2-1140. Groupwide supervision of internationally active insurance groups. (1) (a) The commissioner is authorized to act as the groupwide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the commissioner may otherwise acknowledge another regulatory official as the groupwide supervisor where the internationally active insurance group:  (i) does not have substantial insurance operations in the United States;   (ii) has substantial insurance operations in the United States, but not in this state; or   (iii) has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in subsections (2) and (6) that the other regulatory official is the appropriate groupwide supervisor.   (b) An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a groupwide supervisor pursuant to this section.   (2) (a) In cooperation with other state, federal, and international regulatory agencies, the commissioner will identify a single groupwide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate groupwide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate groupwide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgment under this subsection (2):   (i) the place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group's written premiums, assets, or liabilities;   (ii) the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group;   (iii) the location of the executive offices or largest operational offices of the internationally active insurance group;   (iv) whether another regulatory official is acting or is seeking to act as the groupwide supervisor under a regulatory system that the commissioner determines to be substantially similar to the system of regulation provided under the laws of this state, or otherwise sufficient in terms of providing for groupwide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and   (v) whether another regulatory official acting or seeking to act as the groupwide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.   (b) However, a commissioner identified under this section as the groupwide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the groupwide supervisor. The acknowledgment of the groupwide supervisor shall be made after consideration of the factors listed in subsections (2)(a)(i) through (2)(a)(v) and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group and in consultation with the internationally active insurance group.   (3) Notwithstanding any other provision of law, when another regulatory official is acting as the groupwide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the groupwide supervisor. However, in the event of a material change in the internationally active insurance group that results in the internationally active insurance group's insurers domiciled in this state holding the largest share of the group's premiums, assets or liabilities or this state being the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group, the commissioner shall make a determination or acknowledgment as to the appropriate groupwide supervisor for such an internationally active insurance group pursuant to subsection (2).   (4) Pursuant to 33-2-1115, the commissioner is authorized to collect from any insurer registered pursuant to 33-2-1111 all information necessary to determine whether the commissioner may act as the groupwide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the groupwide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to groupwide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to this section and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group has not less than 30 days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish in the Montana administrative register and on its internet website the identity of internationally active insurance groups that the commissioner has determined are subject to groupwide supervision by the commissioner.   (5) If the commissioner is the groupwide supervisor for an internationally active insurance group, the commissioner is authorized to engage in any of the following groupwide supervision activities:   (a) assess the enterprise risks within the internationally active insurance group to ensure that:   (i) the material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and   (ii) reasonable and effective mitigation measures are in place;   (b) request, from any member of an internationally active insurance group subject to the commissioner's supervision, information necessary and appropriate to assess enterprise risk, including but not limited to information about the members of the internationally active insurance group regarding:   (i) governance, risk assessment, and management;   (ii) capital adequacy; and   (iii) material intercompany transactions;   (c) coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;   (d) communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information, subject to the confidentiality provisions of 33-2-1116, through supervisory colleges as provided for in Title 33, chapter 2, part 11, or otherwise;   (e) enter into agreements with or obtain documentation from any insurer registered under 33-2-1111, any member of the internationally active insurance group, and any other state, federal and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioner's role as groupwide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation may not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and   (f) other groupwide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the commissioner.   (6) If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the groupwide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with groupwide supervision undertaken by the groupwide supervisor, provided that:   (a) the commissioner's cooperation is in compliance with the laws of this state; and   (b) the regulatory official acknowledged as the groupwide supervisor also recognizes and cooperates with the commissioner's activities as a groupwide supervisor for other internationally active insurance groups where applicable. When such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.   (7) The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under 33-2-1111, any affiliate of the insurer, and other state, federal, and international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official's role as groupwide supervisor.   (8) The commissioner may promulgate rules necessary for the administration of this section.   (9) A registered insurer subject to this section is liable for and shall pay the reasonable expenses of the commissioner's participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.   History: En. Sec. 4, Ch. 344, L. 2021. 
  33-2-1201. Limit of risk. (1) An insurer may not retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding 10% of its surplus to policyholders.   (2) A "subject of insurance" for the purposes of this section, as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophe hazards, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of the other hazard insured against.   (3) Reinsurance ceded as authorized by this part must be deducted in determining risk retained. As to surety risks, deduction must also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety's consent and for the surety's protection.   (4) As to alien insurers, this section only relates to risks and surplus to policyholders of the insurer's United States branch.   (5) "Surplus to policyholders" for the purposes of this section, in addition to the insurer's capital and surplus, is considered to include any voluntary reserves which are not required pursuant to law and are determined from the last sworn statement of the insurer on file with the commissioner or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk.   (6) This section does not apply to life or disability insurance, title insurance, insurance of wet marine and transportation risks, workers' compensation insurance, employer's liability coverages, or any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.   History: En. Sec. 80, Ch. 286, L. 1959; R.C.M. 1947, 40-2909; amd. Sec. 49, Ch. 596, L. 1993; amd. Sec. 27, Ch. 379, L. 1995.  
  33-2-1202 through 33-2-1204 reserved.  
  33-2-1205. Repealed. Sec. 71, Ch. 596, L. 1993.   History: En. Sec. 81, Ch. 286, L. 1959; R.C.M. 1947, 40-2910; amd. Sec. 8, Ch. 620, L. 1989.  
  33-2-1206. Bulk reinsurance -- foreign or alien insurers. (1) A foreign or alien insurer may reinsure all or substantially all of its insurance in force in Montana or a major class of insurance with an agreement of bulk reinsurance, but the agreement may not become effective unless filed with the commissioner and approved by the commissioner in writing. The commissioner may hold a hearing before approving or disapproving an agreement of bulk reinsurance. Factors to be considered on bulk reinsurance agreements include but are not limited to:   (a) whether the agreement would be inequitable to Montana policyholders;   (b) whether the agreement would substantially reduce security of Montana policyholders; and   (c) whether the agreement would substantially reduce the service to be rendered to Montana policyholders.   (2) The commissioner shall approve or disapprove the agreement within a reasonable time after filing the proposed agreement or, when applicable, after a hearing.   (3) The commissioner may require a foreign or alien insurer to establish a trust account in this state, not to exceed the aggregate reserves of the policies contained in the bulk reinsurance agreement, prior to granting approval.   History: En. 40-2911 by Sec. 1, Ch. 303, L. 1977; R.C.M. 1947, 40-2911; amd. Sec. 4, Ch. 518, L. 1983; amd. Sec. 1095, Ch. 56, L. 2009.  
  33-2-1207. Interest in reinsurance. The original insured has no interest in a contract of reinsurance.   History: En. Sec. 280, Ch. 286, L. 1959; R.C.M. 1947, 40-3723.  
  33-2-1208 through 33-2-1210 reserved.  
  33-2-1211. Bulk reinsurance -- stock insurers. (1) A domestic stock insurer may reinsure all or substantially all of its insurance in force or a major class of insurance with another insurer by an agreement of bulk reinsurance, but the agreement may not become effective unless filed with the commissioner and approved by the commissioner in writing after a hearing on the agreement.   (2) The commissioner shall approve an agreement within a reasonable time after filing unless the commissioner finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders. If the commissioner does not approve the agreement, the commissioner shall notify the insurer in writing specifying the reasons for disapproval.   History: En. Sec. 464, Ch. 286, L. 1959; R.C.M. 1947, 40-4747; amd. Sec. 1096, Ch. 56, L. 2009.  
  33-2-1212. Bulk reinsurance -- mutual insurers. (1) A domestic mutual insurer may reinsure all or substantially all its business in force, or all or substantially all of a major class of its business, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section. An agreement may not become effective unless filed with the commissioner and approved by the commissioner in writing after a hearing on the agreement.   (2) The commissioner shall approve an agreement within a reasonable time after filing if the commissioner finds it to be fair and equitable to each domestic insurer involved and that the reinsurance if effectuated would not substantially reduce the protection or service to its policyholders. If the commissioner does not approve the agreement, the commissioner shall notify each insurer involved in writing specifying the reasons for disapproval.   (3) The plan and agreement for reinsurance must be approved by vote of not less than two-thirds of each domestic mutual insurer's members voting on the plan and agreement at meetings of members called for the purpose, pursuant to reasonable notice and procedure that the commissioner may approve. If the insurer is a life insurer, the right to vote may be limited to members whose policies are other than term or group policies and have been in effect for more than 1 year.   (4) If the agreement is for reinsurance of a mutual insurer in a stock insurer, the agreement must provide for payment in cash to each member of the insurer entitled to a payment upon conversion of the insurer, pursuant to 33-3-216, of the member's equity in the business reinsured as determined under a fair formula approved by the commissioner. The equity must be based upon the member's equity in the reserves, assets, whether or not "admitted" assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer.   History: En. Sec. 465, Ch. 286, L. 1959; R.C.M. 1947, 40-4748; amd. Sec. 1097, Ch. 56, L. 2009.  
  33-2-1213 through 33-2-1215 reserved.  
  33-2-1216. Credit allowed domestic ceding insurer -- rulemaking. (1) Credit for reinsurance is allowed to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subsection (2), (3), (4), (5), (6), (7), or (8). Credit must be allowed under subsection (2), (3), or (4) only in respect to cessions of those kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which the branch of the alien assuming insurer entered and is licensed to transact insurance or reinsurance. If the requirements of subsection (4) or (5) are met, the requirements of subsection (9) must also be met.  (2) Credit must be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state.   (3) Credit must be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the commissioner as a reinsurer in this state. Credit may not be allowed a domestic ceding insurer if the assuming insurer's accreditation has been revoked by the commissioner after notice and hearing. An accredited reinsurer is one that:   (a) files with the commissioner evidence of its submission to this state's jurisdiction;   (b) submits to this state's authority to examine its books and records;   (c) is licensed to transact insurance or reinsurance in at least one state or, in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;   (d) files annually with the commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and   (e) demonstrates to the satisfaction of the commissioner that the accredited reinsurer has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer meets this requirement as of the time of its application if:   (i) the assuming accredited reinsurer maintains a surplus with regard to policyholders in an amount not less than $20 million; and   (ii) the commissioner approves its accreditation within 90 days after the date that the accredited reinsurer submits its application.   (4) (a) Subject to subsection (4)(b), credit must be allowed when:   (i) the reinsurance is ceded to an assuming insurer that is domiciled and licensed in or, in the case of a United States branch of an alien assuming insurer, is entered through a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this statute; and   (ii) the assuming insurer or the United States branch of an alien assuming insurer:   (A) maintains a surplus with regard to policyholders in an amount not less than $20 million; and   (B) submits to the authority of this state to examine its books and records.   (b) The requirement of subsection (4)(a)(i) does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.   (5) (a) Credit must be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution for the payment of the valid claims of its United States policyholders and ceding insurers and their assigns and successors in interest. The assuming insurer shall report annually to the commissioner information substantially the same as that required to be reported on the NAIC annual statement form by licensed insurers to enable the commissioner to determine the sufficiency of the trust fund. The assuming insurer shall submit to examination of its books and records by the commissioner and shall bear the expense of examination.   (b) (i) In the case of a single assuming insurer, the trust must consist of a trusteed account representing the assuming insurer's liabilities attributable to business written in the United States, and in addition, the assuming insurer shall maintain a surplus with the trustee of not less than $20 million, except as provided in subsection (5)(b)(ii).   (ii) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least 3 full years, the insurance regulator with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus after a finding that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows. The risk assessment must consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust.   (iii) In the case of a group, including incorporated and individual unincorporated underwriters, the trust must consist of a trusteed account representing the respective underwriters' liabilities attributable to business written in the United States to any underwriter of the group. Additionally, the group shall maintain a surplus with the trustee of which $100 million must be held jointly for the benefit of United States ceding insurers of any member of the group. The incorporated members of the group, as group members, may not be engaged in a business other than underwriting as members of the group and are subject to the same level of solvency regulation and control by the insurance regulator as the unincorporated members. Within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the commissioner an annual certification of the solvency of each underwriter by the insurance regulator and the independent public accountants in the jurisdiction where the underwriter is domiciled.   (iv) In the case of a group of incorporated insurers under common administration:   (A) the provisions of subsection (5)(b)(iv)(B) apply to the group that:   (I) complies with the reporting requirements contained in subsection (5)(a);   (II) has continuously transacted an insurance business outside the United States for at least 3 years immediately prior to making application for accreditation;   (III) submits to this state's authority to examine its books and records and bears the expense of the examination; and   (IV) has aggregate policyholders' surplus of $10 billion;   (B) (I) the trust must be in an amount equal to the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group;   (II) the group shall maintain a joint surplus with a trustee of which $100 million is held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any liabilities; and   (III) within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, each member of the group shall provide to the commissioner an annual certification of the member's solvency by the insurance regulator and the independent public accountants in the jurisdiction where the underwriter is domiciled.   (c) The trust must be established in a form approved by the commissioner. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to its assets in the trustees of the trust for its United States policyholders and ceding insurers and their assigns and successors in interest. The trust and the assuming insurer are subject to examination as determined by the commissioner. The trust described in this subsection (5)(c) must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust.   (d) No later than February 28 of each year, the trustees of the trust shall report to the commissioner in writing setting forth the balance of the trust and listing the trust's investments at the end of the preceding year. The trustees shall certify the date of termination of the trust, if planned, or certify that the trust may not expire prior to the following December 31.   (6) (a) The commissioner shall allow credit when the reinsurance is ceded to an assuming insurer that the commissioner has certified as a reinsurer in this state and secures its obligation in accordance with the requirements of this subsection (6).   (b) To be eligible for certification under this subsection (6), an assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction as determined by the commissioner pursuant to subsection (6)(d) and shall:   (i) maintain minimum capital and surplus or its equivalent as promulgated by the commissioner by rule;   (ii) maintain financial strength ratings from two or more rating agencies, as determined by the commissioner;   (iii) agree to the jurisdiction of this state;   (iv) appoint a registered agent for service of process in this state as required by 33-1-605;   (v) agree to provide security for 100% of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement of a final judgment from within the United States;   (vi) agree to meet applicable information filing requirements as determined by the commissioner; and   (vii) satisfy any other requirements for certification considered relevant by the commissioner.   (c) An association, including incorporated and individual unincorporated underwriters, may be a certified reinsurer. The incorporated members of the association may not engage in any business other than underwriting as a member of the association. The incorporated members are subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members. In order to be eligible for certification under this subsection (6)(c), the association shall satisfy the requirements of this subsection (6)(c) and shall:   (i) satisfy its minimum capital and surplus requirements through the capital and surplus equivalents as a net of liabilities of the association and its members. This provision must include use of a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members in an amount that provides adequate protection as determined by the commissioner.   (ii) provide to the commissioner, within 90 days of the date its financial statements are due to be filed with the association's domiciliary regulator, an annual certification by the association's domiciliary regulator of the solvency of each underwriter member. If a certification is unavailable, the association may provide a financial statement prepared by independent public accountants of each underwriter member.   (d) The commissioner shall create, maintain, and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in a qualified jurisdiction is eligible to be considered for certification as a certified reinsurer. The commissioner shall certify all United States jurisdictions as long as those jurisdictions are accredited under the NAIC financial standards and accreditation program. For jurisdictions not in the United States, the commissioner may defer to a list of qualified jurisdictions published by the NAIC or, if the commissioner does not defer to the NAIC list, shall develop a list of qualified jurisdictions by considering:   (i) the reinsurance supervisory system of the jurisdiction;   (ii) the rights, benefits, and extent of reciprocal recognition afforded by the jurisdiction to reinsurers licensed and domiciled within the United States;   (iii) whether an NAIC-accredited jurisdiction has certified the reinsurer; and   (iv) any additional factors the commissioner considers relevant.   (e) If the commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions published by the NAIC, the commissioner shall provide thoroughly documented justification in accordance with the criteria listed under subsection (6)(d).   (f) Qualified jurisdictions under subsection (6)(d) shall agree to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction.   (g) The commissioner may not approve a jurisdiction not in the United States if the commissioner determines that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards.   (h) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the commissioner may either suspend the reinsurer's certification indefinitely or revoke the certification entirely.   (i) The commissioner shall assign a rating to each certified reinsurer. In assigning a rating, the commissioner shall consider the financial strength ratings assigned by agencies approved by the commissioner. The commissioner shall publish a list of all certified reinsurers and their ratings. The commissioner may defer to a rating assigned by a jurisdiction accredited by the NAIC.   (j) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subsection (6)(j) at a level consistent with the certified reinsurer's rating. A domestic ceding insurer qualifies for full financial statement credit for reinsurance ceded to a certified reinsurer if the certified reinsurer:   (i) maintains security in a form acceptable to the commissioner and in accord with the provisions of this section; or   (ii) forms a multibeneficiary trust in accord with subsections (5)(a) through (5)(d), except that minimum trusteed surplus requirements as provided in subsection (5)(b) do not apply with respect to a multibeneficiary trust account maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection (6)(j). A multibeneficiary trust under this subsection (6)(j)(ii) must be maintained with a minimum trusteed surplus of $10 million.   (k) A certified reinsurer operating under subsection (6)(j)(ii) shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection (6) or comparable laws of other United States jurisdictions.   (l) If obligations incurred by a certified reinsurer under this subsection (6) lack sufficient security, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency. The commissioner may impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer's obligations will not be paid in full when due.   (m) For the purposes of this subsection (6), a certified reinsurer whose certification has been terminated for any reason must be treated as a certified reinsurer required to secure 100% of its obligations. If the commissioner assigns a higher rating to a certified reinsurer on inactive status pursuant to this subsection (6)(m), this subsection (6)(m) does not apply. As used in this subsection (6)(m), "terminated" refers to a reinsurer whose certificate of authority has been revoked, suspended, voluntarily surrendered, or put on inactive status.   (n) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection (6), and the commissioner shall assign a rating that takes into account, if relevant, the reasons the reinsurer is not assuming new business.   (7) (a) Credit must be allowed when the reinsurance is ceded to an assuming insurer meeting each of the conditions set forth below:   (i) The assuming insurer must have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. A "reciprocal jurisdiction" is a jurisdiction that meets one of the following criteria:   (A) a non-U.S. jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this subsection (7), a "covered agreement" is an agreement entered into pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in Montana or for allowing the ceding insurer to recognize credit for reinsurance.   (B) a U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or   (C) a qualified jurisdiction as determined by the commissioner pursuant to subsection (6)(d), which is not otherwise described in subsection (7)(a)(i)(A) or (7)(a)(i)(B) above and which meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified by the commissioner in rule.   (ii) The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction, in an amount to be set forth in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the methodology applicable in its domiciliary jurisdiction, and a central fund containing a balance in amounts to be set forth in rule.   (iii) The assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, provided in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed.   (iv) The assuming insurer shall agree and provide adequate assurance to the commissioner, in a form specified by the commissioner pursuant to rules, as follows:   (A) The assuming insurer shall provide prompt written notice and explanation to the commissioner if it falls below the minimum requirements in subsection (7)(a)(ii) or (7)(a)(iii), or if any regulatory action is taken against it for serious noncompliance with applicable law.   (B) The assuming insurer shall consent in writing to the jurisdiction of the Montana courts and to appoint a registered agent for service of process in Montana as required by 33-1-605. The commissioner may require that consent for service of process be provided to the commissioner and included in each reinsurance agreement. Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent the agreements are unenforceable under applicable insolvency or delinquency law.   (C) The assuming insurer shall consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained.   (D) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to the agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate.   (E) The assuming insurer shall confirm that it is not presently participating in any solvent scheme of arrangement which involves Montana's ceding insurers and agree to notify the ceding insurer and the commissioner and to provide security in an amount equal to 100% of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into such a solvent scheme of arrangement. The security must be in a form consistent with the provisions of 33-2-1217 and subsection (7) of this section and as specified by the commissioner through rule.   (v) The assuming insurer or its legal successor shall provide, if requested by the commissioner, on behalf of itself and any legal successors, certain documentation to the commissioner, as specified by the commissioner through rule.   (vi) The assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements, pursuant to criteria set forth through rule.   (vii) The assuming insurer's supervisory authority shall confirm to the commissioner on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements in subsections (7)(a)(ii) and(7)(a)(iii).   (viii) Nothing in this section precludes an assuming insurer from providing the commissioner with information on a voluntary basis.   (b) The commissioner shall create and publish a timely list of reciprocal jurisdictions.   (i) A list of reciprocal jurisdictions is published through the NAIC committee process. The commissioner's list must include any reciprocal jurisdiction as defined under subsections (7)(a)(i)(A) and (7)(a)(i)(B) and must consider any other reciprocal jurisdiction included on the NAIC list. The commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions in accordance with criteria established by the commissioner through rule.   (ii) The commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, in accordance with a process set forth by the commissioner through rule, except that the commissioner may not remove from the list a reciprocal jurisdiction as defined under subsections (7)(a)(i)(A) and (7)(a)(i)(B). Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer which has its home office or is domiciled in that jurisdiction must be allowed, if otherwise allowed pursuant to this section.   (c) The commissioner shall create and publish a timely list of assuming insurers that have satisfied the conditions set forth in this subsection (7) and to which cessions must be granted credit in accordance with this subsection (7). The commissioner may add an assuming insurer to the list if an NAIC accredited jurisdiction has added the assuming insurer to a list of the assuming insurers or if, upon initial eligibility, the assuming insurer submits the information to the commissioner as required under subsection (7)(a)(iv) and complies with any additional requirements that the commissioner may impose through rule, except to the extent that they conflict with an applicable covered agreement.   (d) If the commissioner determines that an assuming insurer no longer meets one or more of the requirements under this subsection (7), the commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this subsection (7) in accordance with procedures set forth in rule.   (i) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with 33-2-1217.   (ii) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the commissioner and consistent with the provisions of 33-2-1217.   (e) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities.   (f) Nothing in this subsection (7) shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement, except as expressly prohibited by this section or other applicable law or regulation.   (g) (i) Credit may be taken under this subsection (7) only for reinsurance agreements entered into, amended, or renewed on or after March 23, 2021, adding this subsection, and only with respect to losses incurred and reserves reported on or after the later of:   (A) the date on which the assuming insurer has met all eligibility requirements pursuant to this subsection (7) herein; and   (B) the effective date of the new reinsurance agreement, amendment, or renewal.   (ii) This subsection (7) does not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under this subsection (7), as long as the reinsurance qualifies for credit under any other applicable provision of this section.   (iii) Nothing in this subsection (7):   (A) authorizes an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement; and   (B) limits, or in any way alters, the capacity of parties to any reinsurance agreement to renegotiate the agreement.   (8) Credit must be allowed when the reinsurance is ceded to an assuming insurer that does not meet the requirements of subsection (2), (3), (4), (5), (6), (7), or (8), but only with respect to the insurance of risks located in a jurisdiction in which the reinsurance is required by applicable law or regulation of that jurisdiction.   (9) (a) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted by subsections (4), (5), (6), and (7) may not be allowed unless the assuming insurer agrees in the reinsurance agreements to the following provisions:   (i) upon the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall:   (A) submit to the jurisdiction of any court of competent jurisdiction in any state of the United States;   (B) comply with all requirements necessary to give the court jurisdiction; and   (C) abide by the final decision of the court or of any appellate court in the event of an appeal; and   (ii) the assuming insurer shall designate the commissioner or a designated attorney as its attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.   (b) Subsection (9)(a)(i) is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes if an obligation is created in the agreement.   (10) (a) If the assuming insurer does not meet the requirements of subsection (1), (2), or (3), the credit permitted by subsection (4), (5), (6), or (7) may not be allowed unless the assuming insurer agrees in the trust agreements to the conditions under subsections (10)(b) through (10)(d).   (b) Regardless of any other provisions in the trust instrument, the trustee shall comply with an order of the commissioner or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner all assets of the trust fund if:   (i) the trust fund is inadequate because the trust fund contains an amount less than the required amount; or   (ii) the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings.   (c) The assets transferred under subsection (10)(a) must be distributed by the commissioner. Claims must be filed with and valued by the commissioner in accordance with the laws of the state in which the trust is domiciled and that apply to the liquidation of domestic insurers.   (d) The commissioner may determine that the assets of the trust fund or any part of the trust fund assets are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust. If the commissioner makes this determination, the commissioner shall return the assets or part of the assets to the trustee for distribution in accordance with the trust agreement.   (11) (a) The commissioner may suspend or revoke a reinsurer's accreditation or certification if the reinsurer ceases to meet the requirements of this section. The commissioner shall give the reinsurer notice and opportunity for a hearing. The suspension or revocation may not take effect until after the commissioner's order on hearing unless:   (i) the reinsurer waives its right to a hearing;   (ii) the commissioner's order is based on:   (A) regulatory action by the reinsurer's domiciliary jurisdiction; or   (B) the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction; or   (iii) the commissioner finds that an emergency requires immediate action.   (b) While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit under this section except to the extent that the reinsurer's obligations under the contract are secured in accordance with this section. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured in accordance with 33-2-1217 and subsection (6)(j) of this section.   (12) (a) A ceding insurer shall take steps:   (i) to manage the reinsurance recoverables proportionate to the ceding insurer's own book of business. A domestic ceding insurer shall provide notice to the commissioner within 30 days after:   (A) the reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers exceeds 50% of the domestic ceding insurer's last reported surplus to policyholders; or   (B) a determination that the reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers is likely to exceed the limit in subsection (12)(a)(i)(A).   (ii) to diversify its reinsurance program. A domestic ceding insurer shall notify the commissioner within 30 days after ceding to any single assuming insurer or group of affiliated assuming insurers more than 20% of the ceding insurer's gross written premium in the prior calendar year or after the domestic ceding insurer has determined that the reinsurance ceded to any single assuming insurer or group of affiliated assuming insurers is likely to exceed the 20% limit.   (b) The notifications made pursuant to this subsection (12) must demonstrate that the exposure is safely managed by the domestic ceding insurer.   (13) A reinsurance contract issued or renewed after the effective date of a suspension or revocation does not qualify for credit except to the extent that the reinsurer's obligations under the contract are secured in accordance with this section.   History: En. Sec. 28, Ch. 596, L. 1993; amd. Sec. 28, Ch. 379, L. 1995; amd. Sec. 33, Ch. 370, L. 2015; amd. Sec. 16, Ch. 9, L. 2017; amd. Sec. 7, Ch. 60, L. 2019; amd. Sec. 1, Ch. 65, L. 2021. 
  33-2-1217. Reduction of liability for reinsurance ceded by domestic insurer to assuming insurer -- definition. A reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of 33-2-1216 must be allowed in an amount not exceeding the liabilities carried by the ceding insurer. The reduction must be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer:  (1) under a reinsurance contract with the assuming insurer as security for the payment of obligations under the contract if the security is held in the United States subject to withdrawal solely by and under the exclusive control of the ceding insurer; or   (2) in the case of a trust, in a qualified United States financial institution. This security may be in the form of:   (a) cash;   (b) securities listed by the securities valuation office of the NAIC, including those exempt from filing as defined in the purposes and procedures manual of the securities valuation office, and qualifying as admitted assets;   (c) clean, irrevocable, unconditional letters of credit that are issued or confirmed by a qualified United States financial institution no later than December 31 of the year for which filing is being made and that are in the possession of the ceding insurer on or before the filing date of the insurer's annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation must, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever occurs first.   (d) any other form of security acceptable to the commissioner.   (3) For the purposes of subsection (2)(c), a "qualified United States financial institution" means an institution that:   (a) is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any of its states;   (b) is regulated, supervised, and examined by United States federal or state authorities with regulatory authority over banks and trust companies; and   (c) has been determined by either the commissioner or the securities valuation office of the national association of insurance commissioners to meet the standards of financial condition and standing that are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.   (4) For the purposes of this part, except for subsection (2)(c), "qualified United States financial institution" means, with respect to institutions eligible to act as a fiduciary of a trust, an institution that:   (a) is organized or, in the case of a United States branch or agency office of a foreign banking corporation, licensed under the laws of the United States or any of its states and that has been granted authority to operate with fiduciary powers; and   (b) is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.   (5) The commissioner may adopt rules implementing:   (a) the provisions of 33-2-307, 33-2-708, and chapter 12; and   (b) reinsurance arrangements provided under this section provided that:   (i) a rule adopted pursuant to this subsection (5)(b) may apply only to reinsurance relating to:   (A) life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;   (B) universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;   (C) variable annuities with guaranteed death or living benefits;   (D) long-term care insurance policies; or   (E) such other life and health insurance and annuity products as to which NAIC adopts model regulatory requirements with respect to credit for reinsurance;   (ii) a rule adopted pursuant to subsection (5)(b)(i)(A) or (5)(b)(i)(B) may apply to any treaty containing:   (A) policies issued on or after January 1, 2015; or   (B) policies issued prior to January 1, 2015, if risk pertaining to policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015.   History: En. Sec. 29, Ch. 596, L. 1993; amd. Sec. 29, Ch. 379, L. 1995; amd. Sec. 43, Ch. 304, L. 1999; amd. Sec. 34, Ch. 370, L. 2015; amd. Sec. 2, Ch. 65, L. 2021. 
  33-2-1218. Reinsurance agreements affected. Sections 33-2-1216 and 33-2-1217 apply to all cessions after October 1, 1993, under reinsurance agreements that have had an inception, anniversary, or renewal date on or after April 1, 1993.   History: En. Sec. 30, Ch. 596, L. 1993; amd. Sec. 30, Ch. 379, L. 1995.  
  33-2-1301. Short title. This part shall be cited as the "Insurers Supervision, Rehabilitation, and Liquidation Act".   History: En. Sec. 1, Ch. 383, L. 1979.  
  33-2-1302. Construction and purpose. (1) This part may not be interpreted to limit the powers granted the commissioner by other provisions of the law.   (2) This part shall be liberally construed to effect the purpose stated in subsection (3).   (3) The purpose of this part is the protection of the interests of insureds, claimants, creditors, and the public generally, with minimum interference with the normal prerogatives of the owners and managers of insurers, through:   (a) early detection of any potentially dangerous condition in an insurer and prompt application of appropriate corrective measures;   (b) improved methods for rehabilitating insurers, involving the cooperation and management expertise of the insurance industry;   (c) enhanced efficiency and economy of liquidation, through clarification of the law, to minimize legal uncertainty and litigation;   (d) equitable apportionment of any unavoidable loss;   (e) lessening the problems of interstate rehabilitation and liquidation by facilitating cooperation between states in the liquidation process and by extending the scope of personal jurisdiction over debtors of the insurer outside this state; and   (f) regulation of the insurance business by the impact of the law relating to delinquency procedures and substantive rules on the entire insurance business.   History: En. Sec. 1, Ch. 383, L. 1979.  
  33-2-1303. Definitions. For the purposes of this part the following definitions apply:   (1) "Ancillary state" means any state other than a domiciliary state.   (2) "Commissioner" means the commissioner of insurance of this state.   (3) "Creditor" is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent.   (4) "Delinquency proceeding" means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving the insurer and any summary proceeding under 33-2-1321 or 33-2-1322. "Formal delinquency proceeding" means any liquidation or rehabilitation proceeding.   (5) "Doing business" includes any of the following acts, whether effected by mail or otherwise:   (a) the issuance or delivery of contracts of insurance to persons resident in this state;   (b) the solicitation of applications for contracts of insurance or other negotiations preliminary to the execution of the contracts;   (c) the collection of premiums, membership fees, assessments, or other consideration for contracts of insurance;   (d) the transaction of matters subsequent to execution of contracts of insurance and arising out of them; or   (e) operating as an insurer under a license or certificate of authority issued by the commissioner.   (6) "Domiciliary state" means the state in which an insurer is incorporated or organized or, in the case of an alien insurer, its state of entry.   (7) "Fair consideration" is given for property or an obligation:   (a) when in exchange for the property or obligation, as a fair equivalent for the property or obligation and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or   (b) when the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained.   (8) "Foreign country" means any jurisdiction not in any state.   (9) "General assets" means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, "general assets" includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, must be treated as general assets.   (10) "Guaranty association" means the Montana insurance guaranty association, the workers' compensation security fund, the Montana life and health insurance guaranty association, and any other similar entity created by the legislature of this state for the payment of claims of insolvent insurers. "Foreign guaranty association" means any similar entities created by the legislature of any other state.   (11) (a) "Insolvency" or "insolvent" means:   (i) for an insurer issuing only assessable fire insurance policies, the inability to pay any obligation within 30 days after it becomes payable; or   (ii) for any other insurer, the inability to pay its obligations when they are due or when its admitted assets do not exceed its liabilities plus the greater of:   (A) any capital and surplus required by law for its organization; or   (B) the total par or stated value of its authorized and issued capital stock.   (b) For purposes of this subsection (11), "liabilities" include but are not limited to reserves required by statute or by the commissioner upon a subject company at the time of admission or subsequent to the time of admission.   (12) "Insurer" means any person who has done, purports to do, is doing, or is licensed to do insurance business and is or has been subject to the authority of or to liquidation, rehabilitation, reorganization, supervision, or conservation by any insurance commissioner. Any other persons included under 33-2-1304 are considered to be insurers.   (13) "Preferred claim" means any claim with respect to which the terms of this part accord priority of payment from the general assets of the insurer.   (14) "Receiver" means a receiver, liquidator, rehabilitator, or conservator as the context requires.   (15) "Reciprocal state" means any state other than this state in which in substance and effect 33-2-1342(1), 33-2-1381, 33-2-1382, and 33-2-1384 through 33-2-1386 are in force and in which provisions are in force requiring that the commissioner or equivalent official be the receiver of a delinquent insurer and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers.   (16) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. The term also includes claims that have become liens upon specific assets by reason of judicial process.   (17) "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class of persons, but not including any claim secured by general assets.   (18) "State" means any state, district, or territory of the United States.   (19) "Transfer" includes the sale and every other mode, direct or indirect, of disposing of or parting with property or with an interest in the property or with the possession of the property or fixing a lien upon property or upon an interest in the property, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor is considered a transfer suffered by the debtor.   History: En. Sec. 2, Ch. 383, L. 1979; amd. Sec. 7, Ch. 169, L. 2013.  
  33-2-1304. To whom proceedings may be applied. The proceedings authorized by this part may be applied to:   (1) all insurers who are doing or have done insurance business in this state and against whom claims arising from that business may exist now or in the future;   (2) all insurers who purport to do an insurance business in this state;   (3) all insurers who have insureds resident in this state;   (4) all other persons organized or in the process of organizing with the intent to do an insurance business in this state;   (5) all nonprofit service plans, fraternal benefit societies and beneficial societies, health service corporations, and health maintenance organizations; and   (6) all title insurance companies.   History: En. Sec. 3, Ch. 383, L. 1979; amd. Sec. 9, Ch. 151, L. 2017.  
  33-2-1305. Who may bring action -- procedure exclusive. (1) No delinquency proceeding may be commenced under this part by anyone other than the commissioner, and no court shall have jurisdiction to entertain, hear, or determine any proceeding commenced by any other person.   (2) No court of this state has jurisdiction to entertain, hear, or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer or praying for an injunction or restraining order or other relief preliminary to, incidental to, or relating to such proceedings other than in accordance with this part.   History: En. Sec. 4, Ch. 383, L. 1979.  
  33-2-1306. Personal jurisdiction. In addition to other grounds for jurisdiction provided by the law of this state, a court of this state having jurisdiction of the subject matter has jurisdiction over a person served pursuant to the Montana Rules of Civil Procedure or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state:   (1) if the person served is obligated to the insurer in any way as an incident to any agency or brokerage arrangement that may exist or has existed between the insurer and the insurance producer or broker in any action on or incident to the obligation;   (2) if the person served is a reinsurer who has at any time written a policy of reinsurance for an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced or is an insurance producer or broker of or for the reinsurer in any action on or incident to the reinsurance contract; or   (3) if the person served is or has been an officer, manager, trustee, organizer, promoter, or person in a position of comparable authority or influence in an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced in any action resulting from such a relationship with the insurer.   History: En. Sec. 4, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-1307. Stay pending out-of-state proceedings. If the court on motion of any party finds that any action should as a matter of substantial justice be tried in a forum outside this state, the court may enter an appropriate order to stay further proceedings on the action in this state.   History: En. Sec. 4, Ch. 383, L. 1979.  
  33-2-1308. Venue. All actions herein authorized shall be brought in the district court in the county in which the office of the commissioner is located.   History: En. Sec. 4, Ch. 383, L. 1979.  
  33-2-1309. Injunctions and orders. (1) Any receiver appointed in a proceeding under this part may at any time apply for and any court of general jurisdiction may grant such restraining orders, preliminary and permanent injunctions, and other orders as may be necessary to prevent:   (a) the transaction of further business;   (b) the transfer of property;   (c) interference with the receiver or with a proceeding under this part;   (d) waste of the insurer's assets;   (e) dissipation and transfer of bank accounts;   (f) the institution or further prosecution of any actions or proceedings;   (g) the obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets, or its policyholders;   (h) the levying of execution against the insurer, its assets, or its policyholders;   (i) the making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;   (j) the withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or   (k) any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders or the administration of any proceeding under this part.   (2) The receiver may apply to any court outside of the state for the relief described in subsection (1).   History: En. Sec. 5, Ch. 383, L. 1979.  
  33-2-1310. Cooperation of officers, owners, and employees. (1) An officer, manager, director, trustee, owner, employee, or insurance producer of any insurer or any other persons with authority over or in charge of any segment of the insurer's affairs shall cooperate with the commissioner in any proceeding under this part or any investigation preliminary to the proceeding.   (2) (a) The term "person" as used in this section includes any person who exercises control directly or indirectly over activities of an insurer through any holding company or other affiliate of the insurer.   (b) "To cooperate" includes but is not limited to the following:   (i) replying promptly in writing to any inquiry from the commissioner requesting a reply; and   (ii) making available to the commissioner any books, accounts, documents, or other records or information or property of or pertaining to the insurer and in the insurer's possession, custody, or control.   (3) A person may not obstruct or interfere with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental to the proceeding.   (4) This section may not be construed to abridge otherwise existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings or other orders.   (5) Any person included within subsection (1) who fails to cooperate with the commissioner or any person who obstructs or interferes with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental to the proceeding or who violates any order the commissioner issued validly under this part may, after a hearing, be subject to the imposition by the commissioner of a civil penalty not to exceed $10,000 and to the revocation or suspension of any insurance licenses issued by the commissioner.   History: En. Sec. 6, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1098, Ch. 56, L. 2009; amd. Sec. 22, Ch. 396, L. 2017.  
  33-2-1311. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 7, Ch. 383, L. 1979.  
  33-2-1312 through 33-2-1320 reserved.  
  33-2-1321. Commissioner's summary orders and supervision proceedings. (1) If the commissioner determines, after a hearing held under subsection (5), that any domestic insurer has committed or engaged in or is about to commit or engage in any act, practice, or transaction that would subject it to delinquency proceedings under this part, the commissioner may make and serve upon the insurer and any other persons involved orders that are reasonably necessary to correct or eliminate the conduct.   (2) If upon examination or at any other time the commissioner determines that any domestic insurer is in a condition that renders the continuance of its business hazardous to the public or to holders of its policies or certificates of insurance or if the domestic insurer gives its consent, then the commissioner shall notify the insurer of the commissioner's determination and furnish to the insurer a written list of the commissioner's requirements to abate the determination.   (3) If the commissioner makes a determination to supervise an insurer subject to an order under subsection (1) or (2), the commissioner shall notify the insurer that it is under the supervision of the commissioner. During the period of supervision, the commissioner may appoint a supervisor to supervise the insurer. The order appointing a supervisor shall direct the supervisor to enforce orders issued under subsections (1) and (2) and may also require that the insurer may not do any of the following things during the period of supervision without the prior approval of the commissioner or the supervisor:   (a) dispose of, convey, or encumber any of its assets or its business in force;   (b) withdraw from any of its bank accounts;   (c) lend any of its funds;   (d) invest any of its funds;   (e) incur any debt, obligation, or liability;   (f) merge or consolidate with another company; or   (g) enter into any new reinsurance contract or treaty.   (4) Any insurer subject to an order under this section shall comply with the lawful requirements of the commissioner and, if placed under supervision, has 60 days from the date the supervision order is served within which to comply with the requirements of the commissioner. If the insurer fails to comply within that time, the commissioner may institute proceedings under 33-2-1331 or 33-2-1341 to have a rehabilitator or liquidator appointed or extend the period of supervision.   (5) The notice of hearing under subsection (1) and any order issued pursuant to subsection (1) must be served upon the insurer pursuant to the applicable rules of civil or administrative procedure. The notice of hearing must state the time and place of hearing and the conduct, condition, or ground upon which the commissioner would base an order. Unless mutually agreed between the commissioner and the insurer, the hearing must occur not less than 10 days or more than 30 days after notice is served and must be either in Lewis and Clark County or in some other place convenient to the parties to be designated by the commissioner. The commissioner shall hold all hearings under subsection (1) privately unless the insurer requests a public hearing, in which case the hearing must be public.   (6) (a) Any insurer subject to an order under subsection (2) may request a hearing to review that order. The hearing must be held as provided in subsection (5), but the request for a hearing may not stay the effect of the order.   (b) If the commissioner issues an order under subsection (2), the insurer may, at any time, waive a commissioner's hearing and apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies. Subsequent to a hearing, any party to the proceedings whose interests are substantially affected is entitled to judicial review of any order issued by the commissioner.   (7) During the period of supervision the insurer may request the commissioner to review an action taken or proposed to be taken by the supervisor, specifying the reason why the action complained of is believed not to be in the best interest of the insurer.   (8) If any person has violated any supervision order issued under this section that was still in effect for that person, the person is subject to a civil penalty imposed by the district court not to exceed $10,000.   (9) The commissioner may apply for and any court of general jurisdiction may grant restraining orders, preliminary and permanent injunctions, and other orders that may be necessary to enforce a supervision order.   (10) If any person subject to the provisions of this part, including any person described in 33-2-1310(1), knowingly violates any valid order of the commissioner issued under the provisions of this section and, as a result of the violation, the net worth of the insurer is reduced or the insurer suffers loss it would not otherwise have suffered, the person is personally liable to the insurer for the amount of any reduction or loss. The commissioner or supervisor is authorized to bring an action on behalf of the insurer in the district court to recover the amount of the reduction or loss together with any costs.   History: En. Sec. 9, Ch. 383, L. 1979; amd. Sec. 1099, Ch. 56, L. 2009.  
  33-2-1322. Court's seizure order. (1) The commissioner may file in a district court of this state a petition alleging, with respect to a domestic insurer:   (a) that there exist grounds that would justify a court order for a formal delinquency proceeding against an insurer under this part;   (b) that the interests of policyholders, creditors, or the public will be endangered by delay; and   (c) the contents of an order considered necessary by the commissioner.   (2) Upon a filing under subsection (1), the court may issue forthwith, ex parte and without a hearing, the requested order which shall direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer and of the premises occupied by it for transaction of its business and until further order of the court enjoin the insurer and its officers, managers, insurance producers, and employees from disposition of its property and from transaction of its business except with the written consent of the commissioner.   (3) The court shall specify in the order what its duration shall be, which shall be such time as the court considers necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold such hearings as it considers desirable after such notice as it considers appropriate and may extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this part after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this part shall ipso facto vacate the seizure order.   (4) Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.   (5) An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of such order for a hearing and review of the order. The court shall hold such a hearing and review not more than 15 days after the request. A hearing under this subsection may be held privately in chambers, and it shall be so held if the insurer proceeded against so requests.   (6) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.   History: En. Sec. 10, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-1323. Confidentiality of proceedings. In all proceedings and judicial reviews under 33-2-1321 and 33-2-1322, all records of the insurer, all other documents, and all files and court records and papers of the commissioner, as far as they pertain to or are a part of the record of the proceedings, remain confidential except as necessary to obtain compliance with the proceedings unless the district court, after hearing arguments from the parties in chambers, orders otherwise or unless the insurer requests that the matter be made public. Until the court order, all papers filed with the clerk of the district court must be held in a confidential file.   History: En. Sec. 11, Ch. 383, L. 1979; amd. Sec. 1100, Ch. 56, L. 2009; amd. Sec. 22, Ch. 19, L. 2011.  
  33-2-1324 through 33-2-1330 reserved.  
  33-2-1331. Grounds for rehabilitation. The commissioner may apply by petition to a district court for an order authorizing the commissioner to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:   (1) The insurer is in such condition that the further transaction of business would be financially hazardous to its policyholders, creditors, or the public.   (2) There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer.   (3) The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general insurance producer, employee, or other person, if the person has been found after notice and hearing by the commissioner to be dishonest or untrustworthy in a way affecting the insurer's business.   (4) Control of the insurer, whether by stock ownership or otherwise and whether direct or indirect, is in a person found after notice and hearing to be untrustworthy.   (5) Any person who in fact has executive authority in the insurer, whether an officer, manager, general insurance producer, director or trustee, employee, or other person, has refused to be examined under oath by the commissioner concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact the insurer has failed promptly and effectively to terminate the employment and status of the person and the person's influence on management.   (6) After demand by the commissioner under 33-1-408 or under this part, the insurer has failed to promptly make available for examination any of its own property, books, accounts, documents, or other records or those of any subsidiary or related company within the control of the insurer or those of any person having executive authority in the insurer so far as they pertain to the insurer.   (7) Without first obtaining the written consent of the commissioner, the insurer has transferred or attempted to transfer, in a manner contrary to chapter 2, part 11, or chapter 2, part 12, of Title 33, substantially its entire property or business or has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person.   (8) The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator, or sequestrator or similar fiduciary of the insurer or its property otherwise than as authorized under the insurance laws of this state, and the appointment has been made or is imminent, and the appointment might oust the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings under this part.   (9) Within the previous 4 years the insurer has willfully violated its charter or articles of incorporation, its bylaws, any insurance law of this state, or any valid order of the commissioner under 33-2-1321.   (10) The insurer has failed to pay within 60 days after the due date any obligation to any state or any subdivision of the state or any judgment entered in any state, if the court in which the judgment was entered had jurisdiction over the subject matter, except that nonpayment may not be a ground until 60 days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the commissioner or in the courts, or the insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligations in full.   (11) The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law and, after written demand by the commissioner, has failed to give an adequate explanation immediately.   (12) The board of directors or the holders of a majority of the shares entitled to vote request or consent to rehabilitation under this part.   History: En. Sec. 12, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 50, Ch. 596, L. 1993.  
  33-2-1332. Rehabilitation orders. (1) An order to rehabilitate the business of a domestic insurer or an alien insurer domiciled in this state shall appoint the commissioner the rehabilitator and shall direct the rehabilitator forthwith to take possession of the assets of the insurer and to administer them under the general supervision of the court. The filing or recording of the order with the clerk of the district court or clerk and recorder of the county in which the principal business of the company is conducted or the county in which its principal office or place of business is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with the county clerk and recorder would have imparted. The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator.   (2) Any order issued under this section shall require accounting to the court by the rehabilitator. Accountings shall be at such intervals as the court specifies in its order.   (3) Entry of an order of rehabilitation does not constitute an anticipatory breach of any contracts of the insurer.   History: En. Sec. 13, Ch. 383, L. 1979.  
  33-2-1333. Powers and duties of the rehabilitator. (1) The commissioner as rehabilitator may appoint one or more special deputies, who have all the powers and responsibilities of the rehabilitator granted under this section, and the commissioner may employ counsel, clerks, and assistants. The compensation of the special deputy, counsel, clerks, and assistants and all expenses of taking possession of the insurer and of conducting the proceedings must be fixed by the commissioner with the approval of the court and must be paid out of the funds or assets of the insurer. The persons appointed under this section shall serve at the pleasure of the commissioner. If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs incurred out of any appropriation for the maintenance of the commissioner's office. Any amounts advanced for expenses of administration must be repaid to the commissioner for the use of the commissioner's office out of the first available money of the insurer.   (2) The rehabilitator may take action as necessary to reform and revitalize the insurer. The rehabilitator shall have all the powers of the directors, officers, and managers, whose authority must be suspended, except as they are redelegated by the rehabilitator. The rehabilitator has full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with the property and business of the insurer.   (3) If it appears to the rehabilitator that there has been criminal or tortious conduct or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, insurance producer, broker, employee, or other person, the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer.   (4) If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, the rehabilitator shall prepare a plan to effect the changes. Upon application of the rehabilitator for approval of the plan and after notice and hearings that the court may prescribe, the court may either approve or disapprove the plan proposed or may modify it and approve it as modified. Any plan approved under this section must be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies for the period and to the extent as may be necessary.   (5) The rehabilitator has the power under 33-2-1351 and 33-2-1352 to avoid fraudulent transfers.   History: En. Sec. 14, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1101, Ch. 56, L. 2009.  
  33-2-1334. Effect of proceedings on pending and potential litigation. (1) Any court in this state before which any action or proceeding in which the insurer is a party or is obligated to defend a party is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for 90 days and an additional time that is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take action respecting the pending litigation that the rehabilitator considers necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.   (2) A statute of limitations or defense of laches may not run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action by or against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied.   History: En. Sec. 15, Ch. 383, L. 1979; amd. Sec. 1102, Ch. 56, L. 2009.  
  33-2-1335. Standing of guaranty associations in proceedings. Any guaranty association or foreign guaranty association covering life or health insurance or annuities has standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if such association is or may become liable to act as a result of the rehabilitation.   History: En. Sec. 15, Ch. 383, L. 1979.  
  33-2-1336. Termination of rehabilitation. (1) Whenever the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public or would be futile, the commissioner may petition the district court for an order of liquidation. A petition under this subsection shall have the same effect as a petition under 33-2-1341. The district court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of such costs and other expenses of defense as justice may require.   (2) The rehabilitator may at any time petition the district court for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of such petition as justice may require. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under 33-2-1331 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The district court may also make that finding and issue that order at any time upon its own motion.   History: En. Sec. 16, Ch. 383, L. 1979.  
  33-2-1337 through 33-2-1340 reserved.  
  33-2-1341. Grounds for liquidation. The commissioner may petition the district court for an order directing the commissioner to liquidate a domestic insurer or an alien insurer domiciled in this state on the basis:   (1) of any ground for an order of rehabilitation as specified in 33-2-1331, whether or not there has been a prior order directing the rehabilitation of the insurer;   (2) that the insurer is insolvent; or   (3) that the insurer is in a condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors, or the public.   History: En. Sec. 17, Ch. 383, L. 1979; amd. Sec. 1103, Ch. 56, L. 2009.  
  33-2-1342. Liquidation orders. (1) An order to liquidate the business of a domestic insurer must appoint the commissioner and the commissioner's successors in office liquidator and shall direct the liquidator to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the district court and the clerk and recorder of the county in which its principal office or place of business is located or, in the case of real estate, with the clerk and recorder of the county where the property is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that clerk and recorder would have imparted.   (2) Upon issuance of the order, the rights and liabilities of any insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate become fixed as of the date of entry of the order of liquidation, except as provided in 33-2-1343 and 33-2-1366.   (3) An order to liquidate the business of an alien insurer domiciled in this state must be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States are the only assets and business included in the order.   (4) At the time of petitioning for an order of liquidation or at any time after petitioning, the commissioner, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of insolvency. After providing notice and hearing as it considers proper, the court may make the declaration.   (5) Any order issued under this section must require accounting to the court by the liquidator. Accountings must be at intervals as the court specifies in its order.   (6) (a) Within 5 days after the initiation of an appeal of an order of liquidation that has not been stayed, the commissioner shall present for the court's approval a plan for the continued performance of the defendant company's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. The plan must provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation, including the ground of insolvency. In the event that the defendant company's financial condition will not, in the judgment of the commissioner, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties, as well as other policyholders and claimants, as the commissioner finds to be fair and equitable, considering the relative circumstances of the policyholders and claimants. The court shall examine the plan submitted by the commissioner, and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. An action does not lie against the commissioner or any of the commissioner's deputies, agents, clerks, assistants, or attorneys by any party based on preference in an appeal pendency plan approved by the court.   (b) The appeal pendency plan may not supersede or affect the obligations of any insurance guaranty association.   (c) A plan must provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, in the event that the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, so that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. If an order of liquidation is set aside upon any appeal, the company may not be released from delinquency proceedings unless all funds advanced by any guaranty association, including reasonable administrative expenses that relate to obligations of the company, have been repaid in full, together with interest at the judgment rate of interest, or unless an arrangement for repayment has been made with the consent of all applicable guaranty associations.   History: En. Sec. 18, Ch. 383, L. 1979; amd. Sec. 51, Ch. 596, L. 1993.  
  33-2-1343. Continuance of policy coverage. (1) All policies, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of:   (a) a period of 30 days from the date of entry of the liquidation orders;   (b) the expiration of the policy coverage;   (c) the date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy; or   (d) the liquidator has effected a transfer of the policy obligation pursuant to 33-2-1345(1)(h).   (2) An order of liquidation under 33-2-1342 terminates coverages at the time specified in subsection (1) for purposes of any other statute.   (3) Policies of life or health insurance or annuities continue in force for such period and under such terms as provided by any applicable guaranty association or foreign guaranty association.   (4) Policies of life or health insurance or annuities or any period or coverage of such policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (1) and (2).   History: En. Sec. 19, Ch. 383, L. 1979.  
  33-2-1344. Dissolution of insurer. The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time the commissioner applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it must be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent but may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.   History: En. Sec. 20, Ch. 383, L. 1979; amd. Sec. 1104, Ch. 56, L. 2009.  
  33-2-1345. Powers of liquidator. (1) The liquidator may:   (a) appoint a special deputy to act for the liquidator under this part and determine the deputy's reasonable compensation. The special deputy has all powers of the liquidator granted by this section. The special deputy serves at the pleasure of the liquidator.   (b) employ insurance producers, legal counsel, actuaries, accountants, appraisers, consultants, and other personnel necessary to assist in the liquidation;   (c) fix the reasonable compensation of employees and insurance producers, legal counsel, actuaries, accountants, appraisers, and consultants with the approval of the court;   (d) pay reasonable compensation to persons appointed and defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs incurred out of any appropriation for the maintenance of the commissioner's office. Any amounts advanced for expenses of administration must be repaid to the commissioner for the use of the commissioner's office out of the first available money of the insurer.   (e) hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to the person's testimony after it has been correctly reduced to writing and in connection with the hearings require the production of any books, papers, records, or other documents that the liquidator considers relevant to the inquiry;   (f) collect all debts and money due and claims belonging to the insurer, wherever located, and for this purpose:   (i) institute timely action in other jurisdictions in order to forestall garnishment and attachment proceedings against the debts;   (ii) do other acts that are necessary to collect, conserve, or protect its assets or property, including selling, compounding, compromising, or assigning debts for collection purposes on terms and conditions that the liquidator considers best; and   (iii) pursue any creditor's remedies available to enforce the liquidator's claims;   (g) conduct public and private sales of the property of the insurer;   (h) use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer if the transfer can be arranged without prejudice to applicable priorities under 33-2-1371;   (i) acquire, encumber, lease, improve, sell, or transfer any property of the insurer at its market value or upon terms and conditions that are fair and reasonable. The liquidator also has the power to execute, acknowledge, and deliver any and all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation.   (j) borrow money on the security of the insurer's assets or without security and execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation;   (k) enter into contracts that are necessary to carry out the order to liquidate and affirm or disavow any contracts to which the insurer is a party;   (l) continue to prosecute and institute in the name of the insurer or in the liquidator's own name any and all suits and other legal proceedings, in this state or elsewhere, and abandon the prosecution of claims that the liquidator considers unprofitable to pursue further. If the insurer is dissolved under 33-2-1344, the liquidator has the power to apply to any court in this state or elsewhere for leave to substitute for the insurer as plaintiff.   (m) prosecute any action that may exist in behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer or any other person;   (n) remove any or all records and property of the insurer to the offices of the commissioner or to another place that may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations must have reasonable access to the records of the insurer that is necessary for them to carry out their statutory obligations.   (o) deposit in one or more banks in this state sums that are required for meeting current administration expenses and dividend distributions;   (p) invest all sums not currently needed, unless the court orders otherwise;   (q) file any necessary documents for record in the office of any county clerk and recorder in this state or elsewhere where property of the insurer is located;   (r) assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed may not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to the obligation and may defend only in the absence of a defense by the guaranty associations.   (s) exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included with 33-2-1351 through 33-2-1357;   (t) intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee and act as the receiver or trustee whenever the appointment is offered;   (u) enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states;   (v) exercise all powers now held or conferred upon receivers by the laws of this state not inconsistent with the provisions of this part.   (2) The enumeration in this section of the powers and authority of the liquidator may not be construed as a limitation upon the liquidator or exclude in any manner the right to do other acts not specifically enumerated or otherwise provided for that may be necessary for the accomplishment of or in aid of the purpose of liquidation.   History: En. Sec. 21, Ch. 383, L. 1979; amd. Sec. 143, Ch. 575, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1105, Ch. 56, L. 2009.  
  33-2-1346. Notice to creditors and others. (1) Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible:   (a) by first-class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business;   (b) by first-class mail to any guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation;   (c) by first-class mail to all insurance producers of the insurer;   (d) by first-class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at their last-known address as indicated by the records of the insurer; and   (e) by publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in other locations that the liquidator considers appropriate.   (2) Notice to potential claimants under subsection (1) requires claimants to file with the liquidator their claims together with proper proofs of the claims under 33-2-1365, on or before a date the liquidator specifies in the notice. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants have a duty to keep the liquidator informed of any changes of address.   (3) (a) Notice under subsection (1) to insurance producers of the insurer and to potential claimants who are policyholders must include, when applicable, notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty laws.   (b) The liquidator shall promptly provide to the guaranty associations information concerning the identities and addresses of the policyholders and their policy coverages as is within the liquidator's possession or control and shall otherwise cooperate with guaranty associations to assist them in providing to the policyholders timely notice of the guaranty associations' coverage of policy benefits, including coverage of claims and continuation or termination of coverages.   (4) If notice is given in accordance with this section, the distribution of assets of the insurer under this part is conclusive with respect to all claimants, whether or not they received notice.   History: En. Sec. 22, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 52, Ch. 596, L. 1993.  
  33-2-1347. Duty of insurance producers to give notice. (1) Every person who receives notice in the form prescribed in 33-2-1346 that an insurer that the person represents as an insurance producer is the subject of a liquidation order shall within 15 days of the notice give notice of the liquidation order. The notice must be sent by first-class mail to the last address contained in the insurance producer's records to each policyholder or other person named in any policy issued through the insurance producer by the insurer if the producer has a record of the address of the policyholder or other person. A policy must be considered issued through an insurance producer if the insurance producer has a property interest in the expiration of the policy or if the insurance producer has had in the producer's possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another. The written notice must include the name and address of the insurer, the name and address of the insurance producer, identification of the policy impaired, and the nature of the impairment, including termination of coverage as described in 33-2-1343. Notice by a general insurance producer satisfies the notice requirement for any insurance producers under contract to the producer. Each insurance producer obligated to give notice under this section shall file a report of compliance with the liquidator.   (2) Any insurance producer failing to give notice or file a report of compliance as required in subsection (1) may be subject to payment of a penalty of not more than $1,000 and may have the producer's license suspended after a hearing held by the commissioner.   (3) The liquidator may waive the duties imposed by this section if the liquidator determines that other notice to the policyholders of the insurer under liquidation is adequate.   History: En. Sec. 23, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1106, Ch. 56, L. 2009.  
  33-2-1348. Effect of proceedings on pending and potential litigation -- actions by liquidator. (1) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, an action at law or equity may not be brought against the insurer or liquidator, whether in this state or elsewhere. Any existing actions may not be maintained or further presented after issuance of the order. The courts of this state shall give full faith and credit to injunctions against the liquidator or the company or the continuation of existing actions against the liquidator or the company when the injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever in the liquidator's judgment protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this state, the liquidator may intervene in the action. The liquidator may defend any action in which the liquidator intervenes under this section at the expense of the estate of the insurer.   (2) The liquidator may, upon or after an order for liquidation, within 2 years or a time in addition to 2 years that applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered. When, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim or for filing any claim, proof of claim, proof of loss, demand, notice, or the like or when in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act and when in any case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any action or do any act required of or permitted to the insurer within a period of 180 days subsequent to the entry of an order for liquidation or within a further period that is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.   (3) A statute of limitations or defense of laches may not run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the petition is denied.   History: En. Sec. 24, Ch. 383, L. 1979; amd. Sec. 1107, Ch. 56, L. 2009.  
  33-2-1349. Standing of guaranty associations in proceedings. Any guaranty association or foreign guaranty association shall have standing to appear in any court proceeding concerning the liquidation of an insurer if such association is or may become liable to act as a result of the liquidation.   History: En. Sec. 24, Ch. 383, L. 1979.  
  33-2-1350. Collection and listing of assets. (1) As soon as practicable after the liquidation order but not later than 120 days thereafter, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the clerk of the district court, and one copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed.   (2) The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.   (3) A submission to the court for disbursement of assets in accordance with 33-2-1363 fulfills the requirements of subsection (1) of this section.   History: En. Sec. 25, Ch. 383, L. 1979.  
  33-2-1351. Fraudulent transfers prior to petition. (1) Every transfer made or suffered and every obligation incurred by an insurer within 1 year prior to the filing of a successful petition for rehabilitation or liquidation under this part is fraudulent as to then existing and future creditors if made or incurred without fair consideration or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this part which is fraudulent under this section may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and except that any purchaser, lienor, or obligee who in good faith has given a consideration less than fair for such transfer, lien, or obligation may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver succeeds to and may enforce the rights of the purchaser, lienor, or obligee.   (2) (a) A transfer of property other than real property is considered to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under 33-2-1353(3).   (b) A transfer of real property is considered to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.   (c) A transfer which creates an equitable lien is not considered to be perfected if there are available means by which a legal lien could be created.   (d) Any transfer not perfected prior to the filing of a petition for liquidation is considered to be made immediately before the filing of the successful petition.   (e) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.   (3) Any transaction of the insurer with a reinsurer is considered fraudulent and may be avoided by the receiver under subsection (1) if:   (a) the transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and   (b) any part of the transaction took place within 1 year prior to the date of filing of the petition through which the receivership was commenced.   History: En. Sec. 26, Ch. 383, L. 1979.  
  33-2-1352. Fraudulent transfer after petition. (1) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee must have a lien on the property transferred. The commencement of a proceeding in rehabilitation or liquidation is constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the county clerk and recorder in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state may not be impaired by the pendency of a rehabilitation or liquidation proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.   (2) After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:   (a) a transfer of any of the property of the insurer, other than real property, made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee must have a lien on the property transferred;   (b) a person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property or any part of the property to the insurer or upon the person's order, with the same effect as if the petition were not pending;   (c) a person having actual knowledge of the pending rehabilitation or liquidation is considered not acting in good faith;   (d) a person asserting the validity of a transfer under this section has the burden of proof. Except as otherwise provided in this section, a transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator is not valid against the liquidator.   (3) This part does not impair the negotiability of currency or negotiable instruments.   History: En. Sec. 27, Ch. 383, L. 1979; amd. Sec. 1108, Ch. 56, L. 2009.  
  33-2-1353. Voidable preferences and liens. (1) (a) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within 1 year before the filing of a successful petition for liquidation under this part, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then the transfers must be considered preferences if made or allowed within 1 year before the filing of the successful petition for rehabilitation or within 2 years before the filing of the successful petition for liquidation, whichever time is shorter.   (b) Any preference may be avoided by the liquidator if:   (i) the insurer was insolvent at the time of the transfer;   (ii) the transfer was made within 4 months before the filing of the petition;   (iii) the creditor receiving it or to be benefited by it or the creditor's agent acting with reference to the transfer had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or   (iv) the creditor receiving it was an officer or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer, whether or not the creditor held the position, or any shareholder holding directly or indirectly more than 5% of any class of any equity security issued by the insurer or any other person, firm, corporation, association, or aggregation of persons with whom the insurer did not deal at arm's length.   (c) When the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property, except when a bona fide purchaser or lienor has given less than fair equivalent value, the purchaser or lienor has a lien upon the property to the extent of the consideration actually given by the purchaser or lienor. When a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title passes to the liquidator.   (2) (a) A transfer of property other than real property is considered to be made or allowed when it becomes so far perfected that a subsequent lien is not obtainable by legal or equitable proceedings on a simple contract that could become superior to the rights of the transferee.   (b) A transfer of real property is considered to be made or allowed when it becomes so far perfected that a subsequent bona fide purchaser from the insurer could not obtain rights superior to the rights of the transferee.   (c) A transfer that creates an equitable lien is not considered to be perfected if there are available means by which a legal lien could be created.   (d) A transfer not perfected prior to the filing of a petition for liquidation is considered to be made immediately before the filing of the successful petition.   (e) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.   (3) (a) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of the proceedings upon the entry or docketing of a judgment or decree or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens that under applicable law are given a special priority over other liens that are prior in time.   (b) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee or a purchaser could obtain rights superior to the rights of a transferee, within the meaning of subsection (2), if the consequences would follow only from the lien or purchase itself or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. However, a lien could not become superior and a purchase could not create superior rights for the purpose of subsection (2) through any acts subsequent to the obtaining of a lien or subsequent to a purchase that require the agreement or concurrence of any third party or that require any further judicial action or ruling.   (4) A transfer of property for or on account of a new and contemporaneous consideration that is considered under subsection (2) to be made or suffered after the transfer because of delay in perfecting it does not become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within 21 days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if a loan is actually made, or a transfer that becomes security for a future loan must have the same effect as a transfer for or on account of a new and contemporaneous consideration.   (5) If any lien considered voidable under subsection (1)(b) has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this part that results in a liquidation order, the indemnifying transfer or lien must also be considered voidable.   (6) The property affected by any lien considered voidable under subsections (1) and (5) must be discharged from the lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety must pass to the liquidator, except that the court may on due notice order any lien to be preserved for the benefit of the estate and the court may direct that the conveyance be executed as may be proper or adequate to evidence the title of the liquidator.   History: En. Sec. 28, Ch. 383, L. 1979; amd. Sec. 1109, Ch. 56, L. 2009.  
  33-2-1354. Procedure for voiding preferences and liens. (1) The district court has summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under 33-2-1353 through 33-2-1357. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. When an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien and, if the value is less than the amount for which the property is indemnity or less than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator within such reasonable times as the court shall fix.   (2) The liability of a surety under a releasing bond or other like obligation is discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator or, when the property is retained under subsection (1), to the extent of the amount paid to the liquidator.   History: En. Sec. 28, Ch. 383, L. 1979.  
  33-2-1355. Set off for further credit given in good faith. If a creditor has been preferred and afterward in good faith gives the insurer further credit without security of any kind for property that becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference that would otherwise be recoverable from the insurer.   History: En. Sec. 28, Ch. 383, L. 1979; amd. Sec. 1110, Ch. 56, L. 2009.  
  33-2-1356. Transactions to pay for attorneys' services. If an insurer, directly or indirectly, within 4 months before the filing of a successful petition for liquidation under this part or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney at law for services rendered or to be rendered, the transaction may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court and the excess may be recovered by the liquidator for the benefit of the estate, provided that where the attorney is in a position of influence in the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney at law for services rendered or to be rendered shall be governed by the provision of 33-2-1353(1)(b)(iv).   History: En. Sec. 28, Ch. 383, L. 1979.  
  33-2-1357. Personal liability. (1) Every officer, manager, employee, shareholder, member, subscriber, attorney, or any other person acting on behalf of the insurer who knowingly participates in giving any preference when the individual has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference is personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is reasonable cause to so believe if the transfer was made within 4 months before the date of filing of a successful petition for liquidation.   (2) Every person receiving any property from the insurer or the benefit of the property as a preference voidable under 33-2-1353(1) is personally liable and is bound to account to the liquidator.   (3) This section does not prejudice any other claim by the liquidator against any person.   History: En. Sec. 28, Ch. 383, L. 1979; amd. Sec. 1111, Ch. 56, L. 2009.  
  33-2-1358. Claims of holders of void or voidable rights. (1) The claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this part may not be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim may not be allowed unless the money is paid or the property is delivered to the liquidator within 30 days from the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.   (2) A claim allowable under subsection (1) by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment, or encumbrance may be filed as an excused late filing under 33-2-1364 if filed within 30 days from the date of the avoidance or within the further time allowed by the court under subsection (1).   History: En. Sec. 29, Ch. 383, L. 1979; amd. Sec. 1112, Ch. 56, L. 2009.  
  33-2-1359. Setoffs. (1) Mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this part must be set off and the balance only allowed or paid, except as provided in 33-2-1362 and subsection (2) of this section.   (2) A setoff may not be allowed in favor of any person when:   (a) the obligation of the insurer to the person would not at the date of the filing of a petition for liquidation entitle the person to share as a claimant in the assets of the insurer;   (b) the obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff; or   (c) the obligation of the person is to pay an assessment levied against the members or subscribers of the insurer or is to pay a balance upon a subscription to the capital stock of the insurer or is in any other way in the nature of a capital contribution.   History: En. Sec. 30, Ch. 383, L. 1979; amd. Sec. 10, Ch. 531, L. 1997.  
  33-2-1360. Assessments against members of insurer. (1) As soon as practicable but not more than 2 years from the date of an order of liquidation under 33-2-1342 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:   (a) the reasonable value of the assets of the insurer;   (b) the insurer's probable total liabilities;   (c) the probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and   (d) a recommendation as to whether or not an assessment should be made and in what amount.   (2) (a) Upon the basis of the report provided for in subsection (1), including any supplements and amendments, the district court may levy one or more assessments against all members of the insurer who are subject to assessment.   (b) Subject to any applicable legal limits on assessability, the aggregate assessment must be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.   (3) After levy of assessment under subsection (2), the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment for the assessment.   (4) The liquidator shall give notice of the order to show cause by publication and by first-class mail to each member liable for the assessment mailed to the member's last-known address as it appears on the insurer's records at least 20 days before the return day of the order to show cause.   (5) (a) If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under subsection (3), the court shall make an order adjudging the member liable for the amount of the assessment against the member, pursuant to subsection (3), together with costs, and the liquidator has a judgment against the member for that amount.   (b) If on or before the return day the member appears and serves duly verified objections upon the liquidator, the commissioner may hear and determine the matter or may appoint a referee to hear it and make an order that the facts warrant. If the commissioner determines that the objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.   (6) The liquidator may enforce any order or collect any judgment under subsection (5) by any lawful means.   History: En. Sec. 31, Ch. 383, L. 1979; amd. Sec. 1113, Ch. 56, L. 2009.  
  33-2-1361. Reinsurer's liability. The amount recoverable by the liquidator from reinsurers may not be reduced as a result of delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement. Payment made directly to an insured or other creditor may not diminish the reinsurer's obligation to the insurer's estate except when the reinsurance contract provided for direct coverage of a named insured and the payment was made in discharge of that obligation.   History: En. Sec. 32, Ch. 383, L. 1979.  
  33-2-1362. Recovery of premiums owed. (1) (a) An insurance producer or any other person responsible for the payment of a premium, other than the insured, is obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earned or unearned, as shown on the records of the insurer. The liquidator may recover from the person any part of an unearned premium that represents a commission of the person. Credits or setoffs or both may not be allowed to an insurance producer for any amounts advanced to the insurer by the insurance producer on behalf of but in the absence of a payment by the insured.   (b) An insured shall pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer.   (2) Upon satisfactory evidence of a violation of this section, the commissioner may pursue either one or both of the following courses of action:   (a) suspend, revoke, or refuse to renew the licenses of any offending party;   (b) impose a penalty of not more than $1,000 for each act in violation of this section by the party.   (3) Before the commissioner may take any action as set forth in subsection (2), the commissioner shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation and fixing a time and place, at least 10 days after the notice, when a hearing on the matter will be held. After the hearing or upon failure of the accused to appear at the hearing, the commissioner, if a violation is found, shall impose penalties under subsection (2) that the commissioner considers advisable.   (4) When the commissioner takes action in any of the ways set out in subsection (2), the party aggrieved may appeal from the action to the district court.   History: En. Sec. 33, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1114, Ch. 56, L. 2009.  
  33-2-1363. Domiciliary liquidator's proposal to distribute assets. (1) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this state, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshalled assets, from time to time as assets become available, to a guaranty association or foreign guaranty association having obligations because of the insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section must be considered satisfied by a filing by the liquidator stating the reasons for this determination.   (2) The proposal must at least include provisions for:   (a) reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in 33-2-1371, class 1;   (b) disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available;   (c) equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled to a disbursement;   (d) the securing by the liquidator from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the liquidator assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in 33-2-1371 in accordance with the priorities. A bond may not be required of the association.   (e) a full report to be made by each association to the liquidator accounting for all assets disbursed to the association, all disbursements made from the assets, any interest earned by the association on the assets, and any other matter that the court may direct;   (f) compliance with Title 33, chapter 3, part 6, if the insurer being liquidated is a domestic stock insurer or a domestic mutual insurer.   (3) The liquidator's proposal must provide for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made by the associations for which the associations could assert a claim against the liquidator and must provide that if the assets available for disbursement from time to time do not equal or exceed the amount of claim payments made or to be made by the association, then disbursements must be in the amount of available assets.   (4) The liquidator's proposal must, with respect to an insolvent insurer writing life or health insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating the associations.   (5) Notice of the application must be given to the association in each of the states and to the commissioners of insurance of each of the states. Any notice must be considered to have been given when deposited in the United States certified mail, first-class postage prepaid, at least 30 days prior to submission of the application to the court. Action on the application may be taken by the court if the required notice has been given and if the liquidator's proposal complies with subsections (2)(a) and (2)(b).   History: En. Sec. 34, Ch. 383, L. 1979; amd. Sec. 26, Ch. 227, L. 2001; amd. Sec. 10, Ch. 151, L. 2017.  
  33-2-1364. Filing of claims. (1) Proof of all claims must be filed with the liquidator in the form required by 33-2-1365 on or before the last day for filing specified in the notice required under 33-2-1346, except that proof of claims for cash surrender values or other investment values in life insurance and annuities is not required to be filed unless the liquidator requires.   (2) The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if the claimant were not late, to the extent that any payment will not prejudice the orderly administration of the liquidation, under the following circumstances:   (a) the existence of the claim was not known to the claimant, and the claim was filed as promptly after learning of it as reasonably possible;   (b) a transfer to a creditor was avoided under 33-2-1351 through 33-2-1357 or was voluntarily surrendered under 33-2-1358, and the filing satisfies the conditions of 33-2-1358; and   (c) the valuation under 33-2-1370 of security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation.   (3) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late if the claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where the payments were made and expenses incurred as provided by law.   (4) The liquidator may consider any claim filed late that is not covered by subsection (2) and permit it to receive distributions that are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant must receive, at each distribution, the same percentage of the amount allowed on that claim that is being paid to claimants of any lower priority. This distribution must continue until the claim has been paid in full.   History: En. Sec. 35, Ch. 383, L. 1979; amd. Sec. 1115, Ch. 56, L. 2009.  
  33-2-1365. Proof of claim. (1) Proof of claim consists of a statement signed by the claimant that includes all of the following that are applicable:   (a) the particulars of the claim, including the consideration given for it;   (b) the identity and amount of the security on the claim;   (c) the payments made on the debt, if any;   (d) that the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim;   (e) any right of priority of payment or other specific right asserted by the claimants;   (f) a copy of the written instrument that is the foundation of the claim;   (g) the name and address of the claimant and the attorney who represents the claimant, if any.   (2) A claim is not required to be considered or allowed if it does not contain all the information in subsection (1) that may be applicable. The liquidator may require that a prescribed form be used and may require that other information and documents be included.   (3) At any time, the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (1) and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.   (4) A judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation and a judgment or order against an insured or the insurer entered at any time by default or by collusion are not required to be considered as evidence of liability or of quantum of damages. A judgment or order against an insured or the insurer entered within 4 months before the filing of the petition is not required to be considered as evidence of liability or of the quantum of damages.   (5) All claims of a guaranty association or foreign guaranty association must be in the form and contain the substantiation that may be agreed to by the association and the liquidator.   History: En. Sec. 36, Ch. 383, L. 1979; amd. Sec. 1116, Ch. 56, L. 2009.  
  33-2-1366. Special claims. (1) The claim of a third party that is contingent on the third party first obtaining a judgment against the insured must be considered and allowed as if there were no contingency.   (2) A claim may be allowed, even if contingent, if it is filed in accordance with 33-2-1364. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.   (3) Claims that are due except for the passage of time must be treated as absolute claims are treated, except that the claims may be discounted at the legal rate of interest.   (4) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under 33-2-1332 or 33-2-1342.   History: En. Sec. 37, Ch. 383, L. 1979; amd. Sec. 1117, Ch. 56, L. 2009.  
  33-2-1367. Claims of insureds or claimants against insureds. (1) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.   (2) Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by 33-2-1346, whichever is later, the insured is an unexcused late filer.   (3) The liquidator shall make recommendations to the court under 33-2-1371 for the allowance of an insured's claim under subsection (2) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action, and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the bases of additional information and amend the recommendations to the court. The insured must be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it determines appropriate. As claims against the insured are settled or barred, the insured must be paid, from the amount withheld, the same percentage dividend as was paid on other claims of similar property, based on the lesser of the amount actually recovered from the insured by action or paid by agreement, plus the reasonable costs and expenses of defense, or the amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld must revert to the undistributed assets of the insurer. Delay in final payment under this subsection may not be a reason for unreasonable delay of final distribution and discharge of the liquidator.   (4) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed must be reduced in the same proportion so that the total equals the policy limit. Claims by the insured must be evaluated as provided in subsection (3). If any insured's claim is subsequently reduced under subsection (3), the amount freed must be apportioned ratably among the claims that have been reduced under this subsection.   (5) A claim may not be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association.   History: En. Sec. 38, Ch. 383, L. 1979; amd. Sec. 1118, Ch. 56, L. 2009.  
  33-2-1368. Disputed claims. (1) When a claim is denied in whole or in part by the liquidator, written notice of the determination must be given to the claimant or the claimant's attorney by first-class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file objections with the liquidator. If a filing is not made, the claimant may not further object to the determination.   (2) Whenever objections are filed with the liquidator and the liquidator does not alter the denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first-class mail to the claimant or the claimant's attorney and to any other persons directly affected not less than 10 or more than 30 days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee who shall submit findings of fact along with a recommendation.   History: En. Sec. 39, Ch. 383, L. 1979; amd. Sec. 1119, Ch. 56, L. 2009.  
  33-2-1369. Claims of sureties. (1) Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name and must be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking. However, in the absence of an agreement with the creditor to the contrary, the other person is not entitled to any distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor must be held by the creditor in trust for the other person.   (2) The term "other person", as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.   History: En. Sec. 40, Ch. 383, L. 1979; amd. Sec. 1120, Ch. 56, L. 2009.  
  33-2-1370. Claims of secured creditors. (1) The value of any security held by a secured creditor must be determined in one of the following ways, as the court may direct:   (a) by converting the security into money according to the terms of the agreement pursuant to which the security was delivered to the creditors; or   (b) by agreement, arbitration, compromise, or litigation between the creditor and the liquidator.   (2) The determination must be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount determined must be credited upon the secured claim, and any deficiency must be treated as an unsecured claim. If the claimant surrenders the claimant's security to the liquidator, the entire claim must be allowed as if unsecured.   History: En. Sec. 41, Ch. 383, L. 1979; amd. Sec. 1121, Ch. 56, L. 2009.  
  33-2-1371. Priority of distribution. The priority of distribution of claims from the insurer's estate is in accordance with the order in which each class of claims is set forth in this section. Every claim in each class must be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. Subclasses may not be established within any class. The order of distribution of claims is as follows:   (1) Class 1--the costs and expenses of administration, including but not limited to the following:   (a) the actual and necessary costs of preserving or recovering the assets of the insurer;   (b) compensation for all services rendered in the liquidation;   (c) any necessary filing fees;   (d) the fees and mileage payable to witnesses;   (e) reasonable attorney fees;   (f) the reasonable expenses of a guaranty association or foreign guaranty association in handling claims.   (2) Class 2--all claims under policies for losses incurred, including third-party claims, all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property that are not under policies, and all claims of a guaranty association or foreign guaranty association for payment of covered claims or covered obligations of the insurer. All claims under life and health insurance and annuity policies, whether for death proceeds, health benefits, annuity proceeds, or investment values, must be treated as loss claims. The portion of any loss, indemnification that is provided by other benefits, or advantages recovered by the claimant may not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance or as gratuities. A payment by an employer to an employee may not be treated as a gratuity.   (3) Class 3--claims of the federal government.   (4) Class 4--debts due to employees for services performed to the extent that they do not exceed $1,000 and represent payment for services performed within 1 year before the filing of the complaint for liquidation. Officers and directors may not be entitled to the benefit of this priority. The priority must be in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees.   (5) Class 5--claims of general creditors.   (6) Class 6--claims of any state or local government. Claims, including those of any state or local government for a penalty or forfeiture, may be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, along with reasonable and actual costs. The remainder of the claims must be postponed to the class of claims under subsection (9).   (7) Class 7--claims filed late or any other claims other than claims under subsections (8) and (9).   (8) Class 8--surplus or contribution notes or similar obligations and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies are limited in accordance with law.   (9) Class 9--the claims of shareholders or other owners.   History: En. Sec. 42, Ch. 383, L. 1979; amd. Sec. 27, Ch. 227, L. 2001.  
  33-2-1372. Liquidator's recommendations to the court concerning claims. (1) The liquidator shall review all claims duly filed in the liquidation and make further investigation that the liquidator considers necessary. The liquidator may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court except when the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes must be determined under 33-2-1368. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with the liquidator's recommendations. The report must include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.   (2) The court may approve, disapprove, or modify the report on claims by the liquidator. Reports not modified by the court within a period of 60 days following submission by the liquidator must be treated by the liquidator as allowed claims, subject to later modification or to rulings made by the court pursuant to 33-2-1368. A claim under a policy of insurance may not be allowed for an amount in excess of the applicable policy limits.   History: En. Sec. 43, Ch. 383, L. 1979; amd. Sec. 1122, Ch. 56, L. 2009.  
  33-2-1373. Distribution of assets. Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third-party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.   History: En. Sec. 44, Ch. 383, L. 1979.  
  33-2-1374. Unclaimed and withheld funds. (1) All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, must be deposited with the state treasurer and must be paid without interest except in accordance with 33-2-1371 to the person entitled to the funds or the person's legal representative upon proof satisfactory to the state treasurer of the person's right to the funds. Any amount on deposit not claimed within 6 years from the discharge of the liquidator must be considered to have been abandoned and must be escheated without formal escheat proceedings and be deposited in the general fund.   (2) All funds withheld under 33-2-1366 and not distributed must upon discharge of the liquidator be deposited with the state treasurer and paid in accordance with 33-2-1371. Any sums remaining that under 33-2-1371 would revert to the undistributed assets of the insurer must be transferred to the state treasurer and become the property of the state under subsection (1) unless the commissioner petitions the court to reopen the liquidation under 33-2-1376.   History: En. Sec. 45, Ch. 383, L. 1979; amd. Sec. 1123, Ch. 56, L. 2009.  
  33-2-1375. Termination of liquidation proceedings. (1) When all assets justifying the expense of collection and distribution have been collected and distributed under this part, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, as may be considered appropriate.   (2) Any other person may apply to the court at any time for an order under subsection (1). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.   History: En. Sec. 46, Ch. 383, L. 1979.  
  33-2-1376. Reopening liquidation. After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the district court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.   History: En. Sec. 47, Ch. 383, L. 1979.  
  33-2-1377. Disposition of records during and after liquidation. When it appears to the commissioner that the records of any insurer in the process of liquidation or completely liquidated are no longer useful, the commissioner may recommend to the court and the court shall direct which records should be retained for future reference and which should be destroyed.   History: En. Sec. 48, Ch. 383, L. 1979; amd. Sec. 1124, Ch. 56, L. 2009.  
  33-2-1378. Audit of the receiver's books. The district court may, as it considers desirable, cause audits to be made of the books of the commissioner relating to any receivership established under this part, and a report of each audit shall be filed with the commissioner and with the court. The books, records, and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.   History: En. Sec. 49, Ch. 383, L. 1979.  
  33-2-1379. Conservation of property of foreign or alien insurers. (1) If a domiciliary liquidator has not been appointed, the commissioner may apply to the district court by verified petition for an order directing the commissioner to act as conservator to conserve the property of an alien insurer not domiciled in this state or a foreign insurer on any one or more of the following grounds:   (a) any of the grounds in 33-2-1331;   (b) that any of its property has been sequestered by official action in its domiciliary state or in any other state;   (c) that enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;   (d) that its certificate of authority to do business in this state has been revoked or that none was ever issued;   (e) that there are residents of this state with outstanding claims or outstanding policies.   (2) When an order is sought under subsection (1), the court shall cause the insurer to be given notice and a time to respond that is reasonable under the circumstances.   (3) The court may issue the order in whatever terms it considers appropriate. The filing or recording of the order with the clerk of the district court or the clerk and recorder of the county in which the principal business of the company is located or the county in which its principal office or place of business is located must impart the same notice as a deed, bill of sale, or other evidence of title filed or recorded with that clerk and recorder would have imparted.   (4) The conservator may at any time petition for and the court may grant an order under 33-2-1380 to liquidate assets of a foreign or alien insurer under conservation or, if appropriate, for an order under 33-2-1382 to be appointed ancillary receiver.   (5) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order the insurer to be restored to possession of its property and the control of its business. The court may also make a finding and issue an order at any time upon motion of any interested party, but if the motion is denied, all costs must be assessed against the party.   History: En. Sec. 50, Ch. 383, L. 1979; amd. Sec. 1125, Ch. 56, L. 2009.  
  33-2-1380. Liquidation of assets of foreign or alien insurers. (1) If a domiciliary receiver has not been appointed, the commissioner may apply to the district court by verified petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state on any of the following grounds:   (a) any of the grounds in 33-2-1331 or 33-2-1341; or   (b) any of the grounds specified in 33-2-1379(1)(b) through (1)(d).   (2) When an order is sought under subsection (1), the court shall cause the insurer to be given notice and time to respond that is reasonable under the circumstances.   (3) If it appears to the court that the best interests of creditors, policyholders, and the public require, the court may issue an order to liquidate in whatever terms it considers appropriate. The filing or recording of the order with the clerk of the district court or the clerk and recorder of the county in which the principal business of the company is located or the county in which its principal office or place of business is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that clerk and recorder would have imparted.   (4) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall act as ancillary receiver under 33-2-1382. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under 33-2-1382.   (5) On the same grounds as specified in subsection (1), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction or any lesser part of the assets and business that the commissioner considers desirable for the protection of the policyholders and creditors in this state.   (6) The court may order the commissioner, when the commissioner has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of this state against the insurer under rules that relate to the liquidation of insurers under this part and that are otherwise compatible with the provisions of this section.   History: En. Sec. 51, Ch. 383, L. 1979; amd. Sec. 1126, Ch. 56, L. 2009.  
  33-2-1381. Domiciliary liquidators in other states. (1) The domiciliary liquidator of an insurer domiciled in a reciprocal state is, except as to special deposits and security on secured claims under 33-2-1382(3), vested by operation of law with the title to all of the assets, property, contracts, and rights of action, insurance producers' balances, and all of the books, accounts, and other records of the insurer located in this state. The date of vesting must be the date of the filing of the petition if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting is the date of entry of the order directing possession to be taken. The domiciliary liquidator has the immediate right to recover balances due from insurance producers and to obtain possession of the books, accounts, and other records of the insurer located in this state. The domiciliary liquidator also has the right to recover all other assets of the insurer located in this state, subject to 33-2-1382.   (2) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this state is vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books, accounts, and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile. The commissioner of this state may petition for a conservation or liquidation order under 33-2-1379 or 33-2-1380 or for an ancillary receivership under 33-2-1382 or, after approval by the district court, may transfer title to the domiciliary liquidator that the interests of justice and the equitable distribution of the assets require.   (3) Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary liquidator if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings.   History: En. Sec. 52, Ch. 383, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1127, Ch. 56, L. 2009.  
  33-2-1382. Ancillary formal proceedings. (1) If a domiciliary liquidator has been appointed for an insurer not domiciled in this state, the commissioner may file a petition with the district court requesting appointment as ancillary receiver in this state:   (a) if the commissioner finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver;   (b) if the protection of creditors or policyholders in this state requires.   (2) The court may issue an order appointing an ancillary receiver in whatever terms it considers appropriate. The filing or recording of the order with the county clerk and recorder imparts the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded.   (3) When a domiciliary liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in this state may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in this state. The ancillary receiver shall, as soon as practicable, liquidate from respective securities those special deposit claims and secured claims that are proved and allowed in the ancillary proceedings in this state and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets, books, accounts, and records to the domiciliary liquidator. Subject to this section, the ancillary receiver and the ancillary receiver's deputies have the same powers and are subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in this state.   (4) When a domiciliary liquidator has been appointed in this state, ancillary receivers appointed in reciprocal states have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties, and powers to those provided in subsection (3) for ancillary receivers appointed in this state.   History: En. Sec. 53, Ch. 383, L. 1979; amd. Sec. 144, Ch. 575, L. 1981; amd. Sec. 1128, Ch. 56, L. 2009.  
  33-2-1383. Ancillary summary proceedings. The commissioner may institute proceedings under 33-2-1321 through 33-2-1323 at the request of the commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this state.   History: En. Sec. 54, Ch. 383, L. 1979; amd. Sec. 1129, Ch. 56, L. 2009.  
  33-2-1384. Claims of nonresidents against insurers domiciled in this state. (1) In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in states not reciprocal states must file claims in this state, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.   (2) Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this state as provided in this part or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this state as provided in 33-2-1385(2) with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in reciprocal states is conclusive as to amount and as to priority against special deposits or other security located in such ancillary states but is not conclusive with respect to priorities against general assets under 33-2-1371.   History: En. Sec. 55, Ch. 383, L. 1979.  
  33-2-1385. Claims of residents against insurers domiciled in reciprocal states. (1) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this state may file claims either with the ancillary receiver, if any, in this state or with the domiciliary liquidator. Claims must be filed on or before the last dates fixed for the filing of claims in the domiciliary liquidation proceeding.   (2) Claims belonging to claimants residing in this state may be proved either in the domiciliary state under the law of that state or in ancillary proceedings, if any, in this state. If a claimant elects to prove a claim in this state, the claimant shall file the claim with the liquidator in the manner provided in 33-2-1364 and 33-2-1365. The ancillary receiver shall make a recommendation to the court in the same manner provided in 33-2-1372. The ancillary receiver shall also arrange a date for hearing, if necessary, under 33-2-1368 and shall give notice to the liquidator in the domiciliary state, either by certified mail or by personal service, at least 40 days prior to the date set for hearing. If the domiciliary liquidator, within 30 days after the giving of the notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or by personal service, of the ancillary receiver's intention to contest the claim, the ancillary receiver is entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim.   (3) The final allowance of the claim by the courts of this state must be accepted as conclusive as to amount and as to priority against special deposits or other security located in this state.   History: En. Sec. 56, Ch. 383, L. 1979; amd. Sec. 1130, Ch. 56, L. 2009.  
  33-2-1386. Exemption from legal process during pendency of liquidation. During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment, or levy of execution may be commenced or maintained in this state against the delinquent insurer or its assets.   History: En. Sec. 57, Ch. 383, L. 1979.  
  33-2-1387. Interstate priorities. (1) In a liquidation proceeding in this state involving one or more reciprocal states, the order of distribution of the domiciliary state must control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states must be given equal priority of payment from general assets regardless of where the assets are located.   (2) The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state is given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing must be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.   (3) The owner of a secured claim against an insurer for which a liquidator has been appointed in this or any other state may surrender the security and file the claim as a general creditor, or the claim may be discharged by resort to the security in accordance with 33-2-1370, in which case the deficiency, if any, must be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors.   History: En. Sec. 58, Ch. 383, L. 1979; amd. Sec. 1131, Ch. 56, L. 2009.  
  33-2-1388. Subordination of claims for noncooperation of ancillary receiver. If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this state any assets within the ancillary receiver's control, other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, must be placed in the class of claims under 33-2-1371(8).   History: En. Sec. 59, Ch. 383, L. 1979; amd. Sec. 28, Ch. 227, L. 2001.  
  33-2-1389 and 33-2-1390 reserved.  
  33-2-1391. Condition on release from delinquency proceedings. An insurer that is subject to any delinquency proceeding, whether formal, informal, administrative, or judicial, may not:   (1) be released from the proceeding, unless the proceeding is converted to a judicial rehabilitation or liquidation proceeding;   (2) be permitted to solicit or accept new business or request or accept the restoration of any suspended or revoked license or certificate of authority;   (3) be returned to the control of its shareholders or private management; or   (4) have any of its assets returned to the control of its shareholders or private management until all payments of or on account of the insurer's contractual obligations by all guaranty associations, along with all expenses of the guaranty associations and interest on all payments and expenses, have been repaid to the guaranty associations or a plan of repayment by the insurer has been approved by the guaranty association.   History: En. Sec. 35, Ch. 596, L. 1993.  
  33-2-1392. Indemnification of rehabilitator, liquidator, and employees -- persons covered. (1) The persons entitled to protection under 33-2-1393 and 33-2-1394 are:   (a) all rehabilitators and liquidators responsible for the conduct of a delinquency proceeding under Title 33, chapter 2, including present and former rehabilitators and liquidators; and   (b) the employees of the rehabilitators and liquidators, including all present and former special deputies and assistant special deputies appointed by the commissioner, and all persons whom the commissioner, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding under Title 33, chapter 2.   (2) Attorneys, accountants, auditors, and other professional persons or firms, who are retained by the rehabilitator or liquidator as independent contractors, and their employees are not considered employees of the rehabilitator or liquidator for purposes of any cause of action initiated by the rehabilitator or liquidator against the independent contractor in the name of the rehabilitation or liquidation estate.   History: En. Sec. 36, Ch. 596, L. 1993.  
  33-2-1393. Indemnification of rehabilitator, liquidator, and employees. (1) If any legal action is commenced against the rehabilitator or liquidator or any employee of the rehabilitator or liquidator, whether against the rehabilitator, liquidator, or employee personally or in an official capacity, alleging property damage, property loss, personal injury, or other civil liability caused by or resulting from any alleged act, error, or omission of the rehabilitator, liquidator, or employee arising out of or by reason of duties or employment, the rehabilitator, liquidator, or employee is indemnified from the assets of the insurer for all expenses, attorney fees, judgments, settlements, decrees, surety bond premiums, or amounts due and owing or paid in satisfaction of or incurred in the defense of the legal action unless it is determined upon a final adjudication on the merits that the alleged act, error, or omission of the rehabilitator, liquidator, or employee that gave rise to the claim did not arise out of or by reason of the rehabilitator's, liquidator's, or employee's duties or employment or was caused by intentional or willful and wanton misconduct.   (2) Attorney fees and related expenses incurred in defending a legal action for which indemnity is available under this section must be paid from the assets of the insurer, as the expenses are incurred and in advance of the final disposition of the action, upon receipt of an undertaking by or on behalf of the rehabilitator, liquidator, or employee to repay the attorney fees and expenses. If, upon a final adjudication on the merits, it is determined that the rehabilitator, liquidator, or employee is not entitled to indemnity under this section, the payment must be made from the undertaking.   (3) An indemnification for expenses, attorney fees, judgments, settlements, decrees, surety bond premiums, or other amounts paid or to be paid from the insurer's assets pursuant to this section are an administrative expense of the insurer.   (4) If actual or threatened litigation against a rehabilitator, liquidator, or employee for which indemnity may be available under this section occurs, a reasonable amount of funds that in the judgment of the commissioner may be needed to provide indemnity must be segregated and reserved from the assets of the insurer as security for the payment of indemnity until all applicable statutes of limitation have run, all actual or threatened actions against the rehabilitator, liquidator, or employee have been completely and finally resolved, and all obligations of the insurer and the commissioner under this section have been satisfied.   (5) In lieu of segregation and reservation of funds, the commissioner may obtain a surety bond or make other arrangements that will enable the commissioner to fully secure the payment of all obligations under this section.   History: En. Sec. 37, Ch. 596, L. 1993.  
  33-2-1394. Settlement of actions against rehabilitator, liquidator, and employees -- court approval -- applicability. (1) If any legal action against an employee for which indemnity may be available under this section is settled prior to final adjudication on the merits, the insurer shall pay the settlement amount on behalf of the employee or indemnify the employee for the settlement amount unless the commissioner determines:   (a) that the claim did not arise out of or by reason of the employee's duties or employment; or   (b) that the claim was caused by the intentional or willful and wanton misconduct of the employee.   (2) In a legal action in which the rehabilitator or liquidator is a defendant, that portion of any settlement relating to the alleged act, error, or omission of the rehabilitator or liquidator is subject to the approval of the court before which the delinquency proceeding is pending. The court may not approve that portion of the settlement if it determines:   (a) that the claim did not arise out of or by reason of the rehabilitator's or liquidator's duties or employment; or   (b) that the claim was caused by the intentional or willful and wanton misconduct of the rehabilitator or liquidator.   (3) This section may not be construed to deprive the rehabilitator, liquidator, or employee of immunity, indemnity, benefit of law, right, or defense available under any provision of law, including, without limitation, the provisions of Title 2, chapter 9.   (4) (a) Except as otherwise provided, a legal action by a third party does not lie against the rehabilitator, liquidator, or employee based in whole or in part on any alleged act, error, or omission that took place prior to October 1, 1993, unless suit is filed and valid service of process is obtained by October 1, 1994. A legal action that is pending on or filed after September 30, 1993, by a liquidator or a liquidation estate will lie against a former special deputy liquidator or any employee, agent, or independent contractor retained by a special deputy liquidator without regard to when the alleged act, error, or omission occurred.   (b) Subsections (1) through (3) apply to any suit that is pending on or filed after October 1, 1993, without regard to when the alleged act, error, or omission took place.   History: En. Sec. 38, Ch. 596, L. 1993; amd. Sec. 31, Ch. 379, L. 1995.  
  33-2-1401. Short title. This part may be cited as the "Certificates of Insurance Model Act".   History: En. Sec. 1, Ch. 303, L. 2013.  
  33-2-1402. Definitions. As used in this part, the following definitions apply:   (1) "Certificate of insurance" means a document or instrument, regardless of how titled or described, that is prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage. The term does not include a policy of insurance, insurance binder, policy endorsement, or automobile insurance identification or information card.   (2) "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate property or casualty insurance.   (3) "Insurer" means an organization that issues property or casualty insurance.   (4) "Person" means an individual, partnership, corporation, association, or other legal entity, including any government or governmental subdivision or agency.   History: En. Sec. 2, Ch. 303, L. 2013.  
  33-2-1403. Certificate forms. (1) Except as provided in subsection (3), a person may not prepare, issue, request, or require the issuance of a certificate of insurance on property, operations, or risks located in this state unless the certificate of insurance form has been filed with the commissioner by or on behalf of an insurer.   (2) The commissioner shall prohibit the use of a certificate of insurance form if the form is unfair, misleading, or deceptive or violates public policy or law, including rules adopted by the commissioner.   (3) Insurers are not required to file the current standard certificate of insurance forms promulgated and filed with the commissioner by the association for cooperative operations research and development, the American association of insurance services, or the insurance services office, inc., or certificate of insurance forms whose specific content and wording are established by federal law or regulation or by any law or rule of this state.   (4) A certificate of insurance is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance makes reference. A certificate of insurance may not confer to any person new or additional rights beyond what the referenced policy of insurance expressly provides.   History: En. Sec. 3, Ch. 303, L. 2013.  
  33-2-1404. Limitations on use. (1) A person may not:   (a) alter or modify a certificate of insurance form filed with the commissioner;   (b) prepare, issue, request, or require the issuance of a certificate of insurance that contains any false or misleading information concerning the policy of insurance to which the certificate of insurance makes reference; or   (c) prepare, issue, request, or require the issuance of a certificate of insurance that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy of insurance to which the certificate of insurance makes reference.   (2) A certificate of insurance may not warrant that the policy of insurance referenced in the certificate complies with the insurance or indemnification requirements of a contract, and the inclusion of a contract number or description in the certificate of insurance may not be interpreted as warranting compliance with the insurance or indemnification requirements of a contract.   History: En. Sec. 4, Ch. 303, L. 2013.  
  33-2-1405. Notice requirements. A person is entitled to notice of cancellation, nonrenewal, or other material change concerning a policy of insurance only if the person has notice rights under the terms of the policy of insurance or any endorsement to the policy. The terms and conditions of the notice are governed by the policy of insurance or endorsement and may not be altered by a certificate of insurance.   History: En. Sec. 5, Ch. 303, L. 2013.  
  33-2-1406. Scope -- voidness. (1) The provisions of this part apply to all certificates of insurance issued in connection with property, operations, or risks located in this state, regardless of where the policyholder, insurer, insurance producer, or person requesting or requiring the issuance of the certificate of insurance is located.   (2) A certificate of insurance or any other document or correspondence prepared, issued, requested, or required in violation of this part is void.   History: En. Sec. 6, Ch. 303, L. 2013.  
  33-2-1407. Enforcement and penalties -- rulemaking. (1) The commissioner may examine and investigate the activities of any person that the commissioner reasonably believes has been or is engaged in an act or practice prohibited by this part.   (2) The commissioner may enforce the provisions of this part by issuing cease and desist orders and by imposing a fine not to exceed $1,000 for each violation.   (3) The commissioner may adopt rules to implement the provisions of this part.   History: En. Sec. 7, Ch. 303, L. 2013.  
  33-2-1501. Definitions. As used in parts 15 through 17 of this chapter, the following definitions apply:   (1) "Accredited state" means a state in which the department of insurance or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the national association of insurance commissioners.   (2) "Actuary" means a person who is a member in good standing of the American academy of actuaries.   (3) "Captive insurer" means:   (a) an insurer that is owned by another entity and whose exclusive purpose is to insure risks of the parent entity and its affiliates; or   (b) in the case of a group or association, an insurer that is owned by the member insureds and whose exclusive purpose is to insure risks to member insureds and their affiliates.   (4) "Control" or "controlled" has the meaning defined in 33-2-1101.   (5) "Controlled insurer" means an authorized insurer that is controlled, directly or indirectly, by a producer.   (6) "Controlling person" means a person, firm, association, or corporation that has the power to direct or cause to be directed the management, control, or activities of a reinsurance intermediary.   (7) "Controlling producer" means a producer who, directly or indirectly, controls an insurer.   (8) (a) "Insurer" means any person, firm, association, or corporation authorized, under Title 33, chapter 2, part 1, to transact insurance business in this state.   (b) The term does not mean:   (i) residual market pools and joint underwriting authorities or associations; or   (ii) captive insurers, other than captive risk retention groups as defined in 33-28-101.   (9) "Licensed producer" means a producer or reinsurance intermediary licensed pursuant to this title.   (10) (a) "Managing general agent" means a person who:   (i) manages all or part of the insurance business of an insurer and acts as an agent for the insurer;   (ii) either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross written premiums equal to or more than 5% of the policyholder surplus in any quarter or year; and   (iii) engages in one or more of the following activities on the business produced:   (A) adjustment or payment of claims in excess of an amount determined by the commissioner; or   (B) negotiation of reinsurance on behalf of the insurer.   (b) The term does not include:   (i) an employee of the insurer;   (ii) a manager of the United States branch of an alien insurer;   (iii) an underwriting manager who, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, is subject to Title 33, chapter 2, part 11, and whose compensation is not based solely on the value of premiums written;   (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or an interinsurance exchange under powers of attorney;   (v) a person managing the property and liability business of a resident domestic farm mutual insurer who has been granted a managing general agent waiver under 33-4-320; or   (vi) a director of a resident domestic farm mutual insurer who adjusts claims and participates in the underwriting process.   (11) "NAIC" means the national association of insurance commissioners.   (12) "Producer" means an insurance producer or reinsurance intermediary authorized or licensed pursuant to this title.   (13) (a) "Qualified United States financial institution" means a financial institution that:   (i) is organized or licensed under the laws of the United States or any state;   (ii) is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies and that either:   (A) is determined by the commissioner to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit are acceptable to the commissioner; or   (B) is eligible to act as a fiduciary of a trust or has been granted authority to operate with fiduciary powers.   (b) For purposes of this definition, the commissioner may by rule adopt standards of financial condition and standing that may be developed from time to time by the securities valuation office of the NAIC.   (14) "Reinsurance intermediary" means a reinsurance intermediary-broker or a reinsurance intermediary-manager.   (15) "Reinsurance intermediary-broker" means a person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of the insurer.   (16) (a) "Reinsurance intermediary-manager" means a person who:   (i) has authority to bind or who manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office; and   (ii) acts as an agent for the reinsurer, whether known as a reinsurance intermediary-manager, manager, or other similar term.   (b) The following persons are not considered reinsurance intermediary-managers with respect to the reinsurer:   (i) an employee of the reinsurer;   (ii) a manager of the United States branch of an alien reinsurer;   (iii) an underwriting manager who, pursuant to contract, manages all of the reinsurance operations of the reinsurer, is under common control with the reinsurer, is subject to Title 33, chapter 2, part 11, and whose compensation is not based on the volume of premiums written; or   (iv) a person who manages groups, associations, pools, or organizations of insurers that engage in joint underwriting or joint reinsurance and that are subject to examination by the insurance commissioner of the state in which the manager's principal business office is located.   (17) "Reinsurer" means a person, firm, association, or corporation licensed in this state under this title as an insurer with authority to assume reinsurance.   (18) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.   History: En. Sec. 1, Ch. 596, L. 1993; amd. Sec. 8, Ch. 227, L. 2011; amd. Sec. 2, Ch. 208, L. 2013; amd. Sec. 35, Ch. 370, L. 2015.  
  33-2-1502. Filing requirements. (1) Each domestic, foreign, and alien insurer authorized to transact insurance in this state shall, on or before March 1 of each year, file with the NAIC a copy of its annual statement convention form, along with any additional filings for the preceding year as prescribed by the commissioner. The information filed with the NAIC must be in the same format and scope as that required by the commissioner and must include the signed jurat page and the actuarial certification. Amendments to the annual statement filing that are subsequently filed with the commissioner must also be filed with the NAIC.   (2) Foreign insurers domiciled in a state that has a law substantially similar to this section are considered to be in compliance with this section.   History: En. Sec. 2, Ch. 596, L. 1993.  
  33-2-1503. Immunity of NAIC. In the absence of actual malice, members of the NAIC; their authorized committees, subcommittees, task forces, delegates, and employees; and all others charged with the responsibility of collecting and processing the information developed from the filing of the annual statement convention forms are considered to act under the authority of 33-2-1502 through 33-2-1504. They are not subject to civil liability for libel, slander, or any other cause of action arising from their collection, review, analysis, or dissemination of information collected from the filings required by 33-1-408 through 33-1-410, 33-2-1216 through 33-2-1218, 33-2-1391 through 33-2-1394, Title 33, chapter 2, parts 15 through 17, and 33-11-110.   History: En. Sec. 3, Ch. 596, L. 1993.  
  33-2-1504. Confidentiality. All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the department by the NAIC insurance regulatory information systems are confidential and may not be disclosed by the department.   History: En. Sec. 4, Ch. 596, L. 1993.  
  33-2-1505 through 33-2-1508 reserved.  
  33-2-1509. Applicability of minimum standards. (1) The provisions of 33-2-1510 apply if, in any calendar year, the aggregate amount of gross written premiums on business placed with a controlled insurer by a controlling producer is equal to or greater than 5% of the admitted assets of the controlled insurer, as reported in the controlled insurer's quarterly statement filed as of September 30 of the prior year.   (2) Notwithstanding the provisions of subsection (1), the provisions of 33-2-1510 do not apply if:   (a) the controlling producer:   (i) does not receive compensation based upon the amount of premiums written in connection with the insurance and places insurance only with:   (A) the controlled insurer; or   (B) the controlled insurer and a member or members of the controlled insurer's holding company system or the controlled insurer's parent, affiliate, or subsidiary; and   (ii) accepts insurance placements only from nonaffiliated subproducers and not directly from insureds; and   (b) except for insurance business written through a residual market facility, the controlled insurer accepts insurance business only from a controlling producer, a producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer.   History: En. Sec. 5, Ch. 596, L. 1993.  
  33-2-1510. Minimum standards. Unless there is a written contract between a controlling producer and a controlled insurer specifying the responsibilities of each party, the controlled insurer may not accept business from the controlling producer and the controlling producer may not place business with the controlled insurer. The contract must be approved by the board of directors of the controlled insurer and must contain the following minimum provisions:   (1) The controlled insurer may terminate the contract for cause, upon written notice to the controlling producer. The controlled insurer shall suspend the authority of the controlling producer to write business during the pendency of any dispute regarding the cause for the termination.   (2) The controlling producer shall render to the controlled insurer accounts detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the controlling producer.   (3) On at least a monthly basis, the controlling producer shall remit to the controlled insurer all funds due under the terms of the contract. The due date must be fixed so that premiums or installments of premiums collected must be remitted no later than 90 days after the effective date of any policy placed with the controlled insurer under the contract.   (4) In accordance with the provisions of this title, all funds collected for the controlled insurer's account must be held by the controlling producer in a fiduciary capacity, in one or more appropriately identified bank accounts in banks that are members of the federal reserve system. However, funds of a controlling producer not required to be licensed in this state must be maintained in compliance with the requirements of the jurisdiction in which the controlling producer is domiciled.   (5) The controlling producer shall maintain separately identifiable records of business written for the controlled insurer.   (6) The contract may not be assigned in whole or in part by the controlling producer.   (7) The controlled insurer shall provide the controlling producer with its underwriting standards, rules, procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates, and conditions must be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer.   (8) The rates and terms of the controlling producer's commissions, charges, or other fees and the purposes of those commissions, charges, or fees must be contained in the contract. The rates of the controlling producer's commissions, charges, and other fees may not be greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For purposes of subsection (7) and this subsection, examples of "comparable business" include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business.   (9) If the contract provides that on insurance business placed with the controlled insurer, the controlling producer is to be compensated contingent upon the controlled insurer's profits on that business, then the compensation may not be determined and paid until at least 5 years after the premiums on liability insurance are earned and at least 1 year after the premiums are earned on any other insurance. The commissions may not be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to 33-2-1512.   (10) A limit on the controlling producer's writings in relation to the controlled insurer's surplus and total writings must be contained in the contract. The controlled insurer may establish a different limit for each line or subline of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and may not accept business from the controlling producer if the limit is reached. The controlling producer may not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached.   (11) The controlling producer may negotiate but may not bind reinsurance on behalf of the controlled insurer on business that the controlling producer places with the controlled insurer, except that the controlling producer may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the controlled insurer contains underwriting guidelines. For reinsurance assumed and ceded, the guidelines must include a list of reinsurers with which the automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules.   History: En. Sec. 6, Ch. 596, L. 1993; amd. Sec. 32, Ch. 379, L. 1995.  
  33-2-1511. Audit committee. Each controlled insurer shall have an audit committee of the board of directors composed of independent directors. The audit committee shall annually review the adequacy of the controlled insurer's loss reserves and meet with management, the controlled insurer's independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the commissioner.   History: En. Sec. 7, Ch. 596, L. 1993.  
  33-2-1512. Annual report by independent actuary. In addition to any other required loss reserve certification, the controlled insurer shall, on April 1 of each year, file with the commissioner an opinion of an independent casualty actuary or other independent loss reserve specialist acceptable to the commissioner. The opinion must report the loss ratios for each line of business written and must attest to the adequacy of loss reserves established for losses incurred and outstanding as of the yearend, including losses incurred but not reported, on business placed by the producer.   History: En. Sec. 8, Ch. 596, L. 1993.  
  33-2-1513. Annual report to commissioner. The controlled insurer shall annually report to the commissioner:   (1) the amount of commissions paid to the producer;   (2) the percentage the amount represents of the net premiums written; and   (3) comparable amounts and the percentage paid to noncontrolling producers for placements of the same kinds of insurance.   History: En. Sec. 9, Ch. 596, L. 1993.  
  33-2-1514. Disclosure. (1) Except as provided in subsection (2), the producer, prior to the effective date of the policy, shall deliver written notice to the prospective insured, disclosing the relationship between the producer and the controlled insurer.   (2) If the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in the controlling producer's records a signed commitment from the subproducer that the subproducer is aware of the relationship between the controlled insurer and the producer and that the subproducer has notified or will notify the insured.   History: En. Sec. 10, Ch. 596, L. 1993.  
  33-2-1515. Penalties. (1) (a) If the commissioner believes that a controlling producer or any other person has not materially complied with 33-2-1509 through 33-2-1514 or any regulation or order promulgated under 33-2-1509 through 33-2-1514, the commissioner, after notice and opportunity to be heard, may order the controlling producer to cease placing business with the controlled insurer.   (b) If it is found that because of the material noncompliance with 33-2-1509 through 33-2-1514, the controlled insurer or any policyholder of the controlled insurer has suffered any loss or damage, the commissioner may maintain a civil action or intervene in an action brought by or on behalf of the controlled insurer or policyholder for recovery of compensatory damages for the benefit of the controlled insurer or policyholder or other appropriate relief.   (2) The receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer if:   (a) an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to Title 33, chapter 2, part 13;   (b) the receiver appointed under that order believes that the controlling producer or any other person has not materially complied with 33-2-1509 through 33-2-1514 or any regulation or order promulgated under 33-2-1509 through 33-2-1514; and   (c) the controlled insurer suffered any loss or damage from the noncompliance.   (3) This section does not affect the right of the commissioner to impose any other penalties provided for in this title.   (4) This section may not be construed to alter or affect the rights of policyholders, claimants, creditors, or other third parties.   History: En. Sec. 11, Ch. 596, L. 1993.  
  33-2-1516. Compliance -- applicability. (1) Controlled insurers and controlling producers who are not in compliance with 33-2-1510 on October 1, 1993, have 60 days to come into compliance and shall comply with 33-2-1514 in all policies written or renewed on or after December 1, 1993.   (2) Sections 33-2-1509 through 33-2-1514 apply to insurers that are domiciled in this state or domiciled in a state that is not an accredited state that has in effect a substantially similar law.   (3) The provisions of Title 33, chapter 2, part 11, to the extent they are not superseded by 33-2-1509 through 33-2-1514, continue to apply to all entities within holding company systems subject to 33-2-1509 through 33-2-1514.   (4) An insurer may not continue to use the services of a managing general agent after December 1, 1993, unless the use complies with part 16 of this chapter.   (5) An insurer or reinsurer may not continue to use the services of a reinsurance intermediary after December 1, 1993, unless the use complies with part 17 of this chapter.   History: En. Sec. 12, Ch. 596, L. 1993.  
  33-2-1517. Rulemaking authority. (1) The commissioner may adopt rules implementing the provisions of 33-1-408 through 33-1-410, 33-2-1216 through 33-2-1218, 33-2-1391 through 33-2-1394, Title 33, chapter 2, parts 15 through 17, and 33-11-110.   (2) The authority of the commissioner to adopt rules is specifically extended, without limitation, to establish standards for companies considered to be in hazardous financial condition, to require annual audited financial reports, to regulate life and health reinsurance agreements, to provide for reports to the commissioner by holding company systems, and to establish accounting practices and procedures to be used by insurers in their annual statements.   History: En. Sec. 13, Ch. 596, L. 1993.  
  33-2-1601. Licensure of managing general agent. (1) A person, firm, association, or corporation may not act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless the person is a licensed producer in this state.   (2) A person, firm, association, or corporation may not act in the capacity of a managing general agent representing an insurer domiciled in this state with respect to risks located outside this state unless the person is licensed as a resident or nonresident producer in this state pursuant to the provisions of this part.   (3) The commissioner may require a bond in an amount acceptable to the commissioner for the protection of the insurer.   (4) The commissioner may require the managing general agent to maintain a policy on errors and omissions.   History: En. Sec. 14, Ch. 596, L. 1993.  
  33-2-1602. Managing general agent -- required contract provisions. A person acting in the capacity of a managing general agent may not place business with an insurer unless there is in force a written contract between the parties that sets forth the responsibilities of each party. Whenever both parties share responsibility for a particular function, the written contract must specify the division of responsibilities. The contract must provide at least the following:   (1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination.   (2) The managing general agent shall render accounts to the insurer, detailing all transactions, and shall remit all funds due under the contract to the insurer on not less than a monthly basis.   (3) All funds collected for the account of an insurer must be held by the managing general agent in a fiduciary capacity in a bank that is a member of the federal reserve system. This account must be used for all payments on behalf of the insurer. The managing general agent may not retain more than 3 months' estimated claims payments and allocated loss adjustment expenses.   (4) Separate records of business written by the managing general agent must be maintained. The insurer has access to and may copy all accounts and records that are related to its business, in a form usable by the insurer. The commissioner has access to all books, bank accounts, and records of the managing general agent in a form usable to the commissioner. The records must be retained pursuant to 33-3-401.   (5) The contract may not be assigned in whole or in part by the managing general agent.   (6) The contract must contain appropriate underwriting guidelines, including:   (a) the maximum annual premium volume;   (b) the basis of the rates to be charged;   (c) the types of risks that may be written;   (d) maximum limits of liability;   (e) any applicable exclusions;   (f) the territorial limitations;   (g) policy cancellation provisions; and   (h) the maximum policy period.   (7) The insurer may cancel or decline to renew any policy of insurance, as provided by law.   (8) If the contract permits the managing general agent to settle claims on behalf of the insurer:   (a) all claims must be reported to the company in a timely manner;   (b) a copy of the claims file must be sent to the insurer at its request or as soon as it becomes known that the claim:   (i) has the potential to exceed an amount determined by the commissioner or actually exceeds the limit set by the company, whichever is less;   (ii) involves a coverage dispute;   (iii) may exceed the managing general agent's claims settlement authority;   (iv) is open for more than 6 months; or   (v) is closed by payment of an amount set by the commissioner or an amount set by the company, whichever is less;   (c) all claims files are the joint property of the insurer and managing general agent. However, upon an order of liquidation of the insurer, the files become the sole property of the insurer or its estate. The managing general agent has reasonable access to and may copy the files on a timely basis.   (d) any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.   (9) When electronic claims files are in existence, the contract must address the timely transmission of the data.   (10) If the contract provides for a sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits, whether by establishing loss reserves or controlling claim payments or in any other manner, interim profits may not be paid to the managing general agent until:   (a) 1 year after they are earned for property insurance business;   (b) 5 years after they are earned on casualty business; and   (c) the profits have been verified.   (11) The managing general agent may not:   (a) bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines, including for reinsurance assumed and ceded:   (i) a list of reinsurers with which automatic agreements are in effect;   (ii) the coverages and amounts or percentages that may be reinsured; and   (iii) commission schedules;   (b) commit the insurer to participate in insurance or reinsurance syndicates;   (c) appoint any producer without ensuring that the producer is lawfully licensed to transact the type of insurance for which the producer is appointed;   (d) without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which may not exceed 1% of the insurer's policyholder's surplus as of December 31 of the last-completed calendar year;   (e) collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without the prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer.   (f) permit its subproducer to serve on the insurer's board of directors;   (g) jointly employ an individual who is employed with the insurer; or   (h) appoint a submanaging general agent.   History: En. Sec. 15, Ch. 596, L. 1993.  
  33-2-1603. Duties of insurers. (1) The insurer must have on file an independent financial examination, in a form acceptable to the commissioner, of each managing general agent with which it has done business.   (2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification.   (3) At least semiannually, the insurer shall conduct an onsite review of the underwriting and claims processing operations of the managing general agent.   (4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates rests with an officer of the insurer who is not affiliated with the managing general agent.   (5) Within 30 days of entering into or termination of a contract with a managing general agent, the insurer shall provide the commissioner with written notification of the appointment or termination. Notices of appointment of a managing general agent must include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the commissioner may request.   (6) An insurer shall review its books and records each quarter to determine if any producer has become a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the commissioner of the determination and the insurer and the producer shall comply with this part within 30 days.   (7) An insurer may not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of its managing general agent. This subsection does not apply to relationships governed by Title 33, chapter 2, part 11, or 33-2-1509 through 33-2-1514.   History: En. Sec. 16, Ch. 596, L. 1993.  
  33-2-1604. Examination authority. The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer.   History: En. Sec. 17, Ch. 596, L. 1993.  
  33-2-1605. Penalties and liabilities. (1) If, after a hearing conducted in accordance with Title 33, chapter 1, part 7, the commissioner finds that a person has violated any provision of this part, the commissioner may order:   (a) a penalty in an amount of $5,000 for each separate violation;   (b) revocation or suspension of the producer's license; and   (c) the managing general agent to reimburse the insurer, the rehabilitator, or a liquidator of the insurer for any losses incurred by the insurer caused by a violation of this part committed by the managing general agent.   (2) An order of the commissioner pursuant to subsection (1) is subject to judicial review pursuant to 33-1-711.   (3) This section does not limit the power of the commissioner to impose any other penalty provided in this title.   (4) This part does not limit the rights of policyholders, claimants, or creditors.   History: En. Sec. 18, Ch. 596, L. 1993; amd. Sec. 33, Ch. 379, L. 1995.  
  33-2-1701. Licensure of reinsurance intermediaries. (1) A person, firm, association, or corporation may not act as a reinsurance intermediary-broker in this state if the reinsurance intermediary-broker maintains an office directly, as a member or employee of a firm or association, or as an officer, director, or employee of a corporation:   (a) in this state, unless the reinsurance intermediary-broker is a licensed producer in this state; or   (b) in another state, unless the reinsurance intermediary-broker is a licensed producer in this state or another state that has a law substantially similar to this law or unless the reinsurance intermediary-broker is licensed in this state as a nonresident reinsurance intermediary.   (2) A person, firm, association, or corporation may not act as a reinsurance intermediary-manager:   (a) for a reinsurer domiciled in this state, unless the reinsurance intermediary-manager is a licensed producer in this state;   (b) in this state, if the reinsurance intermediary-manager maintains an office either directly or as a member or employee of a firm or association or as an officer, director, or employee of a corporation in this state, unless the reinsurance intermediary-manager is a licensed producer in this state; or   (c) in another state for a nondomestic insurer, unless the reinsurance intermediary-manager is a licensed producer in this state or another state that has a law substantially similar to this law or unless the person is licensed in this state as a nonresident insurance intermediary.   (3) Subject to subsection (2), the commissioner may require a reinsurance intermediary-manager to:   (a) file a bond in an amount from an insurer acceptable to the commissioner for the protection of the reinsurer; and   (b) maintain a policy on errors and omissions in an amount acceptable to the commissioner.   (4) (a) The commissioner may issue a reinsurance intermediary license to any person, firm, association, or corporation that has complied with the requirements of this part. A license issued to a firm or association authorizes all the members of the firm or association and any designated employees to act as reinsurance intermediaries under the license. All authorized persons must be named in the application and in any supplements to the application. A license issued to a corporation must authorize all of the officers and any designated employees and directors to act as reinsurance intermediaries on behalf of the corporation. All authorized persons must be named in the application and in any supplements to the application.   (b) If the applicant for a reinsurance intermediary license is a nonresident, the applicant, as a condition precedent to receiving or holding a license, shall appoint an agent for service of process in the manner provided for by 33-1-605. The licensee shall promptly notify the commissioner in writing of each change in its appointed agent for service of process, and the change may not become effective until acknowledged by the commissioner.   (5) (a) The commissioner may refuse to issue a reinsurance intermediary license if, in the commissioner's judgment:   (i) the applicant, a person named on the application, or a member, principal, officer, or director of the applicant is not trustworthy;   (ii) a controlling person of the applicant is not trustworthy to act as a reinsurance intermediary; or   (iii) any of the persons listed in subsection (5)(a)(i) or (5)(a)(ii) has given cause for revocation or suspension of the license or has failed to comply with any prerequisite for the issuance of the license.   (b) Upon written request, the commissioner shall furnish a summary of the basis for refusal to issue a license.   (6) Licensed attorneys of this state, when acting in their professional capacity, are exempt from this section.   History: En. Sec. 19, Ch. 596, L. 1993; amd. Sec. 8, Ch. 416, L. 1999; amd. Sec. 8, Ch. 60, L. 2019.  
  33-2-1702. Required contract provisions -- reinsurance intermediary-brokers. Transactions between a reinsurance intermediary-broker and the insurer it represents must be entered into pursuant to a written authorization, specifying the responsibilities of each party. The authorization must, at a minimum, contain the following provisions:   (1) The insurer may terminate the reinsurance intermediary-broker's authority at any time.   (2) The reinsurance intermediary-broker shall render to the insurer accounts accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the reinsurance intermediary-broker. The reinsurance intermediary-broker shall remit all funds due to the insurer within 30 days of receipt.   (3) All funds collected for the insurer's account must be held by the reinsurance intermediary-broker in a fiduciary capacity in a bank that is a qualified United States financial institution.   (4) The reinsurance intermediary-broker shall comply with the requirements of 33-2-1703.   (5) The reinsurance intermediary-broker shall comply with the written standards established by the insurer for the cession or retrocession of all risks.   (6) The reinsurance intermediary-broker shall disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.   History: En. Sec. 20, Ch. 596, L. 1993.  
  33-2-1703. Books and records -- reinsurance intermediary-brokers. (1) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-broker, the reinsurance intermediary-broker shall keep a complete record for each transaction, showing:   (a) the type of contract, limits, underwriting restrictions, classes or risks, and territory;   (b) the period of coverage, including the effective and expiration dates, cancellation provisions, and notice required for cancellation;   (c) the reporting and settlement requirements of balances;   (d) the rate used to compute the reinsurance premium;   (e) the names and addresses of assuming reinsurers;   (f) the rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-broker;   (g) any related correspondence and memorandums;   (h) the proof of placement;   (i) the details regarding retrocessions handled by the reinsurance intermediary-broker, including the identity of the party making the retrocession and the percentage of each contract assumed or ceded;   (j) the financial records, including but not limited to premium and loss accounts; and   (k) when the reinsurance intermediary-broker procures a reinsurance contract on behalf of a licensed ceding insurer:   (i) directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or   (ii) if placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.   (2) The insurer has access to and may copy and audit all accounts and records maintained by the reinsurance intermediary-broker that are related to the insurer's business, in a form usable by the insurer.   History: En. Sec. 21, Ch. 596, L. 1993.  
  33-2-1704. Duties of insurers utilizing the services of a reinsurance intermediary-broker. (1) An insurer may not engage the services of any person, firm, association, or corporation to act as a reinsurance intermediary-broker on its behalf unless the person is licensed as required by 33-2-1701.   (2) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker with which it transacts business unless the reinsurance intermediary-broker is under common control with the insurer and is subject to the provisions of Title 33, chapter 2, part 11.   (3) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-broker with which it transacts business.   History: En. Sec. 22, Ch. 596, L. 1993.  
  33-2-1705. Required contract provisions -- reinsurance intermediary-managers. Transactions between a reinsurance intermediary-manager and the reinsurer it represents in that capacity may only be entered into pursuant to a written contract specifying the responsibilities of each party. The contract must be approved by the reinsurer's board of directors. At least 30 days before the reinsurer assumes or cedes business through a producer, a true copy of the approved contract must be filed with the commissioner for approval. The contract must, at a minimum, include the following provisions:   (1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary-manager. The reinsurer may immediately suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of any dispute regarding the cause for termination.   (2) The reinsurance intermediary-manager shall render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owed to the reinsurance intermediary-manager, and shall remit all funds due under the contract to the reinsurer on not less than a monthly basis.   (3) All funds collected for the reinsurer's account will be held by the reinsurance intermediary-manager in a fiduciary capacity in a bank that is a qualified United States financial institution. The reinsurance intermediary-manager may not retain more than 3 months' estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that it represents.   (4) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall keep a complete record for each transaction showing:   (a) the type of contract, limits, underwriting restrictions, classes or risks, and territory;   (b) the period of coverage, including effective and expiration dates, cancellation provisions, notice required for cancellation, and disposition of outstanding reserves on covered risks;   (c) the reporting and settlement requirements of balances;   (d) the rate used to compute the reinsurance premium;   (e) the names and addresses of reinsurers;   (f) the rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager;   (g) related correspondence and memorandums;   (h) proof of placement;   (i) details regarding retrocessions handled by the reinsurance intermediary-manager, as permitted by 33-2-1707, including the identity of persons making the retrocessions and the percentage of each contract assumed or ceded;   (j) financial records, including but not limited to premium and loss accounts; and   (k) when the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer:   (i) directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or   (ii) if placed through a representative of the assuming reinsurer, other than an employee, written evidence that the assuming reinsurer has delegated binding authority to the representative.   (5) The reinsurer will have access to and the right to copy all accounts and records maintained by the reinsurance intermediary-manager related to its business in a form usable by the reinsurer.   (6) The contract may not be assigned in whole or in part by the reinsurance intermediary-manager.   (7) The reinsurance intermediary-manager shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks.   (8) The rates, terms, and purposes of commissions, charges, and other fees that the reinsurance intermediary-manager may levy against the reinsurer must be set forth.   (9) If the contract permits the reinsurance intermediary-manager to settle claims on behalf of the reinsurer:   (a) all claims must be reported to the reinsurer in a timely manner;   (b) a copy of the claim file must be sent to the reinsurer at its request or as soon as it becomes known that the claim:   (i) has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer;   (ii) involves a coverage dispute;   (iii) may exceed the reinsurance intermediary-manager's claims settlement authority;   (iv) is open for more than 6 months; or   (v) is closed by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer;   (c) all claim files must be the joint property of the reinsurer and the reinsurance intermediary-manager. However, upon an order of liquidation of the reinsurer, the files become the sole property of the reinsurer or its estate. The reinsurance intermediary-manager must have reasonable access to and the right to copy the files on a timely basis.   (d) any settlement authority granted to the reinsurance intermediary-manager may be terminated for cause upon the reinsurer's written notice to the reinsurance intermediary-manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.   (10) If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager, the interim profits may not be paid until:   (a) 1 year after the end of each underwriting period for property business;   (b) 5 years after the end of each underwriting period for casualty business;   (c) a later period set by the commissioner for specified lines of insurance; and   (d) the adequacy of reserves on remaining claims has been verified pursuant to 33-2-1707.   (11) The reinsurance intermediary-manager shall annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant.   (12) The reinsurer shall, at least semiannually, conduct an onsite review of the underwriting and claims processing operations of the reinsurance intermediary-manager.   (13) The reinsurance intermediary-manager shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with the insurer pursuant to the contract.   (14) Within the scope of its actual or apparent authority, the acts of the reinsurance intermediary-manager are considered to be the acts of the reinsurer on whose behalf it is acting.   History: En. Sec. 23, Ch. 596, L. 1993.  
  33-2-1706. Prohibited acts. A reinsurance intermediary-manager may not:   (1) bind retrocessions on behalf of the reinsurer, except that the reinsurance intermediary-manager may bind facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for retrocessions. The guidelines must include a list of reinsurers with which automatic agreements are in effect and, for each reinsurer, must include the coverages, amounts of percentages that may be reinsured, and commission schedules.   (2) commit the reinsurer to participate in reinsurance syndicates;   (3) appoint any producer without ensuring that the producer is licensed to transact the type of reinsurance for which the producer is appointed;   (4) without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or 1% of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year;   (5) collect any payment from a party making a retrocession, or commit the reinsurer to any claim settlement with a party making a retrocession, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer.   (6) jointly employ an individual who is employed by the reinsurer unless the reinsurance intermediary-manager is under common control with the reinsurer subject to Title 33, chapter 2, part 11;   (7) appoint a subreinsurance intermediary-manager.   History: En. Sec. 24, Ch. 596, L. 1993.  
  33-2-1707. Duties of reinsurers using services of reinsurance intermediary-manager. (1) A reinsurer may not engage the services of any person, firm, association, or corporation as a reinsurance intermediary-manager on its behalf unless the person is licensed as required by 33-2-1701.   (2) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager that the reinsurer has engaged, prepared by an independent certified accountant, in a form acceptable to the commissioner.   (3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary-manager. The opinion is in addition to any other required loss reserve certification.   (4) Binding authority for all retrocessional contracts or participation in reinsurance syndicates must rest with an officer of the reinsurer who may not be affiliated with the reinsurance intermediary-manager.   (5) Within 30 days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of the termination to the commissioner.   (6) A reinsurer may not appoint to its board of directors any officer, director, employee, controlling shareholder, or subproducer of its reinsurance intermediary-manager. This subsection does not apply to relationships governed by Title 33, chapter 2, part 11, or, if applicable, 33-2-1701 through 33-2-1705.   History: En. Sec. 25, Ch. 596, L. 1993.  
  33-2-1708. Examination authority. (1) A reinsurance intermediary is subject to examination by the commissioner. The commissioner must have access to all books, bank accounts, and records of the reinsurance intermediary in a form usable to the commissioner.   (2) A reinsurance intermediary-manager may be examined as if it were the reinsurer.   History: En. Sec. 26, Ch. 596, L. 1993.  
  33-2-1709. Penalties and liabilities. (1) (a) A reinsurance intermediary, insurer, or reinsurer found by the commissioner, after a hearing conducted in accordance with Title 33, chapter 1, part 7, to be in violation of any provision of 33-2-1701 through 33-2-1708:   (i) shall, for each separate violation, pay a penalty in an amount not to exceed $5,000; and   (ii) is subject to revocation or suspension of its license.   (b) If a violation was committed by the reinsurance intermediary, the reinsurance intermediary shall make restitution to the insurer, reinsurer, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to the violation.   (2) The order of the commissioner pursuant to subsection (1) is subject to judicial review pursuant to Title 33, chapter 1, part 7.   (3) This section does not limit the authority of the commissioner to impose any other penalties provided in the insurance law.   (4) Sections 33-2-1701 through 33-2-1708 do not limit or restrict the rights of policyholders, claimants, creditors, or other third parties or confer any rights upon those persons.   History: En. Sec. 27, Ch. 596, L. 1993.  
  33-2-1901. Short title. This part constitutes and may be referred to as "The Risk-Based Capital for Insurers Act".   History: En. Sec. 82, Ch. 379, L. 1995.  
  33-2-1902. Definitions. As used in this part, the following definitions apply:   (1) "Adjusted RBC report" means an RBC report that has been adjusted by the commissioner in accordance with 33-2-1903(6).   (2) "Corrective order" means an order issued by the commissioner specifying corrective actions that the commissioner has determined are required.   (3) "Domestic insurer" means any insurance company or health organization domiciled in this state.   (4) "Foreign insurer" means any insurance company licensed to do business in this state under 33-2-116 but not domiciled in this state, or a health organization licensed to do business in this state under Title 33, chapter 31, but not domiciled in this state.   (5) "Health organization" means a health maintenance organization or other managed care organization licensed under Title 33, chapter 31. The term does not include an organization licensed as either a life or disability insurer or a property and casualty insurer, or that is otherwise subject to either the life and health or the property and casualty RBC requirements.   (6) "Insurer" includes life or other disability insurers, property and casualty insurers, and health organizations.   (7) "Life or disability insurer" means:   (a) any insurance company licensed under 33-2-116 and engaged in the business of entering into contracts of disability insurance, as described in 33-1-207, or life insurance, as described in 33-1-208;   (b) a licensed property and casualty insurer writing only disability insurance;   (c) any insurer engaged solely in the business of reinsurance of life or disability contracts;   (d) a fraternal benefit society formed under Title 33, chapter 7; or   (e) a health service corporation formed under Title 33, chapter 30.   (8) "NAIC" means the national association of insurance commissioners.   (9) "Negative trend" means, with respect to a life or health insurer, a negative trend over a period of time, as determined in accordance with the trend test calculation included in the RBC instructions.   (10) (a) "Property and casualty insurer" means:   (i) any insurance company licensed under 33-2-116 and engaged in the business of entering into contracts of property insurance, as described in 33-1-210, or casualty insurance, as described in 33-1-206;   (ii) any insurance company engaged solely in the business of reinsurance of property and casualty contracts; or   (iii) any insurance company engaged in the business of surety and marine insurance.   (b) The term does not include monoline mortgage guaranty insurers, financial guaranty insurers, and title insurers.   (11) "RBC instructions" means the RBC report, including risk-based capital instructions adopted by the NAIC, as the RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.   (12) "RBC level" means an insurer's authorized control level RBC, company action level RBC, mandatory control level RBC, or regulatory action level RBC, in which:   (a) "authorized control level RBC" means the number determined under the risk-based capital formula in accordance with the RBC instructions;   (b) (i) "company action level RBC" means, with respect to any insurer except the state fund as provided in subsection (12)(b)(ii), the product of 2 and its authorized control level RBC;   (ii) "company action level RBC" for the state fund is the product of 4 and its authorized control level RBC;   (c) "mandatory control level RBC" means the product of 0.70 and the authorized control level RBC; and   (d) (i) "regulatory action level RBC" means, except for the state fund as provided in subsection (12)(d)(ii), the product of 1.5 and its authorized control level RBC;   (ii) "regulatory action level RBC" for the state fund is the product of 3 and its authorized control level RBC.   (13) "RBC plan" means a comprehensive financial plan containing the elements specified in 33-2-1904(2). If the commissioner rejects the RBC plan and it is revised by the insurer, with or without the commissioner's recommendation, the plan must be called a revised RBC plan.   (14) "RBC report" means the report required in 33-2-1903.   (15) "Total adjusted capital" means the sum of:   (a) an insurer's statutory capital and surplus; and   (b) other items, if any, as the RBC instructions may provide.   History: En. Sec. 83, Ch. 379, L. 1995; amd. Sec. 11, Ch. 531, L. 1997; amd. Sec. 9, Ch. 63, L. 2015; amd. Sec. 6, Ch. 320, L. 2015; amd. Sec. 17, Ch. 9, L. 2017.  
  33-2-1903. RBC reports. (1) Each domestic insurer shall, on or before each March 1 filing date, prepare and submit to the commissioner a report of its RBC levels as of the end of the previous calendar year in a form and containing information as required by the RBC instructions. In addition, each domestic insurer shall file its RBC report:   (a) with the NAIC in accordance with the RBC instructions; and   (b) with the insurance commissioner in any state in which the insurer is authorized to do business if that insurance commissioner has notified the insurer of the request in writing, in which case the insurer shall file its RBC report not later than the later of:   (i) 15 days from the receipt of notice to file its RBC report with that state; or   (ii) the March 1 filing date.   (2) A life and disability insurer's RBC must be determined in accordance with the formula set forth in the RBC instructions. The formula must take into account and may adjust for the covariance between:   (a) the risk with respect to the insurer's assets;   (b) the risk of adverse insurance experience with respect to the insurer's liabilities and obligations;   (c) the interest rate risk with respect to the insurer's business; and   (d) all other business risks and other relevant risks as are set forth in the RBC instructions and determined in each case by applying the factors in the manner set forth in the RBC instructions.   (3) A property and casualty insurer's RBC must be determined in accordance with the formula set forth in the RBC instructions. The formula must take into account and may be adjusted for the covariance between:   (a) asset risk;   (b) credit risk;   (c) underwriting risk; and   (d) all other business risks and other relevant risks set forth in the RBC instructions and determined in each case by applying the factors in the manner set forth in the RBC instructions.   (4) A health organization's RBC must be determined in accordance with the formula set forth in the RBC instructions. The formula must take into account and may be adjusted for the covariance between:   (a) asset risk;   (b) credit risk;   (c) underwriting risk; and   (d) all other business risks and other relevant risks set forth in the RBC instructions and determined in each case by applying the factors in the manner set forth in the RBC instructions.   (5) An excess of capital over the amount produced by the risk-based capital requirements contained in this part and the formulas, schedules, and instructions referenced in 33-2-1906 through 33-2-1913 is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by this part. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in or affecting the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this part.   (6) If a domestic insurer files an RBC report that in the judgment of the commissioner is inaccurate, the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice must contain a statement of the reason for the adjustment. An RBC report adjusted as provided in this subsection is referred to as an adjusted RBC report.   History: En. Sec. 84, Ch. 379, L. 1995; amd. Sec. 1, Ch. 28, L. 2009; amd. Sec. 9, Ch. 227, L. 2011; amd. Sec. 18, Ch. 9, L. 2017.  
  33-2-1904. Company action level event. (1) "Company action level event" means any of the following events:   (a) the filing of an RBC report by an insurer indicating that:   (i) the insurer's total adjusted capital is greater than or equal to its regulatory action level RBC but less than its company action level RBC;   (ii) for a life or disability insurer, the insurer has total adjusted capital that:   (A) is greater than or equal to its company action level RBC but less than its authorized control level RBC multiplied by 3; and   (B) has a negative trend;   (iii) for a property and casualty insurer, the insurer has total adjusted capital that:   (A) is greater than or equal to its company action level RBC but less than its authorized control level RBC multiplied by 3; and   (B) triggers the trend test determined in accordance with the trend test calculation included in the RBC instructions; or   (iv) for a health organization, the insurer has total adjusted capital that:   (A) is greater than or equal to its company action level RBC but less than its authorized control level RBC multiplied by 3; and   (B) triggers the trend test determined in accordance with the trend test calculation included in the health RBC instructions;   (b) the notification by the commissioner to the insurer of an adjusted RBC report that indicates an event in subsection (1)(a) if the insurer does not challenge the adjusted RBC report under 33-2-1908 or if the commissioner has rejected the insurer's challenge.   (2) In the event of a company action level event, the insurer shall prepare and submit to the commissioner an RBC plan that must:   (a) identify the conditions that contribute to the company action level event;   (b) contain proposals of corrective actions that the insurer intends to take and that would be expected to result in the elimination of the company action level event;   (c) provide projections of the insurer's financial results in the current year and at least the next 4 years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital, and surplus. The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense, and benefit component.   (d) identify the key assumptions impacting the insurer's projections and the sensitivity of the projections to the assumptions; and   (e) identify the quality of and problems associated with the insurer's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case.   (3) The RBC plan must be submitted:   (a) within 45 days of the company action level event; or   (b) if the insurer challenges an adjusted RBC report pursuant to 33-2-1908, within 45 days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.   (4) Within 60 days after an insurer submits an RBC plan to the commissioner, the commissioner shall notify the insurer as to whether the RBC plan may be implemented or is unsatisfactory in the judgment of the commissioner. If the commissioner determines that the RBC plan is unsatisfactory, the notification to the insurer must set forth the reasons for the determination and may propose revisions intended to render the RBC plan satisfactory in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised RBC plan to the commissioner:   (a) within 45 days after the notification from the commissioner; or   (b) if the insurer challenges the notification from the commissioner under 33-2-1908, within 45 days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.   (5) If the commissioner notifies an insurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, the commissioner may, at the commissioner's discretion, subject to the insurer's right to a hearing under 33-2-1908, specify in the notification that the notification constitutes a regulatory action level event.   (6) Each domestic insurer that files an RBC plan or revised RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the insurer is authorized to do business if:   (a) the state has an RBC provision substantially similar to 33-2-1909(1); and   (b) the insurance commissioner of that state has notified the insurer in writing of its request for the filing, in which case the insurer shall file a copy of the RBC plan or revised RBC plan in that state by the later of:   (i) 15 days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with that state; or   (ii) the date on which the RBC plan or revised RBC plan is filed under subsections (3) and (4).   History: En. Sec. 85, Ch. 379, L. 1995; amd. Sec. 10, Ch. 227, L. 2011; amd. Sec. 10, Ch. 63, L. 2015; amd. Sec. 19, Ch. 9, L. 2017.  
  33-2-1905. Regulatory action level event. (1) "Regulatory action level event" means, with respect to any insurer, any of the following events:   (a) the filing of an RBC report by the insurer that indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;   (b) the notification by the commissioner to an insurer of an adjusted RBC report that indicates the event in subsection (1)(a) if the insurer does not challenge the adjusted RBC report under 33-2-1908 or the commissioner rejects the insurer's challenge;   (c) the failure of the insurer to file an RBC report by the filing date, unless the insurer has provided an explanation for the failure that is satisfactory to the commissioner and has cured the failure within 10 days after the filing date;   (d) the failure of the insurer to submit an RBC plan to the commissioner within the time period set forth in 33-2-1904(3);   (e) notification by the commissioner to the insurer that:   (i) the RBC plan or revised RBC plan submitted by the insurer is unsatisfactory in the judgment of the commissioner; and   (ii) the notification constitutes a regulatory action level event with respect to the insurer if the insurer has not challenged the determination under 33-2-1908;   (f) if, pursuant to 33-2-1908, the insurer challenges a determination by the commissioner, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge;   (g) notification by the commissioner to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the commissioner has so stated in the notification and if the insurer has not challenged the determination under 33-2-1908 or the commissioner has not rejected the insurer's challenge.   (2) In the event of a regulatory action level event, the commissioner shall:   (a) require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan;   (b) perform an examination or analysis as the commissioner considers necessary of the assets, liabilities, and operations of the insurer including a review of its RBC plan or revised RBC plan; and   (c) subsequent to the examination or analysis, issue a corrective order specifying corrective actions that the commissioner determines are required.   (3) In determining corrective actions, the commissioner may take into account factors considered relevant with respect to the insurer based upon the commissioner's examination or analysis of the assets, liabilities, and operations of the insurer, including but not limited to the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan must be submitted:   (a) within 45 days after the occurrence of the regulatory action level event;   (b) if the insurer challenges an adjusted RBC report pursuant to 33-2-1908 and the challenge is not frivolous in the judgment of the commissioner, within 45 days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge; or   (c) if the insurer challenges a revised RBC plan pursuant to 33-2-1908 and the challenge is not frivolous in the judgment of the commissioner, within 45 days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.   (4) The commissioner may retain actuaries and investment experts and other consultants that may be necessary in the judgment of the commissioner to review the insurer's RBC plan or revised RBC plan, to examine or analyze the assets, liabilities, and operations of the insurer, and to formulate the corrective order with respect to the insurer. The fees, costs, and expenses relating to consultants must be borne by the affected insurer or such other party as directed by the commissioner.   History: En. Sec. 86, Ch. 379, L. 1995.  
  33-2-1906. Authorized control level event. (1) "Authorized control level event" means any of the following events:   (a) the filing of an RBC report by the insurer that indicates that the insurer's total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;   (b) the notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in subsection (1)(a) if the insurer does not challenge the adjusted RBC report under 33-2-1908 or the commissioner rejects the insurer's challenge;   (c) the failure of the insurer to respond, in a manner satisfactory to the commissioner, to a corrective order if the insurer has not challenged the corrective order under 33-2-1908; or   (d) if the insurer has challenged a corrective order under 33-2-1908 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.   (2) In the event of an authorized control level event with respect to an insurer, the commissioner shall:   (a) take the actions required under 33-2-1905 regarding an insurer with respect to which a regulatory action level event has occurred; or   (b) if the commissioner considers it to be in the best interests of the policyholders and creditors of the insurer and of the public, take the actions necessary to cause the insurer to be placed under regulatory control under Title 33, chapter 2, part 13. In the event that the commissioner places the insurer under regulatory control, the authorized control level event must be considered sufficient grounds for the commissioner to take action under Title 33, chapter 2, part 13, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Title 33, chapter 2, part 13. In the event that the commissioner takes an action under this subsection pursuant to an adjusted RBC report, the insurer is entitled to the protections afforded to insurers under the provisions of 33-2-1321 through 33-2-1323 pertaining to summary proceedings.   History: En. Sec. 87, Ch. 379, L. 1995.  
  33-2-1907. Mandatory control level event. (1) "Mandatory control level event" means any of the following events:   (a) the filing of an RBC report that indicates that the insurer's total adjusted capital is less than its mandatory control level RBC;   (b) notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in subsection (1)(a) if the insurer does not challenge the adjusted RBC report under 33-2-1908 or the commissioner rejects the insurer's challenge.   (2) In the event of a mandatory control level event:   (a) with respect to a life or disability insurer or a health organization, the commissioner shall take the actions that are necessary to place the insurer under regulatory control under Title 33, chapter 2, part 13. In that event, the mandatory control level event must be considered sufficient grounds for the commissioner to take action under Title 33, chapter 2, part 13, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Title 33, chapter 2, part 13. If the commissioner takes an action pursuant to an adjusted RBC report, the insurer is entitled to the protections of 33-2-1321 through 33-2-1323 pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 days after the mandatory control level event if the commissioner finds that there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period.   (b) with respect to a property and casualty insurer, the commissioner shall take the actions necessary to place the insurer under regulatory control under Title 33, chapter 2, part 13, or, in the case of an insurer that is not writing business and that is running-off its existing business, may allow the insurer to continue its runoff under the supervision of the commissioner. In either event, the mandatory control level event must be considered sufficient grounds for the commissioner to take action under Title 33, chapter 2, part 13, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Title 33, chapter 2, part 13. If the commissioner takes an action pursuant to an adjusted RBC report, the insurer is entitled to the protections of 33-2-1321 through 33-2-1323 pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period.   History: En. Sec. 88, Ch. 379, L. 1995; amd. Sec. 20, Ch. 9, L. 2017.  
  33-2-1908. Notification and hearing. (1) An insurer has the right to a hearing before the department upon notification by the commissioner:   (a) of an adjusted RBC report or unsatisfactory RBC plan or revised RBC plan that constitutes a regulatory action level event with respect to the insurer;   (b) that the insurer has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or   (c) of a corrective order with respect to the insurer.   (2) The insurer shall notify the commissioner of its request for a hearing within 5 days after the notification by the commissioner under subsection (1). Upon receipt of the insurer's request for a hearing, the commissioner shall set a date for the hearing, which may not be less than 10 or more than 30 days after the date of the insurer's request.   History: En. Sec. 89, Ch. 379, L. 1995.  
  33-2-1909. Confidentiality -- prohibition on announcements -- prohibition on use in ratemaking. (1) With respect to a domestic insurer or a foreign insurer, all RBC reports, to the extent the information in the reports is not required to be set forth in a publicly available annual statement schedule, and all RBC plans, including the results or report of any examination or analysis of an insurer performed pursuant to this part and any corrective order issued by the commissioner pursuant to the examination or analysis, that are filed with the commissioner constitute information that might be damaging to the insurer if made available to its competitors and must be kept confidential by the commissioner. This information may not be made public and is not subject to subpoena other than by the commissioner and then only for the purpose of enforcement actions taken by the commissioner pursuant to this part or any other provision of the insurance laws of this state.   (2) It is the intent of the legislature that the comparison of an insurer's total adjusted capital to any of its RBC levels is a regulatory tool that may indicate the need for possible corrective action with respect to the insurer and that it is not intended as a means to rank insurers generally. Except as otherwise required under the provisions of 33-2-1911 through 33-2-1913, the making, publishing, disseminating, circulating, or placing before the public or causing, directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, in the form of a notice, circular, pamphlet, letter, or poster, over any radio or television station, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with regard to the RBC levels of any insurer or of any component derived in the calculation that is by any insurer, producer, or other person engaged in any manner in the insurance business would be misleading and is prohibited. However, if any materially false statement with respect to the comparison regarding an insurer's total adjusted capital to its RBC levels or an inappropriate comparison of any other amount to the insurer's RBC levels is published in any written publication and the insurer is able to demonstrate to the commissioner, with substantial proof, the falsity of the statement or the inappropriateness, as the case may be, the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.   (3) It is the further intent of the legislature that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans, and revised RBC plans are intended solely for use by the commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and may not be used by the commissioner for ratemaking or considered or introduced as evidence in any rate proceeding or used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer or any affiliate is authorized to write.   History: En. Sec. 90, Ch. 379, L. 1995.  
  33-2-1910. Supplemental provisions -- rules -- exemption. (1) The provisions of this part are supplemental to any other provisions of the laws of this state and do not preclude or limit any other powers or duties of the commissioner under the law, including but not limited to Title 33, chapter 2, part 13.   (2) The commissioner may adopt reasonable rules necessary for the implementation of this part.   (3) The commissioner may exempt from the application of this part any domestic property and casualty insurer that:   (a) writes direct business only in this state;   (b) writes direct annual premiums of $2 million or less; and   (c) does not assume reinsurance in excess of 5% of direct premium written.   (4) The commissioner may exempt from the application of this part any domestic health organization that:   (a) writes direct business only in this state;   (b) assumes no reinsurance in excess of 5% of direct premium written;   (c) writes direct annual premiums for comprehensive medical business of $1 million or less; and   (d) is a limited health service organization that covers fewer than 1,000 lives.   History: En. Sec. 91, Ch. 379, L. 1995; amd. Sec. 21, Ch. 9, L. 2017.  
  33-2-1911. Foreign insurers. (1) A foreign insurer shall, upon the written request of the commissioner, submit to the commissioner an RBC report for the previous calendar year on the later of:   (a) the date that an RBC report would be required to be filed by a domestic insurer under 33-2-1903; or   (b) 15 days after the request is received by the foreign insurer.   (2) A foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.   (3) In the event of a company action level event, regulatory action level event, or authorized control level event, with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer or, if an RBC statute is not in force in that state, under the provisions of this part, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC plan in the manner specified under that state's RBC statute or, if an RBC statute is not in force in that state, under 33-2-1904, the commissioner may require the foreign insurer to file an RBC plan with the commissioner. In that event, the failure of the foreign insurer to file an RBC plan with the commissioner is grounds to order the insurer to cease and desist from writing new insurance business in this state.   (4) In the event of a mandatory control level event with respect to any foreign insurer, if a domiciliary receiver has not been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to a district court of this state permitted under 33-2-1380 with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the mandatory control level event must be considered adequate grounds for the application.   History: En. Sec. 92, Ch. 379, L. 1995.  
  33-2-1912. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 93, Ch. 379, L. 1995.  
  33-2-1913. Notices. All notices by the commissioner to an insurer that may result in regulatory action are effective on dispatch if transmitted by certified mail or, in the case of any other transmission, are effective on the insurer's receipt of the notice.   History: En. Sec. 94, Ch. 379, L. 1995.  
  33-2-201. Scope of part. This part applies to all alien insurers using Montana as a state of entry to transact insurance in the United States.   History: En. Sec. 599, Ch. 286, L. 1959; R.C.M. 1947, 40-5201.  
  33-2-202. Required deposit of assets. (1) An alien insurer may use Montana as a state of entry to transact insurance in the United States by making and maintaining in this state a deposit of assets in trust with a solvent bank or trust company approved by the commissioner.   (2) The deposit, together with other trust deposits of the insurer held in the United States for the same purpose, must be in amount not less than the deposits required of an alien insurer under 33-2-111(1) and must consist of cash and securities of the same character and diversification as those eligible for the investment of the funds of domestic insurers under chapter 12.   (3) A deposit under this section may be referred to as "trusteed assets".   History: En. Sec. 600, Ch. 286, L. 1959; R.C.M. 1947, 40-5202; amd. Sec. 37, Ch. 304, L. 1999.  
  33-2-203. Existing trusts. All trusts of trusteed assets created before January 1, 1961, and existing on that date shall be continued under the instruments creating them unless inconsistent with the provisions of this part.   History: En. Sec. 601, Ch. 286, L. 1959; R.C.M. 1947, 40-5203.  
  33-2-204. Purpose and duration. The deposit required by 33-2-202 shall be for the benefit, security, and protection of the policyholders or policyholders and creditors of the insurer in the United States. It shall be maintained as long as there is outstanding any liability of the insurer arising out of its insurance transactions in the United States.   History: En. Sec. 602, Ch. 286, L. 1959; R.C.M. 1947, 40-5204.  
  33-2-205. Trust agreement -- approval. (1) The deposit referred to in 33-2-202 must be made under a written trust agreement between the insurer and the trustee, consistent with the provisions of this part, and must be authenticated in the form and manner that the commissioner may designate or approve.   (2) The agreement may not be effective until filed with and approved in writing by the commissioner. The commissioner may not approve any trust agreement found by the commissioner not to be in compliance with law or the terms of which do not in fact provide reasonably adequate protection for the insurer's policyholders or creditors, or both, in the United States.   History: En. Sec. 603, Ch. 286, L. 1959; R.C.M. 1947, 40-5205; amd. Sec. 1076, Ch. 56, L. 2009.  
  33-2-206. Authority to execute trust agreement. An alien insurer using or proposing to use Montana as a state of entry to transact insurance in the United States, whether or not it is then authorized to transact insurance in this state, is authorized to make and execute any trust agreement required by this part.   History: En. Sec. 604, Ch. 286, L. 1959; R.C.M. 1947, 40-5206.  
  33-2-207. Amendment of trust agreement. A trust agreement may be amended, but the amendment shall not be effective until filed with and approved in writing by the commissioner as being in compliance with this part.   History: En. Sec. 605, Ch. 286, L. 1959; R.C.M. 1947, 40-5207.  
  33-2-208. Withdrawal of approval. The commissioner's approval of any trust agreement or of any amendment of a trust agreement may be withdrawn by the commissioner if the commissioner finds upon hearing, after notice to the insurer and the trustee or trustees, that the requisites for approval, as provided in this part, no longer exist.   History: En. Sec. 606, Ch. 286, L. 1959; R.C.M. 1947, 40-5208; amd. Sec. 1077, Ch. 56, L. 2009.  
  33-2-209. Title to trusteed assets. Title to the trusteed assets is vested in the trustee or trustees and their successors for the purposes of the trust deposit, and the trust agreement shall so provide.   History: En. Sec. 607, Ch. 286, L. 1959; R.C.M. 1947, 40-5209.  
  33-2-210. Assets kept separate. The trustee shall keep the trusteed assets separate from other assets and shall maintain a record thereof sufficient to identify trusteed assets at all times.   History: En. Sec. 608, Ch. 286, L. 1959; R.C.M. 1947, 40-5210.  
  33-2-211. Statement of trustee. (1) The trustee of trusteed assets shall, from time to time, file with the commissioner statements, in the form that the commissioner may designate and request in writing, certifying the character of the assets and the amounts of the assets.   (2) If the trustee fails to file any statement described in subsection (1) after a request for the statement and expiration of a reasonable time, the commissioner may suspend or revoke the certificate of authority of the insurer.   History: En. Sec. 609, Ch. 286, L. 1959; R.C.M. 1947, 40-5211; amd. Sec. 1078, Ch. 56, L. 2009.  
  33-2-212. Examination of assets. The commissioner may examine trusteed assets of any insurer at any time in accordance with the same conditions and procedures as govern the examination of insurers in general under chapter 1 of this title.   History: En. Sec. 610, Ch. 286, L. 1959; R.C.M. 1947, 40-5212.  
  33-2-213. Withdrawal of assets. (1) A trust agreement under this part must provide, in substance, that withdrawals of trusteed assets may not be made by the insurer or permitted by the trustee without the written authorization or approval of the commissioner in advance of the withdrawal, except as follows:   (a) any or all income, earnings, dividends, or interest accumulations of the trusteed assets may be paid over to the United States manager of the insurer upon request of the insurer or the manager;   (b) for substitution, coincidentally with a withdrawal, of other securities or assets of value at least equal in amount to those being withdrawn if the substituted securities or assets are eligible for investment of the funds of domestic insurers under chapter 12, if the withdrawal is requested in writing by the insurer's United States manager pursuant to general or specific written authority previously given or delegated by the insurer's board of directors or other similar governing body and a copy of the authority has been filed with the trustee;   (c) for the purpose of making deposits required by law in any state in which the insurer is or becomes an authorized insurer, for the protection of the insurer's policyholders or policyholders and creditors in such state or in the United States, if a withdrawal does not reduce the insurer's deposit in this state to an amount less than the minimum deposit required under 33-2-111(1)(c)(i) and (1)(c)(ii). The trustee shall transfer any assets withdrawn and in the amount required to be deposited in the other state direct to the depositary required to receive the deposit in the other state, as certified in writing by the public official having supervision of insurance in the other state.   (d) for the purpose of transferring the trusteed assets to an official liquidator, conservator, or rehabilitator pursuant to the order of a court of competent jurisdiction.   (2) The commissioner shall authorize or approve withdrawal of only the assets that are in excess of the amount of assets required to be held in trust under 33-2-202 or as may otherwise be consistent with the provisions of this part.   (3) If at any time the insurer becomes insolvent or if its assets held in the United States are less in amount than as required under 33-2-111(1)(c), the commissioner shall in writing order the trustee to suspend the right of the insurer or any other person to withdraw assets as authorized under subsections (1)(a), (1)(b), and (1)(c), and the trustee shall comply with the order and until the further order of the commissioner.   History: En. Sec. 611, Ch. 286, L. 1959; R.C.M. 1947, 40-5213; amd. Sec. 38, Ch. 304, L. 1999.  
  33-2-214. Substitution of trustee. (1) A new trustee or new trustees may be substituted for the original trustee or trustees of trusteed assets in the event of a vacancy or for other proper cause. Any substitution is subject to the commissioner's approval.   (2) If the trustees of any trusteed assets are individuals and if the number of trustees is reduced to less than three by death, resignation, or otherwise, the commissioner shall require that there be substituted for the trustees a bank or trust company in this state approved by the commissioner.   History: En. Sec. 612, Ch. 286, L. 1959; R.C.M. 1947, 40-5214; amd. Sec. 1079, Ch. 56, L. 2009.  
  33-2-215. Canadian insurers. The provisions of this part applicable to a United States manager shall, in the case of insurers domiciled in Canada, be deemed to refer to the president, vice-president, secretary, or treasurer of such a Canadian insurer.   History: En. Sec. 613, Ch. 286, L. 1959; R.C.M. 1947, 40-5215.  
  33-2-2001. Short title. This part may be cited as the "Pharmacy Audit Integrity Act".   History: En. Sec. 1, Ch. 114, L. 2013.  
  33-2-2002. Definitions. As used in this part, the following definitions apply:   (1) "Audit" means a review of the records of a pharmacy by or on behalf of an entity that finances or reimburses the cost of health care services or pharmaceutical products.   (2) "Entity" includes:   (a) a pharmacy benefits manager;   (b) a health benefit plan;   (c) a third-party administrator; and   (d) a company, group, or agent that represents or is engaged by one of the entities described in this subsection (2).   (3) "Fraud" means an intentional act of deception, misrepresentation, or concealment in order to gain something of value.   (4) "Health benefit plan" means a policy or certificate that provides health care insurance or major medical expense insurance or that is offered as a substitute for hospital or medical expense insurance. The term does not include a policy or certificate that provides benefits solely for accident, dental, vision, income replacement, long-term care, a medicare supplement, a specified disease, or a short-term limited duration or that is offered and marketed as supplemental health insurance.   History: En. Sec. 2, Ch. 114, L. 2013.  
  33-2-2003. Applicability. (1) Except as provided in subsection (2), this part applies to an audit of the records of a pharmacy licensed under Title 37, chapter 7.   (2) This part does not apply to an audit of pharmacy records when fraud or other intentional and willful misrepresentation is evidenced by the review of claims data, statements, physical review, or other investigative methods.   History: En. Sec. 3, Ch. 114, L. 2013.  
  33-2-2004. Audit of pharmacy records. (1) An entity conducting an audit of pharmacy records shall audit a pharmacy using the same standards and parameters as used by the entity in auditing other pharmacies on behalf of the same audit client.   (2) An audit that involves clinical or professional judgment must be conducted by or in consultation with a licensed pharmacist who is employed by or working with the entity conducting the audit.   (3) If an audit is conducted onsite at a pharmacy, the entity conducting the audit:   (a) shall give the pharmacy 10 days' advance written notice of the audit, along with the range of prescription numbers or a date range that will be included in the audit; and   (b) may not audit the pharmacy during the first 5 business days of the month unless the pharmacy agrees to the timing of the audit.   (4) An entity may not audit prescription records that exceed 275 selected prescriptions. The period covered by the audit may not exceed 24 months from the date that the prescription was submitted to or adjudicated by the entity unless a longer period is required under state or federal law.   (5) Except as required by state or federal law, an entity conducting an audit may have access to a pharmacy's previous audit report only if the previous report was prepared by that entity.   (6) To validate a pharmacy record, a pharmacy may use documented statements of records in the pharmacy or pharmacy system, including medication administration records of a nursing home, assisted living facility, hospital, physician, surgeon, or other prescriber authorized by the laws of this state.   (7) If an audit results in the dispute or denial of a claim, the entity conducting the audit shall allow the pharmacy to produce additional claims documentation using any commercially reasonable method, including fax, mail, or e-mail.   History: En. Sec. 4, Ch. 114, L. 2013.  
  33-2-2005. Prohibitions -- recoupment -- payment -- interest. An entity conducting an audit may not:   (1) include dispensing fees unless a prescription was not actually dispensed, the prescriber denied authorization, the prescription dispensed was a dispensing error by the pharmacy, or the identified overpayment is based solely on an extra dispensing fee;   (2) recoup funds for prescription clerical or recordkeeping errors, including typographical errors, scrivener's errors, and computer errors, in a required document or record unless the error results in actual financial harm to the entity or to a consumer;   (3) collect any funds, charge-backs, or penalties until the audit and all appeals are final unless the entity is alleging fraud or other intentional or willful misrepresentation that is evidenced by the review of claims data, statements, physical review, or other investigative methods;   (4) use extrapolation or other statistical expansion techniques in calculating the amount of any recoupment or penalty;   (5) pay the agent or employee who conducted the audit based on a percentage of the amount recovered; or   (6) charge interest during the audit period.   History: En. Sec. 5, Ch. 114, L. 2013.  
  33-2-2006. Onsite audits -- preliminary and final reports -- appeals. For audits conducted onsite, the following provisions apply:   (1) An entity that audits a pharmacy shall provide the pharmacy with a preliminary audit report, delivered to the pharmacy or its corporate office of record within 60 days after completion of the audit.   (2) A pharmacy has 30 days following receipt of the preliminary audit report to respond to questions, provide additional documentation, and comment on and clarify findings of the audit. The date of receipt of the report must be determined by the postmark date or the date of the electronic transmission if transferred electronically.   (3) If an audit results in the dispute or denial of a claim, the entity conducting the audit shall allow the pharmacy, for 30 days following receipt of the preliminary audit report, to produce additional claims documentation using any commercially reasonable method, including fax, mail, or e-mail.   (4) (a) Within 120 days after the completion of the appeals process under subsection (5), a final audit report must be delivered to the pharmacy or its corporate office of record.   (b) The final audit report must include a disclosure of any money recovered by the entity that conducted the audit.   (5) An entity that audits a pharmacy shall establish a written policy for a pharmacy to appeal a final audit report. If no remedies are specified by contract or in the pharmacy services manual, the pharmacy may seek to resolve the dispute through mediation.   History: En. Sec. 6, Ch. 114, L. 2013.  
  33-2-2101. Short title. This part may be cited as the "Corporate Governance Annual Disclosure Act".   History: En. Sec. 1, Ch. 9, L. 2017.  
  33-2-2102. Purpose -- scope. (1) The purpose of this part is to:   (a) provide to the insurance commissioner a summary of an insurer or insurance group's corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer's corporate governance framework;   (b) outline the requirements for completing a corporate governance annual disclosure with the insurance commissioner; and   (c) provide for the confidential treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer or insurance group's internal operations and proprietary and trade secret information and that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.   (2) (a) Nothing in this part may be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law.   (b) Notwithstanding subsection (2)(a), nothing in this part may be construed to limit the commissioner's authority or the rights or obligations of third parties under Title 33.   (3) The requirements of this part apply to all insurers domiciled in the state.   History: En. Sec. 2, Ch. 9, L. 2017.  
  33-2-2103. Definitions. As used in this part, the following definitions apply:   (1) "CGAD" means a corporate governance annual disclosure, a confidential report filed by the insurer or insurance group made in accordance with the requirements of this part.   (2) "Commissioner" means the insurance commissioner of the state of Montana.   (3) "Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in 33-2-1101.   (4) "Insurer" has the meaning provided in 33-1-201, except that it may not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.   (5) "NAIC" means the national association of insurance commissioners.   History: En. Sec. 3, Ch. 9, L. 2017.  
  33-2-2104. Disclosure requirement. (1) An insurer or the insurance group of which the insurer is a member shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in 33-2-2106. Notwithstanding any request from the commissioner made pursuant to subsection (3), if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the financial analysis handbook adopted by rule by the commissioner.   (2) The CGAD must include a signature of the insurer or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee of the board of directors.   (3) An insurer not required to submit a CGAD under this section shall do so upon the commissioner's request.   (4) For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending on how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the CGAD disclosures at the level at which the insurer's or insurance group's risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.   (5) The review of the CGAD and any additional requests for information must be made through the lead state as determined by the procedures within the financial analysis handbook referenced in subsection (1).   (6) Insurers providing information substantially similar to the information required by this part in other documents provided to the commissioner, including a proxy statement filed in conjunction with form B requirements, or other state or federal filings provided to the commissioner may not be required to duplicate that information in the CGAD but may only be required to cross-reference the document in which the information is included.   History: En. Sec. 4, Ch. 9, L. 2017.  
  33-2-2105. Rulemaking authority. The commissioner may, upon notice and opportunity for all interested persons to be heard, issue rules and orders necessary to carry out the provisions of this part.   History: En. Sec. 5, Ch. 9, L. 2017.  
  33-2-2106. Contents of corporate governance annual disclosure. (1) The insurer or insurance group has discretion over the responses to the CGAD inquiries provided that the CGAD contains the material information necessary to permit the commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. The commissioner may request additional information that the commissioner deems material and necessary to provide a clear understanding of the corporate governance policies, the reporting or information system, or controls implementing those policies.   (2) Notwithstanding subsection (1), the CGAD must be prepared consistent with any rules adopted by the commissioner. Documentation and supporting information must be maintained and made available upon examination or upon request of the commissioner.   History: En. Sec. 6, Ch. 9, L. 2017.  
  33-2-2107. Confidentiality. (1) Documents, materials, or other information, including the CGAD, in the possession or control of the department of insurance that are obtained by, created by, or disclosed to the commissioner or any other person under this part are recognized by the state as being proprietary and to contain trade secrets. These documents, materials, and other information are confidential by law and privileged, may not be subject to Title 2, chapter 6, part 10, may not be subject to subpoena, and may not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner may not otherwise make the documents, materials, or other information public without the prior written consent of the insurer. Nothing in this section may be construed to require written consent of the insurer before the commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to subsection (3) to assist in the performance of the commissioner's regular duties.   (2) Neither the commissioner nor any person who receives documents, materials, or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner or with whom the documents, materials, or other information are shared pursuant to this part may be permitted or required to testify in any private civil action concerning any confidential documents, materials, or other information subject to subsection (1).   (3) In order to assist in the performance of the commissioner's regular duties, the commissioner may:   (a) upon request, share documents, materials, or other CGAD-related information, including the confidential and privileged documents, materials, or information subject to subsection (1), including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as provided in Title 33, chapter 2, part 11, with the NAIC and with third-party consultants pursuant to 33-2-2108, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, material, or other information and has verified in writing the legal authority to maintain confidentiality; and   (b) receive documents, materials, or other CGAD-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as provided in Title 33, chapter 2, part 11, and from the NAIC, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.   (4) The sharing of information and documents by the commissioner pursuant to this part does not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this part.   (5) A waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other CGAD-related information may not occur as a result of disclosure of such CGAD-related information or documents to the commissioner under this section or as a result of sharing as authorized in this part.   History: En. Sec. 7, Ch. 9, L. 2017.  
  33-2-2108. NAIC and third-party consultants. (1) The commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff, as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurer's compliance with this part.   (2) Any persons retained under subsection (1) must be under the direction and control of the commissioner and shall act in a purely advisory capacity.   (3) The NAIC and third-party consultants must be subject to the same confidentiality standards and requirements as the commissioner.   (4) As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with the conflict and to comply with the confidentiality standards and requirements of this part.   (5) A written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to this part must contain the following provisions and expressly require the written consent of the insurer prior to making public any information provided under this part:   (a) specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this part;   (b) procedures and protocols for sharing by the NAIC only with other state regulators from states in which the insurance group has domiciled insurers. The agreement must provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.   (c) a provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the department of insurance and that the NAIC's or third-party consultant's use of the information is subject to the direction of the commissioner;   (d) a provision that prohibits the NAIC or a third-party consultant from storing the information shared pursuant to this part in a permanent database after the underlying analysis is completed;   (e) a provision requiring the NAIC or a 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 insurer's CGAD-related information; and   (f) a requirement that the NAIC or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the NAIC or the third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or the third-party consultant pursuant to this part.   History: En. Sec. 8, Ch. 9, L. 2017.  
  33-2-2109. Sanctions -- penalties. Any insurer failing, without just cause, to timely file the CGAD as required in this part shall, after notice and hearing, pay a penalty of $100 for each day's delay to the commissioner. The penalty must be collected by the commissioner in the name of the state of Montana and deposited in the general fund. The maximum penalty under this section is $1 million. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.   History: En. Sec. 9, Ch. 9, L. 2017.  
  33-2-2201. Certificate of authority required. (1) A private air ambulance service subject to this part shall obtain a certificate of authority from the commissioner prior to selling, soliciting, or negotiating a membership agreement in Montana.   (2) A private air ambulance service applying for a certificate of authority shall submit an application on a form prescribed by the commissioner.   (3) The commissioner may issue a certificate of authority if the private air ambulance service has complied with the applicable provisions of Title 50 and this title unless the commissioner finds that issuance of the certificate of authority is contrary to the public interest.   (4) A private air ambulance service may renew its certificate of authority upon payment of the annual fee specified in 33-2-2202 on or before March 1 of each year and upon continued compliance with the applicable provisions of Title 50 and this title.   (5) The requirements of this section are in addition to any other licensing or registration requirements that apply to the private air ambulance service.   History: En. Sec. 1, Ch. 210, L. 2017.  
  33-2-2202. Fees. A private air ambulance service subject to this part shall pay the following fees to the commissioner for services rendered:   (1) issuance of a certificate of authority, $300;   (2) annual renewal fee, $300; and   (3) filing of a membership agreement or other forms, $50.   History: En. Sec. 2, Ch. 210, L. 2017.  
  33-2-2203. Suspension or revocation. (1) The commissioner may suspend or revoke a private air ambulance service certificate of authority if the private air ambulance service:   (a) no longer meets the requirements for the certificate of authority;   (b) materially fails to comply with a membership agreement issued to residents of Montana;   (c) is in unsound fiscal condition or is demonstrated to be using methods or practices in the conduct of its business that render its further transaction of insurance in this state injurious or hazardous to its members or to the public; or   (d) violates an applicable provision of law.   (2) Unless otherwise provided in the order of suspension or revocation, the private air ambulance service shall continue to honor membership agreements that are in force at the time of revocation or suspension.   History: En. Sec. 4, Ch. 210, L. 2017.  
  33-2-2204 and 33-2-2205 reserved.  
  33-2-2206. Membership agreement -- contents. A membership agreement issued under this part must contain:   (1) the effective dates of the membership agreement;   (2) a grace period of 30 days for payment of a renewal membership fee;   (3) a description of what constitutes acceptable insurance coverage if eligibility for the membership agreement is conditioned on the member's current and continuing health insurance coverage;   (4) a statement that, except for decisions made as provided in 33-1-102(6), individuals enrolled in medicare, medicaid, or the healthy Montana kids plan under Title 53, chapter 4, part 11, are not subject to charges billed by a private air ambulance service in excess of applicable deductibles, coinsurance, and copayments;   (5) a statement that the membership agreement is an insurance contract;   (6) a description and graphic illustration of the base locations and effective coverage area of the private air ambulance service;   (7) a list of other private air ambulance services with which reciprocity exists under 50-6-320;   (8) a statement that:   (a) participation in a membership program does not guarantee that in the event of a transport, the private air ambulance service will provide the transport; and   (b) unless reciprocity exists under 50-6-320, if another private air ambulance service provides the transport, the individual will not receive the benefits provided under the membership agreement; and   (9) a definition of "medical necessity" if membership coverage of a transport is conditioned on a finding of medical necessity.   History: En. Sec. 6, Ch. 210, L. 2017.  
  33-2-2207. Filings. (1) Pursuant to Title 33, chapter 1, part 5, a private air ambulance service subject to this part shall file for approval any membership agreement, including any rider or endorsement.   (2) A filing under subsection (1) must include all fee schedules associated with the membership agreement.   History: En. Sec. 3, Ch. 210, L. 2017.  
  33-2-2208. Trade practices. (1) A private air ambulance service subject to this part may not use health status as a reason to:   (a) refuse to issue or renew a membership agreement;   (b) assess a differing rate or charge for the membership agreement; or   (c) exclude a specific individual for a membership agreement issued for a household or other group of individuals.   (2) A private air ambulance service subject to this part may not sell, solicit, negotiate, or advertise a membership program in a geographic area for which the private air ambulance does not routinely provide service.   (3) Except as provided in subsection (4)(b), if membership coverage of a transport is conditioned on a finding of medical necessity, a qualified medical professional shall render the determination.   (4) A membership agreement requirement of medical necessity is satisfied if:   (a) the treating physician requesting the transport certifies that the transport is medically necessary; or   (b) the member's insurer determines that the transport is medically necessary.   History: En. Sec. 5, Ch. 210, L. 2017.  
  33-2-2209 and 33-2-2210 reserved.  
  33-2-2211. Recordkeeping requirements. (1) A private air ambulance service subject to this part shall keep records of:   (a) all insurance transactions conducted in Montana; and   (b) all transports provided to individuals entering into membership agreements.   (2) A private air ambulance service subject to this section shall make the records under subsection (1) available to the commissioner on request.   History: En. Sec. 7, Ch. 210, L. 2017.  
  33-2-2212. Relationship to other laws. (1) Except as provided in subsection (2), the chapters and provisions of this title do not apply to a private air ambulance service.   (2) Title 33, chapter 1, parts 3, 4, 5, 12, and 13, chapter 18, parts 2 and 10, and chapter 19 as well as this part apply to a private air ambulance service that offers a membership program covering out-of-pocket expenses in excess of deductibles, copays, and coinsurance incurred for out-of-network services using the private air ambulance service or to private air ambulance services that are out-of-network and with which the membership program has reciprocity.   (3) A membership program of the type described in subsection (2) is insurance as defined in 33-1-201.   History: En. Sec. 8, Ch. 210, L. 2017.  
  33-2-2213. Rulemaking authority. The department shall adopt rules necessary to implement this part.   History: En. Sec. 9, Ch. 210, L. 2017.  
  33-2-2301. Legislative findings and purpose. (1) The legislature finds that:   (a) air ambulance services provide a necessary, and sometimes lifesaving, means of transporting Montanans experiencing health emergencies;   (b) Montanans desire adequate access to air ambulance services;   (c) in many cases the high charges assessed by out-of-network air ambulance services and limited insurer and health plan reimbursements have resulted in Montanans incurring excessive out-of-pocket expenses; and   (d) the federal Airline Deregulation Act preempts states from enacting any law related to a price, route, or service of an air carrier, which is interpreted as applying to air ambulance services.   (2) The purpose of this part is to prevent Montanans from incurring excessive out-of-pocket expenses in out-of-network air ambulance situations in a manner that is not preempted by the Airline Deregulation Act.   History: En. Sec. 1, Ch. 231, L. 2017.  
  33-2-2302. Hold harmless. (1) If a covered person receives services from a non-Montana hospital-controlled out-of-network air ambulance service for an emergency medical condition, an insurer or health plan shall assume the covered person's responsibility, if any, for amounts charged in excess of allowed amounts for covered services and supplies, applicable copayments, coinsurance, and deductibles.   (2) An insurer or health plan that assumes a responsibility pursuant to subsection (1) shall notify the air ambulance service of that assumption no later than the date the insurer or health plan issues payment under subsection (4).   (3) If an air ambulance service receives notice pursuant to subsection (2), with the exception of amounts owed for applicable copayments, coinsurance, and deductibles, the air ambulance service may not:   (a) bill, collect, or attempt to collect from the covered person for the responsibility assumed under subsection (1);   (b) report to a consumer reporting agency that the covered person is delinquent on the responsibility assumed under subsection (1); or   (c) obtain a lien on the covered person's property in connection with the responsibility assumed under subsection (1).   (4) (a) An insurer or health plan is responsible for payment or denial of a claim within 30 days after receipt of a proof of loss, except as provided in 33-18-232(1). Within the timeframe provided in this subsection (4)(a), the insurer or health plan shall notify the covered person of the amount of deductible, coinsurance, or copayment that is the covered person's responsibility to pay.   (b) The insurer or health plan responsible under subsection (1) shall make payment based on:   (i) the billed charges of the air ambulance service;   (ii) another amount negotiated with the air ambulance service; or   (iii) the median amount the insurer or health plan would pay to an in-network air ambulance service for the services performed.   (5) If after payment is made under subsection (4) the insurer or health plan and air ambulance service dispute whether any further payment obligation exists, the insurer or health plan and air ambulance service shall enter into the dispute resolution process set forth in 33-2-2304 through 33-2-2306. After the independent dispute resolution process is exhausted, the aggrieved party may pursue any available remedies in a court of competent jurisdiction.   (6) For the purposes of this section:   (a) "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, so that a person who possesses knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in:   (i) placing the health of the individual or, with respect to a pregnant woman, the health of the woman or her unborn child in serious jeopardy;   (ii) serious impairment to bodily functions; or   (iii) serious dysfunction of any bodily organ or part; and   (b) "insurer" means a health insurance issuer as defined in 33-22-140 and includes issuers of health insurance under Titles 2 and 20.   (7) This part does not apply if a covered person used an air ambulance membership subscription, as provided in 50-6-320, for the services provided by the air ambulance service.   History: En. Sec. 2, Ch. 231, L. 2017.  
  33-2-2303. Disclosures by air ambulance service. An out-of-network nonhospital-controlled air ambulance service must disclose by July 1 of each year any relationships or financial arrangements with health care providers, insurers, or health plans. This includes but is not limited to employment arrangements, ownership interests, first call agreements, and board memberships. This information must be filed with the department of public health and human services and also posted prominently on the commissioner of insurance's website. The air ambulance service must ensure the continued accuracy of this information throughout the year by submitting written updates within 5 days of any changes to the information.   History: En. Sec. 3, Ch. 231, L. 2017.  
  33-2-2304. Independent dispute resolution. (1) If an insurer or health plan and air ambulance service enter into dispute resolution, the procedure in 33-2-2305 is to be used to determine the fair market price of the services that are the subject of the claim.   (2) Payment of the fair market price calculated pursuant to 33-2-2305 constitutes payment in full of the claim.   (3) A determination under this section is not binding on the insurer or health plan and the air ambulance service.   (4) Unless otherwise agreed to by the parties, each party shall:   (a) bear its own attorney fees and costs incurred under the procedure provided in 33-2-2305; and   (b) equally bear all fees and costs of the independent reviewer.   (5) As used in this section, "fair market price" means the value of the services provided as determined by the independent reviewer based on the factors provided in 33-2-2305(6).   History: En. Sec. 4, Ch. 231, L. 2017.  
  33-2-2305. Independent dispute resolution procedure -- exemptions. (1) To initiate a dispute resolution procedure under this part, the parties shall file a written notice of dispute with the insurance commissioner.   (2) Except as provided in subsection (3), within 30 days after the date of receipt of the notice of dispute, and if no independent reviewer is mutually agreed to by the insurer or health plan and air ambulance service under subsection (3), the insurance commissioner shall appoint an independent reviewer having the qualifications listed in 33-2-2306. The insurance commissioner shall select an independent reviewer randomly from a list established under 33-2-2306.   (3) The insurer or health plan and air ambulance provider may by mutual agreement select an independent reviewer. The parties shall notify the insurance commissioner of the mutually agreed independent reviewer prior to the appointment of an independent reviewer under subsection (2).   (4) An independent reviewer's sole substantive determination under this part is the fair market price of the services that are the subject of the claim.   (5) The independent reviewer may make procedural rulings necessary to regulate the proceedings.   (6) The factors to be used in the independent reviewer's determination are:   (a) the training, qualifications, and composition of the air ambulance service personnel;   (b) the fees for rotor wing or fixed wing services originating or provided entirely within the state of Montana that are:   (i) usually charged by the air ambulance service in Montana;   (ii) usually accepted as payment in full by the air ambulance service in Montana;   (iii) usually charged by other air ambulance services doing business in Montana;   (iv) usually accepted as payment in full by other air ambulance services doing business in Montana; and   (v) usually paid by the insurer or health plan for the service provided in Montana;   (c) whether the air ambulance service was provided in a rural or urban context;   (d) the applicable medicare rate of payment for the services that are the subject of the claim; and   (e) any other factors the independent reviewer determines to be relevant in determining fair market price in accordance with established precedent.   (7) Participation in a dispute resolution procedure under 33-2-2304 through 33-2-2306 exempts an insurer from 33-18-201(6) and (8) and 33-18-232(2).   History: En. Sec. 5, Ch. 231, L. 2017.  
  33-2-2306. Insurance commissioner duties -- independent reviewer qualifications. (1) The insurance commissioner shall:   (a) approve any independent reviewer that is eligible to adjudicate disputes under this part;   (b) maintain a list of independent reviewers eligible to adjudicate disputes under this part;   (c) terminate approval of an independent reviewer and remove the independent reviewer from the list of approved independent reviewers upon determining that an independent reviewer no longer meets the requirements to adjudicate disputes; and   (d) adopt rules necessary to implement this part, including rules regarding discovery and other procedures regarding the dispute resolution process and eligibility of an independent reviewer.   (2) An individual is eligible to be an independent reviewer under this part if the individual is knowledgeable and experienced in applicable principles of contract and insurance law.   (3) In approving an individual as an independent reviewer, the insurance commissioner shall ensure that the individual does not have a conflict of interest that would adversely impact the individual's independence and impartiality in rendering a decision in an independent dispute resolution procedure under 33-2-2304 and 33-2-2305. A conflict of interest includes but is not limited to an ownership or direct familial interest in an insurer, a health care provider, or an air ambulance service that may be involved in an independent dispute resolution procedure under 33-2-2304 and 33-2-2305.   (4) In approving an individual as an independent reviewer, the insurance commissioner may not approve an individual who is currently serving in any matter as a hearing officer for the commissioner.   History: En. Sec. 6, Ch. 231, L. 2017.  
  33-2-2401. Short title -- purpose. (1) This part may be cited as the "Montana Pharmacy Benefit Manager Oversight Act".  (2) This part establishes the standards and criteria for the licensure and regulation of pharmacy benefit managers that provide claims processing services or other prescription drug or device services for health benefit plans and workers' compensation insurance carriers.   (3) The purpose of this part is to:   (a) promote, preserve, and protect the public health, safety, and welfare through regulation and licensure of pharmacy benefit managers;   (b) provide for powers and duties of the commissioner in licensing and regulating pharmacy benefit managers; and   (c) provide penalties for violations of this part.   History: En. Sec. 1, Ch. 501, L. 2021. 
  33-2-2402. Definitions. As used in this part, the following definitions apply:  (1) "Claims processing services" means the administrative services performed in connection with the processing and adjudicating of claims relating to pharmacist services that include either or both of the following:   (a) receiving payments for pharmacist services; and   (b) making payments to pharmacists or pharmacies.   (2) "Enrollee" means a member, policyholder, subscriber, covered person, beneficiary, dependent, or other individual participating in a health benefit plan.   (3) "Federally certified health entity" means a 340B covered entity as described in 42 U.S.C. 256b(a)(4).   (4) "Health benefit plan" means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.   (5) (a) "Health carrier" means an entity that is subject to the insurance laws and regulations of this state or to the jurisdiction of the commissioner and that contracts or offers to contract or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.   (b) The term includes:   (i) self-funded multiple employer welfare arrangements as defined in 33-35-103; and   (ii) any other entity providing a plan of health insurance, health benefits, or health care services.   (6) "Manufacturer" has the meaning provided in 37-7-602.   (7) "Other prescription drug or device services" means services other than claims processing services that are provided directly or indirectly, whether in connection with or separate from claims processing services, including but not limited to:   (a) negotiating rebates, discounts, or other financial incentives and arrangements with manufacturers, wholesale distributors, or other third parties;   (b) disbursing or distributing rebates;   (c) managing or participating in incentive programs or arrangements for pharmacist services;   (d) negotiating or entering into contractual arrangements with pharmacists, pharmacies, or both;   (e) developing and maintaining formularies;   (f) designing prescription drug benefit programs;   (g) advertising or promoting services; or   (h) administering prior authorization, step therapy, case management, or other utilization review programs.   (8) "Pharmacist" has the meaning provided in 33-22-170.   (9) "Pharmacist services" means products, goods, and services or any combination of products, goods, and services provided as part of the practice of pharmacy.   (10) "Pharmacy" means an established location, either physical or electronic, that is licensed by the board of pharmacy pursuant to Title 37, chapter 7.   (11) (a) "Pharmacy benefit manager" means a person, including a wholly or partially owned or controlled subsidiary of a pharmacy benefit manager, that provides claims processing services or other prescription drug or device services, or both, to:   (i) enrollees who are residents of this state, for health benefit plans; or   (ii) injured workers of workers' compensation insurance carriers.   (b) The term does not include:   (i) a health care facility as defined in 50-5-101 that is licensed in this state;   (ii) a health care professional licensed under Title 37;   (iii) a consultant who provides advice only as to the selection or performance of a pharmacy benefit manager; or   (iv) a health carrier or workers' compensation insurance carrier to the extent that the carrier performs any claims processing and other prescription drug or device services exclusively for its enrollees or injured workers.   (12) "Plan sponsor" has the meaning provided in 33-10-202.   (13) (a) "Rebates" means all price concessions, however characterized, paid by a manufacturer to a pharmacy benefit manager, including discounts and other remuneration or price concessions, that are based on the actual or estimated utilization of a prescription drug.   (b) The term includes price concessions based on the effectiveness of a prescription drug as in a value-based or performance-based contract.   (14) "Wholesale acquisition cost" has the meaning provided in 42 U.S.C. 1395w-3a.   (15) "Wholesale distributor" or "distributor" has the meaning provided in 37-7-602.   (16) "Workers' compensation insurance carrier" means:   (a) an insurance company transacting business under compensation plan No. 2; or   (b) the state fund compensation plan No. 3 under Title 39, chapter 71.   History: En. Sec. 2, Ch. 501, L. 2021. 
  33-2-2403. Licensing required. (1) A person may not perform an act or do business in this state as a pharmacy benefit manager without a valid license issued under this part by the commissioner.  (2) A license issued under this part is nontransferable.   (3) A pharmacy benefit manager shall apply to the commissioner on a form prescribed by the commissioner. At a minimum, the application form must include the following information:   (a) the name, business address, and telephone number of the pharmacy benefit manager and the name, address, and contact information for the principal contact person of the pharmacy benefit manager for communications with the commissioner on licensure-related matters;   (b) the name and address of:   (i) all members of the pharmacy benefit manager's board of directors, board of trustees, executive committee, or other governing board of committee;   (ii) the principal officers in the case of a corporation; or   (iii) the partners or members in the case of a partnership or association;   (c) proof of registration with the Montana secretary of state;   (d) a copy of the most recent fiscal yearend audited financial statement of the pharmacy benefit manager;   (e) a list of all health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state;   (f) a description of the projected number of enrollees and injured workers to be administered by the pharmacy benefit manager in this state on an annual basis for each health carrier client, plan sponsor client, and workers' compensation insurance carrier client;   (g) a copy of the policies and procedures that demonstrate the pharmacy benefit manager has established processes to comply with the requirements of 33-22-170 through 33-22-177 and 33-22-180 concerning maximum allowable costs lists, including the appeals process required under 33-22-173;   (h) a description of the pharmacy benefit manager's network service areas and pharmacy accessibility in this state;   (i) disclosure of any ownership interest, either directly or indirectly or through an affiliate, holding company, or subsidiary in a pharmacy or mail-order pharmacy that is part of the pharmacy benefit manager's network; and   (j) disclosure of any ownership interest, either directly or indirectly or through an affiliate, holding company, or subsidiary by a health carrier or workers' compensation insurance carrier in the pharmacy benefit manager or by the pharmacy benefit manager in a health carrier or workers' compensation insurance carrier.   (4) Each application for licensure must be accompanied by a nonrefundable fee of $1,000.   (5) The commissioner may require additional information for submission from an applicant and may obtain any document or information reasonably necessary to verify the information contained in an application.   (6) The commissioner may refuse to issue or renew a license if the commissioner finds that the applicant:   (a) is not competent, trustworthy, or financially responsible;   (b) has violated the insurance laws of this state, including violation of 33-22-170 through 33-22-177 and 33-22-180, or any other state; or   (c) has had an insurance or other certificate of authority or license denied or revoked for cause by any jurisdiction.   (7) The commissioner shall grant or deny an initial application for a license within 60 days from the date that a completed application and license fee is received.   (8) (a) Unless surrendered, suspended, or revoked by the commissioner, a license issued under this section is valid as long as the pharmacy benefit manager:   (i) continues to do business in this state;   (ii) remains in compliance with the provisions of this part;   (iii) completes a renewal application on a form prescribed by the commissioner; and   (iv) pays an annual license renewal fee of $500.   (b) The renewal fee and application must be received by the commissioner at least 30 days before the anniversary of the effective date of the pharmacy benefit manager's initial or most recent license.   (9) Denial of an application for initial licensure or renewal of licensure is considered a contested case under the Montana Administrative Procedure Act.   (10) In lieu of denying an application for initial licensure or renewal of licensure, the commissioner may allow the pharmacy benefit manager to submit a corrective action plan to cure or correct the deficiencies identified in review of the application.   History: En. Sec. 3, Ch. 501, L. 2021. 
  33-2-2404. Pharmacy benefit manager prohibited practices. (1) In any participation contracts between a pharmacy benefit manager and pharmacies or pharmacists providing prescription drug coverage, a pharmacy or pharmacist may not be prohibited, restricted, or penalized in any way from disclosing to any enrollee or injured worker any information the pharmacy or pharmacist considers appropriate regarding:  (a) the decision of utilization reviewers or similar persons to authorize or deny drug coverage or benefits; and   (b) the process that is used to authorize or deny drug coverage or benefits.   (2) (a) A pharmacy benefit manager contract with a participating pharmacy or pharmacist in this state may not prohibit, restrict, or limit disclosure of information to the commissioner when the commissioner is investigating or examining a complaint or conducting a review of a pharmacy benefit manager's compliance with the requirements of this part.   (b) A pharmacy benefit manager may not terminate the contract of or penalize a pharmacy or pharmacist for sharing any portion of the pharmacy benefit manager contract with the commissioner for investigation of a complaint or a question regarding whether the contract complies with this part.   (c) Any examination or review under this section must follow the examination procedures and requirements applicable to insurers under Title 33, chapter 1, part 4, including but not limited to the confidentiality provisions of 33-1-409.   History: En. Sec. 4, Ch. 501, L. 2021. 
  33-2-2405. Marketing and advertising. (1) A pharmacy benefit manager may not cause or knowingly permit the use of an advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading.  (2) The commissioner may not review or approve a pharmacy benefit manager's marketing or advertising documents prior to use by the pharmacy benefit manager.   (3) The commissioner shall review complaints related to pharmacy benefit manager marketing and advertising material to determine whether the materials violate the provisions of this section.   History: En. Sec. 5, Ch. 501, L. 2021. 
  33-2-2406. Pharmacy benefit manager transparency to carriers and plan sponsors. (1) Beginning in the second quarter after the effective date of a contract between a pharmacy benefit manager and a health carrier, plan sponsor, or workers' compensation insurance carrier, the pharmacy benefit manager shall disclose, within 45 days of a request of the health carrier, plan sponsor, or workers' compensation insurance carrier, the following information regarding prescription drug benefits specific to the health carrier, plan sponsor, or workers' compensation insurance carrier:  (a) the aggregate wholesale acquisition costs from a manufacturer or wholesale distributor for each therapeutic category of prescription drugs;   (b) the aggregate wholesale acquisition costs from a manufacturer or wholesale distributor for each therapeutic category of prescription drugs available to enrollees of the health carrier or plan sponsor or injured workers of the workers' compensation insurance carrier;   (c) the aggregate amount of rebates received by the pharmacy benefit manager by therapeutic category of prescription drugs;   (d) any other fees received from a manufacturer or wholesale distributor and the reason for the fees;   (e) whether the pharmacy benefit manager has a contract, agreement, or other arrangement with a manufacturer to exclusively dispense or provide a drug to enrollees of the health carrier or plan sponsor or injured workers of the workers' compensation carrier, and the application of all consideration or economic benefits collected or received pursuant to the arrangement;   (f) prescription drug utilization information for enrollees of the health carrier or plan sponsor or injured workers of the workers' compensation carrier, including but not limited to:   (i) the top 10 prescription drugs by average total spending for each enrollee or injured worker;   (ii) the top 10 prescription drugs by average out-of-pocket spending for each enrollee or injured worker;   (iii) the top 10 therapeutic classes of prescription drugs by total spending and volume;   (iv) the total number of pharmacy transactions; and   (v) the total number of rejected pharmacy transactions, including a breakdown of the number rejected for the following reasons:   (A) nonformulary status;   (B) prior authorization requirements; and   (C) step therapy requirements;   (g) deidentified claims-level information in electronic format that allows the health carrier, plan sponsor, or workers' compensation insurance carrier to sort and analyze the following information for each claim:   (i) whether the claim required prior authorization;   (ii) the amount paid to the pharmacy for each prescription, net of the aggregate amount of fees or other assessments imposed on the pharmacy, including point-of-sale and retroactive charges;   (iii) any spread between the net amount paid to the pharmacy as described in subsection (1)(g)(ii) and the amount charged to the health carrier, plan sponsor, or workers' compensation insurance carrier;   (iv) whether the pharmacy is or is not:   (A) under common control or ownership with the pharmacy benefit manager;   (B) a preferred pharmacy for the health benefit plan or workers' compensation insurance carrier; or   (C) a mail-order pharmacy; and   (v) whether enrollees or injured workers are required by the health benefit plan or workers' compensation insurance carrier to use the pharmacy;   (h) the aggregate amount of payments made by the pharmacy benefit manager on behalf of the health carrier, plan sponsor, or workers' compensation insurance carrier to:   (i) pharmacies owned or controlled by the pharmacy benefit manager; and   (ii) pharmacies not owned or controlled by the pharmacy benefit manager; and   (i) the aggregate amount of the fees imposed on or collected from network pharmacies or other assessments against network pharmacies, including point-of-sale fees and retroactive charges, and the amount of fees passed on to the health carrier, plan sponsor, or workers' compensation insurance carrier pursuant to the contract with the health carrier, plan sponsor, or workers' compensation insurance carrier.   (2) A health carrier, plan sponsor, or workers' compensation insurance carrier may request more detailed data from the pharmacy manager for any aggregate data provided under this section, including information to verify the pharmacy benefit manager's source of and reported amounts of rebates and fees.   (3) A pharmacy benefit manager may require a health carrier, plan sponsor, or workers' compensation insurance carrier to agree to a nondisclosure agreement that specifies that the information reported under this section is proprietary information. A pharmacy benefit manager requiring the use of a nondisclosure agreement is not required to disclose information under this section to the health carrier, plan sponsor, or workers' compensation insurance carrier until the health carrier, plan sponsor, or workers' compensation insurance carrier has executed the nondisclosure agreement.   History: En. Sec. 6, Ch. 501, L. 2021. 
  33-2-2407. Transparency report to the commissioner. (1) By July 1 each year for the immediately preceding calendar year, each pharmacy benefit manager doing business in this state shall report to the commissioner on a form prescribed by the commissioner the following information regarding prescription drug benefits provided to enrollees of each health carrier and plan sponsor and injured workers of workers' compensation insurance carriers in the state with which the pharmacy benefit manager has contracted during the previous calendar year:  (a) the aggregate prescription drug spending for all of the pharmacy benefit manager's health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state;   (b) the aggregate prescription drug spending as described in subsection (1)(a) net of all rebates and other fees and payments, direct or indirect, from all sources;   (c) the aggregate dollar amount of all rebates that the pharmacy benefit manager received from all manufacturers for all health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state;   (d) the aggregate dollar amount of all fees from all sources, direct or indirect, that the pharmacy benefit manager received for all of the pharmacy benefit manager's health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state and the reason for the fees;   (e) the aggregate dollar amount of all retained rebates and fees, as listed in subsection (1)(d), that the pharmacy benefit manager received from all sources, direct or indirect, that were not passed through to health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state;   (f) the aggregate retained rebate and fees percentage;   (g) the highest, lowest, and mean aggregate retained rebate and fees percentage for all of the pharmacy benefit manager's health carrier, plan sponsor, and workers' compensation insurance carrier clients in this state;   (h) deidentified claims-level information in electronic format that allows the commissioner to sort and analyze the following information for each claim:   (i) the drug and quantity for each prescription;   (ii) whether the claim required prior authorization;   (iii) patient cost-sharing paid on each prescription;   (iv) the amount paid to the pharmacy for each prescription, net of the aggregate amount of fees or other assessments imposed on the pharmacy by the pharmacy benefit manager, including point-of-sale and retroactive charges;   (v) any spread between the net amount paid to the pharmacy as calculated in subsection (1)(h)(iv) and the amount charged to the health carrier, plan sponsor, or workers' compensation insurance carrier client;   (vi) the pharmacy used for each prescription;   (vii) whether the pharmacy is or is not:   (A) under common control or ownership with the pharmacy benefit manager;   (B) a preferred pharmacy under the health benefit plan; or   (C) a mail-order pharmacy; and   (viii) whether enrollees or injured workers are required by the health benefit plan or workers' compensation insurance carrier to use the pharmacy; and   (i) the aggregate amount of rebates passed on by the pharmacy benefit manager to the enrollees of each health carrier and plan sponsor client in this state at the point of sale that reduced the enrollee's applicable deductible, copayment, coinsurance, or other cost-sharing amount.   (2) For the purposes of this section, the aggregate retained rebate and fee percentage must be calculated for each health carrier, plan sponsor, and workers' compensation insurance carrier for rebates and fees received in the previous calendar year by dividing the sum total dollar amount of rebates and fees from all manufacturers for all utilization of enrollees of a health carrier or plan sponsor and injured workers of a workers' compensation insurance carrier that was not passed through to the health carrier, plan sponsor, or workers' compensation insurance carrier by the sum total dollar amount of all rebates and fees received from all sources, direct or indirect, for all enrollees of a health carrier or plan sponsor and injured workers of a workers' compensation insurance carrier.   (3) The commissioner may request more detailed information from a pharmacy benefit manager for any aggregate data reported under this section, including information to verify a pharmacy benefit manager's reported amounts of rebates and fees and their allocation to a health carrier, plan sponsor, or workers' compensation insurance carrier.   (4) On the request of a pharmacy benefit manager, the commissioner may exempt from disclosure any part of the pharmacy benefit manager's submission that the commissioner determines to contain trade secrets as defined in 30-14-402.   (5) (a) Information provided pursuant to subsections (1)(h)(iii) through (1)(h)(v) is considered a response to an examination under Title 33, chapter 1, part 4, and is subject to the confidentiality provisions of 33-1-409. Any data, documents, materials, or other information provided pursuant to those subsections is not subject to subpoena or discovery and is not admissible in evidence in any private civil action.   (b) The commissioner may use the data, documents, materials, or other information in the furtherance of a regulatory or legal action brought as part of the commissioner's official duties.   (6) (a) By December 31 of each year, the commissioner shall publish on the commissioner's website an aggregated rebate and fee transparency report based on the information submitted by each pharmacy benefit manager.   (b) The report may not contain information considered under this section to be confidential or a trade secret.   (c) The report must be published in a manner that does not disclose:   (i) the identity of a specific health carrier, plan sponsor, or workers' compensation insurance carrier;   (ii) the prices charged for a specific prescription drug or class of drugs; or   (iii) the amount of any rebates provided for a specific prescription drug or class of drugs.   (7) The commissioner may request the information required under this section at any time if the commissioner believes the information is reasonably necessary to ensure compliance with this part.   History: En. Sec. 7, Ch. 501, L. 2021. 
  33-2-2408. Pharmacy benefit manager appeals report. (1) Pharmacy benefit managers shall track, monitor, and report to the commissioner each quarter the following aggregated information related to appeals filed pursuant to 33-22-173:  (a) the number of appeals filed by pharmacies;   (b) whether the appeals were denied or upheld by the pharmacy benefit manager and, if denied, the reasons for the denials;   (c) for each denial, confirmation that the pharmacy benefit manager provided the pharmacy in writing the pricing and other information required under 33-22-173;   (d) the total amount of price adjustments made by the pharmacy benefit manager; and   (e) the average amount of days taken to make price adjustments.   (2) The report must be filed within 30 days of the close of each calendar quarter.   (3) The commissioner may request information required under this section at any time if the commissioner believes the information is reasonably necessary to ensure compliance with this part, 33-22-170 through 33-22-177, and 33-22-180.   History: En. Sec. 8, Ch. 501, L. 2021. 
  33-2-2409. Network adequacy. (1) A pharmacy benefit manager shall provide an adequate and accessible pharmacy network for the provision of prescription drugs to ensure reasonable proximity of pharmacies to the businesses or personal residences of enrollees and injured workers.  (2) In determining whether a pharmacy benefit manager has complied with the requirements of this section, consideration must be given to the relative availability of physical pharmacies in a geographic area.   (3) The commissioner shall adopt rules for network adequacy.   History: En. Sec. 9, Ch. 501, L. 2021. 
  33-2-2410. Federal 340B drug pricing program. A pharmacy benefit manager or health carrier may not:  (1) prohibit a federally certified health entity or a pharmacy under contract with an entity to provide pharmacy services from participating in the pharmacy benefit manager's or health carrier's provider network;   (2) reimburse a federally certified health entity or a pharmacy under contract with an entity differently than it reimburses other similarly situated pharmacies;   (3) require a claim for a drug to include a modifier to indicate that the drug is a 340B drug unless the claim is for payment, directly or indirectly, by the medicaid program provided for in Title 53, chapter 6, part 1; or   (4) create a restriction or an additional charge on a patient who chooses to receive drugs from a federally certified health entity or a pharmacy under contract with an entity, including but not limited to a patient's inability to fully pay a copayment. (Subsection (3) terminates June 1, 2023--sec. 26, Ch. 501, L. 2021.)   History: En. Sec. 10, Ch. 501, L. 2021. 
  33-2-2411. Enforcement -- penalties. (1) The commissioner shall enforce the provisions of this part, 33-22-170 through 33-22-177, and 33-22-180 and may examine the affairs of a pharmacy benefit manager to determine compliance with the provisions.  (2) Any examination under this section must follow the examination procedures and requirements applicable to insurers under Title 33, chapter 1, part 4, including the confidentiality provisions of 33-1-409.   (3) A pharmacy benefit manager may not be regularly examined under the same time period as required of insurers under 33-1-401 but the commissioner may examine the pharmacy benefit manager at any time if the commissioner believes it is reasonably necessary to ensure compliance with this part.   (4) The commissioner may impose a fine in accordance with 33-1-317 and 33-1-318 for a violation of this part, 33-22-170 through 33-22-177, and 33-22-180.   History: En. Sec. 11, Ch. 501, L. 2021. 
  33-2-2412. Rulemaking. The commissioner may adopt rules as necessary to implement the provisions of this part.  History: En. Sec. 12, Ch. 501, L. 2021. 
  33-2-301. Short title -- purpose -- definitions. (1) This part constitutes and may be referred to as "The Surplus Lines Insurance Law".   (2) The purpose of this part is to:   (a) protect persons seeking insurance in this state;   (b) permit surplus lines insurance to be placed with reputable and financially sound unauthorized insurers and to be exported from this state pursuant to this part;   (c) establish a system of regulation that will permit orderly access to surplus lines insurance in this state and encourage unauthorized insurers to provide new and innovative types of insurance to consumers in this state; and   (d) protect revenues of this state.   (3) As used in this part, the following definitions apply:   (a) "Affiliated" means that a person directly or indirectly controls, is controlled by, or is under common control with the insured.   (b) "Affiliated group" means any group of persons that are affiliated.   (c) "Approved risk list" means the list approved by the commissioner of the kinds of insurance presumed unobtainable from authorized insurers when Montana is the home state of the insured.   (d) "Authorized insurer" means an insurer authorized pursuant to 33-2-101 to transact insurance in this state.   (e) (i) "Business entity" means a corporation, a limited liability company, an association, a partnership, a limited liability partnership, or other legal entity.   (ii) The term does not include an individual.   (f) "Control", including the terms "controlled by" and "under common control with", means that:   (i) the person directly or indirectly or acting through one or more other persons owns, controls, or has the power to vote 25% or more of any class of voting securities of a business entity; or   (ii) the person controls in any manner the election of a majority of the directors or trustees of a business entity.   (g) (i) "Disability income insurance" has the meaning provided in 33-1-235 for:   (A) individuals employed in professional sports or the entertainment industry; or   (B) a business entity insuring a principal to cover liability or provide assurance for the business entity's loans or contracts.   (ii) Disability income insurance sold on the surplus lines market must be unavailable from or limited by an authorized insurer.   (h) "Eligible surplus lines insurer" means an unauthorized insurer that is eligible to issue surplus lines insurance under 33-2-307.   (i) "Exempt commercial purchaser" has the meaning provided in 33-2-318.   (j) "Export" means to place surplus lines insurance with an unauthorized insurer.   (k) "Home state" means, with respect to an insured:   (i) the state in which the insured maintains its principal place of business or, in the case of an individual, the individual's principal residence;   (ii) if 100% of the insured risk is located outside the state referred to in subsection (3)(k)(i), the state with the greatest allocated percentage of the insured's taxable premium for that surplus lines insurance contract;   (iii) if more than one insured from an affiliated group are named insureds on a single surplus lines insurance contract, the home state as determined under subsection (3)(k)(i) or (3)(k)(ii) for the member of the affiliated group that has the largest percentage of premium attributed to it under the surplus lines insurance contract; or   (iv) if a group policyholder pays 100% of the premium from its own funds, the home state of the group policyholder as determined under subsection (3)(k)(i) or, if a group policyholder does not pay 100% of the premiums from its own funds, the home state of the group member as determined under subsection (3)(k)(i).   (l) "Independently procured insurance" means surplus lines insurance procured directly by an insured from an eligible surplus lines insurer.   (m) "Multistate risk" means a risk covered by an unauthorized insurer with insured exposures in more than one state.   (n) "Natural disaster multiperil insurance" means any combination of flood, earthquake, and landslide insurance that may be sold as surplus lines insurance.   (o) "Principal place of business" means the state where the insured business maintains its headquarters and where the insured's high-level officers direct, control, and coordinate the business activities of the insured.   (p) "Principal residence" means the state where an individual insured resides for the greatest number of days during a calendar year or, if the insured's principal residence is located outside of any state, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is located.   (q) "Producing insurance producer" means a Montana-licensed property and casualty insurance producer dealing directly with a person seeking insurance.   (r) "Qualified risk manager" has the meaning provided in 33-2-319.   (s) "Single-state risk" means a risk covered by an unauthorized insurer with exposures in only one state.   (t) "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.   (u) (i) "Surplus lines insurance" means any property, casualty, or inland marine insurance permitted in a state to be placed directly or through a surplus lines insurance producer with an unauthorized insurer eligible to accept the insurance. The term includes independently procured insurance.   (ii) The term does not include the kinds of insurance exempted under 33-2-317.   (v) "Surplus lines insurance producer" means an individual or business entity licensed under 33-2-305 to place surplus lines insurance on risks resident, located, or to be performed in this state with unauthorized insurers eligible to accept the insurance.   (w) "Unauthorized insurer" means, with respect to a state, an insurer not authorized to transact the business of insurance in the state. The term includes an insurance exchange authorized under the laws of another state. The term does not include a risk retention group, as that term is defined in the Liability Risk Retention Act of 1986, 15 U.S.C. 3901(a)(4).   History: En. Sec. 184, Ch. 286, L. 1959; R.C.M. 1947, 40-3409; amd. Sec. 1, Ch. 537, L. 1987; (3) En. Sec. 2, Ch. 537, L. 1987; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 8, Ch. 379, L. 1995; amd. Sec. 3, Ch. 271, L. 2009; amd. Sec. 1, Ch. 313, L. 2009; amd. Sec. 2, Ch. 350, L. 2011; amd. Sec. 1, Ch. 50, L. 2015; amd. Sec. 2, Ch. 48, L. 2019; amd. Sec. 1, Ch. 410, L. 2019.  
  33-2-302. Home state exclusive authority -- conditions precedent to sale of surplus lines insurance. (1) Pursuant to the Nonadmitted and Reinsurance Reform Act of 2010, Title V, subtitle B, of Public Law 111-203, the transaction of surplus lines insurance is subject to the statutory and regulatory requirements of the home state of the insured, regardless of whether a multistate risk is covered. If, at the time of the surplus lines insurance transaction, the home state:   (a) is Montana, the surplus lines insurance transaction is subject to the applicable statutory and regulatory requirements in Montana; or   (b) is not Montana, the Montana statutory and regulatory requirements regarding the surplus lines insurance transaction are preempted by the statutory and regulatory requirements of the home state.   (2) When Montana is the home state at the time of the surplus lines insurance transaction, the following apply:   (a) A producing insurance producer may request a surplus lines insurance producer to place or a surplus lines insurance producer may place a contract of insurance with an unauthorized insurer if:   (i) the insurer is an eligible surplus lines insurer;   (ii) the line of insurance or the full amount of the line of insurance cannot be obtained from authorized insurers or, in the case of a renewal, the line of insurance has not become available from an authorized insurer, as evidenced by one of the following:   (A) the producing insurance producer making a diligent effort to place the business with a minimum of three insurers authorized and actually transacting that line of business in this state. If fewer than three insurers are authorized and actually transacting the line of business in this state, diligent effort must be met by searching this lesser market.   (B) the appearance on the current approved risk list of the kind of insurance being sought; or   (C) the insurance is natural disaster multiperil insurance; and   (iii) all other requirements of this part are met.   (b) A producing insurance producer is not required to satisfy the search requirements in subsection (2)(a)(ii) if:   (i) the premium rate quoted by an authorized insurer is at least 10% higher than the premium rate quoted by an unauthorized insurer;   (ii) the unauthorized insurer is eligible under 33-2-307; and   (iii) the unauthorized insurer or the surplus lines insurance producer that placed the contract of insurance with the unauthorized insurer has provided the insured with disclosure information in a form and content approved by the commissioner.   (c) A producing insurance producer is not required to satisfy the search requirements in subsection (2)(a)(ii) if:   (i) the insured is an exempt commercial purchaser;   (ii) the producing insurance producer placing the coverage has disclosed to the exempt commercial purchaser that the insurance may or may not be available from an authorized insurer that may provide greater protection with more regulatory oversight; and   (iii) the exempt commercial purchaser has subsequently requested in writing to the producing insurance producer that the coverage be placed with the surplus lines insurer.   History: En. Secs. 185, 186, Ch. 286, L. 1959; R.C.M. 1947, 40-3410, 40-3411; amd. Sec. 1, Ch. 112, L. 1979; amd. Sec. 3, Ch. 537, L. 1987; amd. Sec. 1, Ch. 285, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 3, Ch. 451, L. 1993; amd. Sec. 9, Ch. 379, L. 1995; amd. Sec. 2, Ch. 191, L. 2005; amd. Sec. 5, Ch. 350, L. 2011; amd. Sec. 2, Ch. 50, L. 2015; amd. Sec. 3, Ch. 48, L. 2019.  
  33-2-303. Filing and endorsement of contract -- submission form. (1) Each insurance contract, cover note, or certificate of insurance procured and delivered as surplus lines insurance under this part, along with a submission form prescribed by the commissioner by rule, must be filed with:   (a) the commissioner if Montana is the home state of the insured and:   (i) the coverage is for a single-state risk; or   (ii) the commissioner has not entered an agreement pursuant to 33-2-323 for multistate risks;   (b) the clearinghouse, established pursuant to 33-2-323, if in operation and if the commissioner has entered an agreement pursuant to 33-2-323 for multistate risks.   (2) The commissioner shall establish by rule a submission form for reporting surplus lines transactions. The commissioner may establish different submission forms for insureds that independently procured insurance, surplus lines insurance producers, single-state risks, and multistate risks. The submission form for surplus lines insurance producers must include:   (a) information regarding the producing producer's diligent efforts to place the coverage with authorized insurers and the results of the efforts; and   (b) the producing insurance producer's affirmation that the producer has expressly advised the insured prior to placing the insurance that:   (i) the surplus lines insurer with whom the insurance is placed is not authorized in this state and is not subject to the same supervision as an authorized insurer; and   (ii) in the event of the insolvency of the surplus lines insurer, the property and casualty guaranty fund of the state will not pay losses under the surplus lines coverage.   (3) A submission form filed under this section is subject to public inspection.   (4) The commissioner may establish by rule an endorsement to be made on each insurance contract, cover note, or certificate of insurance procured and delivered as surplus lines insurance by a surplus lines insurance producer under this part advising the insured that the coverage is issued by an unauthorized insurer that is not covered by the property and casualty guaranty fund of this state if the unauthorized insurer becomes insolvent. The surplus lines insurance producer shall properly fill in and sign the endorsement.   History: En. Sec. 187, Ch. 286, L. 1959; R.C.M. 1947, 40-3412; amd. Sec. 4, Ch. 537, L. 1987; amd. Sec. 2, Ch. 285, L. 1989; amd. Sec. 9, Ch. 713, L. 1989; amd. Sec. 6, Ch. 350, L. 2011.  
  33-2-304. Surplus lines insurance valid. Insurance contracts procured as surplus lines insurance from unauthorized insurers in accordance with this law shall be fully valid and enforceable as to all parties and shall be given acceptance and recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.   History: En. Sec. 188, Ch. 286, L. 1959; R.C.M. 1947, 40-3413; amd. Sec. 5, Ch. 537, L. 1987.  
  33-2-305. Licensing of surplus lines insurance producer -- license fee. (1) If Montana is the home state of the insured, the person placing a contract of surplus lines insurance with an unauthorized insurer must possess a current surplus lines insurance producer's license issued by the commissioner.   (2) The commissioner shall issue licenses to persons to act as surplus lines insurance producers on either a resident or nonresident basis. To be eligible for a resident surplus lines insurance producer license, the person must hold a current property and casualty insurance producer license.   (3) Persons applying for a resident surplus lines insurance producer license shall:   (a) remit to the commissioner the fee prescribed by 33-2-708; and   (b) submit to the commissioner a completed license application in a form and manner approved by the commissioner.   (4) Persons applying for a nonresident surplus lines insurance producer license shall comply with 33-17-401.   (5) The licensee shall renew the license on a form prescribed by the commissioner. The commissioner may establish rules for biennial renewal of the license. A license lapses if not renewed.   (6) A business entity is eligible to be licensed as a surplus lines insurance producer if:   (a) the business entity license lists the individuals within the business entity who have satisfied the requirements of this part to become surplus lines insurance producers; and   (b) only those individuals listed on the business entity license transact surplus lines insurance.   (7) This section may not be construed to require agents, producers, or brokers acting as intermediaries between a surplus lines insurance producer and an unauthorized insurer under this part to hold a valid Montana surplus lines insurance producer's license.   (8) This section may not be construed to require a surplus lines insurance producer license for independently procured insurance.   (9) The commissioner may participate in the national association of insurance commissioners' producer licensing database regarding surplus lines insurance producer licensing.   History: En. Sec. 189, Ch. 286, L. 1959; R.C.M. 1947, 40-3414; amd. Sec. 6, Ch. 537, L. 1987; amd. Sec. 3, Ch. 285, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 1, Ch. 180, L. 1991; amd. Sec. 4, Ch. 451, L. 1993; amd. Sec. 10, Ch. 379, L. 1995; amd. Sec. 6, Ch. 427, L. 2003; amd. Sec. 3, Ch. 469, L. 2005; amd. Sec. 4, Ch. 271, L. 2009; amd. Sec. 2, Ch. 313, L. 2009; amd. Sec. 7, Ch. 350, L. 2011.  
  33-2-306. Surplus lines insurance producer's authority under license -- acceptance of business from other insurance producers. (1) Under a surplus lines insurance producer's license, the licensee may place surplus lines insurance, in compliance with this part, with a foreign or alien insurer not authorized to transact insurance in this state and may act as a surplus lines insurance producer in this state for the insurer.   (2) The surplus lines insurance producer may accept surplus lines insurance from a licensed insurance producer of an authorized insurer or, if the commissioner agrees in advance, through an individual or business entity that has not been appointed as an insurance producer in this state and may provide compensation for the service, notwithstanding 33-17-1103.   (3) A surplus lines insurance producer who places or renews surplus lines insurance in accordance with subsection (1) may collect an inspection fee for the actual costs of inspecting the risk to be covered.   History: En. Sec. 190, Ch. 286, L. 1959; R.C.M. 1947, 40-3415; amd. Sec. 7, Ch. 537, L. 1987; amd. Sec. 4, Ch. 285, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 2, Ch. 180, L. 1991; amd. Sec. 1080, Ch. 56, L. 2009; amd. Sec. 5, Ch. 271, L. 2009; amd. Sec. 3, Ch. 313, L. 2009.  
  33-2-307. Requirements for eligible surplus lines insurers -- list of eligible surplus lines insurers. (1) If an unauthorized insurer is domiciled in any state, a surplus lines insurance producer may not place insurance with that unauthorized insurer unless, at the time of placement, the unauthorized insurer:  (a) is authorized to issue the same kind of property or casualty insurance in its domiciliary jurisdiction; and   (b) maintains capital and surplus or its equivalent under the laws of its state of domicile, which equals the greater of:   (i) the minimum capital and surplus requirements of 33-2-109 and 33-2-110; or   (ii) $15 million. An insurer possessing less than $15 million capital and surplus may satisfy the requirements of this subsection upon an affirmative finding of acceptability by the commissioner. The commissioner's finding must be based on factors that include:   (A) the quality of management, capital, and surplus of a parent company;   (B) company underwriting profit and investment income trends;   (C) market availability; and   (D) company record and reputation within the industry.   (2) The commissioner may not make an affirmative finding of acceptability when the surplus lines insurer's capital and surplus is less than $4.5 million.   (3) If an unauthorized insurer is an alien insurer, a surplus lines insurance producer may not place insurance with that unauthorized insurer unless, at the time of placement, the unauthorized insurer appears on the national association of insurance commissioners' Quarterly Listing of Alien Insurers.   (4) A list of eligible surplus lines insurers must be published at least semiannually by the commissioner for a range of risks, including disability income insurance. This subsection does not require the commissioner to place or maintain the name of any unauthorized insurer on the list of eligible surplus lines insurers. An action may not lie against the commissioner or an employee of the commissioner for anything said in issuing the list of eligible surplus lines insurers referred to in this subsection.   (5) As used in this section, the following definitions apply:   (a) "Capital", as used in the financial requirements of this section, means funds invested in for stocks or other evidences of ownership.   (b) "Surplus", as used in the financial requirements of this section, means funds over and above liabilities and capital of the insurer for the protection of policyholders.   History: En. Sec. 191, Ch. 286, L. 1959; R.C.M. 1947, 40-3416; amd. Sec. 6, Ch. 303, L. 1981; amd. Sec. 8, Ch. 537, L. 1987; (4) En. Sec. 9, Ch. 537, L. 1987; amd. Sec. 2, Ch. 713, L. 1989; amd. Sec. 5, Ch. 451, L. 1993; amd. Sec. 11, Ch. 379, L. 1995; amd. Sec. 3, Ch. 531, L. 1997; amd. Sec. 22, Ch. 227, L. 2001; amd. Sec. 10, Ch. 380, L. 2003; amd. Sec. 8, Ch. 350, L. 2011; amd. Sec. 2, Ch. 410, L. 2019; amd. Sec. 2, Ch. 471, L. 2021. 
  33-2-308. Evidence of insurance -- changes. (1) Upon placing surplus lines insurance, the surplus lines insurance producer shall promptly issue or deliver to the insured or the producing insurance producer evidence of the insurance, consisting either of the policy as issued by the insurer or, if the policy is not then available, a cover note or certificate of insurance signed or countersigned by the insurance producer. The cover note or certificate must show the subject, coverage, conditions, and term of the insurance, the premium charged and taxes collected from the insured, and the name and address of the insurer. If a direct risk is assumed by more than one insurer, the cover note or certificate must state the name and address and proportion of the entire direct risk assumed by each insurer.   (2) If after the issuance and delivery of any cover note or certificate there is a change as to the identity of the insurers or the proportion of the direct risk assumed by the insurer as stated in the original cover note or certificate or in any other material respect as to the insurance coverage evidenced by the cover note or certificate, the surplus lines insurance producer shall promptly issue or deliver to the insured a substitute cover note or certificate accurately showing the current status of the coverage and the insurers responsible under the coverage.   (3) If a policy issued by the insurer is not available upon placement of the insurance and the surplus lines insurance producer has issued and delivered a cover note or certificate as provided in subsection (2), upon request by the insured, the surplus lines insurance producer shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the cover note or certificate previously issued.   (4) A surplus lines insurance producer may not issue or deliver an evidence of insurance or purport to insure or represent that insurance will be or has been written by an eligible surplus lines insurer unless the surplus lines insurance producer has authority from the insurer to cause the risk to be insured or has received information from the insurer in the regular course of business that the insurance has been granted.   History: En. Sec. 192, Ch. 286, L. 1959; R.C.M. 1947, 40-3417; amd. Sec. 11, Ch. 537, L. 1987; amd. Sec. 5, Ch. 285, L. 1989; amd. Sec. 10, Ch. 713, L. 1989; amd. Sec. 1081, Ch. 56, L. 2009; amd. Sec. 20, Ch. 396, L. 2017.  
  33-2-309. Liability of insurer as to losses and unearned premiums. (1) As to a surplus lines risk that has been assumed by an unauthorized insurer pursuant to The Surplus Lines Insurance Law and if the premium on the surplus lines risk has been received by the surplus lines insurance producer who placed the insurance, in all questions arising under the coverage as between the insurer and the insured, the insurer is considered to have received the premium due to it for the coverage. The insurer is liable to the insured for losses covered by the insurance and for unearned premiums that may become payable to the insured upon cancellation of the insurance, whether or not in fact the surplus lines insurance producer is indebted to the insurer with respect to the insurance or for any other cause. This provision does not affect rights as between the insurer and the surplus lines insurance producer.   (2) A payment of premium to a surplus lines insurance producer acting for a person other than individually in negotiating, continuing, or reviewing a policy of insurance under this part is considered to be payment to the insurer, notwithstanding any conditions or stipulations that may be inserted in the policy or contract.   (3) Each unauthorized insurer assuming a surplus lines direct risk under The Surplus Lines Insurance Law is considered to have subjected itself to the terms of this section.   History: En. Sec. 193, Ch. 286, L. 1959; R.C.M. 1947, 40-3418; amd. Sec. 12, Ch. 537, L. 1987; amd. Sec. 6, Ch. 285, L. 1989; amd. Sec. 11, Ch. 713, L. 1989; amd. Sec. 1082, Ch. 56, L. 2009.  
  33-2-310. Records -- tax and fee statement. (1) Each surplus lines insurance producer shall keep a separate record and account of all business transacted under the producer's license, including a copy of each daily report, if any, or of each policy, certificate of insurance, cover note, or other evidence of insurance issued or delivered by the producer. The records must be available for examination by the commissioner at any reasonable time within 5 years after the issuance of the surplus lines insurance to which it relates.   (2) By the reporting date established by the commissioner by rule, the surplus lines insurance producer shall file with the commissioner or with the clearinghouse if requested by the commissioner a tax and fee statement for the preceding reporting period. The commissioner shall establish by rule the content and form of the tax and fee statement that must include but is not limited to:   (a) name and principal residence of the insured or the address at which the insured maintains its principal place of business;   (b) a brief and general description of the risk or exposure insured and where located;   (c) name and home office address of each insurer providing the surplus lines insurance;   (d) amount of each surplus lines insurance policy, the premium rate, and the gross premium charged for the policy;   (e) date and term of the policy;   (f) amount of premium returned on each policy canceled or not taken;   (g) amount of tax and other sums to be collected from the insured;   (h) identity of the producing insurance producer; and   (i) additional information that the commissioner may reasonably require.   (3) If Montana is the home state of the insured, an insured that has independently procured insurance shall report the surplus lines insurance transaction to the commissioner or the clearinghouse if requested by the commissioner in a manner and format prescribed by the commissioner. The insured is responsible for payment of the taxes, stamping fees, and clearinghouse processing fees associated with the surplus lines insurance transaction and is subject to the penalties under this part for failure to timely pay the taxes and fees.   History: En. Sec. 194, Ch. 286, L. 1959; R.C.M. 1947, 40-3419; amd. Sec. 13, Ch. 537, L. 1987; amd. Sec. 7, Ch. 285, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 1083, Ch. 56, L. 2009; amd. Sec. 9, Ch. 350, L. 2011.  
  33-2-311. Tax on surplus lines insurance. (1) Except as provided in 33-2-323, when this state is the home state of the insured, the surplus lines insurance producer shall collect from the insured and pay to the commissioner a tax on premiums collected for surplus lines insurance transacted in this state. The amount of premiums collected and the tax rate must be computed in the same manner as provided in 33-2-705 as to premiums of authorized insurers, except that amounts collected from the insured specifically for applicable state and federal taxes in excess of the premium otherwise required, or fees imposed by the surplus lines insurance producer pursuant to 33-2-320, are not considered to be part of the premium for the purposes of the computation. Upon filing of the tax and fee statement referred to in 33-2-310, the surplus lines insurance producer shall pay to the commissioner the amount of tax owing as to surplus lines insurance business transacted by the surplus lines insurance producer during the preceding reporting period as well as the stamping fee on the premium payable by the insured regardless of whether the coverage includes risks or exposures partially located or to be performed in another state.   (2) Except as provided in 33-2-323, if this state is not the home state of the insured, the commissioner may not collect any tax or stamping fee regardless of whether the coverage includes risks or exposures partially located or to be performed in this state.   (3) The commissioner by rule shall establish procedures that provide for the collection and payment of premium taxes, as well as the reporting of premium tax and surplus lines insurance transaction data, in accordance with the provisions of the Nonadmitted and Reinsurance Reform Act of 2010, Title V, subtitle B, of Public Law 111-203, for payment of taxes on this state's portion of risks covered by surplus lines insurance policies transacted outside this state that cover risks with exposures both in this state and outside this state.   History: En. Sec. 195, Ch. 286, L. 1959; R.C.M. 1947, 40-3420; amd. Sec. 2, Ch. 664, L. 1979; amd. Sec. 14, Ch. 537, L. 1987; amd. Sec. 2, Ch. 622, L. 1987; amd. Sec. 2, Ch. 713, L. 1989; amd. Sec. 1084, Ch. 56, L. 2009; amd. Sec. 10, Ch. 350, L. 2011; amd. Sec. 2, Ch. 223, L. 2015.  
  33-2-312. Penalty for failure to file statement, pay tax, or pay stamping fee. (1) A surplus lines insurance producer or an insured that independently procured insurance that fails to file the tax and fee statement as required under 33-2-310 or to pay the taxes as required under 33-2-311 is liable for a penalty of $25 for each day of delinquency, commencing 30 calendar days after the due date established by the commissioner by rule. The tax and penalty may be recovered in an action instituted by the commissioner in the name of the state in any court of competent jurisdiction with the attorney general representing the commissioner. The penalty when collected, unless collected by a justice's court, must be paid to the commissioner, forwarded to the state treasurer, and placed to the credit of the general fund. The surplus lines insurance producer's license is also subject to revocation as provided in 33-2-313.   (2) If a surplus lines insurance producer or an insured that independently procured insurance does not pay the stamping fee provided for in 33-2-321, the commissioner may impose a penalty of 25% of the stamping fee due plus 1.5% a month from the time of delinquency until the stamping fee is paid.   History: En. Sec. 196, Ch. 286, L. 1959; R.C.M. 1947, 40-3421; amd. Sec. 15, Ch. 537, L. 1987; amd. Sec. 20, Ch. 557, L. 1987; amd. Sec. 8, Ch. 285, L. 1989; amd. Sec. 2, Ch. 713, L. 1989; amd. Sec. 6, Ch. 451, L. 1993; amd. Sec. 11, Ch. 350, L. 2011.  
  33-2-313. Revocation or suspension of license. (1) The commissioner shall revoke or suspend any surplus lines insurance producer's license, together with any license as an insurance producer:   (a) if the insurance producer fails to file a tax and fee statement or to remit the tax and fee as required by law;   (b) if the insurance producer fails to keep the records or to allow the commissioner to examine the records, as required by law;   (c) if the insurance producer falsifies the submission form required by 33-2-310;   (d) if the insurance producer closes the surplus lines insurance producer office for a period of more than 30 business days, unless the commissioner grants permission otherwise;   (e) if the insurance producer violates any provision of this part; or   (f) for any of the causes for which an insurance producer's license may be revoked.   (2) The procedures provided by 33-17-1001 for the suspension, revocation, or refusal to license or renew a license or for imposing a fine on an insurance producer or applicant apply to the suspension, revocation, or refusal to license or renew a license or to imposing a fine on a surplus lines insurance producer or applicant.   (3) An insurance producer whose license has been revoked or suspended may not again be licensed within 1 year after revocation or suspension or until the insurance producer pays all penalties and delinquent taxes that are owed.   History: En. Sec. 197, Ch. 286, L. 1959; R.C.M. 1947, 40-3422; amd. Sec. 16, Ch. 537, L. 1987; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 7, Ch. 451, L. 1993; amd. Sec. 23, Ch. 227, L. 2001; amd. Sec. 12, Ch. 350, L. 2011.  
  33-2-314. Actions against insurer -- venue. Every unauthorized insurer issuing a surplus lines insurance policy under this part is considered to be doing business in this state as an unauthorized insurer and may be sued in this state upon any cause of action arising under any insurance contract so made by it. Such suit must be brought in the district court of the county wherein the plaintiff resides.   History: En. Sec. 198, Ch. 286, L. 1959; R.C.M. 1947, 40-3423; amd. Sec. 17, Ch. 537, L. 1987.  
  33-2-315. Service of process. (1) Every surplus lines insurer before transacting surplus lines insurance under this part shall designate a registered agent with the commissioner as provided in 33-1-605.   (2) Service upon such an insurer must be made pursuant to 33-1-605 or 33-1-606.   History: En. Sec. 199, Ch. 286, L. 1959; R.C.M. 1947, 40-3424; amd. Sec. 18, Ch. 537, L. 1987; amd. Sec. 6, Ch. 60, L. 2019.  
  33-2-316. Rules. The commissioner shall make reasonable rules, consistent with this part, for any of the following purposes:   (1) effectuation of The Surplus Lines Insurance Law; and   (2) establishment of procedures through which determination is to be made as to the eligibility of particular proposed coverages for placement with a surplus lines insurer or insurers.   History: En. Sec. 200, Ch. 286, L. 1959; R.C.M. 1947, 40-3425; amd. Sec. 20, Ch. 537, L. 1987; amd. Sec. 9, Ch. 285, L. 1989; amd. Sec. 12, Ch. 713, L. 1989; amd. Sec. 24, Ch. 227, L. 2001; amd. Sec. 13, Ch. 350, L. 2011.  
  33-2-317. Exemptions. The Surplus Lines Insurance Law does not apply to reinsurance or to the following kinds of insurance when placed by a licensed insurance producer of this state:   (1) wet marine insurance;   (2) insurance on property or operations of railroads engaged in interstate commerce; and   (3) insurance of aircraft owned or operated by manufacturers of aircraft or aircraft operated in scheduled interstate flight or cargo of the aircraft or against liability, other than workers' compensation and employers' liability, arising out of the ownership, maintenance, or use of the aircraft.   History: En. Sec. 201, Ch. 286, L. 1959; R.C.M. 1947, 40-3426; amd. Sec. 21, Ch. 537, L. 1987; amd. Sec. 10, Ch. 285, L. 1989; amd. Sec. 13, Ch. 713, L. 1989; amd. Sec. 4, Ch. 531, L. 1997; amd. Sec. 14, Ch. 350, L. 2011.  
  33-2-318. Exempt commercial purchaser defined. (1) An exempt commercial purchaser means an individual or business entity who at the time of placement:   (a) employs or retains a qualified risk manager to negotiate insurance coverage;   (b) has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months; and   (c) meets at least one of the following criteria:   (i) possesses a net worth in excess of $20 million, as that amount may be adjusted pursuant to subsection (2);   (ii) generates annual revenue in excess of $50 million, as that amount may be adjusted pursuant to subsection (2);   (iii) employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate;   (iv) is a not-for-profit organization or a public entity generating annual budgeted expenditures of at least $30 million, as that amount may be adjusted pursuant to subsection (2); or   (v) is a municipality with a population in excess of 50,000 persons.   (2) Effective January 1, 2015, and on every 5th subsequent January 1, the amounts in subsections (1)(c)(i), (1)(c)(ii), and (1)(c)(iv) must be adjusted to reflect the percentage of change for that 5-year period in the consumer price index for all urban consumers published by the bureau of labor statistics of the United States department of labor.   History: En. Sec. 3, Ch. 350, L. 2011.  
  33-2-319. Qualified risk manager defined. (1) A qualified risk manager means a person who:   (a) is an employee of or a third-party consultant retained by the commercial policyholder;   (b) provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis and purchases of insurance; and   (c) has the qualifications specified in subsection (2).   (2) To be a qualified risk manager, a person must have:   (a) (i) a bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the commissioner to demonstrate minimum competence in risk management; and   (ii) (A) 3 years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or   (B) one of the following designations:   (I) a designation as a chartered property and casualty underwriter (CPCU) issued by the American institute for CPCU/insurance institute of America;   (II) a designation as an associate in risk management issued by the American institute for CPCU/insurance institute of America;   (III) a designation as certified risk manager issued by the national alliance for insurance education and research;   (IV) a designation as a risk and insurance management society fellow issued by the global risk management institute;   (V) any other designation, certification, or license determined by the commissioner to demonstrate minimum competency in risk management;   (b) (i) at least 7 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and   (ii) any one of the designations specified in subsection (2)(a)(ii)(B);   (c) at least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or   (d) a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the commissioner to demonstrate minimum competence in risk management.   History: En. Sec. 4, Ch. 350, L. 2011.  
  33-2-320. Surplus lines insurance producer fee. (1) A surplus lines insurance producer may collect a flat fee per policy for business placed in the surplus lines insurance market. The fee may not exceed:   (a) $50 for a personal lines insurance policy; or   (b) $100 for a commercial lines insurance policy.   (2) The fees allowed under this section are not considered part of the premium charged to the insured and do not fall within the definition of premium provided in 33-15-102.   (3) The fees allowed under this section apply only to surplus lines insurance producers transacting surplus lines insurance business.   History: En. Sec. 1, Ch. 223, L. 2015.  
  33-2-321. Stamping fee and clearinghouse processing fee. (1) The commissioner may collect a stamping fee not to exceed 1% of the premium payable for surplus lines insurance transacted in this state. The commissioner shall establish the stamping fee by rule commensurate with the expenses of regulating surplus lines. The stamping fee must be placed in a state special revenue account to the credit of the commissioner's office and used for the expenses of the commissioner's office in regulating surplus lines insurance.   (2) If the commissioner has entered an agreement with a clearinghouse as authorized pursuant to 33-2-323 to process multistate risks and allocate and distribute taxes and fees collected, the clearinghouse may collect a processing fee from the surplus lines insurance producer or the insured that independently procured insurance. The processing fee may be a flat fee per submission, a percentage of the premium payable for surplus lines insurance, or a combination of a flat fee and a percentage of premium payable. When a percentage of premium payable is used in calculating the processing fee, the charge may not exceed 1% of the premium payable for surplus lines insurance. The commissioner shall establish the processing fee by rule to be commensurate with the clearinghouse's charges to process multistate risks and allocate and distribute taxes and fees collected to the participating states.   (3) If applicable, the surplus lines insurance producer shall collect the stamping fee and clearinghouse processing fee from the insured in addition to the premium payable for the insurance contract and any taxes and fees.   History: En. Sec. 10, Ch. 537, L. 1987; amd. Sec. 11, Ch. 285, L. 1989; amd. Secs. 1, 2, Ch. 713, L. 1989; amd. Sec. 1, Ch. 184, L. 2001; amd. Sec. 15, Ch. 350, L. 2011.  
  33-2-322. Surplus lines advisory organization -- consultation with commissioner in developing approved risk list. (1) A surplus lines insurance advisory organization of surplus lines insurance producers may be formed to:   (a) facilitate and encourage compliance by its members with the laws of this state and the rules of the commissioner relative to surplus lines insurance;   (b) communicate with organizations of authorized insurers with respect to the proper use of the surplus lines insurance market;   (c) receive and disseminate to its members information relative to surplus lines insurance; and   (d) communicate member and industry concerns to the commissioner.   (2) The surplus lines insurance advisory organization shall file with the commissioner:   (a) a copy of its constitution, its articles of agreement or association, or its certificate of incorporation;   (b) a copy of its bylaws, rules, and regulations governing its activities;   (c) a current list of its members.   (3) The commissioner may consult with the organization in regard to the development of the approved risk list and other matters concerning the regulation of surplus lines insurance transactions.   History: En. Sec. 16, Ch. 350, L. 2011.  
  33-2-323. Authorization for agreements with other state regarding multistate risks. (1) Following negotiated rulemaking under Title 2, chapter 5, the commissioner may enter into a cooperative or reciprocal agreement with other states, individually or collectively, for the purposes of collecting, allocating, and disbursing premium taxes and fees attributable to multistate risks. The allocation methodology of any agreement must be based upon readily available data, with simplicity and uniformity for the surplus lines insurance producer as a material consideration. Any agreement regarding multistate risks may require that a single, blended tax rate be used.   (2) An agreement entered into under this section must provide for:   (a) uniform eligibility standards for unauthorized insurers;   (b) uniform methods for reporting surplus lines insurance transactions and sharing information between the parties to the agreement based upon readily available data;   (c) uniform methods for allocating and reporting surplus lines insurance risk classifications based upon readily available data;   (d) uniform procedures for the collection, allocation, and distribution of taxes and fees attributable to the multistate risks;   (e) uniform disclosures to policyholders regarding the reporting and collection of premium taxes on multistate risks;   (f) an allocation methodology and resulting collection of premium tax revenue, less costs of administration and collection, that generate premium tax revenue not less than the premium tax revenue collected under 33-2-311;   (g) minimizing the data collection and reporting burden on insureds and surplus lines insurance producers;   (h) a withdrawal process that minimizes instability among the participating states and the surplus lines and insurance industries;   (i) regulatory provisions that provide certainty regarding compliance to all persons having an interest in surplus lines insurance transactions, including but not limited to insureds, regulators, surplus lines insurance producers, other insurance producers, and surplus lines insurers; and   (j) continued collection of premium taxes under 33-2-311 until the collection infrastructure under the agreement is fully operational and the provisions of the agreement are fully implemented.   (3) If the commissioner has entered into an agreement under subsection (1) for multistate risks and the agreement provides that each participating state develop a single, blended tax rate for multistate risks:   (a) the provisions of 50-3-109 are not applicable to the collection of premium taxes;   (b) the single, blended tax rate must be 3.3% on premiums and must be computed in the manner provided in 33-2-705(1) as to premiums of authorized insurers, except that amounts collected from the insured specifically for applicable state and federal taxes and in excess of the premium otherwise required are not considered to be part of the premium for the purposes of the computation; and   (c) the 3.3% tax collected must be distributed as follows:   (i) 2.75% must be considered premium taxes as provided in 33-2-705 and paid to the state general fund; and   (ii) 0.55% must be considered fire premium taxes as provided in 50-3-109 and paid to the state general fund.   (4) If a single-state risk is involved and Montana is the home state of the insured, the surplus lines transaction must be submitted to the commissioner and the commissioner shall collect the tax at the same rate and in the same manner as provided in 33-2-705.   (5) If the commissioner has entered into a cooperative or reciprocal agreement under subsection (1), the commissioner may contract with the designated clearinghouse to process multistate risks and allocate and distribute taxes and fees collected.   (6) As used in this section, "readily available data" means Montana-specific data, if any, used to rate a surplus lines insurance policy.   History: En. Sec. 17, Ch. 350, L. 2011.  
  33-2-324 and 33-2-325 reserved.  
  33-2-326. Penalties. A surplus lines insurance producer who in this state represents or aids an unauthorized insurer in violation of this part is subject to the penalties and procedures in 33-1-317 and 33-1-318.   History: En. Sec. 19, Ch. 537, L. 1987; amd. Sec. 2, Ch. 713, L. 1989; amd. Sec. 11, Ch. 380, L. 2003.  
  33-2-401. Short title. This part may be cited as the "Standard Valuation Act".   History: En. Sec. 10, Ch. 370, L. 2015.  
  33-2-402. Definitions. As used in this part, the following definitions apply unless the context clearly indicates otherwise:   (1) "Accident and health insurance" means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions.   (2) "Appointed actuary" means a qualified actuary who is appointed in accordance with the valuation manual to prepare an actuarial opinion required by this part.   (3) "Deposit-type contract" means a contract that does not incorporate mortality or morbidity risks.   (4) "Insurer" means an entity that:   (a) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in Montana and has at least one of the named contracts in force or on claim; or   (b) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in Montana.   (5) "Life insurance" means contracts that incorporate mortality risk, including annuity and pure endowment contracts.   (6) "NAIC" means the national association of insurance commissioners.   (7) (a) "Policyholder behavior" means any action taken by a policyholder, a contract holder, or any other person with the right to elect options, such as the action that a certificate holder may take under a policy or a contract subject to this part. The actions include but are not limited to allowing a policy or contract to lapse, making a premium payment or loan, or making benefit elections prescribed by the policy or contract. Other actions may be identified by rule.   (b) The term does not include events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.   (8) "Principle-based valuation" means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer. A principle-based valuation must comply with the provisions of 33-2-404.   (9) "Qualified actuary" means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American academy of actuaries qualification standards and meets the requirements specified in the valuation manual.   (10) "Tail risk" means a risk that occurs either when the frequency of low-probability events is higher than expected under a normal probability distribution or when there are observed events of very significant size or magnitude.   (11) "Valuation manual" means the valuation manual adopted by the NAIC in accordance with its model law regarding standard valuation and adopted by the commissioner by rule.   History: En. Sec. 11, Ch. 370, L. 2015.  
  33-2-403. Valuation for policies. (1) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under 33-2-407, except as provided in subsection (6) or (8) of this section.   (2) The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:   (a) the valuation manual has been adopted by the NAIC by an affirmative vote of at least 42 members or three-fourths of the members voting, whichever is greater;   (b) the standard valuation law as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75% of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident and health, health, and fraternal annual statements;   (c) the standard valuation law as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions: the 50 states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico; and   (d) the commissioner has adopted by rule the valuation manual.   (3) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual are effective on January 1 following the date when all of the following have occurred:   (a) the change in the valuation manual has been adopted by an affirmative vote representing:   (i) at least three-fourths of the members of the NAIC voting but not less than a majority of the total membership; and   (ii) members of the NAIC representing jurisdictions totaling more than 75% of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subsection (3)(a)(i): life, accident and health, health, and fraternal annual statements; and   (b) the change to the valuation manual is adopted by the commissioner by rule.   (4) The valuation manual adopted by the commissioner must specify all of the following:   (a) minimum valuation standards for and definitions of the policies or contracts subject to 33-2-407(2). The minimum valuation standards include:   (i) the commissioner's reserve valuation method for life insurance contracts, other than annuity contracts, subject to 33-2-404;   (ii) the commissioner's annuity reserve valuation method for annuity contracts subject to 33-2-407(2); and   (iii) minimum reserves for all other policies or contracts subject to 33-2-404(2).   (b) a description of the policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in 33-2-404(1) and the minimum valuation standards consistent with those requirements;   (c) for policies and contracts subject to a principle-based valuation:   (i) requirements for the format of reports to the commissioner under 33-2-404(3)(c), which must include information necessary to determine if the valuation is appropriate and in compliance with this part;   (ii) prescribed assumptions for risks over which the company does not have significant control or influence; and   (iii) procedures for corporate governance and oversight of the actuarial function as well as a process for appropriate waiver or modification of the corporate governance procedures.   (d) for policies not subject to a principle-based valuation under 33-2-404, the minimum valuation standard must either:   (i) be consistent with the minimum standard of valuation prior to the operative date of the valuation manual as determined in subsections (1) and (2) or as amended as provided in subsection (3); or   (ii) develop reserves that quantify the benefits and guarantees as well as the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring; and   (e) other components in the valuation manual that the commissioner considers necessary for the smooth operation of policies or contracts under this part. These may include but are not limited to reserve methodologies, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memoranda, transition rules, and internal controls.   (5) The commissioner shall specify by rule the data and form of the data required under 33-2-405 and to whom the data must be submitted as well as any other requirements including data analysis and reporting of analysis.   (6) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this part, the company shall, with respect to the requirements named as out of compliance with this part, comply with minimum standard valuations prescribed by the commissioner by rule.   (7) The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and comment on the appropriateness of any reserve assumption or method used by the company or to review and comment on a company's compliance with any requirement in this part. The commissioner may rely on the opinion, regarding provisions contained in this part, of a qualified actuary engaged by the insurance regulator of another state, district, or territory of the United States. As used in this subsection, the term "engage" includes employment and contracting.   (8) The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or of this part.   (9) A company shall adjust its reserves as required by the commissioner.   (10) The commissioner may take disciplinary action for violations of this section as provided in 33-1-317.   History: En. Sec. 12, Ch. 370, L. 2015.  
  33-2-404. Principle-based valuation. (1) A company domiciled in Montana shall establish reserves using a principle-based valuation that meets the conditions for policies or contracts in this section and as specified in the valuation manual.   (2) The principle-based valuation at a minimum must:   (a) quantify the benefits and guarantees as well as the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. The principle-based valuation method must reflect conditions appropriately adverse to quantify the tail risk for policies and contracts with significant tail risk.   (b) incorporate assumptions, risk analysis methods, and financial models and management techniques that are consistent with but not necessarily identical to those used within the company's overall risk assessment process. This process must recognize potential differences in financial reporting structures and any prescribed assumptions or methods.   (c) incorporate assumptions derived:   (i) as prescribed in the valuation manual; or   (ii) if not prescribed in the valuation manual, using:   (A) the company's available experience to the extent the experience is relevant and statistically credible; or   (B) other relevant and statistically credible experience whenever the company's own data is not available, relevant, or statistically credible; and   (d) provide margins for uncertainty, including adverse deviation and estimation error to the extent that the greater the uncertainty, the larger the margin and resulting reserve.   (3) A company using principle-based valuation for one or more policies or contracts subject to this section and as specified in the valuation manual shall:   (a) establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual;   (b) provide to the commissioner and its board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. These internal controls must be designed to ensure that all material risks inherent in the liabilities and associated assets subject to the principle-based valuation are included in the valuation and are performed in accordance with the valuation manual. The certification must be based on controls in place as of the end of the preceding calendar year.   (c) develop a principle-based valuation report that complies with standards prescribed in the valuation manual. This report must be filed with the commissioner upon the commissioner's request. A report under this subsection (3)(c) is required after the commissioner has adopted rules as provided in 33-2-418.   (4) A principle-based valuation may include a prescribed formulaic reserve component.   History: En. Sec. 13, Ch. 370, L. 2015.  
  33-2-405. Experience reporting. A company shall submit mortality, morbidity, policyholder behavior, expense experience, and other data as prescribed by the commissioner and in accordance with the valuation manual.   History: En. Sec. 14, Ch. 370, L. 2015.  
  33-2-406. Confidentiality -- definitions. (1) Except as provided in subsection (9), a company's confidential information is confidential information as provided in 2-6-1002 and privileged, is not subject to subpoena or discovery, and is not admissible in evidence in any private civil action.   (2) The commissioner may use the confidential information to further any regulatory or legal action brought against the company as a part of the commissioner's official duties.   (3) Neither the commissioner nor any person who receives confidential information while acting under the authority of the commissioner may be required or permitted to testify in any private civil action concerning a company's confidential information.   (4) Subject to the conditions in subsection (4)(c), the commissioner may, to assist in the performance of the commissioner's duties, share:   (a) confidential information with other state, federal, and international regulatory agencies and with the NAIC and its affiliates and subsidiaries upon agreement that the confidential information will be kept confidential; and   (b) only confidential information as defined in subsections (10)(a)(i)(A) and (10)(a)(i)(D) with:   (i) the actuarial board for counseling and discipline or its successor upon a request that states the confidential information is required for use in professional disciplinary proceedings; and   (ii) state, federal, and international law enforcement officials; and   (c) the information under this subsection (4) only if the recipient of the information has the legal authority to agree, and the recipient has agreed, to maintain the confidentiality and privileged status of the documents, materials, data, and other information in the same manner and to the same extent as required for the commissioner.   (5) (a) The commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, and other information, from:   (i) the NAIC and its affiliates and subsidiaries;   (ii) regulatory or law enforcement officials of other foreign or domestic jurisdictions; and   (iii) the actuarial board for counseling and discipline or its successor.   (b) The commissioner shall maintain as confidential or privileged any documents, materials, data, or other information received from the entities listed in subsection (5)(a) with notice or the understanding that the documents, materials, data, or other information is confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, data, or other information.   (6) The commissioner may enter into agreements governing the sharing and use of confidential information consistent with this section.   (7) A disclosure to the commissioner under this section or a sharing of confidential information authorized in this section does not constitute a waiver of any applicable privilege or claim of confidentiality for the confidential information.   (8) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this section must be recognized and enforced in any proceeding in this state, including any court proceedings.   (9) The confidential information defined in subsections (10)(a)(i)(A) and (10)(a)(i)(D) may:   (a) be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under 33-2-407 or a principle-based valuation report developed pursuant to 33-2-404(3)(c) by reason of an action required by this part;   (b) be otherwise released by the commissioner with the written consent of the company; or   (c) no longer be confidential for all portions after any portion of a memorandum in support of an opinion submitted under 33-2-407 or a principle-based valuation report developed under 33-2-404(3)(c) is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media.   (10) As used in this section, the following definitions apply:   (a) (i) "Confidential information" means:   (A) a memorandum in support of an opinion submitted under 33-2-407 and any other documents, materials, and other information, including but not limited to all working papers or copies of the working papers that were created, produced, or obtained by the commissioner or by any other person in connection with the memorandum or disclosed to the commissioner or to any other person in connection with the memorandum;   (B) subject to the provisions of subsection (10)(a)(ii)(A), all documents, materials, and other information in the course of an examination made under 33-2-403(7), including but not limited to all working papers and copies of the working papers that were created, produced, or obtained by the commissioner or by any other person in connection with the examination or disclosed to the commissioner or to any other person in connection with the examination;   (C) any reports, documents, materials, or other information developed by a company in support of or in connection with an annual certification by the company under 33-2-404(3)(b) evaluating the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including but not limited to working papers and copies of the working papers created, produced, or obtained by the commissioner or by any other person in connection with the reports, documents, materials, and other information disclosed to the commissioner or to any other person in connection with those reports, documents, materials, and other information;   (D) any principle-based valuation report developed under 33-2-404(3)(c) and any other documents, materials, and other information, including but not limited to all working papers and copies of working papers created, produced, or obtained by the commissioner or any other person in connection with the principle-based valuation report or disclosed to the commissioner or to any other person in connection with the report; and   (E) any experience data and any other documents, materials, data, and other information, including but not limited to all working papers and copies of working papers created or produced in connection with the experience data. The information under this subsection (10)(a)(i)(E) includes any potential company-identifying or personally identifiable information that is provided to or obtained by the commissioner or any other person in connection with the documents, materials, data, and other information described in this subsection (10)(a)(i)(E), including but not limited to working papers and copies of working papers created, produced, or obtained by the commissioner or any other person or disclosed to the commissioner or to any other person.   (ii) The term does not include:   (A) an examination report or other material prepared in connection with an examination made under 33-2-403(7) to the extent that the examination report or other material prepared in connection with the examination would not have been held private and confidential if prepared under 33-1-401; or   (B) any portion of confidential information that has been cited by the insurer in its marketing, provided to any governmental agency other than a state insurance department, released by the insurer to the news media, or otherwise made public by the insurer in any way.   (b) "Experience data" means any documents, materials, data, and other information submitted by a company under 33-2-405.   (c) "NAIC" means the national association of insurance commissioners and its employees, agents, consultants, and contractors.   (d) "Regulatory agency" includes the agency's employees, agents, consultants, and contractors.   History: En. Sec. 15, Ch. 370, L. 2015; amd. Sec. 69, Ch. 348, L. 2015.  
  33-2-407. Standard valuation of reserve liabilities law. (1) The commissioner shall annually value or cause to be valued the reserve liabilities (reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state issued on or before the operative date of the valuation manual. In calculating the reserves under this subsection, the commissioner may use group methods and approximate averages for fractions of a year or otherwise.  (2) The commissioner shall annually value or cause to be valued the reserve liabilities for all outstanding life insurance contracts, annuities, and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued after the operative date of the valuation manual in accordance with the valuation manual.   (3) In lieu of the valuation of the reserves required in this section of any foreign or alien insurer, the commissioner may accept any valuation made or caused to be made by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this part.   (4) Any insurer that has adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standards provided in this part may, with the approval of the commissioner, adopt any lower standard of valuation but not lower than the minimum in this section. For the purposes of this section, the holding of additional reserves previously determined by an appointed actuary to be necessary to render the opinion required in subsections (5) and (6) may not be considered to be the adoption of a higher standard of valuation.   (5) (a) Each life insurer doing business in this state prior to the operative date of the valuation manual shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by rule are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The commissioner by rule shall define the specifics of this opinion and add any other items considered necessary to its scope.   (b) Each life insurer, except as exempted by or pursuant to regulation, shall also annually include in the opinion required by subsection (5)(a) an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by rule make adequate provision for the insurer's obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. In developing the opinion, the qualified actuary shall consider the assets held by the insurer with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts.   (c) The commissioner may provide by rule for a transition period for establishing any higher reserves that the qualified actuary may consider necessary in order to render the opinion required by this subsection (5).   (d) Each opinion required by this subsection (5) must be governed by the following provisions:   (i) A memorandum, in form and substance acceptable to the commissioner as specified by rule, must be prepared to support each actuarial opinion.   (ii) If the insurer fails to provide a supporting memorandum at the request of the commissioner within a period specified by rule or if the commissioner determines that the supporting memorandum provided by the insurer fails to meet the standards prescribed by the rules or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and to prepare any supporting memorandum as is required by the commissioner.   (iii) The opinion must be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after December 31, 1996.   (iv) The opinion must apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by rule.   (v) The opinion must be based on standards adopted from time to time by the actuarial standards board and on additional standards as the commissioner may prescribe by rule.   (vi) In the case of an opinion required to be submitted by a foreign or alien insurer, the commissioner may accept the opinion filed by that insurer with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state.   (vii) Except in cases of fraud or willful misconduct, the qualified actuary is not liable for damages to any person, other than the insurer and the commissioner, for any act, error, omission, decision, or conduct with respect to the actuary's opinion.   (viii) Disciplinary action by the commissioner against the insurer or the qualified actuary must be defined in rules by the commissioner.   (6) (a) After the operative date of the valuation manual, each life insurer doing business in this state shall annually submit the opinion of a qualified actuary regarding whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by rule are:   (i) computed appropriately;   (ii) based on assumptions that satisfy contractual provisions;   (iii) consistent with prior reported amounts; and   (iv) in compliance with the applicable laws of this state.   (b) After the operative date of the valuation manual, each life insurer doing business in this state shall also annually include in the opinion required in subsection (6)(a) an opinion by the same qualified actuary on whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual make adequate provision for the company's obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. The opinion required in this subsection (6)(b) must consider the reserves and related actuarial items in light of the assets held by the company with respect to those reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts.   (c) A qualified actuary shall prepare a memorandum in support of each actuarial opinion under this subsection (6). The memorandum must be in the form and substance specified in the valuation manual and as provided by the commissioner.   (d) The opinion under this subsection (6):   (i) must be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the valuation manual;   (ii) must apply to all policies and contracts subject to this subsection (6) and to other actuarial liabilities identified in the valuation manual; and   (iii) must be based on the actuarial standards board's standards and any additional standards prescribed in the valuation manual.   (e) If the insurer fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or if the commissioner determines that the supporting memorandum provided by the insurer fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner.   (f) For an opinion required to be submitted by a foreign or alien insurer, the commissioner may accept the opinion filed by that insurer with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to an insurer domiciled in this state.   (g) (i) Except as provided in subsection (6)(g)(iii), the appointed actuary is not liable for damages to any person other than the insurer and the commissioner for any act, error, omission, decision, or conduct with respect to the appointed actuary's opinion.   (ii) The provisions of subsection (6)(g)(i) do not apply in cases of fraud or willful misconduct.   (h) The commissioner shall define by rule any disciplinary action that may be taken by the commissioner against the insurer or the appointed actuary.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(1); amd. Sec. 13, Ch. 379, L. 1995; amd. Sec. 14, Ch. 472, L. 1999; amd. Sec. 17, Ch. 370, L. 2015; Sec. 33-2-521, MCA 2013; redes. 33-2-407 by Sec. 40, Ch. 370, L. 2015; amd. Sec. 3, Ch. 471, L. 2021. 
  33-2-408. Contracts prior to the operative date of 33-20-213 -- valuation. (1) This section shall apply to only those policies and contracts issued prior to the operative date of 33-20-213.   (2) Except as otherwise provided in 33-2-410 for group annuity and pure endowment contracts, the minimum standard of valuation on all policies of domestic life insurers issued prior to January 1, 1922, shall be the American experience table of mortality and interest at 3 1/2% per annum, with preliminary term insurance for the first policy year, and for policies of such insurers issued subsequent to December 31, 1921, shall be the American experience table of mortality with interest at 3 1/2% per annum, with preliminary term insurance for the first policy year, except as follows: If the premium charged for term insurance under a limited payment life preliminary term policy providing for the payment of all premiums thereon in less than 20 years from the date of the policy or under an endowment preliminary term policy exceeds that charged for life insurance under 20-payment life preliminary term policies of the same insurer, the reserve thereon at the end of any year, including the first, shall not be less than the reserve on a 20-payment life preliminary term policy issued in the same year and at the same age, together with an amount which shall be equivalent to the accumulation of a net level premium reserve sufficient to provide for a pure endowment at the end of the premium payment period equal to the difference between the value at the end of such period of such a 20-payment life preliminary term policy and the full net level premium reserve at such time of such a limited payment life or endowment policy.   (3) Reserves for all such policies and contracts may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by this section.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(2); Sec. 33-2-522, MCA 2013; redes. 33-2-408 by Sec. 40, Ch. 370, L. 2015.  
  33-2-409. Contracts on or after operative date of 33-20-213 and prior to operative date of valuation manual -- valuation. (1) This section applies to only those policies and contracts issued prior to the date of adoption of the valuation manual, which is the operative date for the valuation manual, and on or after the operative date of 33-20-213, except as otherwise provided in 33-2-410 for group annuity and pure endowment contracts issued prior to that date.   (2) Except as otherwise provided in 33-2-410, 33-2-411, and 33-2-417(2), the minimum standard for the valuation of all the policies and contracts issued prior to October 1, 1995, is the standard provided by the laws in effect prior to October 1, 1995. Except as otherwise provided in 33-2-410, 33-2-411, and 33-2-417(2), the minimum standard for the valuation of all policies and contracts issued prior to the operative date of the valuation manual, as provided in subsection (1) of this section, is the commissioner's reserve valuation methods defined in 33-2-411, 33-2-412(3) and (4), and 33-2-417, 5% interest for group annuity and pure endowment contracts, and 3 1/2% interest for all other policies and contracts or, in the case of life insurance policies and contracts other than annuity and pure endowment contracts issued on or after March 17, 1973, 4% interest for all other policies issued prior to July 1, 1979, 5 1/2% interest for single-premium life insurance policies, and 4 1/2% interest for all other policies issued on or after July 1, 1979, and the following tables:   (a) for all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies:   (i) the 1941 commissioners standard ordinary mortality table for policies issued prior to the operative date of 33-20-206, as amended, and the 1958 commissioners standard ordinary mortality table for policies issued on or after that operative date but prior to January 1, 1989, except that for any category of the policies issued on female risks, modified net premiums and present values, referred to in 33-2-411 and 33-2-412, may be calculated, at the option of the insurer, with the approval of the commissioner, according to an age younger than the actual age of the insured;   (ii) for policies issued prior to the operative date of the valuation manual but on or after January 1, 1989:   (A) the 1980 commissioners standard ordinary mortality table;   (B) at the election of the insurer for any one or more specified policies of life insurance, the 1980 commissioners standard ordinary mortality table with 10-year select mortality factors; or   (C) any ordinary mortality table adopted after 2001 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for policies;   (iii) for policies issued on or after January 1, 2005, and before January 1, 2009, at the election of the insurer for any one or more specified policies of life insurance, the 2001 commissioners standard ordinary mortality table; or   (iv) for policies issued prior to the operative date of the valuation manual but on or after January 1, 2009, the 2001 commissioners standard ordinary mortality table;   (b) for all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies, the 1941 standard industrial mortality table for policies issued prior to the operative date of 33-20-207 and, for policies issued on or after that operative date, the 1961 commissioners standard industrial mortality table or any industrial mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;   (c) for individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies, the 1937 standard annuity mortality table or, at the option of the insurer, the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the commissioner;   (d) for group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies, the group annuity mortality table for 1951, any modification of the table approved by the commissioner, or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts;   (e) (i) for total and permanent disability benefits in or supplementary to ordinary policies or contracts:   (A) for policies or contracts issued on or after January 1, 1966, the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates adopted after 1980 by the national association of insurance commissioners that are approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;   (B) for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either the tables or, at the option of the insurer, the class 3 disability table (1926); and   (C) for policies issued prior to January 1, 1961, the class 3 disability table (1926);   (ii) any table must, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies;   (f) (i) for accidental death benefits in or supplementary to policies:   (A) for policies issued on or after January 1, 1966, the 1959 accidental death benefits table or any accidental death benefits table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;   (B) for policies issued on or after January 1, 1961, and prior to January 1, 1966, a table referenced in subsection (2)(f)(i)(A) or, at the option of the insurer, the intercompany double indemnity mortality table; and   (C) for policies issued prior to January 1, 1961, the intercompany double indemnity mortality table;   (ii) either table must be combined with a mortality table permitted for calculating the reserves for life insurance policies;   (g) for group life insurance, life insurance issued on the substandard basis, and other special benefits, the tables approved by the commissioner.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(part); amd. Sec. 1, Ch. 346, L. 1979; amd. Sec. 1, Ch. 520, L. 1983; amd. Sec. 14, Ch. 379, L. 1995; amd. Sec. 142, Ch. 42, L. 1997; amd. Sec. 4, Ch. 469, L. 2005; amd. Sec. 18, Ch. 370, L. 2015; Sec. 33-2-523, MCA 2013; redes. 33-2-409 by Sec. 40, Ch. 370, L. 2015.  
  33-2-410. Individual and group annuity and pure endowment contracts -- valuation. (1) Except as provided in 33-2-413, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this section, as defined herein, and for all annuities and pure endowments purchased on or after that operative date under group annuity and pure endowment contracts is the commissioner's reserve valuation methods defined in 33-2-411 and the following tables and interest rates:   (a) for individual annuity and pure endowment contracts issued prior to July 1, 1979, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table or any modification of this table approved by the commissioner and 6% interest for single-premium immediate annuity contracts and 4% interest for all other individual annuity and pure endowment contracts;   (b) for individual single-premium immediate annuity contracts issued on or after July 1, 1979, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table or any individual annuity mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for such contracts or any modification of such tables approved by the commissioner and 7 1/2% interest;   (c) for individual annuity and pure endowment contracts issued on or after July 1, 1979, other than single-premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 individual annuity mortality table or any individual annuity mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for such contracts or any modification of such tables approved by the commissioner and 5 1/2% interest for single-premium deferred annuity and pure endowment contracts and 4 1/2% interest for all other such individual annuity and pure endowment contracts;   (d) for all annuities and pure endowments purchased prior to July 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 group annuity mortality table or any modification of the table approved by the commissioner and 6% interest;   (e) for all annuities and pure endowments purchased on or after July 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 group annuity mortality table or any group annuity mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for such annuities and pure endowments or any modification of such tables approved by the commissioner and 7 1/2% interest.   (2) After March 17, 1973, any insurer may file with the commissioner a written notice of its election to comply with the provisions of subsection (1) after a specified date before January 1, 1979, which shall be the operative date of subsection (1) for such insurer. An insurer may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no such election, the operative date of this section for such insurer shall be January 1, 1979.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(part); amd. Sec. 9, Ch. 198, L. 1979; amd. Sec. 2, Ch. 346, L. 1979; amd. Sec. 2, Ch. 520, L. 1983; Sec. 33-2-524, MCA 2013; redes. 33-2-410 by Sec. 40, Ch. 370, L. 2015.  
  33-2-411. Commissioner's reserve valuation method. (1) Except as otherwise provided in 33-2-412(3) and (4), 33-2-417(2), and subsection (4) of this section, reserves according to the commissioner's reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, must be the excess, if any, of the present value, at the date of valuation, of future guaranteed benefits provided for by the policies, over the then present value of any future modified net premiums. The modified net premiums for any policy must be the uniform percentage of the respective contract premiums for the benefits that the present value, at the date of issue of the policy, of all modified net premiums must be equal to the sum of the then present value of the benefits provided for by the policy and the excess of subsection (1)(a) over subsection (1)(b), as follows:   (a) a net level annual premium equal to the present value, at the date of issue, of benefits provided for after the first policy year, divided by the present value, at the date of issue of an annuity of one per annum payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age 1 year higher than the age at issue of the policy.   (b) a net 1-year term premium for benefits provided for in the first policy year.   (2) (a) For each life insurance policy issued on or after January 1, 1987, for which the contract premium in the first policy year exceeds that of the second year, for which a comparable additional benefit is not provided in the first year for the excess, and that provides an endowment benefit, a cash surrender value, or a combination of both in an amount greater than the excess premium, the reserve according to the commissioner's reserve valuation method, as of any policy anniversary occurring on or before the assumed ending date as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, is, except as otherwise provided in 33-2-412, the greater of the reserve as of the policy anniversary calculated as described in subsection (1) or the reserve as of the policy anniversary calculated as described in subsection (1) with the following exceptions:   (i) the value defined in subsection (1)(a) is reduced by 15% of the amount of the excess first-year premium;   (ii) all present values of benefits and premiums are determined without reference to premiums or benefits provided for in the policy after the assumed ending date;   (iii) the policy is assumed to mature on the assumed ending date as an endowment; and   (iv) the cash surrender value provided on the assumed ending date is considered an endowment benefit.   (b) In making the comparisons in subsection (2)(a), the mortality and interest bases stated in 33-2-409 and 33-2-413 must be used.   (3) Reserves according to the commissioner's reserve valuation method for the following must be calculated by a method consistent with the principles of this section, except that any extra premiums charged because of impairments or special hazards must be disregarded in the determination of modified net premiums:   (a) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;   (b) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as amended;   (c) disability and accidental death benefits in all policies and contracts; and   (d) all other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts.   (4) (a) Subsection (4)(b) applies to any annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as amended.   (b) Reserves according to the commissioner's annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, must be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by the contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations required by the terms of the contract that become payable prior to the end of the respective contract year. The future guaranteed benefits must be determined by using the mortality table, if any, and the interest rate or rates specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.   (c) The commissioner's reserve valuation method provided by this section is subject to the provisions of the valuation manual as adopted by the commissioner.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(part); amd. Sec. 3, Ch. 346, L. 1979; amd. Sec. 6, Ch. 520, L. 1983; amd. Sec. 15, Ch. 379, L. 1995; amd. Sec. 19, Ch. 370, L. 2015; Sec. 33-2-525, MCA 2013; redes. 33-2-411 by Sec. 40, Ch. 370, L. 2015.  
  33-2-412. Limits -- options -- minimum reserves. (1) (a) An insurer's aggregate reserves for all life insurance policies, excluding disability and accidental death benefits issued on or after October 1, 1995, and prior to adoption of the valuation manual by the commissioner by rule may not be less than the aggregate reserves calculated in accordance with the methods set forth in 33-2-411, 33-2-417(2), subsection (3) of this section, and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies.   (b) After the operative date of the valuation manual, the reserve valuation methods determined by the commissioner under 33-2-411(4)(c) must be used in conjunction with the provisions of this section.   (2) Reserves for all policies and contracts issued prior to October 1, 1995, may be calculated, at the option of the insurer, according to standards that produce greater aggregate reserves for those policies and contracts than the minimum reserves required by the laws in effect immediately prior to October 1, 1995. Reserves for any category of policies, contracts, or benefits as established by the commissioner, issued on or after October 1, 1995, may be calculated at the option of the insurer according to any standards which produce greater aggregate reserves for a category than those calculated according to the minimum standard provided in this section, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, may not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for a category.   (3) If in any contract year the gross premium charged by any life insurer on any policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve on the policy or contract but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract must be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract or the reserve calculated by the method actually used for the policy or contract but using the minimum standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in 33-2-410 and 33-2-413.   (4) For every life insurance policy issued after December 30, 1986, for which the gross premium in the first policy year exceeds that of the second year, for which a comparable additional benefit is not provided in the first year for an excess, and that provides an endowment benefit, a cash surrender value, or a combination of both in an amount greater than the excess premium, subsections (1) through (3) of this section must be applied as if the method actually used in calculating the reserve for the policy were the method described in 33-2-411(1). The minimum reserve at each policy anniversary of the policy must be the greater of the minimum reserve calculated in accordance with 33-2-411 and the minimum reserve calculated in accordance with this section.   History: En. Sec. 92, Ch. 286, L. 1959; amd. Sec. 1, Ch. 61, L. 1961; amd. Sec. 1, Ch. 41, L. 1965; amd. Sec. 1, Ch. 341, L. 1973; R.C.M. 1947, 40-3011(part); amd. Sec. 4, Ch. 346, L. 1979; amd. Sec. 7, Ch. 520, L. 1983; amd. Sec. 16, Ch. 379, L. 1995; amd. Sec. 20, Ch. 370, L. 2015; Sec. 33-2-526, MCA 2013; redes. 33-2-412 by Sec. 40, Ch. 370, L. 2015.  
  33-2-413. Interest rates -- determination of minimum standard valuation. (1) For policies issued prior to the operative date of the valuation manual, the calendar year statutory valuation interest rates as established in this section must be used in determining the minimum standard for the valuation of:   (a) all life insurance policies issued in a particular calendar year on or after January 1, 1989;   (b) all individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1984;   (c) all annuities and pure endowments purchased in a particular calendar year on or after January 1, 1984, under group annuity and pure endowment contracts; and   (d) the net increase, if any, in a particular calendar year after January 1, 1984, in amounts held under guaranteed interest contracts.   (2) Except as provided in subsection (3), the calendar year statutory valuation interest rates are determined as follows and the results rounded to the nearer 1/4 of 1%, when R 1 is the lesser of R and .09, R 2 is the greater of R and .09, R is the reference interest rate established in 33-2-415, and W is the weighting factor established in 33-2-414:   (a) for life insurance:   Interest rate = .03 + W(R 1 - .03) + (W/2)(R 2 - .09);   (b) for single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:   Interest rate = .03 + W(R - .03);   (c) for other annuities with:   (i) cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subsection (2)(b), the formula for life insurance stated in subsection (2)(a) applies to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years and the formula for single-premium immediate annuities stated in subsection (2)(b) applies to annuities and guaranteed interest contracts with guarantee durations of 10 years or less;   (ii) no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single-premium immediate annuities stated in subsection (2)(b) applies; and   (iii) cash settlement options and guaranteed interest contracts with cash settlement options valued on a change-in-fund basis, the formula for single-premium immediate annuities stated in subsection (2)(b) applies.   (3) If the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than 1/2 of 1%, the calendar year statutory valuation interest rate for such life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of this subsection, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year must be determined for 1980 (using the reference interest rate defined for 1979) and must be determined for each subsequent calendar year regardless of when 33-20-208 becomes operative.   History: En. Sec. 3, Ch. 520, L. 1983; amd. Sec. 21, Ch. 370, L. 2015; Sec. 33-2-527, MCA 2013; redes. 33-2-413 by Sec. 40, Ch. 370, L. 2015.  
  33-2-414. Interest rate weighting factor. (1) The weighting factors referred to in the formulas stated in 33-2-413 are as follows:   (a) (i) for life insurance:     Guarantee Duration in Years   Weighting Factors     10 or less   .50     More than 10 but not more than 20   .45     More than 20   .35     (ii) for life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, that are guaranteed in the original policy;   (b) .80 for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options;   (c) for other annuities and for guaranteed interest contracts, except as stated in subsection (1)(b), according to the guarantee duration established in subsections (1)(c)(i) through (1)(c)(iii) and the rules and definitions established in subsections (2) through (4):   (i) for annuities and guaranteed interest contracts valued on an issue year basis:     Guarantee Duration in Years   Weighting Factor         for Plan Type         A   B   C     5 or less   .80   .60   .50     More than 5 but not more than 10   .75   .60   .50     More than 10 but not more than 20   .65   .50   .45     More than 20   .45   .35   .35           Plan Type         (ii)   A   B   C     for annuities and guaranteed interest contracts valued on a change-in-fund basis, the factors shown in subsection (1)(c)(i) increased by:   .15   .25   .05           Plan Type         (iii)   A   B   C     for annuities and guaranteed interest contracts valued on an issue year basis, other than those without cash settlement options, that do not guarantee interest on considerations received more than 1 year after issue or purchase and for annuities and guaranteed interest contracts valued on a change-in-fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors set forth in subsection (1)(c)(i) or derived in subsection (1)(c)(ii) increased by:   .05   .05   .05     (2) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities without cash settlement options and for guaranteed interest contracts without cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.   (3) Plan types used in subsection (1)(c) are:   (a) Plan Type A--No withdrawal is permitted or at any time policyholder may withdraw funds only:   (i) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company;   (ii) without an adjustment but in installments over 5 years or more; or   (iii) as an immediate life annuity.   (b) Plan Type B--   (i) Before expiration of the interest rate guarantee, no withdrawal is permitted or a policyholder may withdraw funds only:   (A) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company;   (B) without an adjustment but in installments over 5 years or more.   (ii) At the end of the interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than 5 years.   (c) Plan Type C--A policyholder may withdraw funds before expiration of the interest rate guarantee in a single sum or installments over less than 5 years either:   (i) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company; or   (ii) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.   (4) (a) An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change-in-fund basis. Guaranteed interest contracts without cash settlement options and other annuities without cash settlement options must be valued on an issue year basis.   (b) As used in subsection (4):   (i) issue year basis of valuation is a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract; and   (ii) change-in-fund basis of valuation is a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.   History: En. Sec. 4, Ch. 520, L. 1983; amd. Sec. 17, Ch. 379, L. 1995; Sec. 33-2-528, MCA 2013; redes. 33-2-414 by Sec. 40, Ch. 370, L. 2015.  
  33-2-415. Reference interest rate. (1) The reference interest rate referred to in the formulas in 33-2-413 is:   (a) for all life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moody's monthly average composite yield on seasoned corporate bonds;   (b) for single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average composite yield on seasoned corporate bonds;   (c) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on a year-of-issue basis, except as stated in subsection (1)(b), with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average composite yield on seasoned corporate bonds;   (d) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on a year-of-issue basis, except as stated in subsection (1)(b), with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average composite yield on seasoned corporate bonds;   (e) for other annuities without cash settlement options and for guaranteed interest contracts without cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's monthly average composite yield on seasoned corporate bonds; or   (f) for other annuities with cash settlement options and guaranteed interest contracts with cash settlement options valued on a change-in-fund basis, except as stated in subsection (1)(b), the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of Moody's monthly average composite yield on seasoned corporate bonds.   (2) If Moody's monthly average composite yield on seasoned corporate bonds is no longer published by Moody's investors service, inc., or if the national association of insurance commissioners determines that Moody's monthly average composite yield on seasoned corporate bonds, as published by Moody's investors service, inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the national association of insurance commissioners and approved by rule promulgated by the commissioner may be substituted.   History: En. Sec. 5, Ch. 520, L. 1983; amd. Sec. 18, Ch. 379, L. 1995; Sec. 33-2-529, MCA 2013; redes. 33-2-415 by Sec. 40, Ch. 370, L. 2015.  
  33-2-416. Deposit of reserves -- domestic life insurers. (1) Domestic life insurers shall deposit and maintain on deposit, in securities and assets, with depositaries and subject to conditions as provided for in part 6 of this chapter, an amount not less than the reserves on its outstanding life insurance policies and annuity contracts, as valued under 33-2-407 through 33-2-412, minus policy loans.   (2) Annually on or before April 1, the insurer shall deposit any additional securities or assets required under subsection (1) and related to the increase of the reserves, minus policy loans, during the preceding calendar year, as determined from the insurer's annual statement as at December 31 of the preceding year.   (3) A domestic stock life insurer may credit toward the deposit the amount of any other deposit of the insurer held under part 6 of this chapter for the protection of its policyholders or of its policyholders and creditors.   (4) Deposits of the reserves of a domestic life insurer under this section must consist of securities and assets acquired and valued in accordance with chapter 12 and part 5 of this chapter.   (5) Real estate mortgage loans and chattel mortgage loans may be made a part of the deposit by filing a verified statement of the loans with the commissioner. The statement is subject to audit at all times by the commissioner. Nonnegotiable securities deposited with the commissioner must be accompanied by transfer powers in due form. If the insurer uses real estate acquired under 33-12-207 as a deposit, then a deed of trust, mortgage, or other instrument sufficient to convey a security interest in the real estate, in a form acceptable to the commissioner, must be completed in due form and recorded prior to being deposited with the commissioner.   (6) If default occurs in the payment of interest or principal of any deposited security and the default continues for a period of 120 days, the commissioner may declare the security no longer eligible for deposit under this section.   History: En. Sec. 93, Ch. 286, L. 1959; R.C.M. 1947, 40-3012; amd. Sec; 2, Ch. 570, L. 1979; amd. Sec. 1, Ch. 427, L. 1981; amd. Sec. 19, Ch. 379, L. 1995; amd. Sec. 40, Ch. 304, L. 1999; Sec. 33-2-531, MCA 2013; redes. 33-2-416 by Sec. 40, Ch. 370, L. 2015.  
  33-2-417. Reserve calculation -- indeterminate premium plans -- minimum standards for disability plans and accident and health plans. (1) In the case of a plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of a plan of life insurance or annuity that is of a nature that the minimum reserves cannot be determined by the methods described in 33-2-411 and 33-2-412(3), the reserves that are held under the plan must:   (a) be appropriate in relation to the benefits and the pattern of premiums for that plan; and   (b) be computed by a method that is consistent with the principles of 33-2-407 through 33-2-415.   (2) The commissioner may promulgate a rule containing the minimum standards applicable to the valuation of disability plans issued prior to the operative date of the valuation manual. For accident and health insurance contracts issued on or after the operative date of the valuation manual and after the applicable effective date provided in 33-2-403, the minimum standard of valuation prescribed by the valuation manual must be used.   History: En. Sec. 76, Ch. 379, L. 1995; amd. Sec. 7, Ch. 531, L. 1997; amd. Sec. 22, Ch. 370, L. 2015; Sec. 33-2-537, MCA 2013; redes. 33-2-417 by Sec. 40, Ch. 370, L. 2015.  
  33-2-418. Rulemaking. The commissioner shall adopt rules necessary to implement the provisions of this part, including but not limited to adopting the valuation manual.   History: En. Sec. 16, Ch. 370, L. 2015.  
  33-2-501. Assets allowed. In any determination of the financial condition of an insurer, there must be allowed as assets only assets that are owned by the insurer and that consist of:   (1) cash in the possession of the insurer or in transit under its control and including the true balance of any deposit in a solvent bank or trust company;   (2) investments, securities, properties, and loans acquired or held in accordance with this code and in connection therewith the following items:   (a) interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest;   (b) declared and unpaid dividends on stock and shares unless the amount has otherwise been allowed as an asset;   (c) interest due or accrued upon a collateral loan in an amount not to exceed 1 year's interest on the loan;   (d) interest due or accrued on deposits in solvent banks and trust companies and interest due or accrued on other assets, if the interest is in the judgment of the commissioner a collectible asset;   (e) interest due or accrued on a mortgage loan in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes on the property over the unpaid principal. Interest accrued for a period in excess of 18 months may not be allowed as an asset.   (f) rent due or accrued on real property if the rent is not in arrears for more than 3 months and rent more than 3 months in arrears if the payment of the rent is adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral;   (g) the unaccrued portion of taxes paid prior to the due date on real property;   (3) premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy;   (4) the net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer;   (5) premiums in the course of collection, other than for life insurance, not more than 3 months past due, less commissions payable on the premiums. The limitation in this subsection does not apply to premiums payable directly or indirectly by the United States government or by any of its instrumentalities.   (6) installment premiums other than life insurance premiums to the extent of the unearned premium reserve carried on the policy to which premiums apply;   (7) notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on that basis, to the extent of the unearned premium reserves carried on the policies;   (8) the full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under chapter 2, part 12;   (9) amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty;   (10) deposits or equities recoverable from underwriting associations, syndicates, and reinsurance funds or from any suspended banking institution, to the extent considered by the commissioner available for the payment of losses and claims and at values to be determined by the commissioner;   (11) electronic data processing equipment if the cost of the equipment is amortized in full over a period of not to exceed 8 calendar years. However, the amount of the asset allowed may not exceed 1% of the total of the other allowable assets of the insurer.   (12) all assets, whether or not consistent with the provisions of this section, as may be allowed pursuant to the annual statement form approved by the commissioner for the kinds of insurance to be reported upon in the annual statement;   (13) other assets, not inconsistent with the provisions of this section, considered by the commissioner to be available for the payment of losses and claims, at values to be determined by the commissioner.   History: En. Sec. 82, Ch. 286, L. 1959; R.C.M. 1947, 40-3001; amd. Sec. 1, Ch. 570, L. 1979; amd. Sec. 40, Ch. 596, L. 1993; amd. Sec. 12, Ch. 379, L. 1995.  
  33-2-502. Assets expressly not allowed. In addition to assets impliedly excluded by the provisions of 33-2-501, the following expressly may not be allowed as assets in any determination of the financial condition of an insurer:   (1) goodwill, trade names, and other like intangible assets;   (2) advances to officers, other than policy loans, whether secured or not, and advances to employees, insurance producers, and other persons on personal security only;   (3) stock issued and owned by the insurer, any equity in the stock issued by the insurer, loans secured by the stock issued by the insurer, or any proportionate interest in the stock acquired or held through the ownership by the insurer of an interest in another firm, corporation, or business unit;   (4) furniture, fixtures (other than electronic data processing machines authorized under 33-2-501(11)), furnishings, safes, vehicles, libraries, stationery, literature, and supplies, except:   (a) in the case of title insurers, materials and plants that the insurer is expressly authorized to invest in under 33-25-211; and   (b) in the case of any insurer, personal property that the insurer is permitted to hold pursuant to chapter 12, that is acquired through foreclosure of chattel mortgages acquired pursuant to 33-12-207 or 33-12-307, or that is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office, and similar purposes;   (5) the amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value of the investments as determined under this title; and   (6) prepaid expenses.   History: En. Sec. 84, Ch. 286, L. 1959; R.C.M. 1947, 40-3003; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 39, Ch. 304, L. 1999; amd. Sec. 13, Ch. 472, L. 1999.  
  33-2-503. Treatment of assets. Assets may be allowed as deductions from corresponding liabilities, liabilities may be charged as deductions from assets, and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to the insurer as prescribed by the commissioner.   History: En. Sec. 83, Ch. 286, L. 1959; R.C.M. 1947, 40-3002; amd. Sec. 1085, Ch. 56, L. 2009.  
  33-2-504 through 33-2-510 reserved.  
  33-2-511. Liabilities chargeable against assets. In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:   (1) the amount of its capital stock outstanding, if any;   (2) the amount, estimated consistent with the provisions of this code, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof;   (3) with reference to life and disability insurance and annuity contracts:   (a) the amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this code which are applicable thereto;   (b) reserves for disability benefits, for both active and disabled lives;   (c) reserves for accidental death benefits;   (d) any additional reserves which may be required by the commissioner, consistent with practice formulated or approved by the national association of insurance commissioners, on account of such insurance;   (4) with reference to insurance other than specified in subsection (3) of this section and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this part;   (5) taxes, expenses, and other obligations due or accrued at the date of the statement.   History: En. Sec. 85, Ch. 286, L. 1959; R.C.M. 1947, 40-3004.  
  33-2-512. Unearned premium reserve for property, casualty, and surety. (1) As to insurance against loss or damage to property, except as provided in 33-2-513, and as to all general casualty insurance and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.   (2) The commissioner may require that such reserves shall be equal to the unearned portions of the gross premiums in force after deducting applicable reinsurance in solvent insurers as computed on each respective risk from the policy's date of issue. If the commissioner does not so require, the portions of the gross premium in force, less applicable reinsurance in solvent insurers, to be held as an unearned premium reserve, shall be computed according to the following table:     Term for Which Policy   Reserve for Unearned       Was Written   Premium            1 year or less     1/2      2 years     1st year 3/4        2nd year 1/4       3 years     1st year 5/6        2nd year 1/2         3rd year 1/6       4 years     1st year 7/8        2nd year 5/8         3rd year 3/8         4th year 1/8       5 years     1st year 9/10        2nd year 7/10         3rd year 1/2         4th year 3/10         5th year 1/10       Over 5 years     pro rata    (3) In lieu of computation according to the foregoing table, the insurer at its option may compute all of such reserves on a monthly or more frequent pro rata basis.   (4) After adopting a method for computing such reserve, an insurer shall not change methods without approval of the commissioner.   (5) This section does not apply to title insurance.   History: En. Sec. 86, Ch. 286, L. 1959; R.C.M. 1947, 40-3005.  
  33-2-513. Unearned premium reserve for marine and transportation insurance. As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned and the commissioner may require the insurer to carry a reserve equal to 100% of premiums on trip risks written during the month ended as of the date of statement.   History: En. Sec. 87, Ch. 286, L. 1959; R.C.M. 1947, 40-3006.  
  33-2-514. Reserve for disability insurance. (1) For all disability insurance policies, the insurer shall maintain an active life reserve that places a sound value on its liabilities under the policies and that may not be less than the pro rata gross unearned premiums for the policies.   (2) The commissioner may promulgate rules to define additional standards for reserve requirements.   History: En. Sec. 88, Ch. 286, L. 1959; R.C.M. 1947, 40-3007; amd. Sec. 5, Ch. 531, L. 1997.  
  33-2-515. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 89, Ch. 286, L. 1959; R.C.M. 1947, 40-3008.  
  33-2-516. Inadequate reserves -- increase required. If loss experience shows that an insurer's loss reserves, however computed or estimated, are inadequate, the commissioner shall require the insurer to maintain loss reserves in such increased amount as is needed to make them adequate.   History: En. Sec. 90, Ch. 286, L. 1959; R.C.M. 1947, 40-3009.  
  33-2-517. Title insurance reserves. (1) In addition to an adequate reserve as to outstanding losses as required under 33-2-511, a title insurer shall maintain a guaranty fund or unearned premium reserve of not less than an amount computed as follows:   (a) Ten percent of the total amount of the risk premiums written in the calendar year for title insurance contracts must be assigned originally to the reserve.   (b) During each of the 20 years next following the year in which the title insurance contract was issued, the reserve applicable to the contract must be reduced by 5% of the original amount of the reserve.   (2) The reserve sums required by subsection (1) for unearned premiums on contracts of title insurance must at all times and for all purposes be considered and constitute unearned portions of the original premiums and must be held in trust for the benefit of policyholders.   (3) The reduction of the unearned premium reserve required by subsection (1)(b) must be made for all title insurance contracts issued after December 31, 1958, with respect to which 10% of the risk premiums have been assigned to the reserve pursuant to subsection (1)(a). If the insurer has not reduced the amount of its unearned premium reserves pursuant to subsection (1)(b) for a previous year or years, the insurer shall make the reduction for the prior year or years in its next accounting year.   History: En. Sec. 91, Ch. 286, L. 1959; amd. Sec. 1, Ch. 96, L. 1977; R.C.M. 1947, 40-3010; amd. Sec. 6, Ch. 531, L. 1997.  
  33-2-518. Loss and loss expense reserves for property and casualty insurance. (1) (a) In determining the financial condition of a property and casualty insurer for the purpose of applying the provisions of this chapter and in any financial statement or report of an insurer, loss reserves and loss expense reserves at least equal to the amounts required under the provisions of this section must be included in the insurer's liabilities. The date from which the determination, statement, or report is made is, for the purpose of this part, the date of determination.   (b) Accepted actuarial standards as adopted by the actuarial standards board must be taken into consideration for the purpose of determining the loss reserves and loss expense reserves.   (2) Except as provided in subsections (3) and (4), the reserves for all outstanding losses and loss expenses must include the following:   (a) the aggregate estimated amounts due or to become due on account of all known losses, claims, and loss expenses incurred but not paid, including the estimated liability on any notice received by the insurer of the occurrence of any event that may result in a loss; and   (b) the aggregate amounts of liability for all losses and loss expenses incurred for which notice has not been received, estimated in accordance with the insurer's prior experience, if any, or otherwise in accordance with Montana industry experience, or countrywide industry experience if this state's experience is not credible, for similar contracts of insurance. The estimated liabilities for losses under all bonds, policies, or contracts of fidelity insurance may not be less than 10% of the net premiums in force, and the estimated liabilities for all of those losses under all the insurer's surety contracts may not be less than 5% of the net premiums in force.   (3) Except as provided in subsection (4), tabular reserves for outstanding losses under policies of workers' compensation insurance may be actuarially calculated for both indemnity and medical payments. The loss adjustment expenses are not eligible for discounting. Tabular reserves are those reserves that are:   (a) calculated using discounts determined with reference to actuarial tables, which incorporate mortality, interest, not to exceed 4%, remarriage, and other contingencies applied to a reasonably determinable payment stream associated with lifetime benefit cases; or   (b) annuities certain, such as those arising from structured settlements.   (4) Whenever, in the judgment of the commissioner, the loss and loss expense reserves of any property and casualty insurer doing business in this state, calculated in accordance with the provisions of this section, are inadequate or excessive, the commissioner may prescribe any other method that will produce adequate and reasonable reserves.   (5) The excess, if any, of statutory reserves over statement reserves must be calculated in accordance with the annual statement instructions adopted by the national association of insurance commissioners.   History: En. Sec. 43, Ch. 531, L. 1997.  
  33-2-519 and 3-2-520 reserved.  
  33-2-521. Renumbered 33-2-407. Sec. 40, Ch. 370, L. 2015.  
  33-2-522. Renumbered 33-2-408. Sec. 40, Ch. 370, L. 2015.  
  33-2-523. Renumbered 33-2-409. Sec. 40, Ch. 370, L. 2015.  
  33-2-524. Renumbered 33-2-410. Sec. 40, Ch. 370, L. 2015.  
  33-2-525. Renumbered 33-2-411. Sec. 40, Ch. 370, L. 2015.  
  33-2-526. Renumbered 33-2-412. Sec. 40, Ch. 370, L. 2015.  
  33-2-527. Renumbered 33-2-413. Sec. 40, Ch. 370, L. 2015.  
  33-2-528. Renumbered 33-2-414. Sec. 40, Ch. 370, L. 2015.  
  33-2-529. Renumbered 33-2-415. Sec. 40, Ch. 370, L. 2015.  
  33-2-530 reserved.  
  33-2-531. Renumbered 33-2-416. Sec. 40, Ch. 370, L. 2015.  
  33-2-532. Repealed. Sec. 40, Ch. 469, L. 2005.   History: En. Sec. 94, Ch. 286, L. 1959; R.C.M. 1947, 40-3013; amd. Sec. 41, Ch. 596, L. 1993.  
  33-2-533. Repealed. Sec. 40, Ch. 469, L. 2005.   History: En. Sec. 95, Ch. 286, L. 1959; R.C.M. 1947, 40-3014; amd. Sec. 42, Ch. 596, L. 1993.  
  33-2-534. Repealed. Sec. 40, Ch. 469, L. 2005.   History: En. Sec. 96, Ch. 286, L. 1959; R.C.M. 1947, 40-3015; amd. Sec. 2, Ch. 534, L. 1987; amd. Sec. 41, Ch. 304, L. 1999.  
  33-2-535. Repealed. Sec. 40, Ch. 469, L. 2005.   History: En. Sec. 97, Ch. 286, L. 1959; R.C.M. 1947, 40-3016.  
  33-2-536. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 8, Ch. 520, L. 1983.  
  33-2-537. Renumbered 33-2-417. Sec. 40, Ch. 370, L. 2015.  
  33-2-601. Authorized deposits of insurers. The following deposits of insurers when made through the commissioner must be accepted and held and are subject to the provisions of this part:   (1) deposits required under this code for authority to transact insurance in this state;   (2) deposits of domestic insurers when required by the laws of other states, provinces, and countries as a condition for the authority to transact insurance; or   (3) deposits of reserves made by domestic life insurers under 33-2-416.   History: En. Sec. 132, Ch. 286, L. 1959; R.C.M. 1947, 40-3201; amd. Sec. 7, Ch. 227, L. 2011.  
  33-2-602. Purpose of deposit. Such deposits shall be held for purposes as follows:   (1) Deposits made in this state under 33-2-111 shall be held for the purpose stated in such section.   (2) A deposit made in this state by a domestic insurer transacting insurance in another state, province, or country and as required by the laws of such other state, province, or country shall be held for the protection of all the insurer's policyholders or all its policyholders and creditors or for such other purpose or purposes as may be specified pursuant to such laws.   (3) Deposits of reserves made by domestic life insurers under 33-2-416 shall be held for the common benefit of all the holders of its life insurance policies and annuity contracts.   (4) Deposits required pursuant to the retaliatory law, 33-2-709, shall be held for such purposes as is required by such law and as specified by the commissioner's order requiring such deposit to be made.   History: En. Sec. 133, Ch. 286, L. 1959; R.C.M. 1947, 40-3202.  
  33-2-603. Securities eligible for deposit. (1) All deposits required under 33-2-111 for authority to transact insurance in this state must consist of certificates of deposit or the following securities:   (a) United States or Canadian government bonds, notes, warrants, or other evidences of indebtedness that are direct obligations of the United States or of Canada or for which the full faith and credit of the United States or of Canada is pledged for the payment of principal and interest;   (b) state, county, municipal, and school bonds or other evidences of indebtedness that are general obligations of or are secured by a pledge of specific revenue of a state or of a province of Canada or of any of the counties, incorporated cities or towns, school districts, or other taxing districts in a state or province; and   (c) revenue bonds, notes, or other evidences of indebtedness of any state or province, political subdivision of a state or province or agency or instrumentality of a state or province that are payable from revenue or earnings specifically pledged for the payment of the principal and interest on the obligations and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained.   (2) All other deposits of a domestic insurer held in this state pursuant to the laws of another state, province, or country must be comprised of assets of the kinds described in subsection (1) and of additional kind or kinds of securities required or permitted by the laws of the state, province, or country except common stocks, mortgages of any kind, and real estate.   (3) Deposits of the reserves of a domestic life insurer must consist of securities and assets as provided under 33-2-416.   (4) Deposits of foreign insurers made in this state under the retaliatory law, 33-2-709, must consist of assets that are required by the commissioner pursuant to 33-2-709.   History: En. Sec. 134, Ch. 286, L. 1959; R.C.M. 1947, 40-3203; amd. Sec. 42, Ch. 304, L. 1999.  
  33-2-604. Depositary or custodian. (1) Deposits made in this state under this code must be made through the office of the commissioner or under custodial arrangements as required or approved by the commissioner consistent with the purposes of the deposit. The deposit must be made with a bank or trust company located in the state of Montana and selected by the insurer with the commissioner's approval. The commissioner may, with good cause, withhold or withdraw approval.   (2) For convenience purposes, in the buying, selling, and exchange of securities comprising its deposit and in the collection of interest and other income currently accruing on the securities, the insurer may, with the commissioner's advance written approval, deposit the securities under custodial arrangements with an established bank or trust company located outside this state. Any receipts representing the securities that are issued by an out-of-state custodian bank or trust company are subject to the requirements of subsection (1).   (3) The form and terms of all depositary or custodial agreements must be as prescribed or approved by the commissioner, consistent with the applicable provisions of this code.   (4) The compensation and expenses of the depositary or custodian must be borne by the insurer.   History: En. Sec. 135, Ch. 286, L. 1959; R.C.M. 1947, 40-3204; amd. Sec. 3, Ch. 169, L. 2013.  
  33-2-605. Record of deposits -- liability of commissioner and state. (1) The commissioner shall give to the depositing insurer vouchers as to all assets and securities deposited by it in this state through the commissioner as provided in this code.   (2) The commissioner shall keep a record of the assets and securities comprising each deposit, showing as far as practical the amount and market value of each item, and all transactions relative to the deposits.   (3) The commissioner and the state of Montana do not have liability as to the safekeeping of any deposit by the depositary or custodian of the deposit.   History: (1), (2)En. Sec. 136, Ch. 286, L. 1959; Sec. 40-3205, R.C.M. 1947; (3)En. Sec. 137, Ch. 286, L. 1959; Sec. 40-3206, R.C.M. 1947; R.C.M. 1947, 40-3205, 40-3206; amd. Sec. 1086, Ch. 56, L. 2009.  
  33-2-606. Assignment or conveyance of assets or securities. All securities not negotiable by delivery and deposited under this code must be duly assigned to the commissioner. In the case of securities held under custodial arrangements outside this state pursuant to 33-2-604(2), the custodian's receipt for the securities must be delivered, if negotiable, or assigned to the commissioner if legal title to the securities is vested in the commissioner. The insurer shall transfer or convey to the commissioner all other assets deposited. Upon release to the insurer of any asset or security, the commissioner shall reassign or transfer or reconvey the asset or security to the insurer.   History: En. Sec. 138, Ch. 286, L. 1959; R.C.M. 1947, 40-3207; amd. Sec. 1087, Ch. 56, L. 2009; amd. Sec. 4, Ch. 169, L. 2013.  
  33-2-607. Appraisal. The commissioner may, prior to acceptance for deposit of any particular asset or security or at any later time while deposited, have the asset or security appraised or valued by competent appraisers. The reasonable costs of any appraisal or valuation must be borne by the insurer.   History: En. Sec. 139, Ch. 286, L. 1959; R.C.M. 1947, 40-3208; amd. Sec. 1088, Ch. 56, L. 2009.  
  33-2-608. Rights of insurer during solvency. So long as the insurer remains solvent and is in compliance with this code it may:   (1) demand, receive, sue for, and recover the income from the assets or securities deposited;   (2) exchange and substitute for the deposited assets or securities, or any part thereof, other eligible assets or securities of equivalent or greater value; and   (3) at any reasonable time inspect any such deposit.   History: En. Sec. 140, Ch. 286, L. 1959; R.C.M. 1947, 40-3209.  
  33-2-609. Repealed. Sec. 24, Ch. 227, L. 2011.   History: En. Sec. 141, Ch. 286, L. 1959; R.C.M. 1947, 40-3210.  
  33-2-610. Levy upon deposit. No judgment creditor or other claimant of an insurer shall have the right to levy upon any of the assets or securities held in this state as a deposit for the protection of the insurer's policyholders or policyholders and creditors. As to deposits pursuant to the retaliatory law, 33-2-709, levy thereupon shall be permitted if so provided in the commissioner's order under which the deposit is made.   History: En. Sec. 142, Ch. 286, L. 1959; R.C.M. 1947, 40-3211.  
  33-2-611. Deficiency of deposit -- revocation of certificate. If for any reason the market value of assets and securities of an insurer held on deposit in this state or in another state under custodial arrangements authorized by 33-2-604(2) falls below the amount required under this code to be held, the insurer shall promptly deposit other or additional assets or securities eligible for deposit under this part and in an amount sufficient to cure the deficiency. If the insurer has failed to cure the deficiency within 20 days after receipt of notice of the deficiency by certified mail from the commissioner, the commissioner shall revoke the insurer's certificate of authority.   History: En. Sec. 143, Ch. 286, L. 1959; R.C.M. 1947, 40-3212; amd. Sec. 5, Ch. 169, L. 2013.  
  33-2-612. Duration and release of deposit. (1) Every deposit made in this state by an insurer pursuant to this code, including assets and securities held in another state under custodial arrangements permitted by 33-2-604(2), must be held as long as there is outstanding any liability of the insurer as to which the deposit was required, or if a deposit was required under the retaliatory law, 33-2-709, the deposit must be held for as long as the basis of the retaliation exists.   (2) Upon the request of a domestic insurer, the commissioner shall return to the insurer the whole or any portion of the assets and securities of the insurer held on deposit when the commissioner is satisfied that the assets and securities to be returned are not subject to liability and are not required to be held by any provision of law or purposes of the original deposit. If the insurer has reinsured all its outstanding risks in another insurer or insurers authorized to transact insurance in this state, then the commissioner shall deliver the assets and securities to the insurer or insurers assuming the risks upon:   (a) written notice to the commissioner by the domestic insurer that the assets and securities have been assigned, transferred, and set over to the reinsuring insurer or insurers, accompanied by a verified copy of the assignment, transfer, or conveyance; and   (b) in the case of deposits of the reserves of domestic life insurers under 33-2-416, proof satisfactory to the commissioner that the reinsuring insurer or insurers have deposited or will deposit and will maintain on deposit in public custody through the insurance supervisory official of its state of domicile assets and securities of like quality in an amount not less than the reserves of the policies and contracts reinsured, in addition to any other deposit of the insurer required or permitted by law, and, unless the insurer is required to deposit and maintain on deposit all of its reserves, that the deposit of the reserves will be deposited and held on deposit for the special benefit and protection of the holders of the life insurance policies and annuity contracts reinsured.   (3) The commissioner shall return to a foreign insurer any deposit made in this state by the insurer when the insurer has ceased transacting insurance in this state or in the United States, and the insurer is not subject to any liability in this state on account of which the deposit was held.   (4) If the insurer is subject to delinquency proceedings, as defined in part 13 of this chapter, upon the order of a court of competent jurisdiction, the commissioner shall yield the assets and securities held on deposit to the receiver, conservator, rehabilitator, or liquidator of the insurer or to any other properly designated official or officials who succeed to the management and control of the insurer's assets.   (5) A release of deposited assets may not be made except upon application to and the written order of the commissioner. The commissioner does not have personal liability for release of any deposit or part of a deposit made in good faith.   History: En. Sec. 144, Ch. 286, L. 1959; R.C.M. 1947, 40-3213; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 1089, Ch. 56, L. 2009; amd. Sec. 6, Ch. 169, L. 2013.  
  33-2-701. Annual statement -- revocation or fine for failure to file -- penalty for perjury. (1) Each authorized insurer shall annually on or before March 1 file with the commissioner a full and true statement of the authorized insurer's financial condition, transactions, and affairs as of the preceding December 31. The statement must be:   (a) in the general form and context as is required or not disapproved by the commissioner, as is in current use for similar reports to states in general with respect to the type of insurer and kinds of insurance to be reported upon, and as supplemented for additional information required by the commissioner;   (b) completed in accordance with the annual statement instructions and the Accounting Practices and Procedures Manual of the national association of insurance commissioners;   (c) accompanied by an actuarial opinion attesting to the adequacy of the insurer's reserves;   (d) verified by the oath of the insurer's president or vice president and secretary or, if a reciprocal insurer, by the oath of the attorney-in-fact or its like officers if a corporation. The commissioner may waive the verification under oath.   (2) (a) Each domestic insurer shall file electronic versions of the domestic insurer's annual and quarterly financial statements with the national association of insurance commissioners. The date for submission of the annual statement electronic filing is March 1. The dates for the submission of the quarterly statement electronic filings are as follows:   (i) the first quarter filing is due May 15;   (ii) the second quarter filing is due August 15; and   (iii) the third quarter filing is due November 15.   (b) The commissioner may exempt insurers that operate only in Montana from these filing requirements.   (3) The statement of an alien insurer must relate only to its transactions and affairs in the United States unless the commissioner requires otherwise. If the commissioner requires a statement as to an alien insurer's affairs throughout the world, the insurer shall file the statement with the commissioner as soon as reasonably possible. The statement must be verified by the insurer's United States manager or other authorized officer.   (4) The commissioner may refuse to accept the fee for renewal of the insurer's certificate of authority, as provided in 33-2-117, or may suspend or revoke the certificate of authority of any insurer failing to file the insurer's annual statement when due or within an extension of time that the commissioner may grant.   (5) A director, officer, agent, or employee of a company who subscribes to, makes, or concurs in making or publishing an annual statement or any other statement required by law knowing that the statement contains any material statement that is false shall be punished by a fine of not more than $25,000 for each violation.   (6) The commissioner may impose a fine not to exceed $100 a day for each day after March 1 that an insurer fails to file the annual statement referred to in subsection (1). The fine may not exceed a maximum of $1,000.   History: En. Sec. 65, Ch. 286, L. 1959; amd. Sec. 1, Ch. 27, L. 1967; R.C.M. 1947, 40-2820; amd. Sec. 3, Ch. 534, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 43, Ch. 596, L. 1993; amd. Sec. 20, Ch. 379, L. 1995; amd. Sec. 3, Ch. 316, L. 1999; amd. Sec. 15, Ch. 472, L. 1999; amd. Sec. 1, Ch. 206, L. 2005; amd. Sec. 5, Ch. 469, L. 2005.  
  33-2-702 and 33-2-703 reserved.  
  33-2-704. Insured lives reporting requirement. On or before March 1 of each year, each insurer providing disability insurance shall, on a form prescribed by the commissioner, report the number of Montana residents insured on February 1 under any policy of individual or group disability insurance, including excess of loss or stop-loss insurance policies covering disability insurance.   History: En. Sec. 11, Ch. 377, L. 1995; amd. Sec. 8, Ch. 531, L. 1997.  
  33-2-705. Report on premiums and other consideration -- tax. (1) Each authorized insurer and each formerly authorized insurer with respect to premiums received while an authorized insurer in this state shall file with the commissioner, on or before March 1 each year, a report in a form prescribed by the commissioner showing total direct premium income, including policy, membership, and other fees, premiums paid by application of dividends, refunds, savings, savings coupons, and similar returns or credits to payment of premiums for new or additional or extended or renewed insurance, charges for payment of premium in installments, and all other consideration for insurance from all kinds and classes of insurance, whether designated as a premium or otherwise, received by a life insurer or written by an insurer other than a life insurer during the preceding calendar year on account of policies covering property, subjects, or risks located, resident, or to be performed in Montana, with proper proportionate allocation of premium as to property, subjects, or risks in Montana insured under policies or contracts covering property, subjects, or risks located or resident in more than one state, after deducting from the total direct premium income applicable cancellations, returned premiums, the unabsorbed portion of any deposit premium, the amount of reduction in or refund of premiums allowed to industrial life policyholders for payment of premiums direct to an office of the insurer, all policy dividends, refunds, savings, savings coupons, and other similar returns paid or credited to policyholders with respect to the policies. As to title insurance, "premium" includes the total charge for the insurance. A deduction may not be made of the cash surrender values of policies. Considerations received on annuity contracts may not be included in total direct premium income and are not subject to tax.   (2) (a) Except as provided in subsections (2)(b) and (2)(c), coincident with the filing of the tax report referred to in subsection (1) and subject to 33-2-709, each insurer shall pay to the commissioner a tax on the net premiums computed at the rate of 2.75%.   (b) All casualty insurers issuing policies of legal professional liability insurance pursuant to 33-1-206 shall pay to the commissioner a tax on the net premiums derived from legal professional liability insurance computed at a rate of 0.75%.   (c) A dormant captive insurer that has a valid certificate of dormancy shall pay to the commissioner an annual dormancy tax of $1,000 as provided in 33-28-401.   (3) That portion of the tax paid under this section by an insurer on account of premiums received for fire insurance must be separately specified in the report required by the commissioner for apportionment as provided by law. When insurance against fire is included with insurance of property against other perils at an undivided premium, the insurer shall make a reasonable allocation from the entire premium to the fire portion of the coverage as must be stated in the report and as may be approved or accepted by the commissioner.   (4) With respect to authorized insurers, the premium tax provided by this section or the annual dormancy tax under 33-28-401 must be payment in full and in lieu of all other demands for any and all state, county, city, district, municipal, and school taxes, licenses, fees, and excises of whatever kind or character, excepting only those prescribed by this code, taxes on real and tangible personal property located in this state, and taxes payable under 50-3-109.   (5) The commissioner may suspend or revoke the certificate of authority of any insurer that fails to pay its taxes as required under this section.   (6) In addition to the penalty provided for in subsection (5), the commissioner may impose on an insurer who fails to pay the tax required under this section a fine of $100 plus interest on the delinquent amount at the annual interest rate of 12%.   (7) The commissioner may by rule provide a quarterly schedule for payment of portions of the premium tax under this section during the year in which tax liability is accrued.   History: En. Sec. 66, Ch. 286, L. 1959; amd. Sec. 1, Ch. 160, L. 1961; amd. Sec. 1, Ch. 78, L. 1963; amd. Sec. 1, Ch. 26, L. 1965; amd. Sec. 1, Ch. 71, L. 1967; amd. Sec. 1, Ch. 358, L. 1969; amd. Sec. 1, Ch. 237, L. 1971; R.C.M. 1947, 40-2821(part); amd. Sec. 1, Ch. 664, L. 1979; amd. Sec. 7, Ch. 303, L. 1981; amd. Sec. 12, Ch. 467, L. 1981; amd. Sec. 1, Ch. 295, L. 1983; amd. Sec. 3, Ch. 518, L. 1983; amd. Sec. 3, Ch. 622, L. 1987; amd. Sec. 2, Ch. 798, L. 1991; amd. Sec. 30, Ch. 15, Sp. L. July 1992; amd. Sec. 8, Ch. 451, L. 1993; amd. Sec. 21, Ch. 379, L. 1995; amd. Sec. 18, Ch. 537, L. 2005; amd. Sec. 1, Ch. 309, L. 2009; amd. Sec. 1, Ch. 377, L. 2015; amd. Sec. 2, Ch. 304, L. 2017.  
  33-2-706. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 202, Ch. 286, L. 1959; amd. Sec. 1, Ch. 147, L. 1977; R.C.M. 1947, 40-3427; amd. Sec. 26, Ch. 537, L. 1987; amd. Sec. 2, Ch. 713, L. 1989.  
  33-2-707. Preemption of taxing. The state of Montana hereby preempts the field of imposing excise, privilege, franchise, income, license, and similar taxes, licenses, and fees upon insurers and their general insurance producers and insurance producers as such and on the intangible property of insurers or such insurance producers. No county, city, municipality, district, school district, or other political subdivision or agency in Montana shall levy upon insurers, or upon their general insurance producers and insurance producers as such, any such tax, license, or fee additional to such as are levied by the legislature of Montana in this code.   History: En. Sec. 66, Ch. 286, L. 1959; amd. Sec. 1, Ch. 160, L. 1961; amd. Sec. 1, Ch. 78, L. 1963; amd. Sec. 1, Ch. 26, L. 1965; amd. Sec. 1, Ch. 71, L. 1967; amd. Sec. 1, Ch. 358, L. 1969; amd. Sec. 1, Ch. 237, L. 1971; R.C.M. 1947, 40-2821(6); amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-708. Fees and licenses. (1) (a) Except as provided in subsection (5), the commissioner shall collect a fee of $1,900 from each insurer applying for or annually renewing a certificate of authority to conduct the business of insurance in Montana.   (b) The commissioner shall collect certain additional fees as follows:   (i) nonresident insurance producer's license:   (A) application for original license, including issuance of license, if issued, $100;   (B) biennial renewal of license, $50;   (C) lapsed license reinstatement fee, $100;   (ii) resident insurance producer's license lapsed license reinstatement fee, $100;   (iii) surplus lines insurance producer's license:   (A) application for original license and for issuance of license, if issued, $50;   (B) biennial renewal of license, $100;   (C) lapsed license reinstatement fee, $200;   (iv) insurance adjuster's license:   (A) application for original license, including issuance of license, if issued, $50;   (B) biennial renewal of license, $100;   (C) lapsed license reinstatement fee, $200;   (v) insurance consultant's license:   (A) application for original license, including issuance of license, if issued, $50;   (B) biennial renewal of license, $100;   (C) lapsed license reinstatement fee, $200;   (vi) viatical settlement broker's license:   (A) application for original license, including issuance of license, if issued, $50;   (B) biennial renewal of license, $100;   (C) lapsed license reinstatement fee, $200;   (vii) resident and nonresident rental car entity producer's license:   (A) application for original license, including issuance of license, if issued, $100;   (B) quarterly filing fee, $25;   (viii) an original notification fee for a life insurance producer acting as a viatical settlement broker, in accordance with 33-20-1303(2)(b), $50;   (ix) navigator certification:   (A) application for original certification, including issuance of certificate if issued, $100;   (B) biennial renewal of certification, $50;   (C) lapsed certification reinstatement fee, $100;   (x) 50 cents for each page for copies of documents on file in the commissioner's office.   (c) The commissioner may adopt rules to determine the date by which a nonresident insurance producer, a surplus lines insurance producer, an insurance adjuster, an insurance public adjuster, or an insurance consultant is required to pay the fee for the biennial renewal of a license.   (2) (a) The commissioner shall charge a fee of $75 for each course or program submitted for review as required by 33-17-1204 and 33-17-1205, but may not charge more than $1,500 to a sponsoring organization submitting courses or programs for review in any biennium.   (b) Insurers and associations composed of members of the insurance industry are exempt from the charge in subsection (2)(a).   (3) (a) Except as provided in subsection (3)(b), the commissioner shall promptly deposit with the state treasurer to the credit of the general fund all fines and penalties and those amounts received pursuant to 33-2-311, 33-2-705, 33-28-201, and 50-3-109.   (b) The commissioner shall deposit 33% of the money collected under 33-2-705 in the special revenue account provided for in 53-4-1115.   (c) All other fees collected by the commissioner pursuant to Title 33 and the rules adopted under Title 33 must be deposited in the state special revenue fund to the credit of the state auditor's office.   (4) All fees are considered fully earned when received. In the event of overpayment, only those amounts in excess of $10 will be refunded.   (5) The commissioner shall collect a licensing fee of $500 for casualty insurance companies issuing policies of legal professional liability insurance pursuant to 33-1-206.   History: En. Sec. 45, Ch. 286, L. 1959; amd. Sec. 1, Ch. 32, L. 1969; amd. Sec. 1, Ch. 334, L. 1973; amd. Sec. 1, Ch. 444, L. 1975; amd. Sec. 1, Ch. 322, L. 1977; R.C.M. 1947, 40-2726(1), (2); amd. Sec. 10, Ch. 198, L. 1979; amd. Sec. 1, Ch. 344, L. 1979; amd. Sec. 8, Ch. 303, L. 1981; amd. Sec. 1, Ch. 391, L. 1985; amd. Sec. 15, Ch. 249, L. 1987; amd. Sec. 1, Ch. 469, L. 1987; amd. Sec. 27, Ch. 537, L. 1987; amd. Sec. 6, Ch. 351, L. 1989; amd. Sec. 5, Ch. 509, L. 1989; amd. Sec. 14, Ch. 713, L. 1989; amd. Sec. 3, Ch. 798, L. 1991; amd. Sec. 9, Ch. 451, L. 1993; amd. Sec. 44, Ch. 596, L. 1993; amd. Sec. 7, Ch. 622, L. 1993; amd. Sec. 1, Ch. 6, Sp. L. November 1993; amd. Sec. 1, Ch. 98, L. 1995; amd. Sec. 22, Ch. 379, L. 1995; amd. Sec. 1, Ch. 70, L. 1997; amd. Sec. 4, Ch. 316, L. 1999; amd. Sec. 25, Ch. 227, L. 2001; amd. Sec. 17, Ch. 298, L. 2001; amd. Sec. 12, Ch. 380, L. 2003; amd. Secs. 7, 25, Ch. 427, L. 2003; amd. Sec. 1, Ch. 552, L. 2005; amd. Sec. 10, I.M. No. 155, approved Nov. 4, 2008; amd. Sec. 15, Ch. 486, L. 2009; amd. Sec. 1, Ch. 245, L. 2013; amd. Sec. 8, Ch. 63, L. 2015; amd. Sec. 2, Ch. 139, L. 2015; amd. Sec. 2, Ch. 377, L. 2015; amd. Sec. 14, Ch. 6, Sp. L. November 2017.  
  33-2-709. Retaliatory fees, taxes, and other obligations. (1) When by or pursuant to the laws of any other state or foreign country any taxes, licenses, and other fees, in the aggregate, and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Montana insurers or upon the insurance producers or representatives of such insurers which are in excess of such taxes, licenses, and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers or upon the insurance producers or representatives of such insurers of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, or deposit requirements or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the commissioner upon the insurers or upon the insurance producers or representatives of such insurers of such other state or country doing business or seeking to do business in Montana. Any tax, license, or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on Montana insurers or their insurance producers or representatives shall be deemed to be imposed by such state or country within the meaning of this section.   (2) This section shall not apply as to any fees in conjunction with the licensing of insurance producers, personal income taxes, ad valorem taxes on real or personal property, or special purpose obligations or assessments imposed by another state or by an agency of this state other than the department in connection with particular kinds of insurance other than property insurance, except that deductions from premium taxes or other taxes otherwise payable allowed on account of real estate or personal property taxes paid shall be taken into consideration by the commissioner in determining the propriety and extent of retaliatory action under this section.   (3) (a) For the purposes of this section the domicile of an alien insurer, other than insurers formed under the laws of Canada, shall be that state designated by the insurer in writing filed with the commissioner at time of admission to this state or within 6 months after January 1, 1961, whichever date is the later, and may be any one of the following states:   (i) that in which the insurer was first authorized to transact insurance;   (ii) that in which is located the insurer's principal place of business in the United States;   (iii) that in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States.   (b) If the insurer makes no such designation, its domicile shall be deemed to be that state in which is located its principal place of business in the United States.   History: En. Sec. 71, Ch. 286, L. 1959; R.C.M. 1947, 40-2826; amd. Sec. 9, Ch. 303, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 4, Ch. 798, L. 1991.  
  33-2-710. Premium tax imposed on policy issued through nonresident licensee. Any insurer who issues a policy on a subject or risk located or to be performed in Montana through a nonresident licensee shall pay a premium tax on such policy to the state of Montana, in an amount and in the manner provided in 33-2-705.   History: En. Sec. 4, Ch. 395, L. 1983.  
  33-2-711. Terminated. Sec. 6, Ch. 706, L. 1985.   History: En. Sec. 2, Ch. 706, L. 1985.  
  33-2-712. Genetics program fee. Except as provided in 33-2-713, for each Montana resident insured under any individual or group disability or health insurance policy on February 1 of each year, the insurer or health service corporation issuing the policy, and the state group health plan provided for in Title 2, chapter 18, part 8, shall pay a fee of $1 to the commissioner. The fee must be paid on or before March 1 of each year and be deposited in an account in the state special revenue fund provided for in 50-19-212. The fee may be used only to fund the statewide genetics program established in 50-19-211.   History: En. Sec. 1, Ch. 554, L. 1987; amd. Sec. 1, Ch. 155, L. 1989; amd. Sec. 1, Ch. 638, L. 1991; amd. Sec. 1, Ch. 396, L. 2005; amd. Sec. 1, Ch. 377, L. 2007.  
  33-2-713. Group disability policy exemption. The fee required in 33-2-712 does not apply to blanket group disability insurance as defined in Title 33, chapter 22, part 6, where the total premium charged per person is less than $10 a year. For these policies, the fee is to be assessed on the basis of the number of blanket group policyholders in Montana.   History: En. Sec. 2, Ch. 554, L. 1987.  
  33-2-714. (Temporary) Health service corporation fee. (1) An authorized health service corporation as defined in 33-30-101 shall file with the commissioner, on or before March 1 of each year, a report in a format prescribed by the commissioner showing the total direct premium income during the preceding calendar year from all sources after deducting from the income applicable cancellations, returned premiums, or the amount of reduction in or refund of premiums.   (2) At the time the report is filed, and subject to 33-2-709, the health service corporation shall pay a fee to the commissioner on net premium income computed at the rate of 1%.   (3) If a health service corporation fails to pay the fee required under this section, the commissioner may:   (a) suspend or revoke the certificate of authority for the health service corporation; and   (b) impose a fine of $100 plus interest on the delinquent amount at an annual interest rate of 12%.   (4) The commissioner may provide by rule a quarterly schedule for the payment of the fee.   (5) The commissioner shall deposit money collected from the fee into the Montana HELP Act special revenue account provided for in 53-6-1315.   (6) The fee required under this section applies to a formerly authorized health service corporation if the corporation received premiums during the preceding calendar year while doing business as an authorized health service corporation in this state. (Terminates June 30, 2025, on occurrence of contingency--sec. 48, Ch. 415, L. 2019.)   History: En. Sec. 6, Ch. 415, L. 2019.  
  33-2-715 through 33-2-720 reserved.  
  33-2-721. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 1, Ch. 615, L. 1979; amd. Sec. 1, Ch. 60, L. 1983.  
  33-2-722. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 2, Ch. 615, L. 1979.  
  33-2-723. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 3, Ch. 615, L. 1979; amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-724. Repealed. Sec. 64, Ch. 503, L. 2021.  History: En. Sec. 8, Ch. 582, L. 2003.  
  33-2-725 through 33-2-735 reserved.  
  33-2-736. Terminated. Sec. 39(9), Ch. 15, Sp. L. July 1992.   History: En. Sec. 31, Ch. 15, Sp. L. July 1992.  
  33-2-801. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 98, Ch. 286, L. 1959; R.C.M. 1947, 40-3101.  
  33-2-802. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 99, Ch. 286, L. 1959; R.C.M. 1947, 40-3102.  
  33-2-803. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 100, Ch. 286, L. 1959; R.C.M. 1947, 40-3103; amd. Sec. 23, Ch. 379, L. 1995.  
  33-2-804. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 130, Ch. 286, L. 1959; R.C.M. 1947, 40-3133.  
  33-2-805. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 101, Ch. 286, L. 1959; R.C.M. 1947, 40-3104.  
  33-2-806. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 102, Ch. 286, L. 1959; R.C.M. 1947, 40-3105; amd. Sec. 4, Ch. 534, L. 1987; amd. Sec. 24, Ch. 379, L. 1995; amd. Sec. 9, Ch. 531, L. 1997.  
  33-2-807 through 33-2-810 reserved.  
  33-2-811. Repealed. Sec. 50, Ch. 304, L. 1999.   History: (1)En. Sec. 103, Ch. 286, L. 1959; Sec. 40-3106, R.C.M. 1947; (2)En. Sec. 104, Ch. 286, L. 1959; Sec. 40-3107, R.C.M. 1947; R.C.M. 1947, 40-3106, 40-3107.  
  33-2-812. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 105, Ch. 286, L. 1959; R.C.M. 1947, 40-3108.  
  33-2-813. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 106, Ch. 286, L. 1959; R.C.M. 1947, 40-3109.  
  33-2-814. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 107, Ch. 286, L. 1959; R.C.M. 1947, 40-3110.  
  33-2-815. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 108, Ch. 286, L. 1959; R.C.M. 1947, 40-3111.  
  33-2-816. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 109, Ch. 286, L. 1959; R.C.M. 1947, 40-3112.  
  33-2-817. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 110, Ch. 286, L. 1959; R.C.M. 1947, 40-3113; amd. Sec. 1, Ch. 411, L. 1989.  
  33-2-818. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 111, Ch. 286, L. 1959; R.C.M. 1947, 40-3114.  
  33-2-819. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 112, Ch. 286, L. 1959; R.C.M. 1947, 40-3115.  
  33-2-820. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 113, Ch. 286, L. 1959; R.C.M. 1947, 40-3116; amd. Sec. 25, Ch. 379, L. 1995.  
  33-2-821. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 114, Ch. 286, L. 1959; R.C.M. 1947, 40-3117.  
  33-2-822. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 115, Ch. 286, L. 1959; R.C.M. 1947, 40-3118; amd. Sec. 3, Ch. 570, L. 1979.  
  33-2-823. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 116, Ch. 286, L. 1959; R.C.M. 1947, 40-3119.  
  33-2-824. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 117, Ch. 186, L. 1959; R.C.M. 1947, 40-3120.  
  33-2-825. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 118, Ch. 286, L. 1959; R.C.M. 1947, 40-3121.  
  33-2-826. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 119, Ch. 286, L. 1959; R.C.M. 1947, 40-3122.  
  33-2-827. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 120, Ch. 286, L. 1959; R.C.M. 1947, 40-3123; amd. Sec. 55, Ch. 10, L. 1993.  
  33-2-828. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 121, Ch. 286, L. 1959; R.C.M. 1947, 40-3124.  
  33-2-829. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 122, Ch. 286, L. 1959; R.C.M. 1947, 40-3125; amd. Sec. 1, Ch. 713, L. 1989.  
  33-2-830. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 123, Ch. 286, L. 1959; amd. Sec. 1, Ch. 20, L. 1961; R.C.M. 1947, 40-3126; amd. Sec. 4, Ch. 570, L. 1979; amd. Sec. 143, Ch. 42, L. 1997; amd. Sec. 1, Ch. 94, L. 1997.  
  33-2-831. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 124, Ch. 286, L. 1959; R.C.M. 1947, 40-3127.  
  33-2-832. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 125, Ch. 286, L. 1959; amd. Sec. 1, Ch. 16, L. 1961; R.C.M. 1947, 40-3128; amd. Sec. 5, Ch. 570, L. 1979.  
  33-2-833. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 1, Ch. 5, Ex. L. 1933; amd. Sec. 1, Ch. 37, L. 1935; re-en. Sec. 5309.35, R.C.M. 1935; amd. Sec. 1, Ch. 24, L. 1937; R.C.M. 1947, 35-142(part); amd. Sec. 11, Ch. 198, L. 1979.  
  33-2-834 through 33-2-840 reserved.  
  33-2-841. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 126, Ch. 286, L. 1959; R.C.M. 1947, 40-3129.  
  33-2-842. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 127, Ch. 286, L. 1959; R.C.M. 1947, 40-3130.  
  33-2-843. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 128, Ch. 286, L. 1959; R.C.M. 1947, 40-3131.  
  33-2-844 through 33-2-850 reserved.  
  33-2-851. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 129, Ch. 286, L. 1959; R.C.M. 1947, 40-3132; amd. Sec. 17, Ch. 519, L. 1985; amd. Sec. 3, Ch. 713, L. 1989.  
  33-2-852. Repealed. Sec. 50, Ch. 304, L. 1999.   History: En. Sec. 131, Ch. 286, L. 1959; R.C.M. 1947, 40-3134.  
  33-2-901. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 566, Ch. 286, L. 1959; R.C.M. 1947, 40-5101.  
  33-2-902. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 567, Ch. 286, L. 1959; R.C.M. 1947, 40-5102.  
  33-2-903. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 568, Ch. 286, L. 1959; R.C.M. 1947, 40-5103.  
  33-2-904. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 569, Ch. 286, L. 1959; R.C.M. 1947, 40-5104.  
  33-2-905. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 570, Ch. 286, L. 1959; R.C.M. 1947, 40-5105.  
  33-2-906. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 571, Ch. 286, L. 1959; R.C.M. 1947, 40-5106.  
  33-2-907. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 572, Ch. 286, L. 1959; R.C.M. 1947, 40-5107.  
  33-2-908. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 573, Ch. 286, L. 1959; R.C.M. 1947, 40-5108.  
  33-2-909. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 574, Ch. 286, L. 1959; R.C.M. 1947, 40-5109.  
  33-2-910 through 33-2-914 reserved.  
  33-2-915. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 575, Ch. 286, L. 1959; R.C.M. 1947, 40-5110.  
  33-2-916. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 576, Ch. 286, L. 1959; R.C.M. 1947, 40-5111.  
  33-2-917. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 577, Ch. 286, L. 1959; R.C.M. 1947, 40-5112.  
  33-2-918. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 578, Ch. 286, L. 1959; R.C.M. 1947, 40-5113.  
  33-2-919 and 33-2-920 reserved.  
  33-2-921. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 579, Ch. 286, L. 1959; R.C.M. 1947, 40-5114.  
  33-2-922. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 580, Ch. 286, L. 1959; R.C.M. 1947, 40-5115.  
  33-2-923. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 585, Ch. 286, L. 1959; R.C.M. 1947, 40-5120.  
  33-2-924. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 587, Ch. 286, L. 1959; R.C.M. 1947, 40-5122.  
  33-2-925. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 588, Ch. 286, L. 1959; R.C.M. 1947, 40-5123.  
  33-2-926. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 589, Ch. 286, L. 1959; R.C.M. 1947, 40-5124.  
  33-2-927. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 591, Ch. 286, L. 1959; R.C.M. 1947, 40-5126.  
  33-2-928. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 590, Ch. 286, L. 1959; R.C.M. 1947, 40-5125.  
  33-2-929 and 33-2-930 reserved.  
  33-2-931. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 581, Ch. 286, L. 1959; R.C.M. 1947, 40-5116.  
  33-2-932. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 582, Ch. 286, L. 1959; R.C.M. 1947, 40-5117.  
  33-2-933. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 595, Ch. 286, L. 1959; R.C.M. 1947, 40-5130.  
  33-2-934. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 583, Ch. 286, L. 1959; R.C.M. 1947, 40-5118.  
  33-2-935. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 592, Ch. 286, L. 1959; amd. Sec. 1, Ch. 200, L. 1977; R.C.M. 1947, 40-5127(2).  
  33-2-936. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 592, Ch. 286, L. 1959; amd. Sec. 1, Ch. 200, L. 1977; R.C.M. 1947, 40-5127(1).  
  33-2-937. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 584, Ch. 286, L. 1959; R.C.M. 1947, 40-5119.  
  33-2-938. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 594, Ch. 286, L. 1959; R.C.M. 1947, 40-5129.  
  33-2-939. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 593, Ch. 286, L. 1959; R.C.M. 1947, 40-5128.  
  33-2-940 through 33-2-944 reserved.  
  33-2-945. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 596, Ch. 286, L. 1959; R.C.M. 1947, 40-5131.  
  33-2-946. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 597, Ch. 286, L. 1959; R.C.M. 1947, 40-5132.  
  33-2-947. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. Sec. 598, Ch. 286, L. 1959; R.C.M. 1947, 40-5133.  
  33-2-948. Repealed. Sec. 61, Ch. 383, L. 1979.   History: En. 40-5134 by Sec. 2, Ch. 200, L. 1977; R.C.M. 1947, 40-5134.  
  33-20-101. Scope. (1) Except as provided in subsection (2), parts 1 through 5 of this chapter apply only to contracts of life insurance and annuities, other than reinsurance, group life insurance, and group annuities.   (2) Sections 33-20-114, 33-20-131, and 33-20-150 also apply to group life insurance, and 33-20-114, 33-20-124, and 33-20-150 also apply to group annuities.   History: En. Sec. 295, Ch. 286, L. 1959; R.C.M. 1947, 40-3801; amd. Sec. 149, Ch. 575, L. 1981; amd. Sec. 6, Ch. 699, L. 1991; amd. Sec. 22, Ch. 451, L. 1993; amd. Sec. 28, Ch. 531, L. 1997; amd. Sec. 2, Ch. 76, L. 1999; amd. Sec. 24, Ch. 380, L. 2003.  
  33-20-102. Industrial life insurance defined. For the purposes of this code, industrial life insurance is that form of life insurance written under policies of face amount of $2,000 or less bearing the words "industrial policy" imprinted on the face thereof as part of the descriptive matter and under which premiums are payable monthly or more often.   History: En. Sec. 296, Ch. 286, L. 1959; amd. Sec. 1, Ch. 30, L. 1969; R.C.M. 1947, 40-3802.  
  33-20-103. Standard provisions required -- exceptions. (1) A policy of life insurance, other than group and pure endowments with or without return of premiums or of premiums and interest, may not be delivered or issued for delivery in this state unless it contains in substance all of the applicable provisions as required by 33-20-104 through 33-20-108, 33-20-110 through 33-20-116, and 33-20-131.   (2) This section does not apply to annuity contracts or to any provision of a life insurance policy, or contract supplemental to an annuity contract or life insurance policy, relating to disability benefits or to additional benefits in the event of death by accident or accidental means. However, the provisions of 33-20-114 do apply to annuity contracts.   (3) Any provision or portions of a provision not applicable to single premium or term policies may not to that extent be incorporated in single premium or term policies.   History: En. Sec. 297, Ch. 286, L. 1959; R.C.M. 1947, 40-3803; amd. Sec. 83, Ch. 370, L. 1987; amd. Sec. 25, Ch. 380, L. 2003.  
  33-20-104. Grace period. There shall be a provision that a grace period of 30 days or, at the option of the insurer, of 1 month of not less than 30 days or of 4 weeks in the case of industrial life insurance policies, the premiums for which are payable more frequently than monthly, shall be allowed within which the payment of any premium after the first may be made, during which period of grace the policy shall continue in full force; but if a claim arises under the policy during such period of grace, the amount of any premium due or overdue may be deducted from the policy proceeds.   History: En. Sec. 298, Ch. 286, L. 1959; R.C.M. 1947, 40-3804.  
  33-20-105. Incontestability. (1) There must be a provision that the policy, exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means, is incontestable, except for nonpayment of premiums, after the policy has been in force during the lifetime of the insured for a period of 2 years from the policy date of issue.   (2) (a) Life insurance coverage issued as the result of an exchange or a conversion of existing life insurance coverage with the same insurer or its subsidiaries is incontestable, except for nonpayment of premiums, under the following conditions:   (i) the person who is covered is alive; and   (ii) the policy that is being exchanged or converted has been in effect for 2 years from the date of issue.   (b) This subsection (2) does not apply to any amount of insurance provided by the new policy that exceeds the coverage amount that was exchanged or converted.   History: En. Sec. 299, Ch. 286, L. 1959; R.C.M. 1947, 40-3805; amd. Sec. 26, Ch. 380, L. 2003; amd. Sec. 23, Ch. 469, L. 2005.  
  33-20-106. Entire contract. There shall be a provision that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties and, if the application is so made a part of the policy, that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.   History: En. Sec. 300, Ch. 286, L. 1959; R.C.M. 1947, 40-3806.  
  33-20-107. Misstatement of age. There shall be a provision that if the age of the insured or of any other person whose age is considered in determining the premium has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.   History: En. Sec. 301, Ch. 286, L. 1959; R.C.M. 1947, 40-3807.  
  33-20-108. Dividends. (1) There shall be a provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy, provided the policy is in force and all premiums to that date are paid.   (2) Except as hereinafter provided, any dividend becoming payable shall at the option of the party entitled to elect such option be either:   (a) payable in cash; or   (b) applied to any one of such other dividend options as may be provided by the policy.   (3) If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party shall not have elected some other option. If the policy specifies a period within which such other dividend option may be elected, such period shall be not less than 30 days following the date on which such dividend is due and payable.   (4) The annually apportioned dividend shall be deemed to be payable in cash within the meaning of subsection (2)(a) above even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed 6 years from the date of apportionment and that interest will be added to such dividend at a specified rate.   (5) If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus becoming payable or apportioned while the insurance is in force under such nonforfeiture provision shall be applied in the manner set forth in the policy.   (6) In participating industrial life insurance policies, in lieu of the provision required in subsections (1) through (5) above, there shall be a provision that, beginning not later than the end of the fifth policy year, the policy shall participate annually in the divisible surplus, if any, in the manner set forth in the policy.   History: En. Sec. 302, Ch. 286, L. 1959; R.C.M. 1947, 40-3808.  
  33-20-109. Renumbered 33-20-131. Code Commissioner, 1985.  
  33-20-110. Table of values. There shall be a table showing in figures the loan value, if required under 33-20-131, and the cash surrender values and nonforfeiture benefits in accordance with 33-20-202(1)(e), either during the first 20 policy years or during the term of the policy, whichever is shorter.   History: En. Sec. 304, Ch. 286, L. 1959; R.C.M. 1947, 40-3810.  
  33-20-111. Table of installments. In case the policy provides that the proceeds may be payable in installments which are determinable at issue of the policy, there shall be a table showing the amounts of the guaranteed installments.   History: En. Sec. 305, Ch. 286, L. 1959; R.C.M. 1947, 40-3811.  
  33-20-112. Reinstatement. There shall be a provision that the policy will be reinstated at any time within 3 years, or 2 years in the case of industrial life insurance policies, from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, with interest on all premiums in arrears at a rate not exceeding 6% per annum compounded annually and with interest on any indebtedness at a rate as provided in 33-20-132 through 33-20-136, unless:   (1) the policy has been surrendered for its cash surrender value;   (2) its cash surrender value has been exhausted; or   (3) the paid-up term insurance, if any, has expired.   History: En. Sec. 306, Ch. 286, L. 1959; R.C.M. 1947, 40-3812; amd. Sec. 7, Ch. 191, L. 1985.  
  33-20-113. Payment of premiums. There shall be a provision relative to the payment of premiums.   History: En. Sec. 307, Ch. 286, L. 1959; R.C.M. 1947, 40-3813.  
  33-20-114. Payment of claims -- interest. (1) There must be a provision, which may be made by endorsement, that when a claim is made upon the death of the insured, settlement must be made upon receipt of proof of death and, at the insurer's option, surrender of the policy or proof of the interest of the claimant, or both.   (2) There must be a provision, which may be made by endorsement, that settlement must be made within 60 days of receipt of proof of death and that if settlement is made after the first 30 days, the settlement must include interest from the 30th day until settlement. Interest must be paid at the monthly average discount rate on 90-day AA asset-backed commercial paper in effect at the federal reserve bank in the ninth federal reserve district at the time of proof of death or at the rate stated in the policy, whichever is greater. The settlement period and interest provisions of this subsection apply to all claims upon deaths filed with an insurer, regardless of whether those provisions are included in the policy.   History: En. Sec. 308, Ch. 286, L. 1959; R.C.M. 1947, 40-3814; amd. Sec. 1, Ch. 469, L. 1985; amd. Sec. 27, Ch. 380, L. 2003; amd. Sec. 15, Ch. 63, L. 2015.  
  33-20-115. Beneficiary -- industrial policies. (1) An industrial life insurance policy shall have the name of the beneficiary designated thereon with a reservation of the right to designate or change the beneficiary after the issuance of the policy.   (2) The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.   (3) The policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor or dies before the insured or is not legally competent to give a valid release, then the insurer may make any payment thereunder to the personal representative of the insured or to any relative of the insured by blood or legal adoption or connection by marriage or to any person appearing to the insurer to be equitably entitled thereto by reason of having been named beneficiary or by reason of having incurred expense for the maintenance, medical attention, or burial of the insured.   (4) The policy may also include a similar provision applicable to any other payment due under the policy.   (5) The provisions of 33-20-114(2) shall be incorporated into an industrial life insurance policy and are applicable as set out in that subsection.   History: En. Sec. 309, Ch. 286, L. 1959; R.C.M. 1947, 40-3815; amd. Sec. 150, Ch. 575, L. 1981; amd. Sec. 2, Ch. 469, L. 1985.  
  33-20-116. Title. There shall be a title on the policy, briefly describing the same.   History: En. Sec. 310, Ch. 286, L. 1959; R.C.M. 1947, 40-3816.  
  33-20-117. Nonforfeiture rights -- policies issued before operative date. (1) This section applies only to policies of life insurance issued prior to the operative date of 33-20-213.   (2) In the event of default in payment of any premium due on any policy, if not less than 3 full years' premiums have been paid, there must be secured to the insured, without action on the insured's part, either paid-up or extended insurance as specified in the policy, the net value of which must be at least equal to the entire net reserve held by the insurer of the policy, less 2 1/2% of the amount insured by the policy and dividend additions, if any, and less any outstanding indebtedness to the insurer on the policy at the time of default. There must be secured to the insured the right to surrender the policy to the insurer at its home office within 1 month after the date of default for cash value otherwise available for the purchase of the paid-up or extended insurance.   History: En. Sec. 326, Ch. 286, L. 1959; R.C.M. 1947, 40-3832; amd. Sec. 1211, Ch. 56, L. 2009.  
  33-20-118. Contestability -- excluded or restricted coverage. A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.   History: En. Sec. 311, Ch. 286, L. 1959; R.C.M. 1947, 40-3817.  
  33-20-119. Incontestability -- limitation on liability after reinstatement of life insurance or annuity. (1) A reinstated policy of life insurance or annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.   (2) When any life insurance policy or annuity contract is reinstated, such reinstated policy or contract may exclude or restrict liability to the same extent that such liability might have been or was excluded or restricted when the policy or contract was originally issued, and such exclusion or restriction shall be effective from the date of reinstatement.   History: En. Sec. 322, Ch. 286, L. 1959; R.C.M. 1947, 40-3828.  
  33-20-120. Policy settlements -- holding proceeds -- indebtedness deducted from proceeds. (1) Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.   (2) In determining the amount due under any life insurance policy heretofore or hereafter issued, deduction may be made of:   (a) any unpaid premiums or installments thereof for the current policy year due under the terms of the policy; and   (b) the amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid.   History: En. Secs. 323, 324, Ch. 286, L. 1959; R.C.M. 1947, 40-3829, 40-3830.  
  33-20-121. Prohibited provisions -- limitations on liability. (1) A policy of life insurance may not be delivered or issued for delivery in this state if it contains a provision:   (a) for a period shorter than that provided by statute within which an action at law or in equity may be commenced on the policy; or   (b) that excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified in the policy in the event of death:   (i) as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces or of an act or hazard of war or action or of service in the military, naval, or air forces or in civilian forces auxiliary to those military forces or from any cause while a member of military, naval, or air forces of a country at war, declared or undeclared, or of a country engaged in military action;   (ii) as a result of aviation, air travel, or flight;   (iii) as a result of a specified hazardous occupation or occupations;   (iv) while the insured is a resident outside the continental United States and Canada; or   (v) within 2 years from the date of issue of the policy as a result of suicide. If a life insurance policy contains a dependent rider, the dependent coverage may be continued upon payment of the premium for the dependent rider.   (2) A policy that contains an exclusion or restriction pursuant to subsection (1) must also provide that in the event of death under the circumstances to which the exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the commissioner's reserve valuation method on the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits or, if the policy does not provide for nonforfeiture benefits, computed according to a mortality table and interest rate determined by the insurer and specified in the policy or by any other method more favorable to the policyholder, with adjustment for indebtedness or dividend credit.   (3) This section does not apply to industrial life insurance, group life insurance, disability insurance, reinsurance, or annuities or to a provision in a life insurance policy relating to disability benefits or to additional benefits in the event of death by accident or accidental means.   (4) This section does not prohibit a provision that in the opinion of the commissioner is more favorable to the policyholder than a provision permitted by this section.   History: En. Sec. 320, Ch. 286, L. 1959; R.C.M. 1947, 40-3826; amd. Sec. 28, Ch. 198, L. 1979; amd. Sec. 7, Ch. 699, L. 1991; amd. Sec. 23, Ch. 451, L. 1993; amd. Sec. 6, Ch. 490, L. 1997; amd. Sec. 38, Ch. 472, L. 1999.  
  33-20-122. Prohibited provisions -- industrial life insurance. No policy of industrial life insurance shall contain any of the following provisions:   (1) a provision by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer;   (2) a provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical, or surgical treatment or attention, except a provision which gives the insurer the right to declare the policy void if the insured has, within 2 years prior to the issuance of the policy, received institutional, hospital, medical, or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning such treatment or attention was not of a serious nature or was not material to the risk;   (3) a provision giving the insurer the right to declare the policy void because the insured has been rejected for insurance, unless such right be conditioned upon a showing by the insurer that knowledge of such rejection would have led to a refusal by the insurer to make such contract.   History: En. Sec. 321, Ch. 286, L. 1959; R.C.M. 1947, 40-3827.  
  33-20-123. Prohibited policy plans -- life insurance policies or annuity contracts. (1) No insurer shall issue for delivery or deliver in this state any life insurance policy or annuity contract issued under any plan for the segregation of policyholders into mathematical groups and providing benefits for a surviving policyholder of a group arising out of the death of another policyholder of such group or under any other similar plan.   (2) No insurer shall issue for delivery or deliver in this state any life insurance policy or annuity contract providing benefits or values for surviving or continuing policyholders contingent upon the lapse or termination of the policies of other policyholders, whether by death or otherwise. This provision shall not be deemed to prohibit the payment or allowance of regular annual dividends or "savings" under participating forms of policies or contracts or prohibit the annual distribution to policyholders or beneficiaries of sums representing in part gains to the insurer from lapses, surrenders, or mortality either in general or as resulting from particular classifications of policies.   History: En. Sec. 327, Ch. 286, L. 1959; R.C.M. 1947, 40-3833.  
  33-20-124. Policy provisions -- conformity with state statutes. Each policy regulated by this part must contain a provision or the equivalent thereto as follows:   "Conformity with Montana statutes. The provisions of this policy conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy."   History: En. Sec. 22, Ch. 798, L. 1991.  
  33-20-125 and 33-20-126 reserved.  
  33-20-127. Life insurance policy with long-term care provision or accelerated benefits provision -- summary required. At the time of policy delivery, a summary must be delivered to the insured for an individual life insurance policy that provides accelerated benefits within the policy or by rider. An individual life insurance policy that provides long-term care benefits must provide a summary as described in 33-22-1123. In the case of direct response solicitations, the insurer shall deliver the summary upon the applicant's request but not later than the time of policy delivery. In addition to complying with all applicable requirements, the summary must also include:   (1) an explanation of how the long-term care benefits or accelerated benefits interact with other components of the policy, including deductions from death benefits;   (2) an illustration of the amount of benefits, the length of benefits, and the guaranteed lifetime benefits, if any, for each covered person;   (3) any exclusions, reductions, and limitations of long-term care benefits and accelerated benefits; and   (4) if applicable to the policy type:   (a) a disclosure of the effects of exercising other rights under the policy;   (b) a disclosure of guaranties related to long-term care costs of insurance charges; and   (c) current and projected maximum lifetime benefits.   History: En. Sec. 3, Ch. 152, L. 1991; amd. Sec. 24, Ch. 451, L. 1993; amd. Sec. 1, Ch. 32, L. 2007.  
  33-20-128. Life insurance policy paying long-term benefits -- monthly report. When a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report must be provided to the policyholder as provided for in 33-22-1123 and this section. The report must include the following information for the month for which the report is issued:   (1) the amount of long-term care benefits paid out during the month;   (2) an explanation of any changes in the policy, including without limitation death benefits or cash values, resulting from long-term care benefits having been paid out; and   (3) the amount of long-term care benefits existing or remaining.   History: En. Sec. 4, Ch. 152, L. 1991; amd. Sec. 2, Ch. 416, L. 1997; amd. Sec. 2, Ch. 32, L. 2007.  
  33-20-129 and 33-20-130 reserved.  
  33-20-131. Policy loan or certificate loan. (1) Subject to the provisions of 33-20-101(2) and except as provided in 33-20-132 through 33-20-136, there must be a provision that after 3 full years' premiums have been paid and after the policy or certificate has a cash surrender value and while a premium is not in default beyond the grace period for payment, the insurer will advance, on proper assignment or pledge of the policy or certificate and on the sole security of the policy or certificate, at a specified rate of interest not exceeding 6% a year, an amount equal to or, at the option of the party entitled to the loan, less than the loan value of the policy or certificate. The commissioner may authorize a rate of interest in excess of 6%, but not in excess of 8% a year (or 7.4% if payable annually in advance), for policies or certificates issued on or after January 1, 1980, if the insurer provides adequate written certification that the holders of the policies will benefit fully from the increased earnings of the insurer resulting from the use of an interest rate in excess of the 6% per annum, such as from higher interest income to the company on policy or certificate loans, higher investment yield resulting from a reduction in policy or certificate loans because of the higher policy or certificate loan interest rate, and any additional income to the company resulting from the use of the higher interest rate in any manner. These benefits to the policyholder must be reflected through higher dividends, lower premiums, or both. The loan value of the policy must be at least equal to the cash surrender value at the end of the then current policy or certificate year, provided that the insurer may deduct, either from the loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining the cash surrender value (including interest then accrued but not due), an unpaid balance of the premium for the current policy or certificate year, and interest on the loan to the end of the current policy or certificate year unless the policyowner by written notice to the insurer elects to defer payment of interest until it has accrued. The policy or certificate may also provide that if interest on indebtedness is not paid when due, it must be added to the existing indebtedness and must bear interest at the same rate, and that if and when the total indebtedness on the policy or certificate, including interest due or accrued, equals or exceeds the amount of its loan value, the policy or certificate terminates and is void. The policy or certificate must reserve to the insurer the right to defer the granting of a loan, other than for the payment of a premium to the insurer, for 6 months after application for the loan. The policy or certificate, at the insurer's option, may provide for an automatic premium loan, subject to an election of the party entitled to elect.   (2) This section does not apply to term policies or to term insurance benefits provided by rider or supplemental policy provisions or to industrial life insurance policies.   History: En. Sec. 303, Ch. 286, L. 1959; R.C.M. 1947, 40-3809; amd. Sec. 1, Ch. 179, L. 1979; amd. Sec. 6, Ch. 191, L. 1985; Sec. 33-20-109, MCA 1983; redes. 33-20-131 by Code Commissioner, 1985; amd. Sec. 8, Ch. 699, L. 1991.  
  33-20-132. Variable policy loan interest rates -- purpose. The purpose of 33-20-132 through 33-20-136 is to permit and set guidelines for life insurers to include in life insurance policies issued after October 1, 1985, a provision for periodic adjustment of policy loan interest rates.   History: En. Sec. 1, Ch. 191, L. 1985.  
  33-20-133. Variable interest rates -- exclusions from application. The provisions of 33-20-132 through 33-20-136 do not apply to:   (1) term policies;   (2) term insurance benefits provided by rider or supplemental policy provisions; or   (3) industrial life insurance policies except as provided in 33-20-112.   History: En. Sec. 2, Ch. 191, L. 1985.  
  33-20-134. Variable interest rates -- published monthly average defined. For purposes of 33-20-132 through 33-20-136, the "published monthly average" means:   (1) Moody's corporate bond yield average--monthly average corporates, as published by Moody's investors service, incorporated; or   (2) in the event that Moody's corporate bond yield average--monthly average corporates is no longer published, a substantially similar average, established by rule of the commissioner.   History: En. Sec. 3, Ch. 191, L. 1985.  
  33-20-135. Variable interest rates on policy loans. (1) (a) Life insurance policies issued on or after October 1, 1985, may have a provision permitting policy loan interest rates as follows:   (i) a maximum interest rate of not more than 8% a year; or   (ii) an adjustable maximum interest rate established from time to time by the life insurer as permitted by 33-20-132 through 33-20-136.   (b) A life insurer is not permitted to issue policies containing variable rates of interest on policy loans under subsection (1)(a)(ii) unless the insurer also makes available policies, which may or may not be on the same plan of insurance, with fixed rates of interest on policy loans under subsection (1)(a)(i).   (2) The rate of interest charged on a policy loan made under subsection (1)(a)(ii) may not exceed the greater of:   (a) the published monthly average for the calendar month ending 2 months before the date on which the rate is determined; or   (b) the rate used to compute the cash surrender values under the policy during the applicable period plus 1% a year.   (3) If the maximum rate of interest is determined pursuant to subsection (1)(a)(ii), the policy must contain a provision setting forth the frequency at which the rate is to be determined for that policy.   (4) The maximum rate for each policy must be determined at regular intervals that must occur at least once every 12 months, but may not occur more frequently than once in any 3-month period. At the intervals specified in the policy, the rate being charged:   (a) may be increased whenever an increase as determined under subsection (2) would increase the rate by 0.5% or more a year;   (b) must be reduced whenever a reduction as determined under subsection (2) would decrease the rate by 0.5% or more a year.   (5) The life insurer shall:   (a) notify the policyholder of the initial rate of interest on the loan at the time a cash loan is made;   (b) notify the policyholder, with respect to premium loans, of the initial rate of interest on the loan as soon as practical after making the initial loan. Notice does not have to be given to the policyholder when a further premium loan is added, except as provided in subsection (5)(c).   (c) send reasonable advance notice of any increase in the rate to policyholders with loans; and   (d) include in the notices required by this subsection (5) the substance of subsection (1) and the frequency of rate determinations as provided in subsection (3).   (6) The policy may provide that if interest on any indebtedness is not paid when due, the interest will be added to the existing indebtedness and will bear interest at the same rate as the indebtedness.   (7) The loan value of the policy must be determined in accordance with the provisions of 33-20-131, but no policy may be terminated in a policy year solely as a result of a change in the interest rate during that policy year. The life insurer shall maintain coverage during that policy year until the time at which the policy would otherwise have terminated if there had been no interest rate change during that policy year.   (8) The substance of the pertinent provisions of subsections (1) and (3) must be set forth in the policies to which they apply.   (9) For purposes of this section, the following definitions apply:   (a) "Policy" includes certificates issued by a fraternal benefit society and annuity contracts that provide for policy loans.   (b) "Policy loan" includes any premium loan made under a policy used to pay one or more premiums that were not paid to the life insurer as they became due. The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after the lapse of a policy.   (c) "Policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.   (10) No other provision of law applies to policy loan interest rates unless it is made specifically applicable to such rates.   History: En. Sec. 4, Ch. 191, L. 1985.  
  33-20-136. Variable interest rates -- applicability to policies issued before October 1985. The provisions of 33-20-132 through 33-20-135 do not apply to any insurance contract issued before October 1, 1985, unless the policyholder agrees in writing to the applicability of such provisions.   History: En. Sec. 5, Ch. 191, L. 1985.  
  33-20-137 through 33-20-140 reserved.  
  33-20-141. Notice required for cancellation. (1) Subject to subsection (2), an insurer may not cancel a life insurance policy or annuity for nonpayment of premiums until the insurer has mailed or delivered to the named insured and policyowner, where they are not the same, at the last-known post office address shown in the records of the company one written notice of cancellation in addition to any billing statement, stating the date the cancellation will become effective, which may not be less than 30 days after the date of mailing or delivery of the notice. Said 30 days shall run concurrently with the grace period required by 33-20-104.   (2) (a) An insurer that delivers or issues for delivery an individual life insurance policy in this state shall notify an applicant in writing at the time of application for the policy of the applicant's right to designate a third party to receive notice of cancellation of the policy based on nonpayment of premium. The applicant may make the designation at the time of application for the policy or at any time the policy is in force by submitting a written notice to the insurer containing the name and address of the third-party designee.   (b) The insurer's transmission to the third-party designee of a copy of a notice of cancellation based on nonpayment of premium must be in addition to the transmission of the original document to the policyowner. The copy of the notice of cancellation transmitted to the third party must be governed by the same law and policy provisions that govern the notice being transmitted to the policyowner.   (c) The designation of a third party may not constitute acceptance of any liability on the part of the third party or insurer for services provided to the policyowner.   History: En. Sec. 1, Ch. 723, L. 1985; amd. Sec. 2, Ch. 324, L. 2017.  
  33-20-142. Contents of notice -- proof -- limitation on recovery -- exemptions. (1) (a) The notice of cancellation shall state:   (i) the amount of the premium, installment, or interest due on such policy;   (ii) the place where it must be paid; and   (iii) the name and address of the person or company to which the premium is payable.   (b) The notice must also state that unless the premium or other sums are paid to the company or its insurance producer, the policy will lapse or be forfeited, except as to any nonforfeiture options provided for by a life insurance policy.   (2) "Policyowner", as used in this section, means the owner of the policy or any other person designated as the person to receive premium notices, as shown by the records of the insurance company.   (3) The affidavit of any responsible officer, clerk, or insurance producer of the insurance company authorized to mail the notice that it is the standard practice of the company to mail to policyowners the notice required by this section is prima facie evidence that the notice has been duly given.   (4) No action may be maintained to recover under a lapsed or forfeited policy on the ground that the insurance company failed to comply with this section unless the action is instituted within 2 years from the due date upon which default was made in paying the premium, installment, or interest for which lapse or forfeiture is claimed.   (5) Section 33-20-141 does not apply to:   (a) group or group-type policies;   (b) industrial life or industrial disability policies; or   (c) policies upon which premiums are payable monthly or at more frequent intervals.   History: En. Sec. 2, Ch. 723, L. 1985; amd. Sec. 1, Ch. 713, L. 1989.  
  33-20-143 through 33-20-149 reserved.  
  33-20-150. Life insurance policy and sales illustrations -- annuity disclosure -- rules. (1) (a) The commissioner shall adopt rules providing for and regulating life insurance policy illustrations, annuity disclosure, and sales illustrations that are marketed, issued, or issued for delivery to Montana residents.   (b) The rules must specify any types of life insurance or annuities that are exempt from the provisions of the rules.   (2) The rules must be designed to:   (a) protect life insurance and annuity consumers;   (b) foster consumer education;   (c) improve consumers' ability to understand the basic features of life insurance policies and annuities; and   (d) improve consumers' ability to select the most appropriate plan of life insurance or annuity.   (3) Rules that are adopted by the commissioner may not go beyond the scope of, or contain material differences from, the national association of insurance commissioners' life insurance illustrations, annuity disclosure, and sales model regulations.   (4) After the effective date of rules that are adopted pursuant to this section, a group or individual life insurance policy, certificate, or annuity may not be marketed, issued, or issued for delivery to a Montana resident unless the policy, certificate, or annuity conforms to the rules that are adopted pursuant to this section.   History: En. Sec. 1, Ch. 76, L. 1999.  
  33-20-151. Repealed. Sec. 134, Ch. 494, L. 1993.   History: En. Sec. 30, Ch. 582, L. 1989.  
  33-20-1001. Group contracts required to meet group requirements. (1) No life insurance policy shall be delivered in this state insuring the lives of more than one individual unless to one of the groups as provided for in 33-20-1101 through 33-20-1106 and unless in compliance with the other applicable provisions of parts 10 through 12 of this chapter.   (2) Subsection (1) above shall not apply to life insurance policies insuring only individuals:   (a) related by blood, marriage, or legal adoption;   (b) having a common interest through ownership of a business enterprise or a substantial legal interest or equity therein and who are actively engaged in the management thereof; or   (c) otherwise having an insurable interest in each other's lives.   History: En. Sec. 328, Ch. 286, L. 1959; R.C.M. 1947, 40-3901; amd. Sec. 151, Ch. 575, L. 1981.  
  33-20-1002. Employee life insurance defined. "Employee life insurance" is that plan of life insurance, other than salary savings life insurance or pension trust insurance and annuities, under which individual policies are issued to the employees of any employer and when the policies are issued on the lives of not less than five employees at date of issue. Premiums for the policies must be paid by the employer or the trustee of a fund established by the employer either wholly from the employer's funds or funds contributed by the employer or partly from those funds and partly from funds contributed by the insured employees.   History: En. Sec. 349, Ch. 286, L. 1959; R.C.M. 1947, 40-3922; amd. Sec. 1212, Ch. 56, L. 2009.  
  33-20-1003. Repealed. Sec. 32, Ch. 396, L. 2017.   History: En. Sec. 350, Ch. 286, L. 1959; R.C.M. 1947, 40-3923.  
  33-20-1101. Employee groups. (1) Subject to the requirements in subsections (2) through (5), the lives of a group of individuals may be insured under a policy issued to an employer or to the trustees of a fund established by an employer to insure employees of the employer for the benefit of persons other than the employer. The employer or trustees must be considered the policyholder.   (2) (a) The employees eligible for insurance under the policy must be all of the employees of the employer or all of any class or classes of the employer determined by conditions pertaining to their employment. The policy may provide that the term "employees" includes:   (i) the employees of one or more subsidiary corporations and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of the employer's affiliated corporations, proprietors, or partnerships is under common control;   (ii) the individual proprietor or partners if the employer is an individual proprietor or a partnership; or   (iii) retired employees.   (b) A director of a corporate employer is not eligible for insurance under the policy unless the director is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director.   (c) An individual proprietor or partner is not eligible for insurance under the policy unless the individual proprietor or partner is actively engaged in and devotes a substantial part of working hours to the conduct of the business of the proprietor or partnership.   (3) (a) Payment of the premium for the insurance must be made by the policyholder from:   (i) the employer's funds or funds contributed by the employer;   (ii) funds contributed by the insured employees or members; or   (iii) funds contributed by a combination of payors in subsections (3)(a)(i) and (3)(a)(ii).   (b) A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.   (4) The policy must cover at least two employees at date of issue.   (5) The amount of insurance under the policy must be based upon a plan precluding individual selection either by the employees or by the employer or trustees.   History: En. Sec. 329, Ch. 286, L. 1959; R.C.M. 1947, 40-3902; amd. Sec. 25, Ch. 469, L. 2005; amd. Sec. 1, Ch. 430, L. 2007.  
  33-20-1102. Labor union groups. The lives of a group of individuals may be insured under a policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives, or agents, subject to the following requirements:   (1) The members eligible for insurance under the policy shall be all of the members of the union or all of any class or classes thereof determined by conditions pertaining to their employment or to membership in the union, or both.   (2) The premium for the policy shall be paid by the policyholder, either wholly from the union's funds or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 75% of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.   (3) The policy must cover at least 25 members at date of issue.   (4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union.   History: En. Sec. 330, Ch. 286, L. 1959; R.C.M. 1947, 40-3903.  
  33-20-1103. Employer and labor union combinations -- trustee groups. The lives of a group of individuals may be insured under a policy issued to the trustees of a fund established by two or more employers or by one or more labor unions or by one or more employers and one or more labor unions, which trustees must be considered the policyholder, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions, subject to the following requirements:   (1) The persons eligible for insurance must be all of the employees of the employers or all of the members of the unions or all of any class or classes of the employees or members determined by conditions pertaining to their employment or to membership in the unions, or to both. The policy may provide that the term "employees" includes retired employees and the individual proprietor or partners if an employer is an individual proprietor or a partnership. A director of a corporate employer may not be eligible for insurance under the policy unless the person is otherwise eligible as a bona fide employee of the corporation by performing services other than usual duties of a director. An individual proprietor or partner may not be eligible for insurance under the policy unless the proprietor or partner is actively engaged in and devotes a substantial part of the individual's time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with the trusteeship.   (2) The premium for the policy must be paid by the trustees wholly from funds contributed by the employer or employers of the insured persons or by the union or unions, or by both, or partly from the funds and partly from funds contributed by the insured persons. A policy may not be issued on which the entire premium is to be derived from funds contributed by the insured persons specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance may be placed in force only if at least 75% of the then eligible persons, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons or all except any person for whom evidence of individual insurability is not satisfactory to the insurer.   (3) The policy must cover at date of issue at least 100 persons and not less than an average of 5 persons per employer unit, and if the fund is established by the members of an association of employers the policy may be issued if:   (a) either:   (i) the participating employers constitute at date of issue at least 60% of those employer members whose employees are not already covered for group life insurance; or   (ii) the total number of persons covered at date of issue exceeds 600; and   (b) the policy does not require that, if a participating employer discontinues membership in the association, the insurance of the employer's employees shall cease solely by reason of the discontinuance.   (4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions.   History: En. Sec. 331, Ch. 286, L. 1959; R.C.M. 1947, 40-3904; amd. Sec. 1213, Ch. 56, L. 2009.  
  33-20-1104. Public employee groups. The lives of a group of individuals may be insured under a policy issued to an incorporated city, town, or village or an association or league of cities, towns, or villages, an independent school district, state college or university, any association of state employees, and any association of state, county, and city, town, or village employees and any combination of state, county, or city, town, or village employees and any department of the state or county government, which employer or association shall be deemed the policyholder, to insure the employees of any such incorporated city, town, or village, of any such independent school district, of any such state college and university, or of any such department of the state or county government or members of any association of state, county, or city, town, or village employees, for the benefit of persons other than the policyholder, subject to the following requirements:   (1) The employees eligible for insurance under the policy shall be all of the employees of the employer or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term "employees" shall include retired employees. A policy issued to insure the employees of a public body may provide that the term "employees" shall include elected or appointed officials.   (2) The premium for the policy shall be paid by the policyholder wholly from funds contributed by it as employer or partly from such funds and partly from funds contributed by the insured employees or wholly from funds contributed by the insured employees, except that:   (a) the employer may deduct from the employees' salaries the required contributions for the premiums when authorized in writing by the respective employees so to do; and   (b) the premium for the policy may be paid by the policyholder wholly or partly from funds contributed by any incorporated city, town, or village policyholder when authorized by the charter of such city, town, or village or as otherwise authorized by law.   (3) Such policy may be placed in force only if at least 75% of the eligible employees, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required premium contributions and become insured thereunder.   (4) The policy must cover at least 10 employees at date of issue.   History: En. Sec. 332, Ch. 286, L. 1959; R.C.M. 1947, 40-3905.  
  33-20-1105. Debtor groups. The lives of a group of individuals may be insured under a policy issued to a creditor, who is considered the policyholder, to insure the debtors of the creditor, subject to the following requirements:   (1) The debtors eligible for insurance under the policy must be all of the debtors of the creditor or all of any class or classes of those debtors determined by conditions pertaining to the indebtedness or the purchase giving rise to the indebtedness. The policy may provide that the term "debtors" includes the debtors of one or more subsidiary corporations and the debtors of one or more affiliated corporations, proprietors, or partnerships if the business of the policyholder and of the affiliated corporations, proprietors, or partnerships is under common control.   (2) The premium for the policy must be paid by the policyholder from the creditor's funds, from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors may not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least 75% of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of identifiable charges must insure all eligible debtors or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.   (3) The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least 100 persons yearly or may reasonably be expected to receive at least 100 new entrants during the first policy year and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75% of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age.   (4) The amount of insurance on the life of any debtor may not at any time exceed the amount owed by the debtor to the creditor.   (5) The insurance must be payable to the policyholder. Each payment must reduce or extinguish the unpaid indebtedness of the debtor to the extent of the payment.   History: En. Sec. 333, Ch. 286, L. 1959; amd. Sec. 1, Ch. 132, L. 1965; R.C.M. 1947, 40-3906; amd. Sec. 1, Ch. 617, L. 1985; amd. Sec. 1214, Ch. 56, L. 2009.  
  33-20-1106. Credit union groups. The lives of a group of individuals may be insured under a policy issued to a credit union organized pursuant to the laws of the state of Montana or the Federal Credit Union Act, which shall be deemed the policyholder, to insure eligible members for amounts of insurance not in excess of the share balance of each member, based upon some plan which will preclude individual selection, for the benefit of someone other than the credit union or its officials and subject to the following requirements:   (1) The members eligible for insurance under the policy shall be all the members of the credit union who meet standard physical requirement conditions of the insurer or all of any class or classes thereof determined by conditions pertaining to their age or to membership in the credit union or both.   (2) The premiums for the policy shall be paid by the policyholder, either wholly from the credit union's funds or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed only if at least 75% of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insured, elect to make the required contribution. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.   (3) The policy must cover at least 25 members at the date of issue.   History: En. Sec. 334, Ch. 286, L. 1959; R.C.M. 1947, 40-3907.  
  33-20-1107 through 33-20-1110 reserved.  
  33-20-1111. Dependents of employee and labor union groups -- coverage. Any group life policy issued under 33-20-1101, 33-20-1102, or 33-20-1103 may be extended to insure the employees or members against loss due to the death of their spouses and minor children, or any class or classes of employees, members, spouses, or minor children, subject to the following requirements:   (1) (a) The premium for the insurance must be paid by the policyholder from:   (i) the employer's or union's funds or funds contributed by the employer or union;   (ii) funds contributed by the insured employees or members; or   (iii) a combination of payors in subsections (1)(a)(i) and (1)(a)(ii).   (b) If no part of the premium is to be paid from funds contributed by the employees or members, all eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, must be insured with respect to their spouses and children.   (2) The amounts of insurance must be based upon some plan precluding individual selection either by the employees or members or by the policyholder, employer, or union.   (3) (a) Upon termination of the insurance with respect to the members of the family of any employee or member by reason of the employee's or member's termination of employment, termination of membership in the class or classes eligible for coverage under the policy, or death, the spouse is entitled to have issued by the insurer, without evidence of insurability, an individual policy of life insurance, without disability or other supplementary benefits, providing application for the individual policy is made and the first premium is paid to the insurer within 31 days after the termination, subject to the requirements of 33-20-1209(1)(a) through (1)(c).   (b) (i) If the group policy terminates or is amended to terminate the insurance of any class of employees or members and the employee or member is entitled to have issued an individual policy under 33-20-1210, the spouse is also entitled to have issued by the insurer an individual policy, subject to the conditions and limitations provided above.   (ii) If the spouse dies within the period during which the spouse would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance that the spouse would have been entitled to have issued under the individual policy must be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium for the individual policy has been made.   (4) Notwithstanding the provisions in 33-20-1208, only one certificate must be issued for delivery to an insured person if a statement concerning any dependent's coverage is included in the certificate.   History: En. Sec. 336, Ch. 286, L. 1959; amd. Sec. 1, Ch. 215, L. 1977; R.C.M. 1947, 40-3909; amd. Sec. 25, Ch. 198, L. 1979; amd. Sec. 84, Ch. 370, L. 1987; amd. Sec. 2, Ch. 430, L. 2007.  
  33-20-1112. Discretionary groups. (1) Subject to the requirements of this section, the lives of a group of individuals may be insured under a policy issued to a group other than one described in this part if the commissioner finds that:   (a) the issuance of the policy is not contrary to the best interest of the public;   (b) the issuance of the policy would result in economies of acquisition or administration; and   (c) the benefits of the policy are reasonable in relation to the premiums charged.   (2) Group life insurance coverage under this section may be offered in this state by an insurer under a policy issued in another state only if this state or another state that has requirements substantially similar to the requirements in subsection (1) has made a determination that the requirements of subsection (1) have been met.   (3) The premium for a policy issued under this section must be paid either from the policyholder's funds, from funds contributed by the covered persons, or from both.   (4) An insurer may exclude or limit the coverage on any individual if the evidence of the individual's insurability is not satisfactory to the insurer.   History: En. Sec. 1, Ch. 163, L. 2011.  
  33-20-1201. Provisions required in group contracts. A policy of group life insurance or a certificate may not be delivered in this state unless it contains in substance the provisions set forth in this part or provisions that in the opinion of the commissioner are more favorable to the persons insured or at least as favorable to the persons insured and more favorable to the policyholder. A provision may be omitted from a certificate if the commissioner has determined that the provision is not appropriate in a certificate. However:   (1) 33-20-1207 through 33-20-1211 do not apply to policies issued to a creditor to insure debtors of the creditor;   (2) the standard provisions required for individual life insurance policies do not apply to group life insurance policies; and   (3) if the group life insurance policy is on a plan of insurance other than the term plan, it must contain a nonforfeiture provision or provisions that in the opinion of the commissioner is or are equitable to the insured persons and to the policyholder. However, this subsection may not be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.   History: En. Sec. 337, Ch. 286, L. 1959; R.C.M. 1947, 40-3910; amd. Sec. 39, Ch. 472, L. 1999; amd. Sec. 49, Ch. 227, L. 2001.  
  33-20-1202. Grace period. The group life insurance policy and certificate must contain a provision that the policyholder is entitled to a grace period of 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage must continue in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period.   History: En. Sec. 338, Ch. 286, L. 1959; R.C.M. 1947, 40-3911; amd. Sec. 28, Ch. 380, L. 2003.  
  33-20-1203. Incontestability. The group life insurance policy and certificate must contain a provision that the validity of the policy may not be contested, except for nonpayment of premium, after it has been in force for 2 years from its date of issue and that a statement made by any person insured under the policy relating to the person's insurability may not be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of 2 years during the person's lifetime or unless it is contained in a written instrument signed by the person.   History: En. Sec. 339, Ch. 286, L. 1959; R.C.M. 1947, 40-3912; amd. Sec. 29, Ch. 380, L. 2003.  
  33-20-1204. Application -- statements considered representations. The group life insurance policy and certificate must contain a provision that a copy of the application, if any, of the policyholder must be attached to the policy when issued, that all statements made by the policyholder or by the persons insured must be considered representations and not warranties, and that a statement made by any person insured may not be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or to the person's beneficiary.   History: En. Sec. 340, Ch. 286, L. 1959; R.C.M. 1947, 40-3913; amd. Sec. 30, Ch. 380, L. 2003.  
  33-20-1205. Insurability. The group life insurance policy and certificate must contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the person's coverage.   History: En. Sec. 341, Ch. 286, L. 1959; R.C.M. 1947, 40-3914; amd. Sec. 31, Ch. 380, L. 2003.  
  33-20-1206. Misstatement of age. The group life insurance policy and certificate must contain a provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated. The provision must contain a clear statement of the method of adjustment to be used.   History: En. Sec. 342, Ch. 286, L. 1959; R.C.M. 1947, 40-3915; amd. Sec. 32, Ch. 380, L. 2003.  
  33-20-1207. Payment of benefits. (1) The group life insurance policy and certificate must contain a provision that any benefits becoming due by reason of the death of the person insured are payable to the beneficiary designated by the person insured, subject to the provisions of the policy. In the event there is not a designated beneficiary with regard to all or some of the benefits, then those benefits must be considered a part of the intestate estate, pursuant to 72-2-111. In addition, the insurer may pay a benefit amount not exceeding $500 to any person appearing to the insurer to be equitably entitled to that amount by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured.   (2) The provisions of 33-20-114(2) must be incorporated into the group life insurance policy and certificate and are applicable as set out in that subsection.   History: En. Sec. 343, Ch. 286, L. 1959; R.C.M. 1947, 40-3916; amd. Sec. 3, Ch. 469, L. 1985; amd. Sec. 33, Ch. 380, L. 2003.  
  33-20-1208. Certificate. The group life insurance policy must contain a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which the person is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in 33-20-1209 through 33-20-1211.   History: En. Sec. 344, Ch. 286, L. 1959; R.C.M. 1947, 40-3917; amd. Sec. 1215, Ch. 56, L. 2009.  
  33-20-1209. Conversion on termination of eligibility. (1) The group life insurance policy or certificate must contain a provision that if the insurance or any portion of it on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person is entitled to have issued to the person by the insurer, without evidence of insurability, an individual policy of life insurance if the application for the individual policy is made and the first premium is paid to the insurer within 31 days after termination and provided that:   (a) the individual policy must, at the option of the person, be on any one of the forms, including but not limited to term insurance, if the group policy provides for term insurance, then customarily issued by the insurer at the age and for the amount applied for, and must offer benefits at least equal to those under the group coverage;   (b) the individual policy must, at the option of the insured, be in an amount not in excess of the amount of life insurance that ceases because of the termination, less the amount of any life insurance for which the person is insured under any other group policy within 31 days after the termination, provided that any amount of insurance that has matured on or before the date of the termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, may not, for the purposes of this provision, be included in the amount that is considered to cease because of the termination; and   (c) the premium on the individual policy is the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk that the person belongs, and to the person's age attained on the effective date of the individual policy.   (2) A group insurer may meet the requirements of this section by contracting with another insurer to issue conversion policies as described in subsection (1). The conversion carrier must be authorized to act as an insurer in this state and shall submit the conversion policies to the commissioner.   (3) (a) (i) With the consent of the employer, a person covered under a group life insurance policy issued to an employer or to the trustees of a fund established by an employer under 33-20-1101 may continue the person's coverage under the group policy during the person's employment even if there has been a reduction of the person's regular work schedule to less than the minimum number of hours required for eligibility for membership. The premium charged for the continued coverage must be equal to that charged other members of the group.   (ii) The person's coverage under the group ceases if the person subsequently becomes eligible for coverage under another group policy because of employment elsewhere.   (b) A group life insurance policy on which the payment of premiums is provided under 33-20-1101(3)(a)(ii) or (3)(a)(iii) may continue in effect for a person whose regular work schedule has been reduced to less than the minimum number of hours required for eligibility for membership. The premium charged for the continued coverage must be equal to that charged other members of the group, and the provisions of subsection (3)(a)(ii) of this section apply.   History: En. Sec. 345, Ch. 286, L. 1959; R.C.M. 1947, 40-3918; amd. Sec. 1, Ch. 579, L. 1981; amd. Sec. 50, Ch. 227, L. 2001; amd. Sec. 34, Ch. 380, L. 2003; amd. Sec. 3, Ch. 430, L. 2007.  
  33-20-1210. Conversion on termination of policy or certificate. (1) The group life insurance policy or certificate must contain a provision that if the group policy or certificate terminates or is amended to terminate the insurance of any class of insured persons, every person insured under the group policy or certificate at the date of the termination whose insurance terminates and who has been insured for at least 3 years prior to the termination date is entitled to have issued to the person by the insurer an individual policy of life insurance, subject to the same conditions and limitations that are provided by 33-20-1209, except that the group policy or certificate may provide that the amount of the individual policy may not exceed the smaller of:   (a) the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy or certificate, less the amount of any life insurance for which the person is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after the termination; or   (b) $10,000.   (2) A group insurer may meet the requirements of this section by contracting with another insurer to issue conversion policies as described in subsection (1). The conversion carrier must be authorized to act as an insurer in this state and shall submit the conversion policies to the commissioner.   History: En. Sec. 346, Ch. 286, L. 1959; R.C.M. 1947, 40-3919; amd. Sec. 2, Ch. 579, L. 1981; amd. Sec. 9, Ch. 518, L. 1983; amd. Sec. 51, Ch. 227, L. 2001; amd. Sec. 35, Ch. 380, L. 2003.  
  33-20-1211. Death pending conversion. The group life insurance policy or certificate must contain a provision that if a person insured under the policy or certificate dies during the period that the person would have been entitled to have an individual policy issued to the person in accordance with 33-20-1209 or 33-20-1210 and before an individual policy becomes effective, the amount of life insurance that the person would have been entitled to have issued to the person under an individual policy is payable as a claim under the group policy or certificate, whether or not application for the individual policy or the payment of the first premium has been made.   History: En. Sec. 347, Ch. 286, L. 1959; R.C.M. 1947, 40-3920; amd. Sec. 52, Ch. 227, L. 2001.  
  33-20-1212. Notice as to conversion right. If an individual insured under a group life insurance policy or certificate delivered in this state becomes entitled under the terms of the policy or certificate to have an individual policy of life insurance issued to the individual without evidence of insurability, subject to making an application and payment of the first premium within the period specified in the policy and if an individual is not given notice of the existence of the right at least 15 days prior to the expiration date of the period, then the individual must have an additional period to exercise the right, but this section may not be construed to continue any insurance beyond the period provided in the policy. The additional period expires 15 days after the individual is given the notice, but an additional period may not extend beyond 60 days after the expiration date of the period provided in the policy. Written notice presented to the individual or mailed by the policyholder to the last-known address of the individual or mailed by the insurer to the last-known address of the individual as furnished by the policyholder constitutes notice for the purpose of this section.   History: En. Sec. 348, Ch. 286, L. 1959; R.C.M. 1947, 40-3921; amd. Sec. 53, Ch. 227, L. 2001.  
  33-20-1213. Policy and certificate provisions -- conformity with state statutes. Each policy and certificate regulated by this part must contain a provision or its equivalent as follows:   "Conformity with Montana statutes. The provisions of this policy or certificate conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy or certificate."   History: En. Sec. 22, Ch. 798, L. 1991; amd. Sec. 36, Ch. 380, L. 2003.  
  33-20-1301. Short title. This part may be cited as the "Viatical Settlement Act".   History: En. Sec. 1, Ch. 298, L. 1997.  
  33-20-1302. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:   (1) "Financing entity" means an underwriter, placement agent, lender, or any entity, other than a nonaccredited investor, that has a direct ownership in a policy or certificate that is the subject of a viatical settlement contract, whose sole activity related to the transaction is the provision of funds to effect the viatical settlement contract, and who has an agreement in writing with one or more licensed viatical settlement providers.   (2) "Related provider trust" means a trust established by a licensed viatical settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. The trust must have a written agreement with the viatical settlement provider under which the licensed viatical settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to viatical settlement transactions available to the commissioner.   (3) "Special purpose entity" means a corporation, partnership, trust, limited liability company, or other similar entity formed solely to provide, either directly or indirectly, access to institutional capital markets for a financing entity or licensed viatical settlement provider.   (4) (a) "Viatical settlement broker" means an individual who, for a fee, commission, or other consideration:   (i) offers or advertises the availability of viatical settlement contracts;   (ii) introduces holders of life insurance policies or certificates insuring the lives of individuals with a terminal illness or condition to viatical settlement providers; or   (iii) offers or attempts to negotiate viatical settlement contracts between the policyholders or certificate holders and one or more viatical settlement providers.   (b) Viatical settlement broker does not mean an attorney, accountant, or financial planner retained to represent the policyholder or certificate holder unless compensation paid to the attorney, accountant, or consultant is paid by the viatical settlement provider.   (5) (a) "Viatical settlement contract" means a written agreement establishing the terms under which compensation or anything of value will be paid, when the compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator's assignment, transfer, sale, devise, or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance.   (b) The term includes:   (i) a contract for a loan or other financing transaction with a viator secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy; or   (ii) an agreement with a viator to transfer ownership or change the beneficiary designation at a later date regardless of the date that compensation is paid to the viator.   (c) The term does not mean a written agreement entered into between a viator and a person having an insurable interest in the viator's life.   (6) (a) "Viatical settlement provider" means a person who solicits, enters into, or negotiates viatical settlement contracts or offers to enter into or negotiate viatical settlement contracts.   (b) Viatical settlement provider does not mean:   (i) a bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a life insurance policy only as collateral for a loan;   (ii) an insurer issuing a life insurance policy providing accelerated benefits pursuant to 33-20-127 or pursuant to the laws of the state to which the policy was subject when issued;   (iii) an individual who enters into a single agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit; or   (iv) any corporation, partnership, or partner that purchases a life insurance contract of an employee or retiree of the corporation or of a partner. The settlement made on any contract exempt under this section must be reasonable and subject to the standards imposed on licensees under 33-20-1304.   (7) (a) "Viatical settlement purchase agreement" means a contract or agreement entered into by a viatical settlement purchaser with a viatical settlement provider to purchase a life insurance policy or an interest in a life insurance policy for the purpose of deriving an economic benefit.   (b) A viatical settlement purchase agreement does not include a viatical settlement contract.   (8) (a) "Viatical settlement purchaser" means a person who, for the purpose of deriving an economic benefit:   (i) gives consideration for a life insurance policy or an interest in the death benefits of a life insurance policy; or   (ii) owns, acquires, or is entitled to a beneficial interest in a trust that owns a viatical settlement contract or that is the beneficiary of a life insurance policy that has been or will be the subject of a viatical settlement contract.   (b) A viatical settlement purchaser does not include a licensed viatical settlement provider, a licensed viatical settlement broker, a qualified institutional buyer as defined in 17 CFR 230.144A, a financing entity, a special purpose entity, or a related provider trust.   (9) (a) "Viator" means the owner of a life insurance policy or the certificate holder under a group policy who enters or seeks to enter into a viatical settlement contract.   (b) The term does not include a licensed viatical settlement provider, a licensed viatical settlement broker, a qualified institutional buyer as defined in 17 CFR 230.144A, a financing entity, a special purpose entity, or a related provider trust.   History: En. Sec. 2, Ch. 298, L. 1997; amd. Sec. 2, Ch. 295, L. 2001; amd. Sec. 7, Ch. 493, L. 2003.  
  33-20-1303. License requirements. (1) A person may not act as or purport to be a viatical settlement provider unless licensed as a viatical settlement provider under this part.   (2) (a) Except as provided in subsections (2)(b) and (2)(c), an individual may not broker, solicit, or negotiate viatical settlement contracts between a viator and one or more viatical settlement providers or otherwise act on behalf of a viator without first having obtained a license as a viatical settlement broker from the commissioner. An applicant for a viatical settlement broker's license shall:   (i) attend required viatical settlement broker training and pass a viatical settlement broker examination designated by the commissioner by rule; and   (ii) pay a fee for an original viatical settlement broker's license pursuant to 33-2-708. The fees for license renewal and lapsed license reinstatement for a viatical settlement broker's license are as provided in 33-2-708.   (b) A resident or nonresident insurance producer must be considered to meet the licensing requirements of a viatical settlement broker and must be permitted to operate as a viatical settlement broker if the insurance producer is licensed as an insurance producer with a life insurance line of authority in this state or in the insurance producer's home state and has been licensed for at least 1 year. In addition:   (i) not later than 30 days from the first day of operating as a viatical settlement broker, the insurance producer shall notify the commissioner, on a form or in a manner prescribed by the commissioner, that the insurance producer is acting as a viatical settlement broker and shall pay a fee pursuant to 33-2-708(1)(b)(viii). The notification must include an acknowledgment by the insurance producer that the insurance producer will operate as a viatical settlement broker in accordance with this part.   (ii) regardless of the manner in which the insurance producer is compensated, the insurance producer must be considered to represent only the viator and owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interests of the viator.   (c) If requested by the commissioner, a life insurance producer acting as a viatical settlement broker under this subsection (2) who has previously complied with subsection (2)(b)(i) shall report to the commissioner when renewing a resident or nonresident life insurance producer's license regarding the life insurance producer's intent to continue to act as a viatical settlement broker. The statement regarding an intent to continue acting as a viatical settlement broker must be made on the life insurance producer's license renewal form. An individual who makes a statement pursuant to this subsection (2)(c) may not be charged an additional fee.   (d) The provisions of subsections (2)(a) and (2)(b) do not prohibit an individual licensed as an attorney, certified public accountant, or certified financial planner who is accredited by a nationally recognized accreditation agency, who is retained to represent the viator, and whose compensation is not paid directly or indirectly by the viatical settlement provider from negotiating viatical settlement contracts without having to obtain a license as a viatical settlement broker.   (3) Regardless of the manner in which a viatical settlement broker or insurance producer is compensated, the viatical settlement broker or insurance producer must be considered to represent only the viator and the viatical settlement broker or insurance producer owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interests of the viator.   (4) (a) To obtain a license to transact business as a viatical settlement provider or as a viatical settlement broker, if required to obtain a viatical settlement broker's license under the provisions of subsection (2)(a), an applicant shall apply for the license in a form approved by the commissioner and shall pay the fee required for the application.   (b) The commissioner may request biographical, organizational, locational, financial, employment, and other information on the application form that the commissioner determines to be relevant to the evaluation of applications and to the granting of the license. The commissioner may require a statement of the business plan or plan of operation of the applicant. The commissioner shall require an applicant for a viatical settlement provider license to file with the application for the commissioner's approval a copy of the viatical settlement contract that the applicant intends to use in business under the license.   (c) If an applicant is a corporation, the corporation must be:   (i) incorporated or organized under the laws of this state; or   (ii) a foreign corporation authorized to transact business in this state.   (d) If the applicant is a partnership, the partnership must be organized under the laws of this state.   (e) If the applicant is a business entity other than a corporation or partnership, the business entity must be organized under the laws of this state.   (5) (a) An individual licensed as a viatical settlement broker must meet the continuing education requirements in 33-17-1203.   (b) The hours of continuing education required under subsection (5)(a) must be in the subjects of life insurance, viaticals, or ethics.   (c) For an individual licensed as a viatical settlement broker, the 24-month period for meeting the continuing education requirements must correlate with the broker's license renewal period.   (d) The viatical settlement broker's license of an individual who fails to comply with this continuing education requirement and who has not been granted an extension of time to comply in accordance with 33-17-1203(2) must be terminated and promptly surrendered to the commissioner.   History: En. Sec. 3, Ch. 298, L. 1997; amd. Sec. 2, Ch. 552, L. 2005; amd. Sec. 36, Ch. 44, L. 2007; amd. Sec. 11, Ch. 399, L. 2007; amd. Sec. 20, Ch. 271, L. 2009.  
  33-20-1304. Issuance of license. (1) The commissioner may issue a license to the applicant if the commissioner determines that the applicant:   (a) has satisfied all of the requirements for the license for which an application is made;   (b) has not engaged in conduct that would authorize the commissioner to refuse to issue a license under this part; and   (c) is financially responsible and has a good business reputation.   (2) The commissioner may issue a license to a nonresident applicant only if the nonresident applicant files with the commissioner in writing an appointment of the commissioner to be the agent of the applicant upon whom all legal process in any action or proceeding against the applicant may be served. In the appointment, the applicant shall agree that any lawful process against the applicant that is served upon the commissioner is of the same legal force and validity as if served upon the applicant and that the authority will continue in force as long as any liability remains outstanding in this state. An appointment under this subsection becomes effective on the date that the commissioner issues the license to the applicant.   (3) If the commissioner denies an application, the commissioner shall inform the applicant and state the grounds for the denial.   (4) An individual may act as a viatical settlement provider or viatical settlement broker under the authority of the license of a firm or of a corporate viatical settlement provider whether or not the individual holds a license as a viatical settlement provider if:   (a) the individual is a member or employee of the firm or is an employee, officer, or director of the corporation; and   (b) the individual is designated by the firm or corporation on its license application or on a form that amends or supplements the application as being authorized to act as a viatical settlement provider under the authority of the license.   History: En. Sec. 4, Ch. 298, L. 1997.  
  33-20-1305. Expiration of license. (1) A license issued under this part expires on its expiration date unless it is renewed on or before its expiration date.   (2) Unless the commissioner designates another date, a license expires on the last day of the month in which the second anniversary of the initial issuance date of the license occurs and on the last day of the month of the second anniversary following each renewal.   History: En. Sec. 5, Ch. 298, L. 1997.  
  33-20-1306. Notification by licensee of material change affecting qualification for license. A licensee shall immediately notify the commissioner of any material change in ownership or control or in any other matter affecting the qualification of the licensee for the license in this state, including keeping the commissioner informed about personnel and address changes.   History: En. Sec. 6, Ch. 298, L. 1997.  
  33-20-1307. Suspension -- revocation -- refusal to issue or renew license. (1) The commissioner may suspend, revoke, refuse to issue, or refuse to renew a license if the commissioner determines that the licensee or applicant for a license is untrustworthy or incompetent to act as a licensee or is guilty of one or more of the following:   (a) dishonesty, fraud, or gross negligence in the conduct of business as a licensee;   (b) a pattern of unreasonable payments to policyholders or certificate holders;   (c) falsification of an application for the license or renewal of the license or misrepresentation or engagement in any other dishonest act in relation to the application;   (d) conduct resulting in a conviction of a felony under the laws of any state or of the United States;   (e) conviction of any crime, an essential element of which is dishonesty or fraud, under the laws of any state or of the United States;   (f) refusal to renew or cancellation, revocation, or suspension of authority to transact insurance or business as a viatical settlement provider, viatical settlement broker, or similar entity in another state;   (g) failure to pay a civil penalty imposed by final order of the commissioner or to carry out terms of probation set by the commissioner;   (h) refusal by a licensee to be examined or to produce accounts, records, or files for examination, refusal by any officers or employees to give information with respect to the affairs of the licensee, or refusal to perform any other legal obligation as to the examination, when required by the commissioner;   (i) affiliation with or under the same general management or interlocking directorate or ownership as another viatical settlement provider, viatical settlement broker, or insurer, any of which unlawfully transacts business in this state;   (j) failure at any time to meet any qualification for which issuance of the license could have been refused had the failure then existed and been known to the commissioner; or   (k) violation of any rule or order of the commissioner or any provision of Montana law.   (2) The commissioner may suspend or refuse to renew a license immediately and without hearing if the commissioner determines that one or both of the following circumstances exist:   (a) the licensee is insolvent;   (b) the financial condition or business practices of the licensee otherwise pose an imminent threat to the public health, safety, or welfare of the residents of this state.   (3) The commissioner may refuse to issue a license in the name of any business entity if the commissioner believes that any member, officer, employee, stockholder, or partner who may materially influence the conduct of the applicant does not meet the standards of this section.   (4) A viatical settlement provider or viatical settlement broker holding a license that has not been renewed or that has been revoked shall surrender the license to the commissioner at the commissioner's request.   (5) The commissioner may take any other administrative action authorized under Montana law in addition to or in lieu of the actions authorized under this part.   History: En. Sec. 7, Ch. 298, L. 1997; amd. Sec. 21, Ch. 271, L. 2009.  
  33-20-1308. Terms of contract. (1) A viatical settlement contract must be in writing. A viatical settlement provider shall establish in the contract the terms under which the viatical settlement provider will pay compensation or anything of value in return for the policyholder's or certificate holder's assignment, transfer, sale, devise, or bequest of the death benefit or ownership of the insurance policy or certificate to the viatical settlement provider.   (2) A viatical settlement provider may not use a viatical settlement contract in this state unless the viatical settlement provider has filed the contract form with the commissioner and the commissioner has approved the contract form according to the provisions set forth in 33-1-501. The commissioner shall disapprove a viatical settlement contract form if, in the commissioner's judgment, the contract or any provision of the contract is unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the policyholder or certificate holder.   (3) Each viatical settlement contract entered into in this state must contain a provision enabling the policyholder or certificate holder to rescind the contract not later than the 30th day after the date on which the contract is executed by all parties or not later than the 15th day after the policyholder or certificate holder receives the viatical settlement proceeds, whichever is the longer period. In order to rescind a contract, a policyholder or certificate holder who has received the proceeds shall return them to the viatical settlement provider or financing entity.   (4) If a viatical settlement provider enters into a viatical settlement that allows the viator to retain an interest in the policy, the viatical settlement contract must contain all of the following provisions:   (a) that the viatical settlement provider shall effect the transfer of the amount of the death benefit only to the extent or portion of the amount viaticated. Benefits in excess of the amount viaticated must be paid directly to the viator's beneficiary by the insurance company.   (b) that the premiums to be paid by the viatical settlement provider and the viator will be apportioned unless the viatical settlement contract specifies that all premiums must be paid by the viatical settlement provider. The contract may also require that the viator reimburse the viatical settlement provider for the premiums attributable to the retained interest.   (c) that the viatical settlement provider shall, upon acknowledgment of the perfection of the transfer, either:   (i) advise the insured in writing that the insurance company has confirmed the viator's interest in the policy; or   (ii) provide the insured with a copy of the instrument provided by the insurance company to the viatical settlement provider that acknowledges the viator's interest in the policy.   History: En. Sec. 8, Ch. 298, L. 1997; amd. Sec. 5, Ch. 272, L. 2009.  
  33-20-1309. Annual report by provider. Unless the commissioner grants a time extension, a viatical settlement provider shall file a report for the preceding calendar year with the commissioner on or before March 1 of each year. The report must be in the form and must contain the information that the commissioner prescribes. The report must be verified as follows:   (1) if the viatical settlement provider is a corporation, by at least two principal officers of the viatical settlement provider;   (2) if the viatical settlement provider is a partnership, by two partners; or   (3) if the viatical settlement provider is not a corporation or a partnership, by the provider's owner and manager.   History: En. Sec. 9, Ch. 298, L. 1997.  
  33-20-1310. Examination of business and practices of licensee or applicant -- maintenance of business records. (1) The commissioner may examine the business and practices of any licensee or applicant for a license when the commissioner determines an examination to be necessary. The commissioner may order a licensee or applicant to produce any records, books, files, or other information reasonably necessary to ascertain whether the licensee or applicant is acting or has acted in violation of the law or contrary to the interests of the public. The licensee or applicant shall pay the expenses incurred in conducting an examination.   (2) A viatical settlement provider shall maintain records of all transactions of viatical settlement contracts of the viatical settlement provider and shall make the records available to the commissioner for inspection during reasonable business hours. The records must be maintained for a period of not less than 5 years from the date of their creation.   (3) The commissioner may at any time require a licensee to fully disclose the identity of all stockholders, partners, officers, and employees.   (4) The names of and individual identification data for all policyholders and certificate holders who have entered viatical settlement contracts with viatical settlement providers are confidential and may not be disclosed except in cases in which the commissioner determines that the merits of public disclosure exceed the demands of individual privacy.   History: En. Sec. 10, Ch. 298, L. 1997; amd. Sec. 10, Ch. 416, L. 1999.  
  33-20-1311. Disclosure of information to policyholder. A viatical settlement provider shall disclose the information specified in this section to the policyholder or certificate holder entering the viatical settlement contract prior to the date on which the viatical settlement contract is signed by all parties. The disclosure must be in the form approved by the commissioner. The information must include the following:   (1) possible alternatives to viatical settlement contracts for persons with terminal illnesses or conditions, including but not limited to accelerated benefits offered by the issuer of the life insurance policy;   (2) the fact that some or all of the proceeds of the viatical settlement may be taxable and that assistance should be sought from a personal tax adviser. Viatical settlement brokers, viatical settlement providers, or their respective employees or agents may not act as personal tax advisers for purposes of this disclosure requirement.   (3) the fact that the viatical settlement could be subject to the claims of creditors;   (4) the fact that receipt of a viatical settlement may adversely affect the recipient's eligibility for medicaid or other government benefits or entitlement and that advice should be obtained from the appropriate agencies;   (5) the right of a policyholder or certificate holder to rescind a viatical settlement contract as provided in 33-20-1308. The disclosure must state the deadlines for rescission and the return of proceeds received.   (6) the date by which the funds will be available to the policyholder or certificate holder and the source of the funds; and   (7) the fact that the viatical settlement contract is void if the viatical settlement provider or viatical settlement broker fails to tender payment of the proceeds as provided in the viatical settlement contract.   History: En. Sec. 11, Ch. 298, L. 1997; amd. Sec. 3, Ch. 295, L. 2001.  
  33-20-1312. Conditions precedent to entering into viatical settlement contract. (1) Before a viatical settlement provider enters into a viatical settlement contract with a policyholder or certificate holder who has a terminal illness or condition, the viatical settlement provider shall first obtain the following:   (a) a written statement from an attending physician that the policyholder or certificate holder is of sound mind and not under constraint or undue influence; and   (b) a witnessed document in which the policyholder or certificate holder:   (i) consents to the viatical settlement contract;   (ii) acknowledges that the illness or condition is terminal;   (iii) represents that the policyholder or certificate holder has a full and complete understanding of the viatical settlement contract;   (iv) confirms that the policyholder or certificate holder has a full and complete understanding of the benefits of the life insurance policy;   (v) releases the medical records of the policyholder or certificate holder relating to the terminal illness or condition; and   (vi) acknowledges that the policyholder or certificate holder has entered into the viatical settlement contract freely and voluntarily.   (2) A viatical settlement provider may enter a viatical settlement contract only after the individual whose life would be the subject of the viatical settlement contract is determined to have a terminal illness or condition, as follows:   (a) if the individual is the policyholder or certificate holder, an attending physician of the policyholder or certificate holder shall make the determination; or   (b) if the individual is a person other than the policyholder or certificate holder, an attending physician of the individual or of the policyholder or certificate holder shall make the determination.   (3) For purposes of this section, "attending physician" means a medical doctor, a doctor of osteopathy, or a naturopathic physician licensed in this state, who is primarily responsible for the treatment or a portion of treatment of the individual whose life would be the subject of the viatical settlement contract.   History: En. Sec. 12, Ch. 298, L. 1997.  
  33-20-1313. Requirements for entering into viatical settlement contract -- prohibitions on finder's fee -- solicitations -- discrimination -- false or misleading advertising or solicitation -- misuse of confidential information. (1) A person may not enter into a viatical settlement contract within a 2-year period from the date of issuance of an insurance policy or certificate unless the person certifies to the viatical settlement provider that one or more of the following conditions have been met within the 2-year period:   (a) (i) the policy or certificate was issued upon the person's exercise of conversion rights arising out of a group or individual policy or certificate and the total of the time covered under the conversion policy or certificate plus the time covered by the policy or certificate prior to the conversion equal at least 24 months; and   (ii) the time covered under a group policy or certificate was calculated without regard to any change in insurance carriers if the coverage was continuous and under the same group sponsorship; or   (b) the person submits independent evidence to the viatical settlement provider that one or more of the following conditions have been met within the 2-year period:   (i) the person is terminally ill or chronically ill; or   (ii) the person has disposed of the person's ownership interest in a closely held corporation pursuant to the terms of a buyout agreement or similar agreement that was in effect at the time that the insurance policy or certificate was issued.   (2) Copies of the certification and independent evidence required under subsection (1) must be submitted by the viatical settlement provider to the insurer when the viatical settlement provider submits a request to the insurer for verification of coverage. The copies must be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies of the documents received by the viatical settlement provider.   (3) A licensee may not pay or offer to pay a finder's fee, commission, or other compensation to a person described in this subsection (3) in connection with a policy insuring the life of an individual with a terminal illness or condition. The prohibition under this subsection (3) applies with respect to payments or offers of payment to:   (a) the physician, attorney, or accountant of the policyholder, the certificate holder, or the insured individual;   (b) any person other than a physician, attorney, or accountant described in subsection (3)(a) who provides medical, legal, or financial planning services to the policyholder, to the certificate holder, or to the insured individual when the individual is other than the policyholder or certificate holder; or   (c) any person other than one described in subsection (3)(a) or (3)(b) who acts as an agent of the policyholder, certificate holder, or insured individual.   (4) A licensee may not solicit an investor who could influence the treatment of the illness or condition of the individual whose life would be the subject of a viatical settlement contract.   (5) All information solicited or obtained from a policyholder or certificate holder by a licensee is subject to the confidentiality requirements set forth in Title 33, chapter 19. For purposes of this subsection, a licensee must be considered an insurance-support organization as defined in 33-19-104.   (6) A licensee may not discriminate in the making of a viatical settlement contract on the basis of race, age, sex, national origin, creed, religion, occupation, marital or family status, or sexual orientation and may not discriminate between persons who have dependents and persons who do not have dependents.   (7) A person licensed pursuant to 33-20-1304 may not engage in any false or misleading advertising, solicitation, or practice as described in 33-18-203.   (8) A person licensed pursuant to 33-20-1304 may not sell another product of insurance to the contract holder unless approval is obtained from the commissioner.   History: En. Sec. 13, Ch. 298, L. 1997; amd. Sec. 3, Ch. 552, L. 2005.  
  33-20-1314. Payment to escrow or trust account -- lump-sum payment. (1) Within 3 business days after receipt of documents from the policyholder or certificate holder effecting the transfer of the insurance policy or certificate, the viatical settlement provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a bank approved by the commissioner, pending acknowledgment of the transfer by the issuer of the life insurance policy. The trustee or escrow agent shall transfer the proceeds due to the policyholder or certificate holder immediately upon receipt of acknowledgment of the transfer from the insurer.   (2) A viatical settlement provider shall make payment of the proceeds of a viatical settlement contract in a lump sum except as provided in this subsection. A viatical settlement provider may not retain any portion of the proceeds. A viatical settlement provider may make installment payments only if the viatical settlement provider has purchased an annuity issued by an authorized insurer or a similar financial instrument issued by a financial institution authorized to engage in the business of a financial institution in this state.   (3) Failure by the viatical settlement provider to tender the viatical settlement by the date disclosed to the policyholder or certificate holder renders the contract void.   History: En. Sec. 14, Ch. 298, L. 1997; amd. Sec. 6, Ch. 272, L. 2009.  
  33-20-1315. Rules -- standards -- bond. The commissioner may, in accordance with the provisions of 33-1-313, adopt rules for the purpose of carrying out this part. In addition, the commissioner:   (1) may establish standards for evaluating reasonableness of payments under viatical settlement contracts for insured individuals who are terminally ill or chronically ill. The authority includes but is not limited to regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise, or bequest of a benefit under a life insurance policy. For the purpose of the standards, the commissioner shall consider payments made in regional and national viatical settlement markets to the extent that this information is available, as well as model standards developed by the national association of insurance commissioners. When the insured is not terminally ill or chronically ill, the commissioner may not establish standards for evaluating the reasonableness of payments, except that a viatical settlement provider shall pay an amount greater than the greater of the cash surrender value or the accelerated death benefit then available.   (2) shall require a bond or other mechanism for financial accountability of viatical settlement providers and viatical settlement brokers; and   (3) shall adopt rules to establish:   (a) trade practice standards for the purpose of regulating advertising and solicitation of viatical settlement contracts;   (b) fees that are commensurate with fees charged pursuant to 33-2-708; and   (c) the continuing education program provided for in 33-20-1303(5).   History: En. Sec. 15, Ch. 298, L. 1997; amd. Sec. 8, Ch. 493, L. 2003; amd. Sec. 4, Ch. 552, L. 2005; amd. Sec. 37, Ch. 44, L. 2007; amd. Sec. 12, Ch. 399, L. 2007.  
  33-20-1316. Service of process. (1) For viatical settlement providers, the provisions of Title 33, chapter 1, part 6, apply.   (2) For viatical settlement brokers, the provisions of 33-17-405 apply.   History: En. Sec. 6, Ch. 227, L. 2001.  
  33-20-1317. Disclosure of information to viatical settlement purchasers. (1) A viatical settlement provider shall disclose the information specified in this section to a viatical settlement purchaser prior to the date on which the parties sign the viatical settlement purchase agreement.   (2) The viatical settlement purchaser shall date and sign the information disclosure. The viatical settlement provider shall provide a copy of the information disclosure to the viatical settlement purchaser.   (3) The information disclosure must include the following:   (a) that the viatical settlement purchaser will not receive payment until the insured dies;   (b) that the actual annual rate of return on a viatical settlement purchase agreement is dependent upon an accurate projection of the insured's life expectancy and the actual date of the insured's death and that an annual guaranteed rate of return is not determinable;   (c) that the viatical insurance contract is not a liquid purchase since it is impossible to predict the exact timing of its maturity, that the funds are probably not available until the death of the insured, and that there is not an established secondary market for the resale of viatical settlement products by the viatical settlement purchaser;   (d) that the viatical settlement purchaser may lose all benefits or may receive substantially reduced benefits if the insurer goes out of business during the term of the viatical settlement investment;   (e) (i) that the viatical settlement purchaser is responsible for payment of the insurance premium or other costs related to the policy, if required by the terms of the viatical purchase agreement, and that these payments may reduce the viatical settlement purchaser's return and may continue beyond the insured's projected life expectancy; and   (ii) if a party other than the viatical settlement purchaser is responsible for the payment, that the name of that party must also be disclosed;   (f) the amount of the premium that a purchaser is required to pay, if applicable;   (g) that the viatical settlement purchaser may be responsible for payment of the insurance premium or other costs related to the policy if the insured returns to health;   (h) the amount of any fees or other expenses to be charged to the viatical settlement purchaser;   (i) whether or not the viatical settlement purchaser is entitled to a refund of all or part of the investment under the viatical settlement purchase agreement if the policy is later determined to be void;   (j) that group policies:   (i) may contain limitations on conversion rights;   (ii) may require additional premiums to be paid if the group policy is converted; and   (iii) may be terminated and replaced by another group policy, with benefits under the new policy that may be substantially less than those in the original coverage;   (k) for group policies, the name of the party responsible for the payment of any additional premiums;   (l) that there are risks associated with policy contestability, including the risk that the viatical settlement purchaser may not have a claim or may have only a partial claim to death benefits if the insurer rescinds the policy within the contestability period;   (m) whether or not the viatical settlement purchaser will be the beneficiary or owner of the policy and, if the viatical settlement purchaser is the beneficiary, the special risks associated with beneficiary status, including the risk that the beneficiary may be changed;   (n) a description of:   (i) the experience and qualifications of the person who has determined the life expectancy of the insured, such as in-house staff, independent physicians, or specialty firms that weigh medical and actuarial data;   (ii) the information on which the projection of life expectancy is based; and   (iii) the relationship of the person who has made the determination of life expectancy to the viatical settlement provider, if any;   (o) all of the life expectancies obtained in the process of determining the price paid to the policyholder or certificate holder;   (p) a description and amount of any loan or other encumbrance against or in connection with the policy; and   (q) that the viatical settlement purchaser is encouraged to consult with an attorney, accountant, or financial planner who is not affiliated with the viatical settlement broker or viatical settlement provider prior to purchase.   History: En. Sec. 4, Ch. 295, L. 2001; amd. Sec. 72, Ch. 114, L. 2003.  
  33-20-1318. Conflict of laws. (1) If there is more than one owner on a single life insurance policy and the owners are residents of different states, the viatical settlement contract is governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all of the owners. The law of the state of the insured governs if equal owners fail to agree in writing upon a state of residence for jurisdictional purposes.   (2) (a) A viatical settlement provider from this state who enters into a viatical settlement contract with a viator who is a resident of another state that has enacted statutes or adopted regulations governing viatical settlement contracts is governed in the effectuation of that viatical settlement contract by the statutes and regulations of the viator's state of residence.   (b) A viatical settlement provider from this state who enters into a viatical settlement contract with a viator who is a resident of another state that has not enacted statutes or adopted regulations governing viatical settlement contracts is governed in the effectuation of that viatical settlement contract by the laws of this state. The viatical settlement provider shall give the viator notice that this state regulates the transaction into which the viator is entering. The viatical settlement provider shall maintain all records required by this state and use forms approved in this state.   (3) If there is a conflict in the laws that apply to a viator and a viatical settlement purchaser in any individual transaction, the laws of the state that apply to the viator take precedence and the viatical settlement provider shall comply with those laws.   History: En. Sec. 7, Ch. 272, L. 2009.  
  33-20-1401. Short title. This part may be cited as the "Structured Settlement Protection Act".   History: En. Sec. 1, Ch. 351, L. 2005.  
  33-20-1402. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:   (1) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured settlement.   (2) "Consideration" has the meaning provided in 28-2-801.   (3) "Dependent" means a payee's spouse, a minor child of the payee, or any person for whom the payee is legally obligated to provide support, including spousal maintenance.   (4) "Discounted present value" means the present value of future payments determined by discounting the future payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States internal revenue service.   (5) "Gross advance amount" means the sum payable to the payee or to the payee's account as consideration for a transfer of a structured settlement payment right before any reduction for a transfer expense or any other deduction is made from the sum.   (6) "Independent professional advice" means advice of an attorney, a certified public accountant, an actuary, or any licensed professional adviser.   (7) "Interested party" means, with respect to a structured settlement, the payee, any beneficiary irrevocably designated under the annuity contract to receive a payment after the payee's death, the annuity issuer, the structured settlement obligor, or any other party that has a continuing right or obligation under the structured settlement.   (8) "Net advance amount" means the gross advance amount minus the aggregate amount of the actual and estimated transfer expenses required to be disclosed under 33-20-1403(5).   (9) "Payee" means an individual who is receiving tax-free payments under a structured settlement and proposes to make a transfer of the payment rights.   (10) "Periodic payment" includes both a recurring payment and any scheduled future lump-sum payments.   (11) "Qualified assignment agreement" means an agreement providing for a qualified assignment, as defined for federal tax purposes, of the liability to make periodic payments under a structured settlement.   (12) "Responsible administrative authority" means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by the structured settlement.   (13) "Settled claim" means the original tort claim.   (14) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or sickness established by settlement or judgment in resolution of a tort claim.   (15) "Structured settlement agreement" means the written agreement, judgment, stipulation, or release embodying the terms of a structured settlement.   (16) "Structured settlement obligor" means, with respect to a structured settlement, the party that has the continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified assignment agreement.   (17) "Structured settlement payment right" means the right to receive periodic payments under a structured settlement, whether from the structured settlement obligor or the annuity issuer, when:   (a) (i) the payee is domiciled in this state; or   (ii) the domicile or principal place of business of the structured settlement obligor or the annuity issuer is located in this state;   (b) a court or responsible administrative authority in this state approved the structured settlement agreement; or   (c) the structured settlement agreement is expressly governed by the laws of this state.   (18) "Terms of the structured settlement" means, with respect to a structured settlement, the terms of the structured settlement agreement, the annuity contract, a qualified assignment agreement, or any order or other approval of a court or responsible administrative authority or other government authority that authorized or approved the structured settlement.   (19) (a) "Transfer" means a sale, assignment, pledge, hypothecation, or other alienation or encumbrance of a structured settlement payment right made by a payee for consideration.   (b) The term does not include the creation or perfection of a security interest in a structured settlement payment right under a blanket security agreement entered into with an insured depository institution in the absence of any action:   (i) to redirect the structured settlement payment to the insured depository institution or its agent or successor in interest; or   (ii) to otherwise enforce the blanket security interest against the structured settlement payment right.   (20) "Transfer agreement" means the agreement providing for a transfer of a structured settlement payment right.   (21) (a) "Transfer expenses" means all expenses of a transfer that are:   (i) required under the transfer agreement to be paid by the payee; or   (ii) deducted from the gross advance amount, including without limitation any court filing fee, attorney fee, escrow fee, lien recordation fee, judgment and lien search fee, finder's fee, commission, and other payments to a broker or other intermediary.   (b) Transfer expenses do not include a payee's preexisting obligations that are payable on the payee's account from the proceeds of a transfer.   (22) "Transferee" means a party acquiring or proposing to acquire a structured settlement payment right through a transfer.   History: En. Sec. 2, Ch. 351, L. 2005.  
  33-20-1403. Disclosure to payee. No less than 3 days prior to the date on which a payee signs a transfer agreement, the transferee shall provide to the payee a written disclosure statement separate from the transfer agreement that sets forth in bold type no smaller than 14 points:   (1) the amounts and the due dates of the structured settlement payment to be transferred;   (2) the aggregate amount of the amounts in subsection (1);   (3) the discounted present value of the payments to be transferred, which must be identified as:   (a) the calculation of the present value of the transferred structured settlement payment under federal standards for valuing annuities; and   (b) the amount of the applicable federal rate used in calculating the discounted present value;   (4) the gross advance amount;   (5) an itemized list of all applicable transfer expenses, other than attorney fees and related disbursements, based on the transferee's best estimate of the amount of fees and disbursements payable in connection with the transferee's application for approval of the transfer;   (6) the net advance amount;   (7) the amount of any penalty or liquidated damages payable by the payee in the event of a breach of the transfer agreement by the payee; and   (8) a statement that the payee has the right to cancel the transfer agreement without penalty or further obligation no later than the third business day after the date on which the payee signs the agreement.   History: En. Sec. 3, Ch. 351, L. 2005.  
  33-20-1404. Transfer of structured settlement payment right -- conditions. A direct or indirect transfer of a structured settlement payment right is not effective and a structured settlement obligor or annuity issuer is not required to make a payment directly or indirectly to a transferee of a structured settlement payment right unless a final court order or order of a responsible administrative authority has approved the transfer in advance based on written findings by the court or responsible administrative authority that:   (1) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents, if any;   (2) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and either has received independent professional advice or knowingly waived independent professional advice in writing; and   (3) the transfer does not contravene any applicable statute or the order of any court or other government authority.   History: En. Sec. 4, Ch. 351, L. 2005.  
  33-20-1405. Obligations after transfer. After the transfer of a structured settlement payment right pursuant to this part:   (1) the structured settlement obligor and the annuity issuer are discharged and released from liability for the transferred payments to all parties except to the transferee;   (2) the transferee is liable to the structured settlement obligor and the annuity issuer:   (a) if the transfer contravenes the terms of the structured settlement for any tax incurred by the structured settlement obligor or annuity issuer as a consequence of the transfer; and   (b) for any other liability or cost, including reasonable costs and attorney fees, arising:   (i) from compliance by the structured settlement obligor and annuity issuer with the order of the court or responsible administrative authority; or   (ii) as a consequence of the transferee's failure to comply with this part; and   (3) neither the structured settlement obligor nor the annuity issuer may be required to divide a periodic payment between a payee and a transferee or assignee or between two or more transferees or assignees.   History: En. Sec. 5, Ch. 351, L. 2005.  
  33-20-1406. Additional transfers. After the transfer of a structured settlement payment right pursuant to this part, any further transfer by the payee is subject to all of the requirements of this part.   History: En. Sec. 6, Ch. 351, L. 2005.  
  33-20-1407. Jurisdiction -- notice. (1) A transferee may apply under this part for approval of a transfer of a structured settlement payment right:   (a) in the county in which the payee resides;   (b) in the county in which the structured settlement obligor or the annuity issuer maintains a principal place of business; or   (c) in any court or before any responsible administrative authority that approved the structured settlement agreement.   (2) Not less than 20 days prior to a scheduled hearing on an application for approval of a transfer of a structured settlement payment right under 33-20-1404, the transferee shall file with the court or responsible administrative authority and serve on all interested parties a notice of the proposed transfer and the application for an authorized transfer. The notice must include the following:   (a) a copy of the transferee's application;   (b) a copy of the transfer agreement;   (c) a copy of the disclosure statement required under 33-20-1403;   (d) a listing of each of the payee's dependents, if any, together with the age of each dependent;   (e) notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee's application either in person or by counsel by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and   (f) notification of the time and the place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed. The filing deadline may not be less than 15 days after the transferee's notice has been served.   History: En. Sec. 7, Ch. 351, L. 2005.  
  33-20-1408. Waiver not allowed. A payee may not waive the provisions of this part.   History: En. Sec. 8, Ch. 351, L. 2005.  
  33-20-1409. Disputes -- entry of judgment. (1) A transfer agreement entered into on or after October 1, 2005, by a payee who resides in this state must provide that disputes under the transfer agreement, including a claim that the payee has breached the agreement, must be determined in this state under the laws of this state.   (2) A transfer agreement may not authorize the transferee or any other party to confess judgment or consent to entry of judgment against the payee.   History: En. Sec. 9, Ch. 351, L. 2005.  
  33-20-1410. Contingent payment conditions. A transfer of a structured settlement payment right may not extend to a payment that is contingent upon the life of a payee unless prior to the date on which the payee signs the transfer agreement the transferee has established and agreed to maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement obligor for:   (1) periodically confirming the payee's survival; and   (2) giving the annuity issuer and the structured settlement obligor prompt written notice upon the payee's death.   History: En. Sec. 10, Ch. 351, L. 2005.  
  33-20-1411. Responsibility for compliance -- liability. (1) Compliance with the requirements in 33-20-1403 and fulfillment of the conditions in 33-20-1404 are the sole responsibility of the transferee in any transfer of a structured settlement payment right. Neither the structured settlement obligor nor the annuity issuer bears responsibility for or liability arising from noncompliance with 33-20-1403 or failure to fulfill the conditions of 33-20-1404.   (2) A payee who proposes to make a transfer of a structured settlement payment right may not incur a penalty, forfeit an application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee based on a failure of a transfer agreement to satisfy the conditions of this part.   History: En. Sec. 11, Ch. 351, L. 2005.  
  33-20-1412. Construction. This part may not be construed to authorize a transfer of a structured settlement payment right in contravention of any law or to imply that any transfer under a transfer agreement entered into prior to October 1, 2005, is valid or invalid.   History: En. Sec. 12, Ch. 351, L. 2005.  
  33-20-1501. Funeral insurance. (1) (a) "Funeral insurance" means an insurance policy or certificate that requires a one-time payment or the payment of premiums to provide for the costs of a funeral and burial for the policyholder or a named individual.   (b) Funeral insurance is a type of life insurance provided for in 33-1-208 and regulated under Title 33, chapter 20. The terms "burial insurance" and "preneed funeral insurance" have the same meaning as funeral insurance.   (c) Funeral insurance may be:   (i) included in a life insurance policy. This form of funeral insurance may not be sold by or through a person licensed under Title 37, chapter 19, regardless of whether a person licensed under Title 37, chapter 19, also has an insurance producer's license in this state.   (ii) a limited policy or certificate with a guaranteed death benefit that may be sold by:   (A) a licensed insurance producer; or   (B) a person licensed under Title 37, chapter 19, parts 3 and 4, if that person also is licensed as a life insurance producer in this state.   (d) Unless otherwise provided by Title 33, chapter 20, the initial policy or certificate limit under subsection (1)(c)(ii) is up to $15,000.   (2) Funeral insurance for the purposes of Title 33 is not a fixed amount prepaid into a trust or escrow fund, called a prearranged funeral plan, as described in 37-19-827, or a preneed arrangement, as defined in 37-19-101, and regulated under Title 37, chapter 19.   (3) A funeral insurance policy and any solicitation material for the policy must clearly indicate that:   (a) the policy is a life insurance product;   (b) the applicant may designate the beneficiary, including but not limited to a funeral director, mortician, mortuary, or undertaker, if the applicant has an insurable interest in the life of the insured; and   (c) subject to the provisions of 33-20-1502 and this section, the beneficiary may use the proceeds for any purpose.   (4) The funeral insurance policy must state that the insurance company shall, as a condition of paying the benefits of the insurance policy, require from the funeral director, mortician, mortuary, or undertaker:   (a) a certified copy of the certificate of death of the insured or other evidence of death satisfactory to the insurance company; and   (b) a certificate of completion signed by the funeral director, mortician, or undertaker stating that the funeral director, mortician, undertaker, or mortuary has delivered all the goods and performed all the services contracted for, by, or on behalf of the insured.   (5) (a) Notwithstanding the provisions of 33-15-414, the funeral insurance policy must contain an assignability clause that allows the policy or certificate to be assigned or otherwise transferred to another funeral director, mortician, mortuary, or undertaker licensed to do business in this state in conjunction with the assumption of the contractual obligation to provide the funeral goods or services to the extent permitted by state or federal law for the purpose of the insured's eligibility for supplemental security income benefits, medicaid, or other public assistance benefits.   (b) The assignability clause may not be used by a funeral director, mortician, mortuary, or undertaker to pledge, assign, transfer, borrow from, or otherwise encumber an insurance policy assigned to it for purposes of purchasing funeral goods or services prior to delivering all of the goods and performing all of the services contracted for, by, or on behalf of the insured.   (6) After the death of a person who at any time received medicaid benefits, a funeral director, mortician, mortuary, undertaker, or other person, including but not limited to the decedent's spouse, heir, devisee, or personal representative, who is the beneficiary of funeral insurance in excess of $5,000 in value designated to pay for the disposition of the medicaid recipient's remains and for related expenses shall, after paying for the disposition and related expenses, pay all remaining funds to the department of public health and human services within 30 days following the receipt of the funeral insurance death benefit. The funds must be paid to the department regardless of any provision in a written contract, insurance policy, or other agreement entered into on or after January 1, 2008, directing a different disposition of the funds. Funds paid to the department under this section are not considered to be property of the deceased medicaid recipient's estate, and the provisions of 53-6-167 do not apply to recovery of the funds by the department.   History: En. Sec. 1, Ch. 507, L. 2007; amd. Sec. 1, Ch. 52, L. 2011.  
  33-20-1502. Excess funeral insurance proceeds. Funeral insurance proceeds that exceed the cost of the funeral goods and services provided must be paid in accordance with the beneficiary designation in the insurance policy or certificate.   History: En. Sec. 2, Ch. 507, L. 2007.  
  33-20-1503. Rules. The commissioner may adopt rules to regulate funeral insurance, including but not limited to rules regarding licensure of producers, form review, and consumer protection.   History: En. Sec. 3, Ch. 507, L. 2007.  
  33-20-1601. Short title. This part may be cited as the "Unclaimed Life Insurance Benefits Act".   History: En. Sec. 1, Ch. 119, L. 2013.  
  33-20-1602. Purpose. The purposes of this part are to require recognition of the escheat or unclaimed property statutes of Montana and to require complete and proper disclosure, transparency, and accountability relating to any method of payment for life insurance death benefits regulated by the commissioner.   History: En. Sec. 2, Ch. 119, L. 2013.  
  33-20-1603. Application of part. (1) This part applies to life insurance policies, annuity contracts, certificates under a life insurance policy or annuity contract, or certificates issued to a fraternal benefit society under which benefits are payable upon the death of the insured.   (2) This part may not be construed to limit any agreement by the commissioner with an insurer regarding unclaimed life insurance benefits.   (3) For the purposes of this part, the term "annuity contract" does not include an annuity used to fund an employment-based retirement plan or program when the insurer is not committed by terms of the annuity contract to pay death benefits to the beneficiaries of specific plan participants.   History: En. Sec. 3, Ch. 119, L. 2013; amd. Sec. 16, Ch. 63, L. 2015.  
  33-20-1604. Definitions. As used in this part, the following definitions apply:   (1) (a) "Certificate under a life insurance policy" means a certificate of life insurance that provides a death benefit.   (b) The term does not include a certificate of life insurance that provides a death benefit under:   (i) an employee benefit plan that is subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.;   (ii) any federal employee benefit program;   (iii) a policy or certificate used to fund a preneed funeral contract or prearrangement; or   (iv) a policy or certificate of credit life insurance or accidental death insurance.   (2) "Death master file" means the social security administration's death master file or any other database or service at least as comprehensive as the social security administration's death master file used for determining that a person has reportedly died.   (3) "Match" means a search of the death master file that results in a match of the social security number or the name and date of birth of an insured, annuitant, or retained asset account owner.   (4) "Policy" means a policy that provides a death benefit. The term does not include a policy that provides a death benefit under:   (a) an employee benefit plan that is subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.;   (b) any federal employee benefit program;   (c) a policy or certificate of insurance used to fund a preneed funeral contract or prearrangement;   (d) a policy or certificate of credit life insurance or accidental death insurance; or   (e) a policy issued to a group master policyholder for which the insurer does not provide recordkeeping services.   History: En. Sec. 4, Ch. 119, L. 2013.  
  33-20-1605. Insurer conduct. (1) An insurer shall perform a comparison of life insurance policies, annuity contracts, and retained asset accounts that are in force for its insureds against a death master file on at least a semiannual basis to identify potential matches of its insureds. For any potential matches, the insurer shall within 90 days:   (a) make a reasonable effort, documented by the insurer, to confirm the death of the insured, annuity contract holder, or retained asset account holder; and   (b) determine whether benefits are due in accordance with the applicable policy or contract.   (2) If benefits are due in accordance with the applicable policy or contract, the insurer shall:   (a) use reasonable efforts, documented by the insurer, to locate the beneficiary; and   (b) provide the appropriate claims forms or instructions to the beneficiary to make a claim, including the requirement to provide an official death certificate, if applicable under the policy or contract.   (3) With respect to group life insurance, an insurer is required to confirm the possible death of an insured when the insurer maintains at least the following information with regard to those covered under a policy or contract:   (a) social security number or name and date of birth;   (b) beneficiary designation information;   (c) coverage eligibility;   (d) benefit amount; and   (e) premium payment status.   (4) To the extent permitted by law, an insurer may disclose minimum necessary personal information about an insured or beneficiary to a person the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of claim proceeds.   (5) An insurer or its service provider may not charge insureds, account holders, or beneficiaries for any fees or costs associated with a search or verification conducted pursuant to this section.   (6) The benefits from a life insurance policy, an annuity contract, or a retained asset account, plus any applicable accrued interest, must be first payable to the designated beneficiary. In the event the beneficiary cannot be found, the benefits escheat to the state as unclaimed property pursuant to Title 70, chapter 9, part 8.   (7) If claim proceeds are presumed abandoned pursuant to 70-9-803, the insurer shall notify the department of revenue that:   (a) the beneficiary of a life insurance policy, annuity contract, or retained asset account has not submitted a claim with the insurer; and   (b) the insurer has been unable, after reasonable efforts documented by the insurer, to contact the beneficiary.   (8) In addition to giving notice to the department of revenue, the insurer shall immediately submit the unclaimed life insurance or annuity contract benefits or the unclaimed retained asset accounts, plus any applicable accrued interest, to the department of revenue.   History: En. Sec. 5, Ch. 119, L. 2013.  
  33-20-1606. Unfair trade practices. A violation of the provisions of 33-20-1605 by an insurer constitutes an unfair method of competition or a deceptive act or practice in the business of insurance as provided in Title 33, chapter 18, part 2.   History: En. Sec. 6, Ch. 119, L. 2013.  
  33-20-201. Short title. This part shall be known as the "Standard Nonforfeiture Law for Life Insurance".   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(1); amd. Sec. 5, Ch. 346, L. 1979.  
  33-20-202. Nonforfeiture provisions. (1) In the case of policies issued on or after the operative date of this part as defined in 33-20-213, no policy of life insurance, except as set forth in 33-20-212, shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions or corresponding provisions which in the opinion of the commissioner are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with 33-20-210:   (a) that in the event of default in any premium payment after premiums have been paid for at least 1 full year, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be specified in this part. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit that provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits.   (b) that upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years in the case of ordinary insurance and 5 full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be specified in this part;   (c) that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default;   (d) that if the policy shall have become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be specified in this part;   (e) for a policy that has on a basis guaranteed in the policy unscheduled changes in benefits or premiums or that provides an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. For each other policy a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.   (f) a statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state;   (g) an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy;   (h) if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and   (i) a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.   (2) Any of the provisions or portions thereof set forth in subsections (1)(a) through (1)(i) which are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of 6 months after demand therefor with surrender of the policy.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(2), (3); amd. Sec. 1, Ch. 498, L. 1983.  
  33-20-203. Cash surrender value -- paid-up nonforfeiture benefit -- life. (1) Except as provided in subsection (2), any cash surrender value available under the policy in the event of default in the premium payment due on any policy anniversary, whether or not required by 33-20-202, is an amount not less than the excess, if any, of the present value on the anniversary of the future guaranteed benefits that would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:   (a) the then present value of the adjusted premiums as defined in 33-20-204 through 33-20-208 corresponding to premiums that would have fallen due on and after the anniversary; and   (b) the amount of any indebtedness to the insurer on account of or secured by the policy.   (2) For any policy issued on or after the relevant operative date of 33-20-208 that provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in subsection (1) is an amount not less than the sum of the cash surrender value as defined in subsection (1) for an otherwise similar policy issued at the same age without a rider or a supplemental policy provision and the cash surrender value as defined in subsection (1) for a policy that provides only the benefits otherwise provided by the rider or the supplemental policy provision.   (3) Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefits, whether or not required by 33-20-202, is an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.   (4) Any paid-up nonforfeiture benefit available under the policy in the event of default in the premium payment due on any policy anniversary is its present value as of the anniversary to the extent that the nonforfeiture benefit is at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value that would have been required by this part in the absence of the conditions that premiums must have been paid for at least a specified period.   (5) For any family policy issued on or after the relevant operative date of 33-20-208 that defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse reaches 71 years of age, the cash surrender value referred to in subsection (1) is an amount not less than the sum of the cash surrender value as defined in subsection (1) for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value as defined in subsection (1) for a policy that provides only the benefits otherwise provided by the term insurance on the life of the spouse.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(4), (5); amd. Sec. 2, Ch. 498, L. 1983; amd. Sec. 37, Ch. 370, L. 2015.  
  33-20-204. Adjusted premium. (1) This section does not apply to policies issued on or after the operative date of 33-20-208.   (2) (a) Except as provided in subsection (3), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:   (i) the then present value of the future guaranteed benefits provided for by the policy;   (ii) 2% of the amount of the insurance if the insurance be uniform in amount or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with the duration of the policy;   (iii) 40% of the adjusted premium for the first policy year;   (iv) 25% of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.   (b) In applying the percentages specified in subsections (iii) and (iv) above, no adjusted premiums shall be deemed to exceed 4% of the amount of insurance or uniform amount equivalent thereto.   (c) Whenever the plan or term of a policy has been changed, either by request of the insured or automatically in accordance with the provisions of the policy, the date of inception of the changed policy for the purposes of determining a nonforfeiture benefit or cash surrender value shall be the date as of which the age of the insured is determined for the purposes of the changed policy. The date of issue of a policy for the purposes of this subsection shall be the date as of which the rated age of the insured is determined.   (d) (i) In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent uniform amount thereof for the purpose of the preceding subsections (a) and (b) shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy.   (ii) In the case of a policy for a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age 10 were the amount provided by such policy at age 10.   (3) (a) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to (i) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (ii) the adjusted premiums for such term insurance.   (b) The foregoing items (a)(i) and (a)(ii) being calculated separately and as specified in subsection (2) except that, for the purposes of (ii), (iii), and (iv) of subsection (2), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (a)(ii) of this subsection shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (a)(i) of this subsection.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(6), (7), (7-a); amd. Sec. 3, Ch. 498, L. 1983.  
  33-20-205. Calculation -- mortality table -- rates of interest. Except as otherwise provided in 33-20-206 and 33-20-207:   (1) All adjusted premiums and present values referred to in this part shall for all policies of ordinary insurance be calculated on the basis of the commissioner's 1941 standard ordinary mortality table.   (2) For any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated, at the option of the insurer with approval of the commissioner, according to an age younger than the actual age of the insured, and such calculations for all policies of industrial insurance shall be made on the basis of the 1941 standard industrial mortality table.   (3) All calculations shall be made on the basis of the rate of interest, not exceeding 3 1/2% per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits.   (4) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than 130% of the rates of mortality according to such applicable table.   (5) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the commissioner.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(8).  
  33-20-206. Mortality tables -- policies issued after operative date. (1) This section does not apply to ordinary policies issued on or after the operative date of 33-20-208.   (2) In the case of ordinary policies issued on or after the operative date of this section as defined herein, all adjusted premiums and present values referred to in this part shall be calculated on the basis of the commissioner's 1958 standard ordinary mortality table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that:   (a) such rate of interest shall not exceed 3 1/2% per annum, except that a rate of interest not exceeding 4% per annum may be used for policies issued on or after March 17, 1973, and prior to July 1, 1979, and a rate of interest not exceeding 5 1/2% a year may be used for policies issued on or after July 1, 1979;   (b) for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than 6 years younger than the actual age of the insured;   (c) in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioner's 1958 extended term insurance table;   (d) for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.   (3) After July 1, 1961, any insurer may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date (which shall be the operative date of this section for such insurer), this section shall become operative with respect to the ordinary policies thereafter issued by such insurer. If an insurer makes no such election, the operative date of this section for such insurer shall be January 1, 1966.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(8-a); amd. Sec. 6, Ch. 346, L. 1979; amd. Sec. 4, Ch. 498, L. 1983.  
  33-20-207. Industrial policies -- mortality tables. (1) This section does not apply to industrial policies issued on or after the operative date of 33-20-208.   (2) In the case of industrial policies issued on or after the operative date of this section as defined herein, all adjusted premiums and present values referred to in this part shall be calculated on the basis of commissioner's 1961 standard industrial mortality table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that:   (a) such rate of interest shall not exceed 3 1/2% per annum except that a rate of interest not exceeding 4% per annum may be used for policies issued on or after March 17, 1973, and prior to July 1, 1979, and a rate of interest not exceeding 5 1/2% a year may be used for policies issued on or after July 1, 1979;   (b) in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioner's 1961 industrial extended term insurance table;   (c) for insurance issued on a substandard basis the calculations of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.   (3) After February 22, 1965, any insurer may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date of this section for such insurer), this section shall become operative with respect to the industrial policies thereafter issued by such insurer. If an insurer makes no such election, the operative date of this section for such insurer shall be January 1, 1968.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(8-b); amd. Sec. 7, Ch. 346, L. 1979; amd. Sec. 5, Ch. 498, L. 1983.  
  33-20-208. Mortality tables -- interest rate adjusted premiums. (1) (a) This section applies to all policies issued on or after the operative date of this section. Except as provided in subsection (7), the adjusted premiums for any policy are calculated on an annual basis and must be a uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments, special hazards, and any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits. The uniform percentage must represent the present value, at the date of issue of the policy, of all adjusted premiums that is equal to the sum of:   (i) the then present value of the future guaranteed benefits provided for by the policy;   (ii) 1% of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and   (iii) 125% of the nonforfeiture net level premium as provided in subsection (2). A nonforfeiture net level premium is considered not to exceed 4% of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years.   (b) The date of issue of a policy for the purpose of this subsection is the date as of which the rated age of the insured is determined.   (2) The nonforfeiture net level premium is equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of that policy on which a premium falls due.   (3) For policies that have on a basis guaranteed in the policy unscheduled changes in benefits or premiums or that provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values are initially calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums, and present values must be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.   (4) Except as otherwise provided in subsection (7), the recalculated future adjusted premiums for any policy are a uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments, special hazards, and any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits. The uniform percentage must be the present value, at the time of change to the newly defined benefits or premiums, of all future adjusted premiums that is equal to the excess of:   (a) the sum of:   (i) the then present value of the then future guaranteed benefits provided for by the policy; and   (ii) the additional expense allowance, if any; over   (b) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.   (5) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, is the sum of:   (a) 1% of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change, over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change or, if there has been no previous change, the date of issue of the policy; and   (b) 125% of the increase, if positive, in the nonforfeiture net level premium.   (6) The recalculated nonforfeiture net level premium is equal to the result obtained by dividing the product of subsection (a) by the product of subsection (b):   (a) (i) the nonforfeiture net level premium applicable prior to the change multiplied by the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and   (ii) the present value of the increase in future guaranteed benefits provided for by the policy;   (b) the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.   (7) Adjusted premiums and present values for a substandard policy may be calculated as if the substandard policy were issued to provide higher uniform amounts of insurance on the standard basis, regardless of other provisions of this section for a policy issued on a substandard basis that provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis that provides higher uniform amounts of insurance.   (8) Except as provided below, all adjusted premiums and present values referred to in this part are for policies of ordinary insurance calculated on the basis of the commissioner's 1980 standard ordinary mortality table or, at the election of the insurer for any one or more specified plans of life insurance, the commissioner's 1980 standard ordinary mortality table with 10-year select mortality factors. All adjusted premiums and present values for policies of industrial insurance are calculated on the basis of the commissioner's 1961 standard industrial mortality table. All adjusted premiums and present values for all policies issued in a particular calendar year are calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as provided in this subsection for policies issued in that calendar year; with the following exceptions and conditions:   (a) At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as provided in this subsection for policies issued in the immediately preceding calendar year.   (b) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by 33-20-202, is calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any.   (c) An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.   (d) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioner's 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioner's 1961 industrial extended term insurance table for policies of industrial insurance.   (e) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the tables set forth in this subsection (8).   (f) (i) For policies issued prior to the operative date of the valuation manual as provided in 33-2-409, any commissioner's standard ordinary mortality tables adopted after 1980 by the national association of insurance commissioners that are approved by the commissioner by rule for use in determining the minimum nonforfeiture standard may be substituted for the commissioner's 1980 standard ordinary mortality table with or without 10-year select mortality factors or for the commissioner's 1980 extended term insurance table.   (ii) For policies issued on or after the operative date of the valuation manual as provided in 33-2-409, the commissioner may use the standard mortality table provided in the valuation manual for use in determining the minimum nonforfeiture standard instead of using either the commissioner's 1980 standard ordinary mortality table with or without 10-year select mortality factors or the commissioner's 1980 extended term insurance table.   (iii) A minimum nonforfeiture standard, if adopted by the commissioner by rule for the commissioner's standard mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, supersedes the valuation manual's nonforfeiture standard.   (g) (i) For policies issued prior to the operative date of the valuation manual, any industrial mortality tables adopted after 1980 by the national association of insurance commissioners that are approved by the commissioner by rule for use in determining the minimum nonforfeiture standard may be substituted for the commissioner's 1961 standard industrial mortality table or the commissioner's 1961 industrial extended term insurance table.   (ii) For policies issued on or after the operative date of the valuation manual, the valuation manual must provide the commissioner's standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the commissioner's 1961 standard industrial mortality table or the commissioner's 1961 industrial extended term insurance table.   (iii) A minimum nonforfeiture standard, if adopted by the commissioner by rule for the commissioner's standard industrial mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, supersedes the valuation manual's nonforfeiture standard.   (9) (a) For policies issued prior to the operative date of the valuation manual, the annual nonforfeiture interest rate for any policy issued in a particular calendar year must be equal to 125% of the calendar year statutory valuation interest rate for such policy as defined in the standard valuation law, Title 33, chapter 2, part 5, rounded to the nearer 1/4 of 1%. However, the nonforfeiture interest rate provided for in this subsection (9)(a) may not be less than 4.00%.   (b) For policies issued on or after the operative date of the valuation manual, the annual nonforfeiture interest rate for any policy issued in a particular calendar year must be as provided in the valuation manual.   (10) Any refiling of nonforfeiture values or their methods of computation for any previously approved policy form that involves only a change in the interest rate or mortality table used to compute nonforfeiture values does not require refiling of any other provisions of that policy form.   (11) After October 1, 1983, any insurer may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date, before January 1, 1989, which is the operative date of this section for that insurer. If an insurer makes no election, the operative date of this section for the insurer is January 1, 1989.   History: En. Sec. 6, Ch. 498, L. 1983; amd. Sec. 38, Ch. 370, L. 2015.  
  33-20-209. Determination of nonforfeiture values for special plans. For a plan of life insurance that provides for future premium determination the amounts of which are to be determined by the insurer based on then estimates of future experience or for a plan of life insurance that is of such a nature that minimum values cannot be determined by the methods described in 33-20-204 through 33-20-208:   (1) the commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by 33-20-204 through 33-20-208;   (2) the commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and   (3) the cash surrender values and paid-up nonforfeiture benefits provided by such plan may not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this part, as determined by rules promulgated by the commissioner.   History: En. Sec. 7, Ch. 498, L. 1983.  
  33-20-210. Additional rules for calculating cash surrender values. (1) This section, in addition to all other applicable sections of this chapter, applies to all policies issued on or after January 1, 1987. Any cash surrender value available under the policy upon default in a premium payment due on any policy anniversary is an amount that does not differ by more than 2/10 of 1% of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years subtracted from the sum of:   (a) the greater of zero and the basic cash value specified in subsection (2); and   (b) the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy.   (2) The basic cash value is equal to the present value, on such anniversary, of the future guaranteed benefits that would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default less the then present value of the nonforfeiture factors, as provided in subsection (3), corresponding to premiums that would have fallen due on and after such anniversary date. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in 33-20-203 or 33-20-204, whichever is applicable, are the same as the effects specified in 33-20-203 or 33-20-204, whichever is applicable, on the cash surrender values defined in that section.   (3) The nonforfeiture factor for each policy year is an amount equal to a percentage of the adjusted premium for the policy year, as defined in 33-20-204 or 33-20-208, whichever is applicable. Except as is required by subsection (4), the percentage:   (a) must be the same percentage for each policy year between the second policy anniversary date and the later of the fifth policy anniversary date and the first policy anniversary date at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least 2/10 of 1% of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and   (b) must be such that no percentage after the later of the two policy anniversary dates specified in subsection (3)(a) applies to less than 5 consecutive policy years.   (4) No basic cash value may be less than the value that would be obtained if the adjusted premiums for the policy, as provided in 33-20-204 or 33-20-208, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.   (5) Adjusted premiums and present values referred to in this section must, for a particular policy, be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this part. The cash surrender values referred to in this section include any endowment benefits provided for by the policy.   (6) A cash surrender value available other than upon default in a premium payment due on a policy anniversary date and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment are determined consistently with provisions specified for determining the analogous minimum amounts in 33-20-202 through 33-20-204, 33-20-208, and 33-20-211. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in 33-20-211(4) must conform with the principles of this section.   History: En. Sec. 9, Ch. 498, L. 1983.  
  33-20-211. Calculation of values -- other requisites. (1) Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary.   (2) All values referred to in 33-20-203 through 33-20-208 may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death.   (3) The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions.   (4) Notwithstanding the provisions of subsections (1) and (3) of 33-20-203, additional benefits payable under the following circumstances shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this part, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits:   (a) in the event of death or dismemberment by accident or accidental means;   (b) in the event of total and permanent disability;   (c) as reversionary annuity or deferred reversionary annuity benefits;   (d) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this part would not apply;   (e) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is 26, is uniform in amount after the child's age is 1, and has not become paid up by reason of the death of a parent of the child; and   (f) as other policy benefits additional to life insurance and endowment benefits and premiums for all such additional benefits.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(9); amd. Sec. 8, Ch. 498, L. 1983.  
  33-20-212. Exceptions. (1) This part does not apply to:   (a) reinsurance;   (b) group insurance;   (c) a pure endowment;   (d) an annuity or reversionary annuity contract;   (e) a term policy of uniform amount that provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71 for which uniform premiums are payable during the entire term of the policy;   (f) a term policy of decreasing amount that provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in 33-20-204 through 33-20-208, is less than the adjusted premiums so calculated on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;   (g) a policy which provides no guaranteed nonforfeiture or endowment benefits for which the cash surrender value, if any, or present value of any paid-up nonforfeiture benefit at the beginning of any policy year, calculated as specified in 33-20-203 through 33-20-208, does not exceed 2.5% of the amount of insurance at the beginning of the same policy year;   (h) a policy that is delivered outside this state through an insurance producer or other representative of the insurer issuing the policy.   (2) For purposes of subsection (1), the age at expiry for a joint term life insurance policy is the age at expiry of the oldest life.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(10); amd. Sec. 10, Ch. 498, L. 1983; amd. Sec. 1, Ch. 713, L. 1989.  
  33-20-213. Operative date. After July 1, 1945, any insurer could have filed with the state auditor a written notice of its election to comply with the provisions of this part, except 33-20-206 and 33-20-207, after a specified date before January 1, 1948, with respect to the policies specified in the notice. After the filing of such notice, then upon such specified date (which shall be the operative date for such insurer with respect to such policies), this part, except 33-20-206 and 33-20-207, shall have become operative with respect to the policies specified in such notice thereafter issued by such insurer. As to all of its policies and contracts with respect to which an insurer makes no such election, the operative date of this part, except 33-20-206 and 33-20-207, with respect to such policies and contracts for such insurer is January 1, 1948.   History: En. Sec. 325, Ch. 286, L. 1959; amd. Sec. 1, Ch. 65, L. 1961; amd. Sec. 1, Ch. 42, L. 1965; amd. Sec. 2, Ch. 341, L. 1973; R.C.M. 1947, 40-3831(11); amd. Sec. 24, Ch. 198, L. 1979.  
  33-20-301. Standard provisions -- annuity and pure endowment contracts. (1) No annuity or pure endowment contract, other than reversionary annuities, survivorship annuities, or group annuities and except as stated herein, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in 33-20-302 through 33-20-307. Any of such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated therein.   (2) This section shall not apply to contracts for deferred annuities included in or upon the lives of beneficiaries under life insurance policies.   History: En. Sec. 312, Ch. 286, L. 1959; R.C.M. 1947, 40-3818.  
  33-20-302. Grace period. In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that there shall be a period of grace of 1 month, but not less than 30 days, within which any stipulated payment to the insurer falling due after the first may be made, subject at the option of the insurer to an interest charge thereon at a rate to be specified in the contract but not exceeding 6% per annum for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force; but in case a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.   History: En. Sec. 313, Ch. 286, L. 1959; R.C.M. 1947, 40-3819.  
  33-20-303. Incontestability. If any statements other than those relating to age and identity are required as a condition to issuing an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, and subject to 33-20-305, there shall be a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom such statements are required, for a period of 2 years from its date of issue, except for nonpayment of stipulated payments to the insurer; and at the option of the insurer such contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.   History: En. Sec. 314, Ch. 286, L. 1959; R.C.M. 1947, 40-3820; amd. Sec. 9, Ch. 798, L. 1991.  
  33-20-304. Entire contract. In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, a provision that the contract and the application therefor shall constitute the entire contract between the parties.   History: En. Sec. 315, Ch. 286, L. 1959; R.C.M. 1947, 40-3821.  
  33-20-305. Misstatement of age. In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that if the age of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding 6% per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.   History: En. Sec. 316, Ch. 286, L. 1959; R.C.M. 1947, 40-3822; amd. Sec. 10, Ch. 798, L. 1991.  
  33-20-306. Dividends. If an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, is participating, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.   History: En. Sec. 317, Ch. 286, L. 1959; R.C.M. 1947, 40-3823.  
  33-20-307. Reinstatement. In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract may be reinstated at any time within 1 year from the default in making stipulated payments to the insurer, unless the cash surrender value had been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding 6% per annum payable annually. In cases where applicable the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.   History: En. Sec. 318, Ch. 286, L. 1959; R.C.M. 1947, 40-3824.  
  33-20-308. Annuity information. The commissioner shall promulgate rules prescribing information that must be delivered to prospective annuitants at the time of sale. The rules must address the following:   (1) the manner of delivery of the information;   (2) when the information must be delivered;   (3) by whom the information is to be delivered; and   (4) the contents of the information, including:   (a) the type of annuity being sold; and   (b) the settlement options available under the annuity contract.   History: En. Sec. 1, Ch. 260, L. 1997.  
  33-20-309. Annuity penalty -- 10-year prohibition. (1) An annuity may not charge a surrender penalty on an annuity contract after 10 years from:   (a) the date of issuance; or   (b) for contracts for which the annuitant voluntarily deposits a separate premium that was not required under the annuity contract, the date of each separate annuity premium deposit. Within 10 years after the separate deposit, the insurer may charge a surrender penalty for that deposit.   (2) An insurer must provide written notice to the annuitant of any surrender penalty imposed under the contract, including subsequent notices if the annuitant voluntarily contributes separate premium deposits under subsection (1)(b).   (3) For purposes of this section, the term "surrender penalty" means a surrender penalty, fee, or charge for the early withdrawal of funds from an annuity contract or for the cancellation of the annuity contract.   (4) This section applies to any annuity contract, including but not limited to annuity contracts under Title 30, chapter 10.   History: En. Sec. 1, Ch. 177, L. 2017.  
  33-20-401. Standard provisions. (1) Except as stated herein, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance each of the following provisions:   (a) Any such reversionary annuity contract shall contain the provisions specified in 33-20-302 through 33-20-306, except that under 33-20-302 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract.   (b) In such reversionary annuity contracts there shall be a provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid or, within the limits permitted by the then cash values of the contract, reinstated, with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 6% per annum compounded annually.   (2) This section shall not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single premium annuities shall not to that extent be incorporated therein.   History: En. Sec. 319, Ch. 286, L. 1959; R.C.M. 1947, 40-3825.  
  33-20-501. Short title. This part shall be known as the "Standard Nonforfeiture Law for Individual Deferred Annuities".   History: En. Sec. 8, Ch. 346, L. 1979.  
  33-20-502. Application. This part does not apply to any reinsurance, group annuity purchased under a retirement plan, or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity or to any contract which is delivered outside this state through an insurance producer or other representative of the company issuing the contract.   History: En. Sec. 9, Ch. 346, L. 1979; amd. Sec. 1, Ch. 713, L. 1989.  
  33-20-503. Nonforfeiture provisions. In the case of contracts issued on or after the operative date of this part as defined in 33-20-513, no contract of annuity except as stated in 33-20-502 shall be delivered or issued for delivery in this state unless it contains in substance the following provisions or corresponding provisions which in the opinion of the commissioner are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:   (1) that upon cessation of payment of considerations under a contract the company will grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in 33-20-506 through 33-20-509 and 33-20-511;   (2) that if a contract provides for a lump-sum settlement at maturity or at any other time, than upon surrender of the contract at or prior to the commencement of any annuity payments, the company will pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as is specified in 33-20-506, 33-20-507, 33-20-509, and 33-20-511. The company shall reserve the right to defer the payment of such cash surrender benefit for a period of 6 months after demand therefor with surrender of the contract.   (3) a statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of such benefits;   (4) a statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which such benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract, or any prior withdrawals from or partial surrenders of the contract.   History: En. Sec. 10, Ch. 346, L. 1979.  
  33-20-504. Exception. Notwithstanding the requirements of 33-20-503, any deferred annuity contract may provide that if no consideration has been received under a contract for a period of 2 full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from consideration paid prior to such period would be less than $20 monthly, the company may at its option terminate such contract by payment in cash of the then present value of such portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by such payment shall be relieved of any further obligation under such contract.   History: En. Sec. 11, Ch. 346, L. 1979.  
  33-20-505. Minimum nonforfeiture amounts. (1) The minimum values as specified in 33-20-506 through 33-20-509 and 33-20-511 of any paid-up annuity, cash surrender, or death benefits available under an annuity contract must be based upon minimum nonforfeiture amounts, as defined in this section.  (2) (a) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments must be equal to an accumulation up to that time at rates of interest as indicated in subsection (3)(a) of the net considerations, as described in subsection (2)(b), paid prior to that time, decreased by the sum of:   (i) any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as indicated in subsection (3)(a);   (ii) an annual contract charge of $50 accumulated at rates of interest as indicated in subsection (3)(a);   (iii) any premium tax paid by the company for the contract accumulated at rates of interest as indicated in subsection (3)(a); and   (iv) the amount of any indebtedness to the company on the contract, including interest due and accrued.   (b) The net consideration for a given contract year used to define the minimum nonforfeiture amount must be an amount equal to 87.5% of the corresponding gross considerations credited to the contract during that contract year.   (3) (a) (i) The interest rate used in determining minimum nonforfeiture amounts must be an annual rate of interest determined as the lesser of 3% a year or the amount calculated under subsection (3)(a)(ii), which must be specified in the contract if the interest rate will be reset.   (ii) The interest rate may be the 5-year constant maturity treasury rate reported by the federal reserve board as of a date or an average over a period, rounded to the nearest 1/20th of 1%, specified in the contract no longer than 15 months prior to the contract issue date or redetermination date under subsection (3)(a)(iii) and reduced by 125 basis points whenever the resulting interest rate is not less than 0.15%.   (iii) The interest rate under subsection (3)(a)(ii) must apply for an initial period and may be redetermined for additional periods. The redetermination date, basis, and period, if any, must be stated in the contract. The basis is the date or the average over a specified period that produces the value of the 5-year constant maturity treasury rate to be used at each redetermination date.   (b) During the period or term that a contract provides substantive participation in an equity indexed benefit, the contract may increase the reduction described in subsection (3)(a)(ii) by up to an additional 100 basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date, of the additional reduction may not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. The commissioner may disallow or limit the additional reduction if the commissioner considers the demonstration unacceptable.   (4) The commissioner may adopt rules to implement the provisions of subsection (3)(b) and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts for which the commissioner determines that adjustments are justified.   History: En. Sec. 12, Ch. 346, L. 1979; amd. Sec. 1, Ch. 512, L. 2003; amd. Sec. 1, Ch. 66, L. 2005; amd. Sec. 4, Ch. 471, L. 2021. 
  33-20-506. Present value to equal minimum nonforfeiture amount. Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.   History: En. Sec. 13, Ch. 346, L. 1979.  
  33-20-507. Cash surrender benefits. For contracts which provide cash surrender benefits, such cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, such present value being calculated on the basis of an interest rate not more than 1% higher than the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. No cash surrender benefit may be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit.   History: En. Sec. 14, Ch. 346, L. 1979.  
  33-20-508. Paid-up annuity benefits. For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity may not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for or changed to a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine such maturity value and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, such present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, the present value of a paid-up annuity benefit may not be less than the minimum nonforfeiture amount at that time.   History: En. Sec. 15, Ch. 346, L. 1979.  
  33-20-509. Maturity date. For the purpose of determining the benefits calculated under 33-20-507 and 33-20-508, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date is the latest date for which election is permitted by the contract but may not be later than the anniversary of the contract next following the annuitant's 70th birthday or the 10th anniversary of the contract, whichever is later.   History: En. Sec. 16, Ch. 346, L. 1979.  
  33-20-510. Statement of noninclusion of certain death benefits. Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided.   History: En. Sec. 17, Ch. 346, L. 1979.  
  33-20-511. Adjusted benefit. Any paid-up annuity, cash surrender, or death benefits available at any time other than on the contract anniversary under any contract with fixed scheduled consideration shall be calculated with allowance for the lapse of time and the payment of any scheduled consideration beyond the beginning of the contract year in which cessation of payment of consideration under the contract occurs.   History: En. Sec. 18, Ch. 346, L. 1979.  
  33-20-512. Calculation of benefits -- special benefits excluded. For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross consideration paid with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of 33-20-506 through 33-20-509 and 33-20-511, additional benefits payable in the event of total and permanent disability or as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment, and annuity benefits, and considerations for all such additional benefits shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits that may be required by this section. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amount paid-up annuity, cash surrender, and death benefits.   History: En. Sec. 19, Ch. 346, L. 1979.  
  33-20-513. Operative date. After July 1, 1979, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before July 1, 1981. After the filing of such notice, then upon such specified date, which shall be the operative date of this section for such company, this section shall become operative with respect to annuity contracts thereafter issued by such company. If a company makes no such election, the operative date of this section for such company shall be July 1, 1981.   History: En. Sec. 20, Ch. 346, L. 1979.  
  33-20-601. Short title. This part may be cited as the "Montana Variable Contract Law".   History: En. Sec. 1, Ch. 112, L. 1989.  
  33-20-602. Powers of commissioner. Except as provided in Title 30, chapter 10, parts 1 through 3, the commissioner has sole authority to regulate the issuance and sale of variable contracts and to adopt rules to carry out the purposes and provisions of this part.   History: En. Sec. 5, Ch. 112, L. 1989.  
  33-20-603. Separate accounts for life insurance or annuities. (1) Subject to the provisions of subsection (2), a life insurer may establish one or more separate accounts and may allocate to those accounts the amounts necessary to provide for life insurance or annuities and benefits incidental to the life insurance or annuities, payable in fixed or variable amounts, or both. The amounts allocated to the accounts may include without limitation proceeds applied under optional modes of settlement or under dividend options.   (2) Separate accounts for life insurance or annuities established under the provisions of subsection (1) are subject to the following:   (a) The income, gains, and losses, realized or unrealized, from assets allocated to a separate account must be credited to or charged against the account, without regard to other income, gains, or losses of the insurer.   (b) Except as provided for reserves for guaranteed benefits and funds in subsection (2)(c):   (i) amounts allocated to a separate account and accumulations on the separate account may be invested and reinvested in any class of investment authorized under chapter 12 if limitations under 33-12-208 or 33-12-308 on investments in stocks are not applicable;   (ii) the investments in the separate account or accounts may not be considered in applying the investment limitations otherwise applicable to the investments of the insurer.   (c) Except with the approval of the commissioner and under conditions relating to investments and other prescribed matters that recognize the guaranteed nature of the benefits provided, reserves for benefits guaranteed as to amount and duration and for funds guaranteed as to principal amount or stated rate of interest may not be maintained in a separate account.   (d) Unless otherwise approved by the commissioner, assets allocated to a separate account must be valued at their market value on the date of valuation or, if there is no readily available market, as provided under the terms of the contract or the rules or other written agreement applicable to that separate account; however, unless otherwise approved by the commissioner, the portion, if any, of the assets of that separate account equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in subsection (2)(c) must be valued in accordance with the laws and rules otherwise applicable to the insurer's assets.   (e) Amounts allocated to a separate account in the exercise of the power granted by this part must be owned by the insurer, and the insurer may not be or hold itself out to be a trustee with respect to those amounts. If and to the extent provided under applicable contracts, that portion of the assets of a separate account equal to the reserves and other contract liabilities with respect to the account are not chargeable with liabilities arising out of any other business the insurer may conduct.   (f) (i) A sale, exchange, or other transfer of assets may not be made by an insurer between any of its separate accounts or between any other investment account and one or more of its separate accounts unless:   (A) in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made; or   (B) the transfer, whether into or from a separate account, is made by a transfer of cash or by a transfer of securities having a readily determinable market value and the transfer of securities is approved by the commissioner.   (ii) The commissioner may approve other transfers among these accounts if, in the commissioner's opinion, transfers would not be inequitable.   (g) To the extent an insurer considers it necessary to comply with any applicable federal or state laws, the insurer, with respect to any separate account, including without limitation any separate account that is a management investment company or a unit investment trust account, may provide, for persons having an interest in the account, appropriate voting and other rights and special procedures for the conduct of the business of that account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and selection of a committee, the members of which need not be otherwise affiliated with the insurer, to manage the business of that account.   History: En. Sec. 2, Ch. 112, L. 1989; amd. Sec. 25, Ch. 451, L. 1993; amd. Sec. 46, Ch. 304, L. 1999.  
  33-20-604. Contract to contain statement of essential features. A contract providing benefits payable in variable amounts delivered or issued for delivery in this state must contain a statement of the essential features of the procedures to be followed by the insurer in determining the dollar amount of the variable benefits. A contract under which the benefits vary to reflect investment experience, including a group contract and a certificate evidencing the variable benefits issued thereunder, must state that the dollar amount will vary and must contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.   History: En. Sec. 3, Ch. 112, L. 1989.  
  33-20-605. Requirements for doing business. (1) No insurer may deliver or issue for delivery within this state a variable contract unless the insurer is authorized to transact life insurance or annuity business in this state and the commissioner is satisfied that its condition or method of operation in connection with the issuance of variable contracts will not render its operation hazardous to the public or its policyholders in this state. In making such a determination, the commissioner must consider, among other things:   (a) the history and financial condition of the insurer;   (b) the character, responsibility, and fitness of the officers and directors of the insurer; and   (c) the laws and regulations under which the insurer is authorized in the state of domicile to issue variable contracts. For this purpose, the state of entry of an alien insurer is its place of domicile.   (2) The commissioner may consider an insurer to have met the provisions of this section if:   (a) the insurer is a subsidiary of an authorized life insurer or is affiliated with an authorized life insurer through common management or ownership; and   (b) either it, the parent, or the affiliated insurer meets the requirements of this section.   History: En. Sec. 4, Ch. 112, L. 1989.  
  33-20-606. Variable contracts to meet insurance contract requirements. (1) Except for 33-15-321 through 33-15-329, 33-20-302, and 33-20-307 for variable annuity contracts and 33-20-104, 33-20-110, 33-20-111, 33-20-112, and 33-20-201 through 33-20-213 for variable life insurance policies and as otherwise provided in this part, all pertinent provisions of Title 33 and other laws relating to insurance apply to separate accounts and their related policies and contracts.   (2) Any individual variable life insurance contract or any individual variable annuity contract delivered or issued for delivery in this state must contain grace and reinstatement provisions appropriate to the contract. Any individual variable life insurance contract must contain nonforfeiture provisions appropriate to that contract.   (3) An insurer shall file with the commissioner a copy of a final prospectus, dated and effective, before it issues or delivers an individual variable life insurance contract or an individual variable annuity contract in this state.   (4) The reserve liability for any variable contract must be established in accordance with actuarial procedures that recognize the variable nature of benefits provided and mortality guarantees.   History: En. Sec. 6, Ch. 112, L. 1989; amd. Sec. 19, Ch. 271, L. 2009.  
  33-20-701. Definitions. In this part, the following definitions apply:   (1) "Charitable gift annuity" means a transfer of cash or other property by a donor to a charitable organization in return for an annuity payable over one or two lives, for the duration of that life or those lives, under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value constitutes a charitable deduction for federal tax purposes.   (2) "Charitable organization" means an entity described by:   (a) section 501(c)(3) of the Internal Revenue Code of 1986, 26 U.S.C. 501(c)(3); or   (b) section 170(c) of the Internal Revenue Code of 1986, 26 U.S.C. 170(c).   (3) (a) "Qualified charitable gift annuity" means a charitable gift annuity, described by section 501(m)(5) of the Internal Revenue Code of 1986, 26 U.S.C. 501(m)(5), section 514(c)(5) of the Internal Revenue Code of 1986, 26 U.S.C. 514(c)(5), section 1011(b) of the Internal Revenue Code of 1986, 26 U.S.C. 1011(b), and the implementing regulations, that is issued by a charitable organization that, on the date of the annuity agreement:   (i) has a minimum of $300,000 net worth or has a minimum of $100,000 in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement;   (ii) has been in continuous operation for at least 3 years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least 3 years; and   (iii) maintains a separate annuity fund with at least one-half the value of the initial amount transferred for outstanding annuities.   (b) If the charitable organization cannot meet the requirements of subsections (3)(a)(i) through (3)(a)(iii), the issuance of a qualified charitable gift annuity by a charitable organization must be commercially insured by a licensed insurance company that is qualified to do business in Montana.   History: En. Sec. 1, Ch. 482, L. 2003.  
  33-20-702. Charitable gift annuity not insurance. (1) The issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state.   (2) A charitable gift annuity issued before April 24, 2003, is a qualified charitable gift annuity for purposes of this part, and the issuance of that charitable gift annuity does not constitute engaging in the business of insurance in this state.   History: En. Sec. 2, Ch. 482, L. 2003.  
  33-20-703. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 3, Ch. 482, L. 2003.  
  33-20-704. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 4, Ch. 482, L. 2003; amd. Sec. 24, Ch. 469, L. 2005.  
  33-20-705. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 5, Ch. 482, L. 2003.  
  33-20-801. Short title. This part may be referred to as the "Montana Suitability in Annuity Transactions Act".   History: En. Sec. 1, Ch. 476, L. 2007.  
  33-20-802. Purpose -- scope. (1) The purpose of this part is to require producers to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers at the time of the transaction are effectively addressed.  (2) This part applies to any sale or recommendation of an annuity.   (3) Nothing in this part may be construed to create or imply a private cause of action for a violation of this part or to subject a producer to civil liability under the best interest standard of care outlined in 33-20-805 or under standards governing the conduct of a fiduciary or a fiduciary relationship.   History: En. Sec. 2, Ch. 476, L. 2007; amd. Sec. 3, Ch. 324, L. 2017; amd. Sec. 1, Ch. 432, L. 2021. 
  33-20-803. Exemptions. Unless otherwise specifically included, this part does not apply to recommendations involving:  (1) direct response solicitations when there is no recommendation made based on information collected from the consumer pursuant to this part;   (2) contracts used to fund:   (a) an employee pension or welfare benefit plan that is covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.;   (b) a plan described by section 401(a), 401(k), 403(b), 408(k), or 408(p) of the Internal Revenue Code, 26 U.S.C. 401(a), 401(k), 403(b), 408(k), or 408(p), if established or maintained by an employer;   (c) a governmental plan or church plan defined in section 414 of the Internal Revenue Code, 26 U.S.C. 414, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under section 457 of the Internal Revenue Code, 26 U.S.C. 457;   (d) a nonqualified deferred compensation plan established or maintained by an employer or plan sponsor;   (3) settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process;   (4) formal prepaid funeral contracts; or   (5) variable annuities regulated under Title 30, chapter 10.   History: En. Sec. 3, Ch. 476, L. 2007; amd. Sec. 2, Ch. 432, L. 2021. 
  33-20-804. Definitions. As used in this part, the following definitions apply:  (1) "Annuity" means a fixed annuity that is individually solicited, regardless of whether the product is classified as an individual or group annuity.   (2) "Cash compensation" means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer.   (3) "Consumer profile information" means information that is reasonably appropriate to determine whether a recommendation addresses the consumer's financial situation, insurance needs, and financial objectives, including, at a minimum, the following:   (a) age;   (b) annual income;   (c) financial situation and needs, including debts and other obligations;   (d) financial experience;   (e) insurance needs;   (f) financial objectives;   (g) intended use of the annuity;   (h) financial time horizon;   (i) existing assets or financial products, including investment, annuity, and insurance holdings;   (j) liquidity needs;   (k) liquid net worth;   (l) risk tolerance, including but not limited to willingness to accept nonguaranteed elements in the annuity;   (m) financial resources used to fund the annuity; and   (n) tax status.   (4) "Continuing education credit" or "CE credit" means one continuing education credit as provided in Title 33, chapter 17.   (5) "Continuing education provider" or "CE provider" means an individual or entity that is approved to offer continuing education courses pursuant to Title 33, chapter 17.   (6) "Insurer" means a company required to be licensed under the laws of this state to provide insurance products, including annuities.   (7) "Intermediary" means an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurer's annuities by producers.   (8) (a) "Material conflict of interest" means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation.   (b) The term does not include cash compensation or noncash compensation.   (9) "Noncash compensation" means any form of compensation that is not cash compensation, including but not limited to health insurance, office rent, office support, and retirement benefits.   (10) "Nonguaranteed elements" means the premiums, credited interest rates including any bonuses, benefits, values, dividends, noninterest-based credits, charges, or elements of formulas used to determine any of these that are subject to company discretion and are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation.   (11) "Producer" or "insurance producer" means a person or entity required to be licensed under the laws of this state to sell, solicit, or negotiate insurance, including annuities. For the purposes of this part, the term includes an insurer in which no producer is involved.   (12) (a) "Recommendation" means advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, an exchange, or a replacement of an annuity in accordance with that advice.   (b) The term does not include general communication to the public, generalized customer services, assistance or administrative support, general educational information and tools, prospectuses, or other product and sales material.   (13) "Replacement" means a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer or to the proposing insurer, whether or not a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy or contract has been or is to be any of the following:   (a) lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;   (b) converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;   (c) amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;   (d) reissued with any reduction in cash value; or   (e) used in a financed purchase.   History: En. Sec. 4, Ch. 476, L. 2007; amd. Sec. 4, Ch. 324, L. 2017; amd. Sec. 3, Ch. 432, L. 2021. 
  33-20-805. Duties of insurers and producers-- best interest obligations. (1) A producer, when making a recommendation of an annuity, shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the producer's or the insurer's financial interest ahead of the consumer's interest. A producer has acted in the best interest of the consumer if the producer has satisfied the following obligations regarding care, disclosure, conflict of interest, and documentation:  (a) The producer, in making a recommendation, shall exercise reasonable diligence, care, and skill to:   (i) know the consumer's financial situation, insurance needs, and financial objectives;   (ii) understand the available recommendation options after making a reasonable inquiry into options available to the producer;   (iii) have a reasonable basis to believe the recommended option effectively addresses the consumer's financial situation, insurance needs, and financial objectives over the life of the product, as evaluated in light of the consumer profile information; and   (iv) communicate the basis or bases of the recommendation to the consumer in writing.   (b) The requirements under subsection (1)(a)(i) include making reasonable efforts to obtain consumer profile information from the consumer prior to the recommendation of an annuity.   (c) The requirements under subsection (1)(a) require a producer to consider the types of products the producer is authorized and licensed to recommend or sell that address the consumer's financial situation, insurance needs, and financial objectives. This does not require analysis or consideration of any products outside the authority and license of the producer or other possible alternative products or strategies available in the market at the time of the recommendation. Producers are to be held to standards applicable to producers with similar authority and licensure.   (d) The requirements under this subsection (1) do not create a fiduciary obligation or relationship and only create a regulatory obligation as established in this part.   (e) The consumer profile information, characteristics of the insurer, and product costs, rates, benefits, and features are those factors generally relevant in making a determination whether an annuity effectively addresses the consumer's financial situation, insurance needs, and financial objectives, but the level of importance of each factor under the care obligation of this section may vary depending on the facts and circumstances of a particular case. However, each factor may not be considered in isolation.   (f) The requirements under subsection (1)(a)(i) include having a reasonable basis to believe the consumer would benefit from certain features of the annuity, such as annuitization, death or living benefit, or other insurance-related features.   (g) The requirements under subsection (1)(a)(i) apply to the particular annuity as a whole and the underlying subaccounts to which funds are allocated at the time of purchase or exchange of an annuity, and riders and similar producer enhancements, if any.   (h) The requirements under subsection (1)(a)(i) do not mean the annuity with the lowest one-time or multiple occurrence compensation structure may necessarily be recommended.   (i) The requirements under subsection (1)(a)(i) do not mean the producer has ongoing monitoring obligations under the care obligation under this section, although this obligation may be separately owed under the terms of a fiduciary, consulting, investment advising, or financial planning agreement between the consumer and the producer.   (2) In the case of an exchange or replacement of an annuity, the producer shall consider the whole transaction, which includes taking into consideration whether:   (a) the consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living, or other contractual benefits, or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements;   (b) the replacing product would substantially benefit the consumer in comparison to the replaced product over the life of the product; and   (c) the consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 60 months.   (3) Nothing in this part may be construed to require a producer to obtain a license other than a producer license with the appropriate line of authority to sell, solicit, or negotiate insurance in this state, including but not limited to any securities license, in order to fulfill the duties and obligations contained in this part, provided the producer does not discuss risks specific to a consumer's individual securities holdings, does not provide advice regarding a consumer's specific securities or securities investment performance, does not compare a consumer's securities or securities investment performance with the annuity products being recommended, does not recommend the liquidation of specific securities or identify specific securities that could be used to fund the purchase of a recommended annuity product, does not recommend specific allocations between insurance and securities products, does not offer research, analysis, or recommendations to a consumer regarding specific securities, and does not give advice or provide services that are otherwise subject to securities laws or engage in any other activity requiring other professional licenses.   (4) (a) Prior to the recommendation or sale of an annuity, the producer shall prominently disclose to the consumer on a form substantially similar to a model form established by the insurance department:   (i) a description of the scope and terms of the relationship with the consumer and the role of the producer in the transaction;   (ii) an affirmative statement on whether the producer is licensed and authorized to sell the following products:   (A) fixed annuities;   (B) fixed indexed annuities;   (C) variable annuities;   (D) life insurance;   (E) mutual funds;   (F) stocks and bonds; and   (G) certificates of deposit;   (iii) an affirmative statement describing the insurers the producer is authorized, contracted or appointed, or otherwise able to sell insurance products for, using the following descriptions:   (A) from one insurer;   (B) from two or more insurers; or   (C) from two or more insurers although primarily contracted with one insurer;   (iv) a description of the sources and types of cash compensation and noncash compensation to be received by the producer, including whether the producer is to be compensated for the sale of a recommended annuity by commission as part of premium or other remuneration received from the insurer, intermediary, or other producer, or by fee as a result of a contract for advice or consulting services; and   (v) a notice of the consumer's right to request additional information regarding cash compensation described in subsection (4)(b).   (b) On request of the consumer or the consumer's designated representative, the producer shall disclose:   (i) a reasonable estimate of the amount of cash compensation to be received by the producer, which may be stated as a range of amounts or percentages; and   (ii) whether the cash compensation is a one-time or multiple occurrence amount, and if a multiple occurrence amount, the frequency and amount of the occurrence, which may be stated as a range of amounts or percentages.   (c) Prior to, or at the time of the recommendation or sale of an annuity, the producer has a reasonable basis to believe the consumer has been informed of various features of the annuity, such as the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity, mortality and expense fees, investment advisory fees, any annual fees, potential charges for and features of riders or other options of the annuity, limitations on interest returns, potential changes in nonguaranteed elements of the annuity, insurance and investment components, and market risk.   (d) A producer shall identify and avoid or reasonably manage and disclose material conflicts of interest, including material conflicts of interest related to an ownership interest.   (e) A producer shall, at the time of recommendation or sale:   (i) make a written record of a recommendation and the basis for the recommendation subject to this part;   (ii) obtain a signed statement from a consumer on a form substantially similar to a model form established by the insurance department documenting:   (A) a customer's refusal to provide the consumer profile information, if any; and   (B) a customer's understanding of the ramifications of not providing the customer's consumer profile information or providing insufficient consumer profile information; and   (iii) obtain a signed statement from a consumer on a form substantially similar to a model form established by the insurance department acknowledging the annuity transaction is not recommended if a customer decides to enter into an annuity transaction that is not based on the producer's recommendation.   (5) Any requirement applicable to a producer under this section must apply to each producer who has exercised material control or influence in the making of a recommendation and has received direct compensation as a result of the recommendation or sale, regardless of whether the producer has had any direct contact with the consumer. Activities such as providing or delivering marketing or educational materials, product wholesaling or other back office product support, and general supervision of a producer do not, in and of themselves, constitute material control or influence.   (6) (a) Except as provided under subsection (6)(b), a producer has no obligation to a consumer under subsection (1) related to any annuity transaction if:   (i) no recommendation is made;   (ii) a recommendation is made but later found to have been prepared based on materially inaccurate information provided by the consumer;   (iii) the consumer refuses to provide relevant consumer profile information and the annuity transaction is not recommended; or   (iv) the consumer decides to enter into an annuity transaction that is not based on a recommendation of the insurer or insurance producer.   (b) An insurer's issuance of an annuity under this subsection (6) must be reasonable under all the circumstances actually known to the insurer at the time the annuity is issued.   (7) (a) Except as permitted under subsection (6), an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity would effectively address the particular consumer's financial situation, insurance needs, and financial objectives based on the consumer's consumer profile information.   (b) An insurer shall establish and maintain a supervision system that is reasonably designed to achieve the insurer's and its producers' compliance with this part and, at a minimum, include the following:   (i) the insurer shall establish and maintain reasonable procedures to inform its producers of the requirements of this part and shall incorporate the requirements of this part into relevant producer training manuals;   (ii) the insurer shall establish and maintain standards for producer product training and shall establish and maintain reasonable procedures to require its insurance producers to comply with the requirements of 33-20-807;   (iii) the insurer shall provide product-specific training and training materials that explain all material features of its annuity products to its producers;   (iv) the insurer shall establish and maintain procedures for the review of each recommendation prior to the issuance of an annuity that are designed to ensure there is a reasonable basis to determine that the recommended annuity would effectively address the particular consumer's financial situation, insurance needs, and financial objectives. The review procedures may apply a screening system for the purpose of identifying selected transactions for additional review and may be accomplished electronically or through other means, including but not limited to physical review. The electronic system or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria.   (v) the insurer shall establish and maintain reasonable procedures to detect recommendations that are not in compliance with subsections (1), (4), (5), (6), (8), and (9). This may include but is not limited to confirmation of the consumer's consumer profile information, systematic consumer surveys, producer and consumer interviews, confirmation letters, producer statements or attestations, and programs of internal monitoring. Nothing in this subsection prevents an insurer from complying with this subsection by applying sampling procedures or by confirming consumer profile information or other required information under this section after issuance or delivery of the annuity.   (vi) the insurer shall establish and maintain reasonable procedures to assess, prior to or on issuance or delivery of an annuity, whether a producer has provided to the consumer the information required to be provided under this section;   (vii) the insurer shall establish and maintain reasonable procedures to identify and address suspicious consumer refusals to provide consumer profile information;   (viii) the insurer shall establish and maintain reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and noncash compensation that are based on the sales of specific annuities within a limited period of time. The requirements of this subsection (7) are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits, or other employee benefits by employees as long as those benefits are not based on the volume of sales of a specific annuity within a limited period of time.   (ix) the insurer shall annually provide a written report to senior management, including to the senior manager responsible for audit functions, that details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.   (c) (i) Nothing in this subsection (7) restricts an insurer from contracting for performance of a function, including maintenance procedures, required under this subsection (7). An insurer is responsible for taking appropriate corrective action and may be subject to sanctions and penalties under 33-20-806 regardless of whether the insurer contracts for performance of a function and regardless of the insurer's compliance with subsection (7)(c)(ii).   (ii) An insurer's supervision system under this subsection (7) must include supervision of contractual performance. This includes but is not limited to the following:   (A) annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has reasonable basis to represent, and does represent that the function is being properly performed; and   (B) monitoring and, as appropriate, conducting audits to ensure that the contracted function is properly performed.   (d) An insurer is not required to include in its system of supervision:   (i)  a producer's recommendations to consumers of products other than the annuities offered by the insurer; or   (ii) consideration of or comparison to options available to the producer or compensation relating to those options other than the annuities or other products offered by the insurer.   (8) A producer or an insurer may not dissuade or attempt to dissuade a consumer from:   (a) truthfully responding to an insurer's request for confirmation of the consumer profile information;   (b) filing a complaint; or   (c) cooperating with the investigation of a complaint.   (9) (a) Recommendations and sales of annuities made in compliance with comparable standards must satisfy the requirements under this part. This subsection (9) applies to all recommendations and sales of annuities made by financial professionals in compliance with business rules, controls, and procedures that satisfy a comparable standard even if the standard would not otherwise apply to the product or recommendation at issue. However, nothing in this subsection (9) may limit the insurance commissioner's ability to investigate and enforce the provisions of this part.   (b) Nothing in subsection (9)(a) may limit the insurer's obligation to comply with subsection (7), although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional.   (c) For subsection (9)(a) to apply, an insurer shall:   (i) monitor the relevant conduct of the financial professional seeking to rely on subsection (9)(a) or the entity responsible for supervising the financial professional, such as the financial professional's broker-dealer or an investment adviser registered under federal or state securities laws, using information collected in the normal course of an insurer's business; and   (ii) provide to the entity responsible for supervising the financial professional seeking to rely on subsection (9)(a), such as the financial professional's broker-dealer or investment adviser registered under federal or state securities laws, information and reports that are reasonably appropriate to assist the entity to maintain its supervision system.   (d) For the purposes of this subsection, a "financial professional" means a producer that is regulated and acting as:   (i) a broker-dealer registered under federal or state securities laws or a registered representative of a broker-dealer;   (ii) an investment adviser registered under federal or state securities laws or an investment adviser representative associated with the federal or state registered investment adviser; or   (iii) a plan fiduciary under section 3(21) of the Employee Retirement Income Security Act of 1974 or a fiduciary under section 4975(e)(3) of the Internal Revenue Code.   (e) For the purposes of this subsection, a "comparable standards" means:   (i) with respect to broker-dealers and registered representatives of broker-dealers, applicable securities and exchange commission and financial industry regulatory authority rules pertaining to best interest obligations and supervision of annuity recommendations and sales, including but not limited to regulation best interest;   (ii) with respect to investment advisers registered under federal or state securities laws or investment adviser representatives, the fiduciary duties and all other requirements imposed on the investment advisers or investment adviser representatives by contract or under the Investment Advisers Act of 1940, Title 30, chapter 10, including but not limited to the Form ADV and interpretations; and   (iii) with respect to plan fiduciaries or fiduciaries, the duties, obligations, prohibitions, and all other requirements attendant to the status under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq., or the Internal Revenue Code.   (10) (a) Insurers, insurance producers, and independent agencies shall maintain or be able to make available to the commissioner records of the information collected from the consumer, disclosures made to the consumer, including summaries of oral disclosures, and other information used in making the recommendations that were the basis for insurance transactions for 5 years after the insurance transaction is completed by the insurer. An insurer is permitted, but is not required, to maintain documentation on behalf of a producer.   (b) Records required to be maintained by this section may be maintained in paper, photographic, microprocess, magnetic, mechanical, or electronic media or by any process that accurately reproduces the actual document.   History: En. Sec. 5, Ch. 476, L. 2007; amd. Sec. 5, Ch. 324, L. 2017; amd. Sec. 4, Ch. 432, L. 2021. 
  33-20-806. Compliance mitigation -- penalties -- enforcement. (1) An insurer is responsible for compliance with this part. If a violation occurs, either because of the action or inaction of the insurer or its producer, the commissioner may order:  (a) an insurer or insurance producer to take reasonably appropriate corrective action for any consumer harmed by a failure to comply with this part by the insurer, an entity contracted to perform the insurer's supervisory duties, or the producer; or   (b) a general agency, independent agency, or the producer to take reasonably appropriate corrective action for any consumer harmed by the producer's violation of this part; and   (c) appropriate penalties and sanctions.   (2) A violation of this part is an unfair trade practice under Title 33, chapter 18. Fines may be imposed pursuant to 33-1-317.   (3) Any applicable penalty for a violation of this part may be reduced or eliminated if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or practice.   (4) The authority to enforce compliance with this part is vested exclusively with the commissioner.   History: En. Sec. 6, Ch. 476, L. 2007; amd. Sec. 5, Ch. 432, L. 2021. 
  33-20-807. Producer training. (1) A producer may not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer's standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this section.  (2) (a) (i) A producer who engages in the sale of annuity products shall complete a one-time, 4-credit training course approved by the department of insurance and provided by the department of insurance-approved education provider.   (ii) Producers who hold a life insurance line of authority on October 1, 2021, and who desire to sell annuities shall complete the requirements of this section within 6 months after October 1, 2021. Individuals who obtain a life insurance line of authority on or after October 1, 2021, may not engage in the sale of annuities until the annuity training course required under this section has been completed.   (b) The minimum length of the training required under this subsection (2) must be sufficient to qualify for at least four continuing education credits, but may be longer.   (c) The training required under this section must include, at a minimum, information on the following topics:   (i) the types of annuities and various classifications of annuities;   (ii) identification of the parties to an annuity;   (iii) how product-specific annuity contract features affect consumers;   (iv) the application of income taxation of qualified and nonqualified annuities;   (v) the primary uses of annuities; and   (vi) appropriate standard of conduct, sales practices, replacement, and disclosure requirements.   (d) Training required under this section may not include any information on marketing, sales techniques, or the specific aspects of a particular insurer's products.   (e) An insurer shall verify that a producer has completed the training under this section before allowing the producer to sell an annuity product for that insurer. An insurer may satisfy its responsibility under this section by obtaining certificates of completion of the training course or obtaining reports provided by a database system satisfactory to the commissioner.   (f) A producer who has completed an annuity training course approved by the department of insurance prior to October 1, 2021, shall, within 6 months after October 1, 2021, complete either:   (i) a new four-credit training course approved by the department of insurance after October 1, 2021; or   (ii) an additional one-time, one-credit training course approved by the department of insurance and provided by the department of insurance-approved education provider on appropriate sales practices and replacement and disclosure requirements under this part.   (g) The satisfaction of the components of the training requirements of a course or courses with components substantially similar to the provisions of this section must be considered to satisfy the training requirements of this section in this state.   History: En. Sec. 1, Ch. 324, L. 2017; amd. Sec. 6, Ch. 432, L. 2021. 
  33-20-901. Short title. This part may be referred to as the "Montana Annuity Disclosure Act".   History: En. Sec. 7, Ch. 476, L. 2007.  
  33-20-902. Purpose. The purpose of this part is to provide standards for the disclosure of certain minimum information about annuity contracts to protect consumers and to foster consumer education. This part specifies the minimum information that must be disclosed and the method for disclosing the information in connection with the sale of annuity contracts. The goal of this part is to ensure that purchasers of annuity contracts understand certain basic features of annuity contracts.   History: En. Sec. 8, Ch. 476, L. 2007.  
  33-20-903. Applicability. (1) This part applies to all group and individual annuity contracts and certificates except:   (a) registered or nonregistered variable annuities or other registered products;   (b) immediate and deferred annuities that do not contain nonguaranteed elements;   (c) structured settlement annuities; and   (d) as provided in subsection (2), annuities used to fund:   (i) an employee pension plan that is covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.;   (ii) a plan described by section 401(a), 401(k), or 403(b) of the Internal Revenue Code, 26 U.S.C. 401(a), 401(k), or 403(b), when the plan, for purposes of the Employment Retirement Income Security Act of 1974, is established or maintained by an employer;   (iii) a governmental plan or church plan defined in section 414 of the Internal Revenue Code, 26 U.S.C. 414, or a deferred compensation plan of a state or local government or a tax-exempt organization under section 457 of the Internal Revenue Code, 26 U.S.C. 457; or   (iv) a nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.   (2) (a) The provisions of this part apply to annuities used to fund a plan or arrangement when:   (i) the plan or arrangement is funded solely by contributions that an employee elects to make whether on a pretax or after-tax basis;   (ii) the insurer has been notified that plan participants may choose from among two or more fixed annuity providers; and   (iii) there is a direct solicitation of an individual employee by an insurance producer for the purchase of an annuity contract.   (b) As used in this subsection (2), direct solicitation does not include any meeting held by an insurance producer solely for the purpose of educating or enrolling employees in the plan or arrangement.   History: En. Sec. 9, Ch. 476, L. 2007.  
  33-20-904. Definitions. As used in this part, the following definitions apply:   (1) "Contract owner" means the owner named in the annuity contract or a certificate holder in the case of a group annuity contract.   (2) (a) "Determinable elements" means elements that are derived from processes or methods that are guaranteed at issue and are not subject to insurer discretion, but the values or amounts cannot be determined until some point after issue.   (b) The term includes premiums, credited interest rates (including any bonus), benefits, values, noninterest-based credits, and charges or elements of formulas used to determine any of these items.   (c) Determinable elements may be described as guaranteed but not determined at issue.   (d) An element is considered determinable if it was calculated from underlying determinable elements only or from both determinable and guaranteed elements.   (3) "Generic name" means a short title descriptive of the annuity contract being applied for, such as "single premium deferred annuity".   (4) "Guaranteed elements" means the premiums, credited interest rates (including any bonus), benefits, values, noninterest-based credits, and charges or elements of formulas used to determine any of these items that are guaranteed and determined at issue. An element is considered guaranteed if all of the underlying elements that go into its calculation are guaranteed.   (5) "Nonguaranteed elements" means the premiums, credited interest rates (including any bonus), benefits, values, noninterest-based credits, and charges or elements of formulas used to determine any of these items that are subject to insurer discretion and are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation.   (6) "Structured settlement annuity" means a qualified funding asset as defined in section 130(d) of the Internal Revenue Code, 26 U.S.C. 130(d), or an annuity that would be a qualified funding asset under section 130(d) except that it is not owned by an assignee under a qualified assignment.   History: En. Sec. 10, Ch. 476, L. 2007.  
  33-20-905. Standards for disclosure document and buyer's guide. (1) When the application for an annuity contract is taken in a face-to-face meeting, the applicant must be given, at or before the time of application, both the disclosure document and the buyer's guide.   (2) (a) When the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant must be sent both the disclosure document and the buyer's guide not later than 5 business days after the completed application is received by the insurer.   (b) When an application is received as a result of a direct solicitation through the mail, providing a disclosure document and a buyer's guide in the mailing inviting prospective applicants to apply for an annuity contract satisfies the requirement that the disclosure document and buyer's guide be provided not later than 5 business days after receipt of the application.   (c) When an application is received over the internet, taking reasonable steps to make the disclosure document and buyer's guide available for viewing and printing on the insurer's website satisfies the requirement that the disclosure document and the buyer's guide be provided not later than 5 business days of receipt of the application.   (d) A solicitation for an annuity contract provided in other than a face-to-face meeting must include a statement that the proposed applicant may contact the commissioner's office for a free annuity buyer's guide, or an insurer may include a statement that the prospective applicant may contact the insurer for a free annuity buyer's guide.   (3) When the disclosure document and buyer's guide are not provided at or before the time of application, a free-look period of not less than 15 days must be provided for the applicant to return the annuity contract without penalty. This free-look period must run concurrently with any other free-look period provided under state law.   (4) At a minimum, the following information must be included in the disclosure document:   (a) the generic name of the contract, the company product name, if different, the form number, and the fact that it is an annuity;   (b) the insurer's name and address;   (c) a description of the contract and its benefits, emphasizing its long-term nature, including when appropriate:   (i) the guaranteed elements, nonguaranteed elements, and determinable elements of the contract and their limitations, if any, and an explanation of how the elements operate;   (ii) an explanation of the initial crediting rate, specifying any bonus or introductory portion, the duration of the rate, and the fact that rates may change from time to time and are not guaranteed;   (iii) periodic income options both on a guaranteed and nonguaranteed basis;   (iv) any value reductions caused by withdrawals from or surrender of the contract within 10 years of issuance under 33-20-309;   (v) how values in the contract can be accessed;   (vi) the death benefit, if one is available, and how it will be calculated;   (vii) a summary of the federal tax status of the contract and any penalties applicable on withdrawal of values from the contract; and   (viii) the impact of any rider, such as a long-term care rider;   (d) specific dollar amount or percentage charges and fees with an explanation of how they apply; and   (e) information about the current guaranteed rate for new contracts that contains a clear notice that the rate is subject to change.   (5) Insurers shall define terms used in the disclosure statement in language that facilitates the understanding by a typical person within the segment of the public to which the disclosure statement is directed.   History: En. Sec. 11, Ch. 476, L. 2007; amd. Sec. 2, Ch. 177, L. 2017.  
  33-20-906. Report to contract owners. (1) For annuities in the payout period with changes in nonguaranteed elements and for the accumulation period of a deferred annuity, the insurer shall provide each contract owner with a report, at least annually, on the status of the contract.   (2) The report must contain at least the following information:   (a) the beginning and ending date of the current report period;   (b) the accumulation and cash surrender value, if any, at the end of the previous report period and at the end of the current report period;   (c) the total amounts, if any, that have been credited, charged to the contract value, or paid during the current report period; and   (d) the amount of outstanding loans, if any, as of the end of the current report period.   History: En. Sec. 12, Ch. 476, L. 2007.  
  33-20-907. Penalties. In addition to any other penalties provided in Title 33, an insurer or insurance producer that violates a provision of this part also violates 33-18-102.   History: En. Sec. 13, Ch. 476, L. 2007.  
  33-21-101. Short title. This chapter may be cited as "The Model Act for the Regulation of Credit Life Insurance and Credit Disability Insurance".   History: En. Sec. 393, Ch. 286, L. 1959; R.C.M. 1947, 40-4202.  
  33-21-102. Purpose and scope. (1) The purpose of this chapter is to promote the public welfare by regulating credit life insurance and credit disability insurance. Nothing in this chapter is intended to prohibit or discourage reasonable competition. The provisions of this chapter shall be liberally construed.   (2) Except as provided in subsection (3), this chapter applies to each policy, certificate of insurance, notice of proposed insurance, binder, endorsement, and rider of life insurance and disability insurance delivered or issued for delivery in Montana in connection with loans or other credit transactions for personal, family, or household purposes.   (3) This chapter does not apply to life insurance or disability insurance delivered or issued for delivery in connection with:   (a) a loan or other credit transaction of more than 15 years' duration;   (b) a credit transaction that is:   (i) secured by a first mortgage or deed of trust; and   (ii) made to finance the purchase of real property or the construction of a dwelling thereon or to refinance a prior credit transaction made for that purpose; or   (c) a credit transaction that is an isolated transaction on the part of the insurer and that is not related to an agreement or a plan for insuring debtors of the creditor.   History: (1)En. Sec. 392, Ch. 286, L. 1959; Sec. 40-4201, R.C.M. 1947; (2)En. Sec. 394, Ch. 286, L. 1959; amd. Sec. 1, Ch. 31, L. 1969; amd. Sec. 1, Ch. 323, L. 1974; Sec. 40-4203, R.C.M. 1947; R.C.M. 1947, 40-4201, 40-4203; amd. Sec. 2, Ch. 617, L. 1985; amd. Sec. 2, Ch. 156, L. 1989.  
  33-21-103. Definitions. As used in this chapter, the following definitions apply:   (1) "Credit disability insurance" means insurance on a debtor or joint debtors to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor or either of the joint debtors is disabled as defined in the policy.   (2) "Credit life insurance" means insurance on the life of a debtor or the lives of joint debtors pursuant to or in connection with a specific loan or other credit transaction.   (3) "Credit transaction" means a transaction by the terms of which, at a future date:   (a) repayment of money loaned is made;   (b) a loan commitment is made; or   (c) payment for goods, services, or property sold or leased is made.   (4) "Creditor" means:   (a) a lender of money or vendor or lessor of goods, services, property, rights, or privileges, for which payment is arranged through a credit transaction;   (b) any successor to the right, title, or interest of a lender, vendor, or lessor;   (c) an affiliate, associate, or subsidiary of a lender, vendor, or lessor;   (d) a director, officer, or employee of a lender, vendor, or lessor; or   (e) any other person in any way associated with a lender, vendor, or lessor.   (5) "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction.   (6) "Indebtedness" means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction.   (7) "Open-end credit" means credit extended by a creditor under an agreement in which:   (a) the creditor reasonably contemplates repeated transactions;   (b) the creditor imposes a finance charge from time to time on an outstanding unpaid balance; and   (c) the amount of credit that may be extended to the debtor during the term of the agreement (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid.   History: En. Sec. 395, Ch. 286, L. 1959; R.C.M. 1947, 40-4204; amd. Sec. 3, Ch. 156, L. 1989; amd. Sec. 1, Ch. 179, L. 1993.  
  33-21-104. Existing insurance -- choice of insurer. When credit life insurance or credit disability insurance is required as additional security for an indebtedness, the debtor, upon request to the creditor, has the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by the debtor or of procuring and furnishing the required coverage through an insurer authorized to transact insurance within Montana.   History: En. Sec. 405, Ch. 286, L. 1959; R.C.M. 1947, 40-4214; amd. Sec. 4, Ch. 156, L. 1989; amd. Sec. 1216, Ch. 56, L. 2009.  
  33-21-105. Claims. (1) A claim must be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. A claim must be settled as soon as possible and in accordance with the terms of the insurance contract.   (2) A claim must be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions or upon direction of the claimant to one specified.   (3) No plan or arrangement may be used whereby a person, partnership, or corporation other than the insurer or its designated claim representative is authorized to settle or adjust claims. The creditor may not be designated as claim representative for the insurer in adjusting claims, except that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer.   History: En. Sec. 404, Ch. 286, L. 1959; R.C.M. 1947, 40-4213; amd. Sec. 5, Ch. 156, L. 1989.  
  33-21-106 through 33-21-110 reserved.  
  33-21-111. Rules -- enforcement of chapter. The commissioner may, after notice and hearing, adopt rules that the commissioner considers appropriate for the supervision of this chapter. Whenever the commissioner finds that there has been a violation of this chapter or any rules adopted pursuant to this chapter and after written notice and hearing given to the insurer or other person authorized or licensed by the commissioner, the commissioner shall set forth the details of the commissioner's findings together with an order for compliance by a specified date. The order is binding on the insurer and other person authorized or licensed by the commissioner on the date specified unless withdrawn by the commissioner or unless a stay has been ordered by a court of competent jurisdiction.   History: En. Sec. 406, Ch. 286, L. 1959; R.C.M. 1947, 40-4215; amd. Sec. 1217, Ch. 56, L. 2009.  
  33-21-112. Judicial review. Any party to the proceeding affected by an order of the commissioner shall be entitled to judicial review by following the procedure set forth in 33-1-711.   History: En. Sec. 407, Ch. 286, L. 1959; R.C.M. 1947, 40-4216.  
  33-21-113. Penalties. In addition to any penalty provided by law, a person or business entity who violates an order of the commissioner after it has become final and while the order is in effect shall, upon proof of the violation to the satisfaction of a court, pay to the state of Montana a sum not to exceed $250 if the violation is found to be not willful. The sum may be recovered in a civil action. If the violation is found to be willful, the amount of the penalty may be in an amount not to exceed $1,000. The commissioner may revoke or suspend the license or certificate of authority of the person or business entity guilty of the violation. The order for suspension or revocation is subject to judicial review as provided in 33-1-711.   History: En. Sec. 408, Ch. 286, L. 1959; R.C.M. 1947, 40-4217; amd. Sec. 6, Ch. 156, L. 1989; amd. Sec. 1218, Ch. 56, L. 2009; amd. Sec. 22, Ch. 271, L. 2009.  
  33-21-201. Form of issuance. An insurer may deliver or issue for delivery credit life insurance and credit disability insurance only in the following forms:   (1) individual policies of life insurance issued to debtors on a term plan;   (2) individual policies of disability insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance;   (3) group policies of life insurance issued to creditors providing insurance on the lives of debtors on a term plan;   (4) group policies of disability insurance issued to creditors on a term plan insuring debtors or disability provisions in group credit life insurance policies to provide disability coverage;   (5) joint policies of life insurance issued to debtors providing insurance jointly on the lives of joint debtors on a term plan; or   (6) joint policies of disability insurance issued to debtors on a term plan insuring joint debtors or disability provisions in joint credit life insurance policies to provide disability coverage.   History: En. Sec. 396, Ch. 286, L. 1959; R.C.M. 1947, 40-4205; amd. Sec. 7, Ch. 156, L. 1989; amd. Sec. 2, Ch. 179, L. 1993.  
  33-21-202. Amount. (1) The initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness. If an indebtedness is repayable in substantially equal installments, the amount of credit life insurance may not exceed the scheduled or actual amount of unpaid indebtedness on the date of death, whichever is greater. The amount of credit life insurance written in connection with:   (a) a credit transaction repayable over a term in excess of 63 months or, at the option of the insurer, for a shorter term may not exceed the actual amount of unpaid indebtedness on the date of death, excluding any:   (i) unearned interest or finance charges; and   (ii) delinquency or extension exceeding 4 months;   (b) an open-end credit agreement having a credit limit exceeding $10,000 may not exceed the plan's credit limit;   (c) an agricultural loan commitment not exceeding 1 year may not exceed the amount of the loan commitment on a nondecreasing or level term plan; and   (d) an education loan commitment may be for the amount of the portion of the commitment that has not been advanced by the creditor.   (2) The amount of periodic indemnity payable by credit disability insurance in the event of disability, as defined in the policy, may not exceed:   (a) the aggregate of the periodic scheduled unpaid installments of indebtedness; and   (b) the original indebtedness divided by the number of periodic installments.   (3) A group or individual credit disability insurance policy or a certificate that provides coverage for credit card indebtedness must provide a disability benefit during each credit card billing cycle throughout the term of coverage that, subject to any specified dollar amount limit defined in the policy or certificate, may not be less than the sum of the following amounts payable in the billing cycle and based on the insured balance on the date that an insured disability commences:   (a) the greater of:   (i) the minimum payment required by the creditor for the billing cycle, less any past-due payments and accelerated payments required for the overlimit usage of the credit card; or   (ii) the finance charge calculated pursuant to the credit card contract;   (b) all premiums charged for credit disability insurance coverage; and   (c) all other charges related to the insured balance as of the date the insured disability commences that are incurred in the billing cycle as a result of the insurer's delay in processing a claim payment.   History: En. Sec. 397, Ch. 286, L. 1959; amd. Sec. 2, Ch. 323, L. 1974; R.C.M. 1947, 40-4206; amd. Sec. 8, Ch. 156, L. 1989; amd. Sec. 1, Ch. 530, L. 1997.  
  33-21-203. Term. (1) The term of any credit life insurance or credit disability insurance commences, subject to acceptance by the insurer, on the date on which the debtor becomes obligated to the creditor. However, if a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to the indebtedness commences on the effective date of the policy.   (2) When evidence of insurability is required and the evidence is furnished more than 30 days after the date on which the debtor becomes obligated to the creditor, the term of the insurance may commence on the date the insurer determines the evidence is satisfactory. In that event, the insurer shall make an appropriate refund or adjustment of any charge to the debtor for insurance.   (3) The term of the insurance may not extend more than 15 days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor, but the term of the insurance may be less than the term of the credit transaction to provide modified or partial coverage or extend beyond the maturity date to provide coverage consistent with 33-21-202(1)(a).   (4) If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force must be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund must be paid or credited as provided in 33-21-206.   History: En. Sec. 398, Ch. 286, L. 1959; R.C.M. 1947, 40-4207; amd. Sec. 9, Ch. 156, L. 1989.  
  33-21-204. Policy or certificate delivered -- time of delivery -- provisions. (1) All credit life insurance and credit disability insurance sold must be evidenced by an individual policy or, in the case of group insurance, by a certificate of insurance. The individual policy or group certificate of insurance must be delivered to the debtor at the time the indebtedness is incurred except as provided in this section.   (2) If the individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for the policy or a notice of proposed insurance, signed by the debtor and setting forth the name and home office address of the insurer, the name of each debtor, the premium or amount of payment, if any, by the debtor separately in connection with credit life insurance and credit disability insurance coverage, the amount, term, and a brief description of the coverage provided or to be provided, must be delivered to the debtor at the time the indebtedness is incurred. The copy of the application for or notice of proposed insurance must also refer exclusively to insurance coverage and must be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement unless the information required by this section is prominently set forth in the statement of account, instrument, or agreement. Upon approval by the insurer of the application for insurance or acceptance of the insurance by the insurer and within 30 days of the date upon which the indebtedness is incurred, the insurer shall deliver the individual policy or group certificate of insurance to the debtor. The application or notice of proposed insurance must state that, upon acceptance by the insurer, the insurance becomes effective as of the date the indebtedness is incurred. If the named insurer does not accept the risk, the debtor must receive a policy or certificate of insurance setting forth the name and home office address of the substituted insurer and the amount of the premium to be charged. If the amount of premium is less than that set forth in the notice of proposed insurance, the insurer shall make an appropriate refund.   (3) Each individual policy or group certificate of credit life insurance and credit disability insurance must, in addition to other requirements of law, set forth the name and home office address of the insurer, the name of each debtor or, in the case of a group certificate of insurance, the identity by name or otherwise of the debtor, the rate or amount of payment, if any, by the debtor separately in connection with credit life insurance and credit disability insurance, and a description of the coverages, including the amount and term of the coverages and any exceptions, limitations, or restrictions, and must state that the benefits must be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any excess must be payable to a beneficiary, other than the creditor, named by the debtor or to the debtor's estate. If the term of the insurance is less than the term of the loan, that fact must be stated on the face of the individual policy or group certificate in not less than 10-point boldface type.   (4) For the purposes of subsections (1) and (2), an individual policy or group certificate of insurance delivered in connection with an open-end credit agreement is considered to be delivered at the time the indebtedness is incurred if delivery occurs on or before the date the indebtedness is incurred.   History: En. Secs. 399, 400, Ch. 286, L. 1959; R.C.M. 1947, 40-4208, 40-4209; amd. Sec. 10, Ch. 156, L. 1989; amd. Sec. 1219, Ch. 56, L. 2009.  
  33-21-205. Filing, approval, and withdrawal of forms and rates -- disapproval. (1) With respect to credit life insurance or credit disability insurance:   (a) a policy, certificate of insurance, notice of proposed insurance, application for insurance, binder, endorsement, or rider may not be delivered or issued for delivery in Montana unless it has been filed with and approved by the commissioner, in accordance with 33-1-501, and the regulatory official of the state in which it is issued; and   (b) a schedule of premium rates pertaining to a policy, certificate of insurance, notice of proposed insurance, application for insurance, binder, endorsement, or rider may not be used in Montana unless it has been filed with the commissioner.   (2) With respect to credit life insurance or credit disability insurance and in accordance with 33-1-501, the commissioner may disapprove a policy, certificate of insurance, notice of proposed insurance, application for insurance, binder, endorsement, or rider:   (a) for a reason listed in 33-1-502;   (b) if the table of premium rates charged or to be charged appears by reasonable assumptions to be excessive in relation to benefits; or   (c) if it contains provisions that are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the insurance.   (3) If the commissioner notifies the insurer that a form is disapproved, it is unlawful for the insurer to issue or use the form.   (4) An insurer may not issue or use a form after the commissioner withdraws approval of the form pursuant to 33-1-501. An order or final determination of the commissioner under this section is subject to judicial review.   History: En. Sec. 401, Ch. 286, L. 1959; R.C.M. 1947, 40-4210; amd. Sec. 11, Ch. 156, L. 1989.  
  33-21-206. Premiums and refunds. (1) Each insurer issuing credit life insurance or credit disability insurance shall file with the commissioner its schedules of premium rates for use in connection with such insurance. Any insurer may revise the schedules from time to time and shall file the revised schedules with the commissioner. No insurer may issue any credit life insurance policy or credit disability insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the commissioner. The commissioner may require the filing of the schedule of premium rates for use in connection with and as a part of the specific policy filings as provided by 33-21-205.   (2) Each individual policy, group certificate of insurance, or notice of proposed insurance of credit life insurance and credit disability insurance must provide that, if the insurance is terminated before the scheduled maturity date of the indebtedness, any refund of premium or amount paid by the debtor for insurance must be paid or credited promptly to the person entitled thereto; provided, however, that the commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing refunds must be filed with and approved by the commissioner.   (3) If a creditor requires a debtor to make a payment in connection with credit life insurance or credit disability insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to the debtor and shall promptly make an appropriate credit to the account.   (4) The amount charged to a debtor for any credit life insurance or credit disability insurance may not exceed the premiums charged by the insurer, as computed at the time the charge to the debtor is determined.   (5) Nothing in this chapter may be construed to authorize any payments for insurance prohibited under a statute, or rule thereunder, governing credit transactions.   History: En. Sec. 402, Ch. 286, L. 1959; amd. Sec. 1, Ch. 113, L. 1967; R.C.M. 1947, 40-4211; amd. Sec. 12, Ch. 156, L. 1989.  
  33-21-207. Issuance of policies. Each policy, certificate of insurance, or notice of proposed insurance of credit life insurance and credit disability insurance must be delivered or issued for delivery in Montana only by an insurer authorized to transact insurance in Montana and must, except as provided in 33-17-103, be issued only through a licensed insurance producer.   History: En. Sec. 403, Ch. 286, L. 1959; R.C.M. 1947, 40-4212; amd. Sec. 13, Ch. 156, L. 1989; amd. Sec. 37, Ch. 16, L. 1991.  
  33-22-101. Exceptions to scope. (1) Subject to subsection (2), parts 1 through 4 of this chapter, except 33-22-107, 33-22-110, 33-22-111, 33-22-114, 33-22-125, 33-22-129, 33-22-130 through 33-22-136, 33-22-138, 33-22-140, 33-22-141, 33-22-142, 33-22-153, 33-22-243, and 33-22-304, and part 19 of this chapter do not apply to or affect:  (a) any policy of liability or workers' compensation insurance with or without supplementary expense coverage;   (b) any group or blanket policy;   (c) life insurance, endowment, or annuity contracts or supplemental contracts that contain only those provisions relating to disability insurance that:   (i) provide additional benefits in case of death or dismemberment or loss of sight by accident or accidental means; or   (ii) operate to safeguard contracts against lapse or to give a special surrender value or special benefit or an annuity if the insured or annuitant becomes totally and permanently disabled as defined by the contract or supplemental contract;   (d) reinsurance.   (2) (a) Sections 33-22-137, 33-22-150 through 33-22-152, 33-22-170 through 33-22-177, 33-22-180, and 33-22-301 apply to group or blanket policies.   (b) Title 33, chapter 2, part 24,and 33-22-170 through 33-22-177 apply to workers' compensation policies.   History: En. Sec. 351, Ch. 286, L. 1959; R.C.M. 1947, 40-4001; amd. Sec. 26, Ch. 451, L. 1993; amd. Sec. 4, Ch. 527, L. 1995; amd. Sec. 9, Ch. 198, L. 1997; amd. Sec. 4, Ch. 410, L. 1997; amd. Sec. 3, Ch. 416, L. 1997; amd. Sec. 2, Ch. 178, L. 1999; amd. Sec. 40, Ch. 472, L. 1999; amd. Sec. 37, Ch. 380, L. 2003; amd. Sec. 3, Ch. 290, L. 2005; amd. Sec. 26, Ch. 469, L. 2005; amd. Sec. 4, Ch. 356, L. 2007; amd. Sec. 23, Ch. 271, L. 2009; amd. Sec. 3, Ch. 97, L. 2013; amd. Sec. 2, Ch. 164, L. 2013; amd. Sec. 4, Ch. 88, L. 2019; amd. Sec. 2, Ch. 215, L. 2019; amd. Sec. 14, Ch. 501, L. 2021. 
  33-22-102. Third-party ownership. The word "insured", as used in parts 1 through 4 of this chapter, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits, and rights provided therein.   History: En. Sec. 379, Ch. 286, L. 1959; R.C.M. 1947, 40-4029.  
  33-22-103. Repealed. Sec. 24, Ch. 227, L. 2011.   History: En. Sec. 384, Ch. 286, L. 1959; R.C.M. 1947, 40-4034.  
  33-22-104 through 33-22-106 reserved.  
  33-22-107. Premium increase restriction -- exception -- notice of rate increase and policy changes. (1) An insurer or a health service corporation that issues or renews a policy, certificate, or membership contract covering a resident of this state may not increase a premium in an individual's or an individual's group disability insurance policy more frequently than once during a 12-month period unless failure to increase the premium more frequently than once during the 12-month period would:   (a) place the insurer in violation of the laws of this state; or   (b) cause the financial impairment of the insurer to the extent that further transaction of insurance by the insurer injures or is hazardous to its policyholders or to the public.   (2) Subsection (1) does not apply to a premium increase necessitated by a state or federal law, court decision, or rule adopted by an agency of competent jurisdiction of the state or federal government.   (3) (a) Every health insurance issuer delivering or issuing for delivery group or individual health insurance coverage shall give a group policyholder at least 60 days' advance notice and an individual policyholder at least 45 days' advance notice of a change in rates or a change in terms or benefits.   (b) A notice given under this subsection (3) must be delivered in the following manner:   (i) it must be mailed to the policyholder's last-known address as shown by the records of the insurer; and   (ii) if a health insurance issuer bills any certificate holder directly at the certificate holder's home address for premiums, the notice must be mailed by the health insurer directly to each certificate holder's last-known home address.   (c) If the health insurance issuer fails to provide the notice required by this subsection (3), the coverage must remain in effect at the existing rate with the existing benefits until the full notice period has expired or until the effective date of the replacement coverage obtained by the insured, whichever occurs first.   History: En. Sec. 2, Ch. 699, L. 1991; amd. Sec. 29, Ch. 531, L. 1997; amd. Sec. 38, Ch. 380, L. 2003; amd. Sec. 1, Ch. 384, L. 2003.  
  33-22-108 reserved.  
  33-22-109. Riders. (1) Except for group health insurance coverage provided by a group health plan or a health insurance issuer, a policy of disability insurance may contain a provision that excludes coverage for specific conditions through the use of elimination riders for conditions for which medical advice, diagnosis, care, or treatment was recommended by or received from a provider of health care services within 3 years preceding the effective date of coverage of an insured person. The provisions of 33-22-110 do not apply to elimination riders. An insured person may apply to the insurer for removal or modification of a rider, and the insurer shall respond to the application within 60 days of receipt.   (2) An insurer may not, except upon agreement by the insured, retroactively impose an elimination rider on an existing policy, certificate, or contract.   History: En. Sec. 2, Ch. 522, L. 1995; amd. Sec. 4, Ch. 416, L. 1997.  
  33-22-110. Preexisting conditions. (1) Except as provided in 33-22-246 and 33-22-514, a policy or certificate of disability insurance may not exclude coverage for a condition for which medical advice or treatment was recommended by or received from a provider of health care services unless the condition occurred within 5 years preceding the effective date of coverage of an insured person. The condition may only be excluded for a maximum of 12 months.   (2) An insurer may use an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, perform underwriting in accordance with the insurer's established underwriting standards.   (3) A policy of disability income insurance may not exclude coverage for a condition for which medical advice or treatment was recommended by or received from a provider of health care services unless the condition occurred within 5 years preceding the effective date of coverage of an insured person. An exclusion may not apply to a disability commencing more than 12 months from the effective date of coverage of an insured person.   History: En. Sec. 34, Ch. 451, L. 1993; amd. Sec. 1, Ch. 522, L. 1995; amd. Sec. 5, Ch. 416, L. 1997.  
  33-22-111.  Policies and certificates to provide for freedom of choice of practitioners -- professional practice not enlarged. (1) All policies or certificates of disability insurance, including individual, group, and blanket policies or certificates, must provide that the insured has full freedom of choice in the selection of any licensed physician, physician assistant, dentist, osteopath, chiropractor, optometrist, podiatrist, psychologist, licensed social worker, licensed professional counselor, licensed marriage and family therapist, acupuncturist, naturopathic physician, physical therapist, speech-language pathologist, audiologist, licensed addiction counselor, or advanced practice registered nurse as specifically listed in 37-8-202 for treatment of any illness or injury within the scope and limitations of the person's practice. Whenever the policies or certificates insure against the expense of drugs, the insured has full freedom of choice in the selection of any licensed and registered pharmacist.   (2) This section may not be construed as enlarging the scope and limitations of practice of any of the licensed professions enumerated in subsection (1). This section may not be construed as amending, altering, or repealing any statutes relating to the licensing or use of hospitals.   History: (1)En. Sec. 1, Ch. 172, L. 1967; amd. Sec. 1, Ch. 402, L. 1971; Sec. 40-4108, R.C.M. 1947; (2)En. Sec. 2, Ch. 172, L. 1967; Sec. 40-4109, R.C.M. 1947; R.C.M. 1947, 40-4108, 40-4109; amd. Sec. 1, Ch. 258, L. 1981; amd. Sec. 20, Ch. 303, L. 1981; amd. Sec. 4, Ch. 324, L. 1981; amd. Sec. 1, Ch. 179, L. 1983; amd. Sec. 1, Ch. 302, L. 1985; amd. Sec. 14, Ch. 572, L. 1985; amd. Sec. 1, Ch. 606, L. 1987; amd. Sec. 39, Ch. 83, L. 1989; amd. Sec. 18, Ch. 97, L. 1989; amd. Sec. 1, Ch. 362, L. 1991; amd. Sec. 1, Ch. 628, L. 1993; amd. Sec. 1, Ch. 459, L. 1999; amd. Sec. 41, Ch. 472, L. 1999; amd. Sec. 1, Ch. 235, L. 2001; amd. Sec. 2, Ch. 519, L. 2005; amd. Sec. 1, Ch. 342, L. 2015; amd. Sec. 1, Ch. 206, L. 2017.  
  33-22-112. Disability insurance coverage of services of state institutions -- provision void -- rate of payment. (1) It is unlawful for any insurance company issuing disability insurance policies in Montana to exclude from coverage in a disability insurance policy services rendered the insured while a resident in a Montana state institution if the services to the insured would be covered by the disability insurance policy if rendered to the insured outside a Montana state institution.   (2) A disability insurance policy is considered issued in Montana if the insured purchasing the disability insurance policy is, at the time of the purchase, residing in the state of Montana.   (3) If the exclusion prohibited by this section appears in a disability insurance policy issued in Montana after February 14, 1973, the provision is void and the disability insurance policy will be considered to cover services rendered the insured in a Montana state institution if the services would have been covered if rendered to an insured outside a Montana state institution.   (4) Payment for services rendered in a Montana state institution must be to the same extent and at the same rates, according to the provisions of the disability policy, that would be paid for the services if rendered outside a Montana state institution.   History: En. Secs. 1, 2, 3, 4, Ch. 50, L. 1973; R.C.M. 1947, 40-4035(part), 40-4036, 40-4037, 40-4038; amd. Sec. 1, Ch. 169, L. 1979; amd. Sec. 1220, Ch. 56, L. 2009.  
  33-22-113. Disability insurance coverage of persons eligible for public medical assistance. No disability insurance policy providing hospital, medical, or surgical expense benefits delivered or issued for delivery in this state on or after July 1, 1979, may contain any provision denying or reducing such benefits for the reason that the person insured is eligible for or receiving public medical assistance provided under Title 53, chapter 2.   History: En. Sec. 2, Ch. 169, L. 1979.  
  33-22-114. Coverage required for services provided by physician assistants, advanced practice registered nurses, and registered nurse first assistants. An insurer, a health service corporation, or any employee health and welfare fund that provides accident or health insurance benefits to residents of this state shall provide, in group and individual insurance contracts, coverage as well as payment or reimbursement for health services provided by:   (1) a physician assistant as normally covered by contracts for services supplied by a physician if health care services that the physician assistant is approved to perform are covered by the contract;   (2) an advanced practice registered nurse, defined in 37-8-102, as normally covered by contracts for services supplied by a physician or a physician assistant if health care services that the advanced practice registered nurse is approved to perform are covered by the contract; and   (3) a registered nurse first assistant, licensed under Title 37, chapter 8, as normally covered by contracts for surgical services supplied by a physician, a physician assistant, or an advanced practice registered nurse if surgical services that the registered nurse first assistant is approved to perform are covered by the contract.   History: En. Sec. 7, Ch. 97, L. 1989; amd. Sec. 3, Ch. 519, L. 2005; amd. Sec. 1, Ch. 173, L. 2011.  
  33-22-115. Provider agreement limited to covered services -- dental network constraints -- penalty -- definitions. (1) A provider agreement entered into or renewed on or after July 1, 2013, between dentists licensed under Title 37, chapter 4, and an issuer that offers an excepted benefits plan for limited-scope dental benefits or a health benefit plan that includes covered services may not:   (a) require the dentist to provide dental services to an individual covered under the excepted benefits plan or health benefit plan at a fee set by or subject to the approval of the issuer unless the dental services are covered services; or   (b) prohibit the dentist from offering or providing to an individual covered under the excepted benefits plan or health benefit plan any dental services that are not covered services. The fee for the noncovered services may be determined only under terms or conditions set by the dentist or negotiated by the dentist with the individual covered under the excepted benefits plan or health benefit plan.   (c) provide minimal coverage for covered services under the provider agreement for the sole purpose of avoiding the requirements of this section.   (2) A business entity that owns a network of health care providers and markets access to that network may not circumvent the terms of this section by making available to an issuer of an excepted benefits plan for limited-scope dental benefits or a health benefit plan that includes covered services any dentists in that network if the business entity sets dental services fees in its network for any services except covered services.   (3) An issuer of an excepted benefits plan for limited-scope dental benefits or a health benefit plan that includes covered services is subject to a fine as provided in 33-1-317 for a violation of this section.   (4) For the purposes of this section, the following definitions apply:   (a) "Covered services" means dental care services provided under a plan for limited-scope dental benefits or a health benefit plan for which a payment is available subject to the application of contractual terms, including but not limited to annual or lifetime maximums, deductibles, copayments, coinsurance, waiting periods, frequency limitations, or alternative benefit reimbursement.   (b) "Issuer" includes an insurer, a health service corporation, or a third-party administrator that offers or administers an excepted benefits plan for limited-scope dental benefits or a health benefit plan that includes covered services.   History: En. Sec. 1, Ch. 160, L. 2013.  
  33-22-116. Prohibition on coverage of abortion services in qualified health plans. (1) A qualified health plan, as defined by 42 U.S.C. 18021, may not be offered or otherwise made available through a health insurance exchange established in the state pursuant to Public Law 111-148, the Patient Protection and Affordable Care Act, if the plan provides coverage for abortion as defined in 50-20-104.  (2) The prohibition in this section does not apply to a plan that provides coverage for an abortion performed when:   (a) the life of the mother is endangered by a physical disorder, physical illness, or physical injury, including a life-endangering physical condition caused by or arising from the pregnancy itself; or   (b) the pregnancy is the result of an act of rape or incest.   History: En. Sec. 1, Ch. 352, L. 2021. 
  33-22-117. Construction. (1) The provisions of 33-22-116 may not be construed as creating or recognizing a right to abortion.  (2) It is not the intent of 33-22-116 to make lawful an abortion that is currently unlawful.   History: En. Sec. 2, Ch. 352, L. 2021. 
  33-22-118 through 33-22-120 reserved. 
  33-22-121. Notice required for cancellation or refusal to renew. (1) An insurer may not cancel or refuse to renew a disability insurance policy or certificate until the insurer has mailed or delivered to the named insured and to the policyowner or certificate holder, as appropriate if they are not the same as the named insured, at the last-known address shown in the records of the company, one written notice in addition to any billing statement, stating the date the cancellation will become effective, which may not be earlier than:   (a) the beginning of the period for which premiums have not been paid in full if the notice of cancellation for nonpayment of premiums is mailed or delivered within 15 days after the due date of the missed premiums for that period;   (b) the date of mailing or delivery of notice of cancellation for nonpayment of premiums if notice of cancellation for nonpayment of premiums is not mailed or delivered within 15 days after the premium due date for the applicable policy period; or   (c) 90 days after the date of mailing or delivery of the notice of cancellation or refusal to renew for any reason other than nonpayment of premiums or a material misrepresentation contained in the application.   (2) An insurer shall give notice of cancellation at least 30 days in advance of cancellation for nonpayment of premiums or 90 days in advance of cancellation or refusal to renew for any reason other than nonpayment of premiums or a material misrepresentation contained in the application.   (3) An insurer may not cancel a disability insurance policy or a certificate based upon nonpayment of premiums if the premiums are paid in full within the 30-day notice period.   (4) The notice requirements in subsections (1) and (2) run concurrently with any grace period required by 33-22-206.   History: En. Sec. 3, Ch. 723, L. 1985; amd. Sec. 1, Ch. 191, L. 1989; amd. Sec. 13, Ch. 399, L. 2007.  
  33-22-122. Contents of notice -- proof -- limitation on recovery -- exemptions. (1) (a) The notice of cancellation must state:   (i) the amount of the premium, installment, or interest due on the policy or certificate;   (ii) the place where it must be paid; and   (iii) the name and address of the person or company to which the premium is payable.   (b) The notice must also state:   (i) that, unless the premium or other sums are paid to the company or its insurance producer, the policy or certificate will be canceled; and   (ii) the date, determined in accordance with 33-22-121, on which cancellation will become effective.   (2) "Policyowner" or "certificate holder", as used in this section, means the owner of the policy or certificate or any other person designated as the person to receive premium notices, as shown by the records of the insurance company.   (3) If any responsible officer, clerk, or insurance producer of the insurance company authorized to mail the notice states in an affidavit that it is the standard practice of the company to mail to policyowners or certificate holders the notice required by this section, the affidavit is prima facie evidence that the notice has been given.   (4) An action may not be maintained to recover under a lapsed or forfeited policy or certificate on the ground that the insurance company failed to comply with this section unless the action is instituted within 2 years from the due date upon which default was made in paying the premium, installment, or interest for which lapse or forfeiture is claimed.   (5) Section 33-22-121 does not apply to:   (a) group health plans; or   (b) industrial life or industrial disability policies.   History: En. Sec. 4, Ch. 723, L. 1985; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 3, Ch. 384, L. 2003; amd. Sec. 14, Ch. 399, L. 2007.  
  33-22-123. Return of unearned premium. If an insured pays a premium in advance for coverage to any disability insurer licensed in this state and the insured subsequently cancels the coverage, the disability insurer shall refund the unearned portion of the premium. The disability insurer may consider the premium to be earned only on a calendar-month basis. The disability insurer may not charge the insured any fees or penalty for canceling the coverage. This section does not apply to a short-term disability policy that has a duration of 6 months or less.   History: En. Sec. 1, Ch. 262, L. 2009.  
  33-22-124 reserved.  
  33-22-125. Independent chiropractic physical examination or review of records. (1) If a patient's attending health care professional is a licensed chiropractor, the following provisions govern the conduct of a utilization review of the health care services rendered to the patient by the chiropractor:   (a) If an independent physical examination is required by the insurer, it must be conducted by a chiropractor engaged in the practice of chiropractic in Montana.   (b) If a review of the patient's or the chiropractor's records is required by the insurer in the course of an appeal or a redetermination of an adverse determination of medical necessity or appropriateness made pursuant to an insurer's review, the review must be conducted by a person trained in the field of chiropractic. During an appeal or redetermination, the patient may, at the patient's expense, request an independent review of the patient's or the chiropractor's records by a chiropractor engaged in the practice of chiropractic in Montana and may require that review to be considered by the insurer in reaching its decision. If the initial adverse determination of medical necessity or appropriateness is reversed, the insurer shall bear the expense of the independent review.   (2) This section does not prevent a health care insurer from requesting additional medical review of a patient's condition or treatment by another chiropractor or medical provider.   (3) The provisions of this section do not apply to routine claim administration or determination by an insurer.   (4) As used in this section, "health care insurer" means:   (a) an insurer who provides disability insurance as defined in 33-1-207;   (b) a health service corporation as defined in 33-30-101;   (c) a health maintenance organization as defined in 33-31-102;   (d) a fraternal benefit society as defined in 33-7-108;   (e) an administrator as defined in 33-17-102; and   (f) any other entity regulated by the commissioner that provides health care coverage.   History: En. Sec. 1, Ch. 727, L. 1991; amd. Sec. 1221, Ch. 56, L. 2009.  
  33-22-126 and 33-22-127 reserved. 
  33-22-128. Coverage for children with hearing loss -- definitions. (1) Health insurance coverage sold in the group or individual market in this state must provide coverage for diagnosis and treatment of hearing loss for a covered child 18 years of age or younger in accordance with subsection (2).  (2) (a) Except as provided in subsection (2)(b), coverage under this section, in addition to diagnosis, must include treatment that is:   (i) a medical necessity; and   (ii) prescribed, provided, or ordered by a licensed health care provider to treat hearing loss of the covered child.   (b) Treatment may not include more than one hearing device with required accessories or amplification device with required accessories for each ear every 3 years or as required by an audiologist licensed under Title 37, chapter 15.   (3) Benefits provided under this section may not be construed as limiting physical health benefits that are otherwise available to the covered child.   (4) (a) Coverage under this section may be subject to deductibles, coinsurance, and copayment provisions and utilization review as provided in Title 33, chapter 32.   (b) Special deductible, coinsurance, copayment, or other limitations that are not generally applicable to other medical care covered under the plan may not be imposed on the coverage under this section.   (5) This section also applies to the state employee group insurance program, the university system employee group insurance program, any employee group insurance program of a city, town, school district, or other political subdivision of this state, and any self-funded multiple employer welfare arrangement that is not regulated by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.   (6) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, specific disease, or long-term care policies.   (7) As used in this section, the following definitions apply:   (a) "Amplification device" means a hearing device, hearing aid, or wearable, nondisposable, nonexperimental instrument or device designed to aid or compensate for impaired human hearing and any parts, attachments, or accessories for the instrument or device, including an ear mold but excluding batteries and cords.   (b) "Generally accepted standards of medical practice" means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, physician specialty society recommendations, the view of physicians practicing in relevant clinical areas, and any other relevant factors.   (c) "Health care provider" means an individual licensed under Title 37, chapter 3, 15, or 20. A nurse practitioner licensed under Title 37, chapter 8, also is a health care provider for the purposes of this section.   (d) "Hearing loss" means a disruption in the normal hearing process that may occur in the outer, middle, or inner ear, whereby sound waves are not converted to electrical signals and nerve impulses are not transmitted to the brain to be interpreted.   (e) "Medical necessity" means health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms, and that are:   (i) in accordance with generally accepted standards of medical practice;   (ii) clinically appropriate, in terms of type, frequency, extent, site, and duration, and considered effective for the patient's illness, injury, or disease;   (iii) not primarily for the convenience of the patient, physician, or other health care provider; and   (iv) not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease.   History: En. Sec. 1, Ch. 209, L. 2021. 
  33-22-129. Coverage for outpatient self-management training and education for treatment of diabetes -- limited benefit for medically necessary equipment and supplies. (1) Each group disability policy, certificate of insurance, and membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for outpatient self-management training and education for the treatment of diabetes. Any education must be provided by a licensed health care professional with expertise in diabetes.   (2) (a) Coverage must include a $250 benefit for a person each year for medically necessary and prescribed outpatient self-management training and education for the treatment of diabetes.   (b) Nothing in subsection (2)(a) prohibits an insurer from providing a greater benefit.   (3) Each group disability policy, certificate of insurance, and membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for diabetic equipment and supplies that is limited to insulin, syringes, injection aids, devises for self-monitoring of glucose levels (including those for the visually impaired), test strips, visual reading and urine test strips, one insulin pump for each warranty period, accessories to insulin pumps, one prescriptive oral agent for controlling blood sugar levels for each class of drug approved by the United States food and drug administration, and glucagon emergency kits.   (4) Annual copayment and deductible provisions are subject to the same terms and conditions applicable to all other covered benefits within a given policy.   (5) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, specific disease, or long-term care policies.   (6) (a) This section does not apply to any employee group insurance program of a city, town, county, school district, or other political subdivision of this state that on January 1, 2002, provides substantially equivalent or greater coverage for outpatient self-management training and education for the treatment of diabetes and certain diabetic equipment and supplies provided for in subsection (3).   (b) Any employee group insurance program of a city, town, county, school district, or other political subdivision of this state that reduces or discontinues substantially equivalent or greater coverage after January 1, 2002, is subject to the provisions of this section.   History: En. Sec. 1, Ch. 450, L. 2001; amd. Sec. 3, Ch. 54, L. 2011.  
  33-22-130. Coverage for adopted children from time of placement -- preexisting conditions. (1) Each group and individual disability policy, certificate of insurance, or membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for an adopted child of the insured or subscriber to the same extent as for natural children of the insured or subscriber.   (2) The coverage required by this section must be effective from the date of placement for the purpose of adoption and must continue unless the placement is disrupted prior to legal adoption and the child is removed from placement. Coverage at the time of placement must include the necessary care and treatment of medical conditions existing prior to the date of placement and may not impose a preexisting condition exclusion.   (3) As used in this section, "placement" means the transfer of physical custody of a child who is legally free for adoption to a person who intends to adopt the child.   History: En. Sec. 1, Ch. 387, L. 1991; amd. Sec. 27, Ch. 451, L. 1993; amd. Sec. 6, Ch. 416, L. 1997; amd. Sec. 161, Ch. 480, L. 1997.  
  33-22-131. Coverage for treatment of inborn errors of metabolism. (1) Each group or individual medical expense disability policy, certificate of insurance, and membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for the treatment of inborn errors of metabolism that involve amino acid, carbohydrate, and fat metabolism and for which medically standard methods of diagnosis, treatment, and monitoring exist.   (2) Coverage must include expenses of diagnosing, monitoring, and controlling the disorders by nutritional and medical assessment, including but not limited to clinical services, biochemical analysis, medical supplies, prescription drugs, corrective lenses for conditions related to the inborn error of metabolism, nutritional management, and medical foods used in treatment to compensate for the metabolic abnormality and to maintain adequate nutritional status.   (3) For purposes of this section:   (a) "medical foods" means nutritional substances in any form that are:   (i) formulated to be consumed or administered enterally under supervision of a physician;   (ii) specifically processed or formulated to be distinct in one or more nutrients present in natural food;   (iii) intended for the medical and nutritional management of patients with limited capacity to metabolize ordinary foodstuffs or certain nutrients contained in ordinary foodstuffs or who have other specific nutrient requirements as established by medical evaluation; and   (iv) essential to optimize growth, health, and metabolic homeostasis;   (b) "treatment" means licensed professional medical services under the supervision of a physician.   (4) These services are subject to the terms of the applicable group or individual disability policy, certificate, or membership contract that establishes durational limits, dollar limits, deductibles, and copayment provisions as long as the terms are not less favorable than for physical illness generally.   (5) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, or specified disease policies.   History: En. Sec. 1, Ch. 80, L. 1989; amd. Sec. 28, Ch. 451, L. 1993; amd. Sec. 56, Ch. 379, L. 1995; amd. Sec. 2, Ch. 434, L. 1999.  
  33-22-132. Coverage for mammography examinations. (1) Each group or individual medical expense and blanket disability policy, certificate of insurance, and membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide minimum mammography examination coverage.   (2) For the purpose of this section, "minimum mammography examination" means:   (a) one baseline mammogram for a woman who is 35 years of age or older and under 40 years of age;   (b) a mammogram every 2 years for any woman who is 40 years of age or older and under 50 years of age or more frequently if recommended by the woman's physician; and   (c) a mammogram each year for a woman who is 50 years of age or older.   (3) A minimum $70 payment or the actual charge if the charge is less than $70 must be made for each mammography examination performed before the application of the terms of the applicable group or individual disability policy, certificate of insurance, or membership contract that establish durational limits, deductibles, and copayment provisions as long as the terms are not less favorable than for physical illness generally.   (4) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, or specified disease policies.   History: En. Sec. 1, Ch. 663, L. 1991; amd. Sec. 29, Ch. 451, L. 1993; amd. Sec. 57, Ch. 379, L. 1995; amd. Sec. 17, Ch. 63, L. 2015.  
  33-22-133. Coverage for minimum hospital stay following childbirth. (1) For the purposes of this section, "attending health care provider" means a person licensed under Title 37 who is responsible for providing obstetrical and pediatric care to a mother and newborn infant.   (2) Each group or individual policy, certificate of disability insurance, subscriber contract, membership contract, or health care services agreement that provides coverage for maternity services, including benefits for childbirth, must provide coverage for at least 48 hours of inpatient hospital care following a vaginal delivery and at least 96 hours of inpatient hospital care following delivery by cesarean section for a mother and newborn infant in a health care facility as defined in 50-5-101.   (3) A decision to shorten the length of inpatient stay to less than that provided under subsection (2) must be made by the attending health care provider and the mother. A health benefit plan, as defined in 33-22-1803, may not terminate the service of an attending health care provider or penalize or otherwise provide financial disincentives to an attending health care provider in response to orders by the attending health care provider for care consistent with the provisions of this section.   (4) A health benefit plan that provides coverage for postdelivery care that is provided to a mother and newborn infant in the home may not be required to provide coverage of inpatient care under subsection (2) unless the inpatient care is determined to be medically necessary by the attending health care provider.   (5) A health benefit plan, as defined in 33-22-243, must provide written notice, in a manner consistent with the provisions of this chapter, to all enrollees, insureds, or subscribers regarding the coverage required by this section.   History: En. Sec. 1, Ch. 183, L. 1997.  
  33-22-134. Postmastectomy care. Each group and individual disability policy, certificate of insurance, or membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for hospital inpatient care for a period of time as is determined by the attending physician and, in the case of a health maintenance organization, also the primary care physician, in consultation with the patient, to be medically necessary following a mastectomy, a lumpectomy, or a lymph node dissection for the treatment of breast cancer. This section also applies to any employee group insurance program of a city, town, county, school district, or other political subdivision of the state, and any self-funded multiple employer welfare arrangement that is not regulated by the Employee Retirement Income Security Act of 1974.   History: En. Sec. 1, Ch. 410, L. 1997; amd. Sec. 4, Ch. 54, L. 2011.  
  33-22-135. Coverage for reconstructive breast surgery after mastectomy -- benefits and conditions. (1) Each group and individual disability policy, certificate of insurance, or membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for:   (a) all stages of reconstruction of the breast on which a mastectomy has been performed;   (b) surgery and reconstruction of the other breast to produce a symmetrical appearance; and   (c) prostheses and physical complications of a mastectomy, including lymphedemas.   (2) The treatment covered under subsection (1) must be determined in consultation with the attending physician and the patient.   (3) The coverage required under this section may be subject to annual deductibles and coinsurance provisions consistent with those established for other benefits under an insurance policy, a membership contract, or a certificate of insurance.   (4) For the purposes of this section:   (a) "mastectomy" means the surgical removal of all or part of a breast;   (b) "reconstructive breast surgery" means surgery performed as a result of a mastectomy to reestablish symmetry between the breasts. The term includes but is not limited to augmentation mammoplasty, reduction mammoplasty, and mastopexy.   (5) Benefits for reconstructive breast surgery under any contract providing outpatient x-ray or radiation therapy include benefits for outpatient chemotherapy following surgical procedures in connection with the treatment of breast cancer that must be included as a part of the outpatient x-ray or radiation therapy benefit.   (6) An insurer shall provide written notice in compliance with the model language of the Women's Health and Cancer Rights Act of 1998 to a covered person of the availability of benefits with respect to the Women's Health and Cancer Rights Act of 1998 upon enrollment and subsequently on an annual basis.   (7) (a) An insurer may not deny to an individual eligibility or continued eligibility to enroll or to renew coverage under the terms of a plan solely for the purpose of avoiding the requirements of this section.   (b) An insurer may not penalize or otherwise reduce or limit the reimbursement of an attending health care provider or provide incentives to an attending health care provider to induce the health care provider to provide care for a covered person in a manner that is inconsistent with this section.   History: En. Sec. 2, Ch. 410, L. 1997; amd. Sec. 1, Ch. 67, L. 2009.  
  33-22-136. Insurance for spouse and dependents of deceased peace officer, game warden, or firefighter. (1) Any insurer, health service corporation, or health maintenance organization issuing group disability coverage to the spouse or dependents of a peace officer as defined in 45-2-101, a game warden as defined in 19-8-101, a firefighter as defined in 19-13-104, or a volunteer firefighter as defined in 19-17-102 shall renew the coverage of the spouse or dependents if the peace officer, game warden, firefighter, or volunteer firefighter dies within the course and scope of employment. This section also applies to an employee group insurance program of a city, town, county, school district, or other political subdivision of the state, and any self-funded multiple employer welfare arrangement not regulated by the Employee Retirement Income Security Act of 1974 that provides coverage for a peace officer, game warden, firefighter, or volunteer firefighter. Except as provided in subsection (2), the continuation of the coverage is at the option of the spouse or dependents. Renewals of coverage under this section must provide for the same level of benefits as are available to other members of the group. Premiums charged to a spouse or dependent under this section must be the same as premiums charged to other similarly situated members of the group. Dependent special enrollment must be allowed under the terms of 33-22-523(2) and (3). The provisions of this subsection are applicable to a spouse or dependent who is insured under a COBRA continuation provision.   (2) A disability insurance issuer subject to the provisions of subsection (1) may discontinue or not renew the coverage of a spouse or dependent only if:   (a) the spouse or dependent has failed to pay premiums or contributions in accordance with the terms of the disability insurance coverage or if the disability insurer has not received timely premium payments;   (b) the spouse or dependent has performed an act or practice that constitutes fraud or has made an intentional misrepresentation of a material fact under the terms of the coverage; or   (c) the disability insurance issuer is ceasing to offer coverage in the group disability market in accordance with applicable state law.   History: En. Sec. 1, Ch. 178, L. 1999; amd. Sec. 5, Ch. 54, L. 2011.  
  33-22-137. Cost-sharing requirements -- applicability. (1) Each group or individual health insurance policy, certificate of insurance, and membership contract that covers prescription drugs and that is delivered, issued for delivery, renewed, extended, or modified in this state must provide that after the applicable deductible is met, the insured shall pay only the required copayment or other cost-sharing requirement for a covered prescription drug at the time of purchase if the prescription drug dispenser, third-party administrator, or health insurance issuer can determine that amount at the time of purchase.   (2) This section applies to blanket policies issued pursuant to Title 33, chapter 22, part 6.   (3) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, or long-term care policies.   History: En. Sec. 24, Ch. 271, L. 2009.  
  33-22-138. Coverage for telehealth services -- rulemaking. (1) Each group or individual policy, certificate of disability insurance, subscriber contract, membership contract, or health care services agreement that provides coverage for health care services must provide coverage for health care services provided by a health care provider or health care facility by means of telehealth if the services are otherwise covered by the policy, certificate, contract, or agreement.  (2) A policy, certificate, contract, or agreement may not:   (a) impose restrictions involving:   (i) the site at which the patient is physically located and receiving health care services by means of telehealth; or   (ii) the site at which the health care provider is physically located and providing the services by means of telehealth; or   (b) distinguish between telehealth services provided to patients in rural locations and telehealth services provided to patients in urban locations.   (3) Coverage under this section must be equivalent to the coverage for services that are provided in person by a health care provider or health care facility.   (4) Nothing in this section may be construed to require:   (a) a health insurance issuer to provide coverage for services that are not medically necessary, subject to the terms and conditions of the insured's policy;   (b) coverage of an otherwise noncovered benefit;   (c) a health care provider to be physically present with a patient at the site where the patient is located unless the health care provider who is providing health care services by means of telehealth determines that the presence of a health care provider is necessary; or   (d) except as provided in 16-12-509 or as provided in Title 37 and related administrative rules, a patient to have a previously established patient-provider relationship with a specific health care provider in order to receive health care services by means of telehealth.   (5) Coverage under this section may be subject to deductibles, coinsurance, and copayment provisions. Special deductible, coinsurance, copayment, or other limitations that are not generally applicable to other medical services covered under the plan may not be imposed on the coverage for services provided by means of telehealth.   (6) This section does not apply to disability income, hospital indemnity, medicare supplement, specified disease, or long-term care policies.   (7) The commissioner may adopt rules necessary to implement the provisions of this section.   (8) For the purposes of this section, the following definitions apply:   (a) "Health care facility" means a critical access hospital, hospice, hospital, long-term care facility, mental health center, outpatient center for primary care, or outpatient center for surgical services licensed pursuant to Title 50, chapter 5.   (b) "Health care provider" means an individual:   (i) licensed pursuant to Title 37, chapter 3, 4, 6, 7, 10, 11, 15, 17, 20, 22, 23, 24, 25, 26, or 35;   (ii) licensed pursuant to Title 37, chapter 8, to practice as a registered professional nurse or as an advanced practice registered nurse;   (iii) certified by the American board of genetic counseling as a genetic counselor; or   (iv) certified by the national certification board for diabetes educators as a diabetes educator.   (c) (i) "Telehealth" means the use of audio, video, or other telecommunications technology or media, including audio-only communication, that is:   (A) used by a health care provider or health care facility to deliver health care services; and   (B) delivered over a secure connection that complies with state and federal privacy laws.   (ii) The term does not include delivery of health care services by means of facsimile machines or electronic messaging alone. The use of facsimile and electronic message is not precluded if used in conjunction with other audio, video, or telecommunications technology or media.   (iii) For physicians providing written certification of a debilitating medical condition pursuant to 16-12-509, the term does not include audio-only communication unless the physician has previously established a physician-patient relationship through an in-person encounter.   History: En. Sec. 1, Ch. 164, L. 2013; amd. Sec. 18, Ch. 63, L. 2015; amd. Sec. 1, Ch. 94, L. 2017; amd. Sec. 4, Ch. 242, L. 2021. 
  33-22-139. Coverage of therapies for Down syndrome. (1) Health insurance coverage sold in the group or individual market in this state must provide coverage for diagnosis and treatment of Down syndrome for a covered child 18 years of age or younger.   (2) Coverage under this section must include:   (a) habilitative or rehabilitative care that is prescribed, provided, or ordered by a licensed physician, including but not limited to professional, counseling, and guidance services and treatment programs that are medically necessary to develop and restore, to the maximum extent practicable, the functioning of the covered child; and   (b) medically necessary therapeutic care that is provided as follows:   (i) up to 104 sessions per year with a speech-language pathologist licensed pursuant to Title 37;   (ii) up to 52 sessions per year with a physical therapist licensed pursuant to Title 37; and   (iii) up to 52 sessions per year with an occupational therapist licensed pursuant to Title 37.   (3) Habilitative and rehabilitative care includes medically necessary interactive therapies derived from evidence-based research, including intensive intervention programs and early intensive behavioral intervention.   (4) Benefits provided under this section may not be construed as limiting physical health benefits that are otherwise available to the covered child.   (5) (a) Coverage under this section may be subject to deductibles, coinsurance, and copayment provisions.   (b) Special deductible, coinsurance, copayment, or other limitations that are not generally applicable to other medical care covered under the plan may not be imposed on the coverage for Down syndrome therapies provided for under this section.   (6) When treatment is expected to require continued services, the insurer may request that the treating physician provide a treatment plan consisting of diagnosis, proposed treatment by type and frequency, the anticipated duration of treatment, the anticipated outcomes stated as goals, and the reasons the treatment is medically necessary. The treatment plan must be based on evidence-based screening criteria. The insurer may ask that the treatment plan be updated every 6 months.   (7) As used in this section, "medically necessary" means any care, treatment, intervention, service, or item that is prescribed, provided, or ordered by a physician licensed in this state and that will or is reasonably expected to:   (a) reduce or improve the physical, mental, or developmental effects of Down syndrome; or   (b) assist in achieving maximum functional capacity in performing daily activities, taking into account both the functional capacity of the recipient and the functional capacities that are appropriate for a child of the same age.   (8) This section applies to the state employee group insurance program, the university system employee group insurance program, any employee group insurance program of a city, town, school district, or other political subdivision of this state, and any self-funded multiple employer welfare arrangement that is not regulated by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.   (9) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, specific disease, or long-term care policies.   History: En. Sec. 1, Ch. 256, L. 2015.  
  33-22-140. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:  (1) "Beneficiary" has the meaning given the term by 29 U.S.C. 1002(33).   (2) "Church plan" has the meaning given the term by 29 U.S.C. 1002(33).   (3) "COBRA continuation provision" means:   (a) section 4980B of the Internal Revenue Code, 26 U.S.C. 4980B, other than subsection (f)(1) of that section as that subsection relates to pediatric vaccines;   (b) Title I, subtitle B, part 6, excluding section 609, of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.; or   (c) Title XXII of the Public Health Service Act, 42 U.S.C. 300dd, et seq.   (4) (a) "Creditable coverage" means coverage of the individual under any of the following:   (i) a group health plan;   (ii) health insurance coverage;   (iii) Title XVIII, part A or B, of the Social Security Act, 42 U.S.C. 1395c through 1395i-4 or 42 U.S.C. 1395j through 1395w-4;   (iv) Title XIX of the Social Security Act, 42 U.S.C. 1396a through 1396u, other than coverage consisting solely of a benefit under section 1928, 42 U.S.C. 1396s;   (v) Title 10, chapter 55, United States Code;   (vi) a medical care program of the Indian health service or of a tribal organization;   (vii) a health plan offered under Title 5, chapter 89, of the United States Code;   (viii) a public health plan;   (ix) a health benefit plan under section 5(e) of the Peace Corps Act, 22 U.S.C. 2504(e); or   (x) a high-risk pool in any state.   (b) Creditable coverage does not include coverage consisting solely of coverage of excepted benefits.   (5) "Dependent" means:   (a) a spouse;   (b) an unmarried child under 25 years of age:   (i) who is not an employee eligible for coverage under a group health plan offered by the child's employer for which the child's premium contribution amount is no greater than the premium amount for coverage as a dependent under a parent's individual or group health plan;   (ii) who is not a named subscriber, insured, enrollee, or covered individual under any other individual health insurance coverage, group health plan, government plan, church plan, or group health insurance;   (iii) who is not entitled to benefits under 42 U.S.C. 1395, et seq.; and   (iv) for whom the insured parent has requested coverage;   (c) a child of any age who is disabled and dependent upon the parent as provided in 33-22-506 and 33-30-1003; or   (d) any other individual defined as a dependent in the health benefit plan covering the employee.   (6) "Elimination rider" means a provision attached to a policy that excludes coverage for a specific condition that would otherwise be covered under the policy.   (7) "Enrollment date" means, with respect to an individual covered under a group health plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for enrollment.   (8) "Excepted benefits" means:   (a) coverage only for accident or disability income insurance, or both;   (b) coverage issued as a supplement to liability insurance;   (c) liability insurance, including general liability insurance and automobile liability insurance;   (d) workers' compensation or similar insurance;   (e) automobile medical payment insurance;   (f) credit-only insurance;   (g) coverage for onsite medical clinics;   (h) other similar insurance coverage under which benefits for medical care are secondary or incidental to other insurance benefits, as approved by the commissioner;   (i) if offered separately, any of the following:   (i) limited-scope dental or vision benefits;   (ii) benefits for long-term care, nursing home care, home health care, community-based care, or any combination of these types of care; or   (iii) other similar, limited benefits as approved by the commissioner;   (j) if offered as independent, noncoordinated benefits, any of the following:   (i) coverage only for a specified disease or illness; or   (ii) hospital indemnity or other fixed indemnity insurance;   (k) if offered as a separate insurance policy:   (i) medicare supplement coverage;   (ii) coverage supplemental to the coverage provided under Title 10, chapter 55, of the United States Code; and   (iii) similar supplemental coverage provided under a group health plan.   (9) "Federally defined eligible individual" means an individual:   (a) for whom, as of the date on which the individual seeks coverage in the group market or individual market, the aggregate of the periods of creditable coverage is 18 months or more;   (b) whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or health insurance coverage offered in connection with any of those plans;   (c) who is not eligible for coverage under:   (i) a group health plan;   (ii) Title XVIII, part A or B, of the Social Security Act, 42 U.S.C. 1395c through 1395i-4 or 42 U.S.C. 1395j through 1395w-4; or   (iii) a state plan under Title XIX of the Social Security Act, 42 U.S.C. 1396a through 1396u, or a successor program;   (d) who does not have other health insurance coverage;   (e) for whom the most recent coverage within the period of aggregate creditable coverage was not terminated for factors relating to nonpayment of premiums or fraud;   (f) who, if offered the option of continuation coverage under a COBRA continuation provision or under a similar state program, elected that coverage; and   (g) who has exhausted continuation coverage under the COBRA continuation provision or program described in subsection (9)(f) if the individual elected the continuation coverage described in subsection (9)(f).   (10) "Group health insurance coverage" means health insurance coverage offered in connection with a group health plan or health insurance coverage offered to an eligible group as described in 33-22-501.   (11) "Group health plan" means an employee welfare benefit plan, as defined in 29 U.S.C. 1002(1), to the extent that the plan provides medical care and items and services paid for as medical care to employees or their dependents, directly or through insurance, reimbursement, or otherwise.   (12) "Health insurance coverage" means benefits consisting of medical care, including items and services paid for as medical care, that are provided directly, through insurance, reimbursement, or otherwise, under a policy, certificate, membership contract, or health care services agreement offered by a health insurance issuer.   (13) (a) "Health insurance issuer" means an insurer, a health service corporation, or a health maintenance organization.   (b) The term does not include a direct patient care agreement established pursuant to 50-4-107.   (14) "Individual health insurance coverage" means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance.   (15) "Individual market" means the market for health insurance coverage offered to individuals other than in connection with group health insurance coverage.   (16) "Large employer" means, in connection with a group health plan, with respect to a calendar year and a plan year, an employer who employed an average of at least 51 employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.   (17) "Large group market" means the health insurance market under which individuals obtain health insurance coverage directly or through any arrangement on behalf of themselves and their dependents through a group health plan or group health insurance coverage issued to a large employer.   (18) "Late enrollee" means an eligible employee or dependent, other than a special enrollee under 33-22-523, who requests enrollment in a group health plan following the initial enrollment period during which the individual was entitled to enroll under the terms of the group health plan if the initial enrollment period was a period of at least 30 days. However, an eligible employee or dependent is not considered a late enrollee if a court has ordered that coverage be provided for a spouse, minor, or dependent under a covered employee's health benefit plan and a request for enrollment is made within 30 days after issuance of the court order.   (19) "Medical care" means:   (a) the diagnosis, cure, mitigation, treatment, or prevention of disease or amounts paid for the purpose of affecting any structure or function of the body;   (b) transportation primarily for and essential to medical care referred to in subsection (19)(a); or   (c) insurance covering medical care referred to in subsections (19)(a) and (19)(b).   (20) "Network plan" means health insurance coverage offered by a health insurance issuer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided, in whole or in part, through a defined set of providers under contract with the issuer.   (21) "Plan sponsor" has the meaning provided under section 3(16)(B) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002(16)(B).   (22) "Preexisting condition exclusion" means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on presence of a condition before the enrollment date coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before the enrollment date.   (23) "Small group market" means the health insurance market under which individuals obtain health insurance coverage directly or through an arrangement, on behalf of themselves and their dependents, through a group health plan or group health insurance coverage maintained by a small employer as defined in 33-22-1803.   (24) "Waiting period" means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the group health plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the group health plan.   History: En. Sec. 33, Ch. 416, L. 1997; amd. Sec. 42, Ch. 472, L. 1999; amd. Sec. 45, Ch. 130, L. 2005; amd. Sec. 27, Ch. 469, L. 2005; amd. Sec. 5, Ch. 356, L. 2007; amd. Sec. 19, Ch. 63, L. 2015; amd. Sec. 9, Ch. 262, L. 2021. 
  33-22-141. Crediting previous coverage. (1) (a) A period of creditable coverage may not be counted, with respect to enrollment of an individual under a group health plan, if there was a 63-day break in coverage.   (b) The 63-day period provided for in subsection (1)(a) must be counted from the date that the certificate of creditable coverage was issued to the individual.   (2) The time that an individual is in a waiting period for coverage under a group health plan or for group health insurance coverage or is in an affiliation period, as defined in 33-31-102, may not be considered in determining the continuous period under subsection (1).   (3) Except as provided in subsection (4), for the purposes of applying 33-22-514, a group health plan or a health insurance issuer offering group health insurance coverage shall count a period of creditable coverage without regard to the specific benefits coverage during the period.   (4) (a) A group health plan or a health insurance issuer offering group health insurance may elect to apply the provisions of 33-22-514 based on coverage of benefits within each of several classes or categories of benefits specified in regulations implementing Public Law 104-191, rather than as provided under subsection (3). If electing to apply the provisions of 33-22-514 pursuant to this subsection (4), a group health plan or a health insurance issuer shall:   (i) make the election on a uniform basis for all participants and beneficiaries; and   (ii) count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category.   (b) In the case of an election under this subsection (4), a group health plan shall:   (i) prominently state in a disclosure statement concerning the group health plan to each enrollee at the time of enrollment that the group health plan has made an election; and   (ii) include a description of the effect of the election in the statement.   (c) In the case of an election under this subsection (4), a health insurance issuer shall:   (i) prominently state in a disclosure statement concerning the health insurance coverage to each employer at the time of the offer or sale of the health insurance coverage that the health insurance issuer has made an election; and   (ii) include a description of the effect of the election in the statement.   (5) Periods of creditable coverage with respect to an individual must be established through presentation of certifications described in 33-22-142 or in such other manner as may be specified in regulations implementing Public Law 104-191.   History: En. Sec. 34, Ch. 416, L. 1997; amd. Sec. 4, Ch. 384, L. 2003.  
  33-22-142. Certification of creditable coverage. (1) (a) A group health plan and a health insurance issuer offering group or individual health insurance coverage shall issue the certification described in subsection (3) within 10 days after a request by an individual who ceases to be covered under the group or individual health plan.   (b) A request for the certification may be made no later than 24 months after the date of termination of coverage.   (2) The certification may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.   (3) Certification is the written:   (a) certification of the period of creditable coverage of the individual under a group or individual health plan and the coverage under any applicable COBRA continuation provision;   (b) certification of the waiting period, if any, and affiliation period, as defined in 33-31-102, if applicable, imposed with respect to the individual for any coverage under a group health plan;   (c) certification of the date of issuance of the certificate specified on the form; and   (d) notification to the individual of:   (i) the individual's conversion rights;   (ii) the availability of COBRA continuation coverage; and   (iii) other notification as determined necessary and in the form prescribed by rule by the commissioner.   (4) To the extent that medical care under a group health plan consists of group health insurance coverage, a group health plan satisfies the certification requirement of this section if the health insurance issuer offering the coverage provides the certification in accordance with this section.   (5) In the case of an election described in 33-22-141 by a group health plan or health insurance issuer, if the group health plan or health insurance issuer enrolls an individual for coverage under the group health plan and the individual provides a certification of coverage of the individual, the entity that issued the certification shall upon request of the group health plan or health insurance issuer promptly disclose information on coverage of classes and categories of health benefits available under the certified coverage. The entity may charge the requesting group health plan or health insurance issuer the reasonable cost of disclosing the information.   (6) At the time that an individual ceases to be covered by a group or individual health plan, the group health plan or health insurance issuer shall notify the individual that the individual may request the certification described in subsection (3) within the timeframes described in subsection (1).   History: En. Sec. 36, Ch. 416, L. 1997; amd. Sec. 5, Ch. 384, L. 2003; amd. Sec. 25, Ch. 271, L. 2009; amd. Sec. 20, Ch. 63, L. 2015; amd. Sec. 1, Ch. 225, L. 2015.  
  33-22-143. Rules. The commissioner may adopt rules to implement 33-22-140 through 33-22-142, 33-22-246, 33-22-247, 33-22-514, and 33-22-523 through 33-22-526.   History: En. Sec. 45, Ch. 416, L. 1997; amd. Sec. 21, Ch. 63, L. 2015.  
  33-22-144 through 33-22-149 reserved.  
  33-22-150. Reciprocal limitations on claim filing and claim audits -- time limit for reimbursements or offsets -- exceptions. (1) Except as provided in subsection (3), (4), or (5), if a health insurance issuer limits the time in which a health care provider or other person is required to submit a claim for payment, the health insurance issuer has the same time limit following payment of the claim to perform any review or audit for reconsidering the validity of the claim and requesting reimbursement for payment of an invalid claim or overpayment of a claim.   (2) Except as provided in subsection (3), (4), or (5), if a health insurance issuer does not limit the time in which a health care provider or other person is required to submit a claim for payment, a health insurance issuer may not request reimbursement or offset another claim payment for reimbursement of an invalid claim or overpayment of a claim more than 12 months after the payment of an invalid or overpaid claim.   (3) Regardless of the period allowed by a health insurance issuer for submission of claims for payment, a health insurance issuer may perform a review or audit to reconsider the validity of a claim and may request reimbursement for an invalid or overpaid claim within 12 months from the date upon which the health insurance issuer received notice of a determination, adjustment, or agreement regarding the amount payable with respect to a claim by:   (a) medicare;   (b) a workers' compensation insurer;   (c) another health insurance issuer or group health plan;   (d) a liable or potentially liable third party; or   (e) a foreign health insurance issuer under an agreement among plans operating in different states when the agreement provides for payment by the Montana health insurance issuer as host plan to Montana providers for services provided to an individual under a plan issued outside of the state of Montana.   (4) (a) The time limitations on the health insurance issuer in subsections (1) and (2) do not commence running until the time specified in subsection (4)(b) if a health insurance issuer pays a claim in which the health insurance issuer:   (i) suspects the health care provider or claimant of insurance fraud related to the claim; and   (ii) has reported evidence of fraud related to the claim to the commissioner pursuant to 33-1-1205.   (b) The time limitation commences running on the date that the commissioner determines that insufficient evidence of fraud exists.   (5) The time limitations on the health insurance issuer in subsections (1) and (2) do not commence running until the health insurance issuer has actual knowledge of an invalid claim, claim overpayment, or other incorrect payment if the health insurance issuer has paid a claim incorrectly because of an error, misstatement, misrepresentation, omission, or concealment, other than insurance fraud, by the health care provider or other person. Regardless of the date upon which the health insurance issuer obtains actual knowledge of an invalid claim, claim overpayment, or other incorrect payment, this subsection does not permit the health insurance issuer to request reimbursement or to offset another claim payment for reimbursement of the claim more than 24 months after payment of the claim.   History: En. Sec. 1, Ch. 290, L. 2005.  
  33-22-151. Offset agreement. A health insurance issuer may not collect a claim overpayment or other reimbursement by offsetting another claim payment made to a health care provider or other person unless the health care provider or other person has previously authorized the health insurance issuer in writing to recover an overpayment or other reimbursement by offsetting a future claim payment.   History: En. Sec. 2, Ch. 290, L. 2005.  
  33-22-152. Continuation of dependent coverage. A health insurance issuer that issues or renews an individual or a group health insurance policy, certificate, or membership contract under which an individual's or employee's dependents are eligible for coverage may not terminate coverage on the basis of the age of an unmarried dependent, as defined in 33-22-140(5)(b), prior to the dependent reaching 25 years of age. Except as otherwise provided by law, the continuation of the coverage of the dependent, as defined in 33-22-140(5)(b), is at the option of the covered employee.   History: En. Sec. 1, Ch. 356, L. 2007.  
  33-22-153. Coverage of routine patient costs for participants in cancer clinical trials -- definitions -- limitations. (1) A plan of group or individual health insurance coverage that is delivered, issued for delivery, renewed, extended, or modified in this state may not:   (a) deny participation by a qualified individual in an approved clinical trial;   (b) deny, limit, or impose additional conditions on the coverage of routine patient costs; or   (c) discriminate against an individual on the basis of the individual's participation in an approved clinical trial.   (2) A network plan may require a qualified individual who wishes to participate in an approved clinical trial to participate in a trial that is offered through a provider who is part of the network plan if the provider is participating in the trial and the provider accepts the individual as a participant in the trial.   (3) This section applies to a qualified individual who participates in an approved clinical trial that is conducted outside of Montana.   (4) This section does not require a health insurance issuer offering individual or group health insurance coverage to provide benefits for routine patient costs if the services are provided outside of the network plan offered by the health insurance coverage unless out-of-network benefits are otherwise provided under the coverage.   (5) As used in this section, the following definitions apply:   (a) "Approved clinical trial" means a phase I, phase II, phase III, or phase IV clinical trial that is conducted in relation to the prevention, detection, or treatment of cancer and is not designed exclusively to test toxicity or disease pathophysiology. The trial must be:   (i) conducted under an investigational new drug application reviewed by the United States food and drug administration;   (ii) exempt from obtaining an investigational new drug application; or   (iii) approved or funded by:   (A) the national institutes of health, the centers for disease control and prevention, the agency for healthcare research and quality, the centers for medicare and medicaid services, or a cooperative group or center of any of the entities described in this subsection (5)(a)(iii)(A);   (B) a cooperative group or center of the United States department of defense or the United States department of veterans affairs;   (C) a qualified nongovernmental research entity identified in the guidelines issued by the national institutes for health for center support groups; or   (D) the United States departments of veterans affairs, defense, or energy if the study or investigation has been reviewed and approved through a system of peer review determined by the United States secretary of health and human services to:   (I) be comparable to the system of peer review of studies and investigations used by the national institutes of health; and   (II) provide unbiased scientific review by individuals who have no interest in the outcome of the review.   (b) "Qualified individual" means an individual with health insurance coverage who is eligible to participate in an approved clinical trial according to the trial protocol for the treatment of cancer because:   (i) the referring health care professional is participating in the clinical trial and has concluded that the individual's participation in the trial would be appropriate; or   (ii) the individual provides medical and scientific information establishing that the individual's participation in the clinical trial is appropriate because the individual meets the conditions described in the trial protocol.   (c) (i) "Routine patient costs" include all items and services covered by a plan of individual or group health insurance coverage when the items or services are typically covered for a qualified individual who is not enrolled in an approved clinical trial.   (ii) The term does not include:   (A) an investigational item, device, or service that is part of the trial;   (B) an item or service provided solely to satisfy data collection and analysis needs for the trial if the item or service is not used in the direct clinical management of the patient;   (C) a service that is clearly inconsistent with widely accepted and established standards of care for the individual's diagnosis; or   (D) an item or service customarily provided and paid for by the sponsor of a clinical trial.   History: En. Sec. 1, Ch. 97, L. 2013.  
  33-22-154 and 33-22-155 reserved.  
  33-22-156. Health insurance rates -- filing required -- use. (1) Each health insurance issuer that issues, delivers, or renews individual or small employer group health insurance coverage in the individual or small employer group market shall, at least 60 days before the rate goes into effect, file with the commissioner its rates, fees, dues, and other charges for each product form intended for use in Montana, together with sufficient information to support the premium to be charged as described in 33-22-156 through 33-22-159. This filing may be made simultaneously with a notice of premium increase to policyholders and certificate holders required by 33-22-107.   (2) A health insurance issuer may submit a single combined justification for rate increases subject to review affecting multiple products if the claims experience of all products has been aggregated to calculate the rate increases and the rate increases are the same for all products. Rate increases are determined by combining the total amount of increases taken on a single product form or market segment, if the rate increase is the same for all products, over a 12-month period. A market segment means the individual or small group market.   (3) The commissioner may waive the 60-day filing requirement under subsection (1) if the rate increase is implemented pursuant to 33-22-107(1)(b). However, the rates and justifications for the rate increase still must be filed.   (4) The health insurance issuer shall submit a new filing to reflect any material change to the previous rate filing. For all other changes, the insurer shall submit an amendment to a previous rate filing. The insurer may file an actuarial trend to phase in rate increases over a 12-month period. The insurer may file amendments to that trend within the 12-month period.   (5) The filing of rates for health plans must include:   (a) the product form number or numbers and approval date of the product form or forms to which the rate applies;   (b) a statement of actuarial justification; and   (c) information sufficient to support the rate as described in 33-22-157.   (6) The commissioner shall prescribe the form and content of the information required under this section.   (7) A rate filing required under this section must be submitted by a qualified actuary representing the health insurance issuer. The qualified actuary shall certify in a form prescribed by the commissioner that, to the best of the actuary's knowledge and belief, the rates are not excessive, inadequate, unjustified, or unfairly discriminatory, as described in 33-22-157, and comply with the applicable provisions of Title 33 and rules adopted pursuant to Title 33.   (8) The rate filing must be delivered by the national association of insurance commissioners' system for electronic rate and form filing.   (9) An insurer may use a rate filing under this section 60 days after the date of filing with the commissioner unless the health insurance issuer fails to provide the minimum documentation required in 33-22-157.   (10) Sections 33-22-156 through 33-22-159 do not apply to coverage consisting solely of excepted benefits as defined in 33-22-140.   History: En. Sec. 1, Ch. 334, L. 2013.  
  33-22-157. Standards for review -- notice of deficiency. (1) (a) When reviewing a premium rate filing, the commissioner shall consider whether the proposed premium rate is excessive, inadequate, unjustified, or unfairly discriminatory. Rates may be considered excessive if they cause the premium charged for the health insurance coverage to be unreasonably high in relation to the benefits provided under the coverage. In order to determine if the rate is excessive, the commissioner shall consider whether:   (i) the assumptions on which the rate increase is based are reasonable; and   (ii) one or more of the assumptions is not supported by the evidence.   (b) Rates may be considered inadequate if the rate is unreasonably low for the coverage provided, and the commissioner may consider if the rate would endanger the solvency of the insurer or disrupt the insurance market in Montana.   (c) A rate increase may be considered unjustified if the health insurance issuer provides data or documentation in connection with the increase that is incomplete, inadequate, or otherwise does not provide a basis upon which the reasonableness of an increase may be determined.   (d) Rates may be considered unfairly discriminatory if they violate 33-18-206, 33-22-526, 49-2-309, or other applicable state laws prohibiting discrimination in health insurance.   (2) In order to determine whether the proposed premium rates for health insurance coverage are not excessive, inadequate, unjustified, or unfairly discriminatory, the commissioner may consider:   (a) the health insurance issuer's financial position, including but not limited to surplus, reserves, and investment savings;   (b) historical and projected administrative costs and medical and hospital expenses, including medical trends;   (c) the historical and projected medical loss ratio;   (d) changes to covered benefits or health plan design, along with actuarial projections concerning cost savings or additional expenses related to those changes;   (e) changes in the health insurance issuer's health care cost containment and quality improvement efforts following the health insurance issuer's last rate filing for the same category of health plan;   (f) product development and startup costs, drug and other benefit costs or expenses, and product age and credibility;   (g) whether the proposed change in the premium rate is necessary to maintain the health insurance issuer's solvency or to maintain rate stability and prevent excessive rate increases in the future;   (h) historical and projected claims experience;   (i) trend projections related to utilization and service or unit cost;   (j) allocation of the overall rate increase to claims and nonclaims costs;   (k) allocation of current and projected premium for each enrollee each month;   (l) the 3-year history of rate increases for the product or group of products associated with the rate increase if the product is 3 years old or older and otherwise any available rate history;   (m) employee and executive compensation data from the health insurance issuer's annual financial statements; and   (n) any other applicable information identified in administrative rules adopted pursuant to Title 33, except that the administrative rules may not include by reference any provisions of Public Law 111-148 and Public Law 111-152 or any regulations promulgated under those laws.   (3) The commissioner shall review rate filings and, if applicable, shall provide a notice of deficiencies containing detailed reasons describing why the commissioner finds that the proposed premium rate is excessive, inadequate, unjustified, or unfairly discriminatory. The notice must be provided within 60 days of receipt of filing.   (4) Within 30 days after receiving a notice of deficiencies alleging that a proposed rate is excessive, inadequate, unjustified, or unfairly discriminatory, the insurer may amend its rate filing, request reconsideration based upon additional information, or, unless the rate is unfairly discriminatory pursuant to subsection (1)(d), implement the proposed rate.   (5) At the end of the 30-day period described in subsection (4), if the insurer implements a rate that the commissioner has determined to be excessive, inadequate, or unjustified, the commissioner shall publish the finding on the commissioner's website indicating the commissioner's determination.   History: En. Sec. 2, Ch. 334, L. 2013; amd. Sec. 24, Ch. 151, L. 2017.  
  33-22-158. Trade secret disclosure exemption. The commissioner, upon request by the health insurance issuer, may exempt from disclosure any part of a premium rate filing submitted pursuant to 33-22-156 that the commissioner determines to contain trade secrets as defined in 30-14-402. The commissioner may not disclose that part of a filing that is subject to a health insurance issuer's request until the commissioner makes a determination under this section. The commissioner shall provide the issuer with 30 days' advance notice of the determination before releasing the information to the public.   History: En. Sec. 3, Ch. 334, L. 2013.  
  33-22-159. Rulemaking. The commissioner may adopt rules necessary to implement the provisions of 33-22-156 through 33-22-159, except that the administrative rules may not include by reference any provisions of Public Law 111-148 and Public Law 111-152 or any regulations promulgated under those laws.   History: En. Sec. 4, Ch. 334, L. 2013.  
  33-22-160 through 33-22-165 reserved.  
  33-22-166. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 1, Ch. 349, L. 2013.  
  33-22-167 through 33-22-169 reserved.  
  33-22-170. Definitions. As used in 33-22-170 through 33-22-177 and 33-22-180, the following definitions apply:  (1) "Contract pharmacy" means a pharmacy operating under contract with a federally certified health entity to provide dispensing services to the federally certified health entity.   (2) "Federally certified health entity" means a 340B covered entity as described in 42 U.S.C. 256b(a)(4).   (3) "Maximum allowable cost list" means the list of drugs used by a pharmacy benefit manager that sets the maximum cost on which reimbursement to a network pharmacy or pharmacist is based.   (4) "Pharmacist" means a person licensed by the state to engage in the practice of pharmacy pursuant to Title 37, chapter 7.   (5) "Pharmacy" means an established location, either physical or electronic, that is licensed by the board of pharmacy pursuant to Title 37, chapter 7, and that has entered into a network contract with a pharmacy benefit manager, health insurance issuer, or plan sponsor.   (6) "Pharmacy benefit manager" means a person who contracts with pharmacies on behalf of a health insurance issuer, third-party administrator, or plan sponsor to process claims for prescription drugs, provide retail network management for pharmacies or pharmacists, pay pharmacies or pharmacists for prescription drugs, or provide other prescription drug or device services.   (7) "Pharmacy performance measurement entity" means:   (a) the electronic quality improvement platform for plans and pharmacies; or   (b) an entity approved by the board of pharmacy provided for in 2-15-1733 as a nationally recognized and unbiased entity that assists pharmacies in improving performance measures.   (8) "Prescription drug" means any drug that is required by federal law or regulation to be dispensed only by a prescription subject to section 353(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301 et seq.   (9) "Prescription drug order" has the meaning provided in 37-7-101.   (10) "Reference pricing" means a calculation for the price of a pharmaceutical that uses the most current nationally recognized reference price or amount to set the reimbursement for prescription drugs and other products, supplies, and services covered by a network contract between a plan sponsor, health insurance issuer, or pharmacy benefit manager and a pharmacy or pharmacist.   History: En. Sec. 1, Ch. 431, L. 2015; amd. Sec. 1, Ch. 136, L. 2017; amd. Sec. 5, Ch. 88, L. 2019; amd. Sec. 3, Ch. 215, L. 2019; amd. Sec. 15, Ch. 501, L. 2021. 
  33-22-171. Maximum allowable cost list -- limitations on drugs. Before a pharmacy benefit manager places or continues a drug on a maximum allowable cost list, the drug:   (1) must be listed as "A" or "B" rated in the most recent version of the United States food and drug administration's approved drug products with therapeutic equivalence evaluations or have an "NR" or "NA" rating by a nationally recognized reference;   (2) must be available for purchase by pharmacies in this state from national or regional wholesalers; and   (3) may not be obsolete.   History: En. Sec. 2, Ch. 431, L. 2015.  
  33-22-172. Maximum allowable cost or reference price list -- price formulation, updating, and disclosure -- exceptions. (1) At the time of entering into a contract with a pharmacy and subsequently upon request, a plan sponsor, health insurance issuer, or pharmacy benefit manager shall provide the pharmacy with the sources used to determine the pricing for the maximum allowable cost list or the reference used for reference pricing.   (2) If using a maximum allowable cost list, a plan sponsor, health insurance issuer, or pharmacy benefit manager shall:   (a) review and update the price information for each drug on the maximum allowable cost list at least once every 10 calendar days to reflect any modification of pricing;   (b) establish a process for eliminating products from the maximum allowable cost list or modifying the prices in the maximum allowable cost list in a timely manner to remain consistent with pricing changes and product availability in the marketplace; and   (c) provide a process for each pharmacy to readily access the maximum allowable cost list specific to the pharmacy in a searchable and usable format.   (3) If using reference pricing, a plan sponsor, health insurance issuer, or pharmacy benefit manager shall:   (a) review and update no less than every 10 business days the price information for each drug, product, supply, or service for which reference pricing is used; and   (b) provide a process for each pharmacy to readily access the reference pricing specific to the plan sponsor or the health insurance issuer's plan.   (4) A plan sponsor, health insurance issuer, or pharmacy benefit manager may not:   (a) prohibit a pharmacist from discussing reimbursement criteria with a covered person;   (b) penalize a pharmacy or a pharmacist for disclosing the information described in subsection (4)(a) to a covered person or for selling a more affordable alternative to a covered person; or   (c) require a pharmacy to charge or collect a copayment from a covered person that exceeds the total charges submitted by the network pharmacy.   History: En. Sec. 3, Ch. 431, L. 2015; amd. Sec. 2, Ch. 136, L. 2017; amd. Sec. 1, Ch. 263, L. 2019.  
  33-22-173. Maximum allowable cost -- appeals process. (1) In contracting with a pharmacy, a plan sponsor or pharmacy benefit manager shall:   (a) provide a procedure by which a pharmacy may appeal the price of a drug or drugs on the maximum allowable cost list;   (b) provide a telephone number at which a network pharmacy may contact the pharmacy benefit manager to discuss the status of the pharmacy's appeal; and   (c) respond to an appeal no later than 10 calendar days after the date the appeal is made.   (2) If the final determination is a denial of the pharmacy's appeal, the pharmacy benefit manager shall state the reason for the denial and provide the national drug code of an equivalent drug that is available for purchase by pharmacies in this state from national or regional wholesalers at a price that is equal to or less than the maximum allowable cost for that drug.   (3) If a pharmacy's appeal is determined to be valid by the pharmacy benefit manager, the pharmacy benefit manager shall:   (a) make an adjustment in the drug price effective on the date the appeal is resolved;   (b) make the adjustment applicable to all similarly situated network pharmacy providers as determined by the plan sponsor or the pharmacy benefit manager, as appropriate; and   (c) permit the appealing pharmacy to reverse and rebill the claim in question, using the dates of the original claim or claims.   (4) A pharmacy benefit manager shall make price adjustments to all similarly situated pharmacies within 3 days.   (5) A pharmacy shall file its appeal within 10 calendar days of its submission of the initial claim for reimbursement.   History: En. Sec. 4, Ch. 431, L. 2015.  
  33-22-174. Opt-out of reference pricing -- notification. (1) A pharmacist or pharmacy in a network plan with a plan sponsor, health insurance issuer, or pharmacy benefit manager providing covered drugs on a reference pricing basis may decline to provide a brand-name drug, multisource generic drug, supply, or service if the reference pricing amount is less than the acquisition cost paid by the pharmacy or pharmacist.  (2) If a pharmacist or pharmacy declines to provide the prescription or service under the conditions in subsection (1), the pharmacy or pharmacist shall attempt to provide the customer with adequate information as to where the prescription for the drug, supply, or service may be filled.   (3) A pharmacy or pharmacist who declines to provide the prescription or service as provided in subsection (2) shall cooperate with any investigation and review of network adequacy.   History: En. Sec. 3, Ch. 136, L. 2017; amd. Sec. 16, Ch. 501, L. 2021. 
  33-22-175. Allowable and prohibited fees on pharmacies. (1) A pharmacy benefit manager or third-party payer may not directly or indirectly charge or hold a pharmacy responsible for a fee related to a claim:   (a) if the fee is not apparent at the time the claim is processed;   (b) if the fee is not reported on the remittance advice of an adjudicated claim; or   (c) after the initial claim is adjudicated.   (2) A pharmacy benefit manager or third-party payer may collect a performance-based fee from a pharmacy only if the pharmacy fails to meet the criteria established by a pharmacy performance measurement entity. The fee may be applied only to the professional dispensing fee outlined in the contract with the pharmacy and may not be imposed on the cost of goods sold by a pharmacy.   (3) Only criteria established by a pharmacy performance measurement entity may be used to measure a pharmacy's performance for the purposes of this section.   History: En. Sec. 1, Ch. 88, L. 2019.  
  33-22-176. Limitation on copayments. A pharmacy benefit manager or third-party payer may not charge a patient a copayment that exceeds the cost of the prescription drug. If a patient pays a copayment, the dispensing provider or pharmacy may retain the adjudicated reimbursement and the pharmacy benefit manager or third-party payer may not alter the adjudicated reimbursement.   History: En. Sec. 2, Ch. 88, L. 2019.  
  33-22-177. Rights of pharmacies. (1) A pharmacy benefit manager or third-party payer may not prohibit a pharmacist or pharmacy from:   (a) participating in a class-action lawsuit;   (b) disclosing to the plan sponsor or to the patient information regarding the adjudicated reimbursement paid to the pharmacy if the pharmacist or pharmacy complies with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, 29 U.S.C. 1181 et seq.;   (c) providing relevant information to a patient about the patient's prescription drug order, including but not limited to the cost and clinical efficacy of a more affordable alternative drug if one is available;   (d) mailing or delivering a prescription drug to a patient as an ancillary service of a pharmacy if the practice is not prohibited under Title 37, chapter 7; or   (e) charging a shipping and handling fee to a patient who has asked that a prescription drug be mailed or delivered if the practice is not prohibited under Title 37, chapter 7.   (2) A pharmacy benefit manager or third-party payer may not require pharmacy accreditation standards or recertification requirements inconsistent with, more stringent than, or in addition to federal and state requirements for licensure as a pharmacy in this state.   (3) A pharmacist or pharmacy that belongs to a pharmacy services administrative organization may receive a copy of a contract the pharmacy services administrative organization entered into with a pharmacy benefit manager or third-party payer on the pharmacy's or pharmacist's behalf.   (4) A pharmacy benefit manager or third-party payer shall provide a pharmacy or pharmacist with the processor control number, bank identification number, and group number for each pharmacy network established or administered by a pharmacy benefit manager or third-party payer to enable the pharmacy to make an informed contracting decision.   (5) (a) A pharmacy benefit manager shall:   (i) offer a pharmacy an opportunity to renew an existing contract every 3 years, at a minimum; and   (ii) allow a pharmacy to terminate a contract upon a 90-day notice to the pharmacy benefit manager.   (b) An addendum or amendment to an existing contract between a pharmacy benefit manager and a pharmacy is effective only upon signing of the addendum or amendment by both parties.   (6) A pharmacy has a private right of action to enforce provisions of 33-22-175 through 33-22-177.   History: En. Sec. 3, Ch. 88, L. 2019.  
  33-22-178 and 33-22-179 reserved.  
  33-22-180. Contract coverage -- nondiscrimination -- penalty. (1) A health insurance issuer, a plan sponsor not subject to the Employee Retirement Income Security Act of 1974, as amended, or a pharmacy benefit manager may not include in a contract with a federally certified health entity provisions that allow:   (a) payment for a prescription drug to the federally certified health entity or a contract pharmacy at less than the state rate determined by surveys used to develop national average drug acquisition costs for the centers for medicare and medicaid services or, if a national average drug acquisition cost has not been calculated, a payment less than the wholesale acquisition cost described in 42 U.S.C. 1395w-3a(c)(6)(B); or   (b) an additional fee or charge or other adjustment that is imposed only on the federally certified health entity or its contract pharmacy. Other adjustments under this subsection (1)(b) include but are not limited to payment of a lower dispensing fee or requiring an add-on payment.   (2) A patient eligible to receive drugs under an agreement covered by 42 U.S.C. 256b may not be discriminated against through conditions imposed on a federally certified health entity or its contract pharmacy through which the patient is eligible to receive drugs.   (3) If a health insurance issuer, plan sponsor not subject to Employee Retirement Income Security Act of 1974, as amended, or a pharmacy benefit manager is found guilty of violating subsection (1) or (2), the insurance commissioner shall impose a fine for each separate entity not to exceed $5,000 for each violation, subject to a maximum fine of no more than $100,000 in any year.   History: En. Sec. 1, Ch. 215, L. 2019.  
  33-22-1001. Definition of home health care. "Home health care" means services provided by a licensed home health agency to an insured in the insured's place of residence that is prescribed by the insured's attending physician as part of a written plan of care. Services provided by home health care include:   (1) nursing;   (2) home health aide services;   (3) physical therapy;   (4) occupational therapy;   (5) speech therapy;   (6) hospice service;   (7) medical supplies and equipment suitable for use in the home; and   (8) medically necessary personal hygiene, grooming, and dietary assistance.   History: En. Sec. 1, Ch. 508, L. 1981; amd. Sec. 1231, Ch. 56, L. 2009.  
  33-22-1002. Availability of coverage for home health care. Insurers and health service corporations transacting health insurance business in this state shall make available, under group insurance policies or certificates and under group hospital and medical service plan contracts, benefits for home health care. Applicants for a group policy, certificate, or contract may select any level of benefits that may be offered by the insurer or service plan corporation.   History: En. Sec. 2, Ch. 508, L. 1981; amd. Sec. 59, Ch. 227, L. 2001.  
  33-22-1003. Applicability. This part applies to policies, certificates, or contracts delivered or issued for delivery in this state after January 29, 1981, but does not apply to blanket, short-term travel, accident-only, limited or specified disease, or individual conversion policies or contracts, to policies or contracts designed for coverage under Title XVIII of the Social Security Act, known as Medicare, or to any other similar coverage under federal governmental plans.   History: En. Sec. 3, Ch. 508, L. 1981; amd. Sec. 60, Ch. 227, L. 2001.  
  33-22-1101. Short title. This part may be cited as the "Long-Term Care Insurance Act".   History: En. Sec. 1, Ch. 355, L. 1989.  
  33-22-1102. Purpose. The purpose of this part is to:   (1) promote the public interest;   (2) promote the availability of long-term care insurance;   (3) protect applicants for long-term care insurance from unfair or deceptive sales or enrollment practices;   (4) establish standards for long-term care insurance;   (5) facilitate public understanding and comparison of long-term care insurance policies; and   (6) facilitate flexibility and innovation in the development of long-term care insurance coverage.   History: En. Sec. 2, Ch. 355, L. 1989.  
  33-22-1103. Compliance required. A policy may not be advertised, marketed, or offered in this state as long-term care insurance or nursing home insurance unless it complies with this part.   History: En. Sec. 13, Ch. 355, L. 1989.  
  33-22-1104. Scope. This part is not intended to supersede the obligations of entities subject to this part to comply with the substance of other applicable insurance laws insofar as they do not conflict with this part. However, laws and regulations designed and intended to apply to medicare supplement insurance policies may not be applied to long-term care insurance.   History: En. Sec. 3, Ch. 32, L. 2007.  
  33-22-1105 and 33-22-1106 reserved.  
  33-22-1107. Definitions. As used in this part, the following definitions apply:   (1) "Activities of daily living" means:   (a) eating;   (b) toileting;   (c) transferring;   (d) bathing;   (e) dressing; and   (f) continence.   (2) "Applicant" means:   (a) in the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and   (b) in the case of a group long-term care insurance policy, the proposed certificate holder.   (3) "Appropriate sale criteria" means the set of conditions that an insurance company is required to address with an applicant that help to determine whether or not a particular insurance policy or contract offered for sale is appropriate to the applicant. These conditions must include but are not limited to any insurance premium involved in the policy, the income of the applicant, and the savings and investments of the applicant.   (4) "Certificate" means a certificate issued under a group long-term care insurance policy that has been delivered or issued for delivery in this state.   (5) "Group long-term care insurance" means a long-term care insurance policy that is delivered or issued for delivery in this state and issued to:   (a) (i) one or more employers;   (ii) a labor organization;   (iii) a trust established by an employer or labor organization; or   (iv) a trustee of a fund established by one or more employers or labor organizations or a combination of employers and labor organizations for:   (A) employees or former employees or a combination of employees and former employees; or   (B) members or former members of the labor organization or a combination of members and former members;   (b) any professional, trade, or occupational association for its current, former, or retired members or a combination of current, former, and retired members if the association:   (i) is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and   (ii) has been maintained in good faith for purposes other than obtaining insurance; or   (c) an association, a trust, or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations.   (i) Prior to advertising, marketing, or offering the policy within this state, the association or the insurer of the association shall file evidence with the commissioner that the association has:   (A) a minimum of 100 persons at the outset;   (B) been organized and maintained in good faith for purposes other than obtaining insurance;   (C) been in active existence for at least 1 year; and   (D) a constitution and bylaws requiring that the association hold regular meetings at least annually to further purposes of the membership; except for credit unions, the association collects dues or solicits contributions from members; and the members have voting privileges and representation on the governing board and committees.   (ii) Thirty days after filing, the association must be considered to have satisfied the organizational requirements unless the commissioner finds that the association does not satisfy the organizational requirements.   (d) a group other than as described in subsections (5)(a) through (5)(c) if the commissioner determines that the:   (i) issuance of the group policy is not contrary to the best interests of the public;   (ii) issuance of the group policy would result in economies of acquisition or administration; and   (iii) benefits are reasonable in relation to the premiums charged.   (6) (a) "Long-term care insurance":   (i) means any insurance policy that is advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person, on an expense-incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, or maintenance or personal-care services provided in a setting other than an acute care unit of a hospital;   (ii) may be issued by an insurer, fraternal benefit society, nonprofit health service corporation, prepaid health plan, health maintenance organization, or similar organization to the extent that the organization is otherwise authorized to issue life or health insurance;   (iii) includes group and individual annuities and life insurance policies that provide directly or that supplement long-term care insurance;   (iv) includes any product advertised, marketed, or offered as long-term care insurance regardless of any exceptions to the definition included in this section;   (v) includes a policy that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity; and   (vi) includes qualified long-term care insurance contracts.   (b) Long-term care insurance does not include:   (i) any insurance policy that is offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset protection coverage, accident-only coverage, specified disease or specified accident coverage, or limited benefit health coverage; or   (ii) life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement and that provide the option of a lump-sum payment for those benefits and in which neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care.   (c) An insurance policy that is offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident-only coverage, specified disease or specified accident coverage, or limited benefit health coverage and that also contains long-term care insurance benefits of a duration of at least 6 months is not required to meet the requirements of this part unless the premium allocable to the long-term care insurance benefits contained in the policy is greater than 25% of the total policy premium.   (7) "Policy" means any policy, certificate, contract, membership contract, subscriber agreement, health care services agreement, rider, or endorsement delivered or issued for delivery in this state by an insurer, fraternal benefit society, health service corporation, prepaid health plan, health maintenance organization, or similar organization.   (8) "Preexisting condition" means a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 months preceding the effective date of coverage of an insured person.   (9) "Qualified long-term care insurance contract" or "federally tax-qualified long-term care insurance contract" means:   (a) an individual or group insurance contract that meets the requirement of section 7702B of the Internal Revenue Code, 26 U.S.C. 7702B, if:   (i) the only insurance protection provided under the contract is coverage of qualified long-term care services, as defined in 33-22-1126. A contract may also satisfy the requirements of this subsection (9)(a) if payments are made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.   (ii) the contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under 42 U.S.C. 1395 or would be reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subsection (9)(a) do not apply to expenses that are reimbursable under 42 U.S.C. 1395 only as a secondary payor. A contract may also satisfy the requirements of this subsection (9)(a) if payments are made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.   (iii) the contract is guaranteed renewable within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code, 26 U.S.C. 7702B(b)(1)(C);   (iv) the contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed. All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits. However, a refund of the aggregate premium paid under the contract may be allowed in the event of death of the insured or a complete surrender or cancellation of the contract.   (v) the contract contains the consumer protection provisions set forth in section 7702B(g) of the Internal Revenue Code, 26 U.S.C. 7702B(g); or   (b) a life insurance contract that provides long-term care coverage by rider or as a part of the contract as long as the contract complies with section 7702B(b) and (e) of the Internal Revenue Code, 26 U.S.C. 7702B(b) and (e).   (10) "Transferring" means moving into or out of a bed, chair, or wheelchair.   History: En. Sec. 3, Ch. 355, L. 1989; amd. Sec. 2, Ch. 152, L. 1991; amd. Sec. 1, Ch. 240, L. 1995; amd. Sec. 10, Ch. 416, L. 1997; amd. Sec. 4, Ch. 32, L. 2007.  
  33-22-1108. Preexisting condition -- definition. (1) A long-term care insurance policy or certificate other than a policy or certificate issued to a group, as specified in 33-22-1107(5)(a)(ii), (5)(a)(iii), or (5)(a)(iv), may not use a definition of preexisting condition that is more restrictive than the definition in 33-22-1107.   (2) A long-term care insurance policy or certificate may not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within 6 months following the effective date of coverage of an insured person.   (3) If a long-term care insurance policy or certificate replaces, with similar benefits, another long-term care insurance policy or certificate, the insurer issuing the replacing long-term care insurance policy or certificate shall waive any time periods applicable to preexisting conditions or probationary periods in the replacing long-term care insurance policy or certificate to the extent that similar time periods have been satisfied under the original policy.   (4) The commissioner may extend the limitation periods in subsections (1) and (2) as to specific age group categories in specific policy forms if extending the limitation periods is in the best interests of the public.   (5) An insurer may use an application form designed to elicit the complete health history of an applicant and on the basis of the answers on that application perform underwriting in accordance with the insurer's established underwriting standards. Unless otherwise provided in the long-term care insurance policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subsection (2) expires. A long-term care insurance policy or certificate may not exclude or use a waiver or rider of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection (2).   History: En. Sec. 7, Ch. 355, L. 1989; amd. Sec. 151, Ch. 42, L. 1997; amd. Sec. 11, Ch. 416, L. 1997.  
  33-22-1109 and 33-22-1110 reserved.  
  33-22-1111. Outline of coverage. (1) (a) An insurer shall deliver an outline of coverage as approved by the commissioner to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.   (b) The commissioner shall prescribe a standard format, including style, arrangement, and overall appearance, and the content of the outline of coverage.   (c) In the case of insurance producer solicitations, an insurance producer shall deliver the outline of coverage prior to the presentation of an application or enrollment form.   (d) In the case of direct response solicitations, the insurer shall deliver the outline of coverage upon the earlier of the applicant's request or the delivery of the policy.   (2) The outline of coverage must include:   (a) a description of the principal benefits and coverage provided in the policy;   (b) a statement of the principal exclusions, reductions, and limitations contained in the policy;   (c) a statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premiums. Continuation or conversion provisions of a group policy must be specifically described.   (d) a statement that the outline of coverage is only a summary of the policy issued or applied for, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions;   (e) a description of the terms under which the policy or certificate may be returned and the premium refunded;   (f) a brief description of the relationship of cost of care and benefits; and   (g) a statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract.   (3) The outline of coverage:   (a) must prominently display the name of the insurer;   (b) must be a freestanding document not dependent for purposes of reader comprehension upon any other document;   (c) must use no smaller than 12-point type; and   (d) may not contain material of an advertising nature.   History: En. Sec. 11, Ch. 355, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 12, Ch. 416, L. 1997; amd. Sec. 5, Ch. 32, L. 2007.  
  33-22-1112. Required content for certificate. A certificate issued pursuant to a group long-term care insurance policy that is delivered or issued for delivery in this state must include:   (1) a description of the principal benefits and coverage provided in the policy;   (2) a statement of the principal exclusions, reductions, and limitations contained in the policy; and   (3) a statement that the group master policy determines governing contractual provisions.   History: En. Sec. 12, Ch. 355, L. 1989.  
  33-22-1113. Disclosure and performance standards for long-term care insurance. (1) The commissioner may by rule adopt standards for full and fair disclosure, setting forth the manner, content, and disclosures required to be made in a long-term care insurance policy, including but not limited to:   (a) terms of renewability;   (b) initial and subsequent conditions of eligibility;   (c) nonduplication of coverage provisions;   (d) coverage of dependents;   (e) preexisting conditions;   (f) termination of insurance;   (g) continuation or conversion;   (h) probationary periods;   (i) limitations;   (j) exceptions;   (k) reductions;   (l) elimination periods;   (m) requirements for replacement;   (n) recurrent conditions;   (o) definition of terms;   (p) prohibitions on limitations and exclusions;   (q) extension of benefits;   (r) discontinuance and replacement of policies;   (s) unintentional lapse;   (t) prohibitions against postclaim underwriting;   (u) minimum standards for home health and community care benefits;   (v) inflation protection;   (w) incontestability period; and   (x) tax consequences.   (2) A group long-term care insurance policy must include a provision relating to conversion on termination of eligibility as described in 33-22-508 or include a provision for continuation of coverage that maintains coverage under the existing group policy if the coverage would otherwise terminate.   History: En. Sec. 5, Ch. 355, L. 1989; amd. Sec. 13, Ch. 416, L. 1997.  
  33-22-1114. Prohibited practices and policy provisions. (1) An insurance company may not issue a refund to a person other than the owner of the policy or certificate.   (2) A long-term care insurance policy may not:   (a) be canceled, nonrenewed, or otherwise terminated on any grounds other than the insured's or certificate holder's failure to pay the premium;   (b) contain a provision establishing a new waiting period if existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or   (c) provide coverage for only skilled nursing care or provide substantially more coverage for skilled nursing care in a facility than coverage for lower levels of care.   History: En. Sec. 6, Ch. 355, L. 1989; amd. Sec. 2, Ch. 240, L. 1995; amd. Sec. 14, Ch. 416, L. 1997.  
  33-22-1115. Prior hospitalization or institutionalization. (1) A long-term care insurance policy may not be delivered or issued for delivery in Montana if the policy conditions eligibility for a benefit:   (a) on a prior hospitalization requirement;   (b) provided in an institutional care setting on the receipt of a higher level of institutional care; or   (c) other than waiver of premium, postconfinement benefits, postacute care benefits, or recuperative benefits, on a prior institutionalization requirement.   (2) A long-term care insurance policy containing a limitation or condition for eligibility other than those prohibited in subsection (1) must clearly label, in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits", the limitations or conditions, including any required number of days of confinement.   (3) A long-term care insurance policy that contains a benefit advertised, marketed, or offered as a home health care benefit may not condition receipt of a benefit on a prior institutionalization requirement.   (4) A long-term care insurance policy that conditions eligibility of noninstitutional benefits on the prior receipt of institutional care may not require a prior institutional stay of more than 30 days.   (5) A long-term care insurance policy that provides benefits only following institutionalization may not condition the benefits upon admission to a facility for the same or a related condition within a period of less than 30 days after discharge from the institution.   History: En. Sec. 8, Ch. 355, L. 1989; amd. Sec. 15, Ch. 416, L. 1997; amd. Sec. 6, Ch. 32, L. 2007.  
  33-22-1116. Nonforfeiture benefits -- offer requirement. (1) Except as provided in subsection (3), a long-term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy that includes a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy.   (2) If a policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that must be available for a specified period of time following a substantial increase in premium rates.   (3) When a group long-term care insurance policy is issued, the offer required in subsection (1) must be made to the group policyholder. However, if the policy is issued as group long-term care insurance as defined in 33-22-1107(5)(d), other than to a continuing care retirement community or other similar entity, the offer must be made to each proposed certificate holder.   History: En. Sec. 4, Ch. 240, L. 1995; amd. Sec. 7, Ch. 32, L. 2007.  
  33-22-1117. Appropriate sale criteria. (1) Appropriate sale criteria must be established and communicated to the consumer prior to the insurance company's acceptance of a person's application for long-term care insurance.   (2) This section may not preclude the purchase of a long-term care insurance policy by a consumer.   History: En. Sec. 5, Ch. 240, L. 1995.  
  33-22-1118 reserved.  
  33-22-1119. Right to return policy -- free look -- refunds upon denial of application. (1) A long-term care insurance applicant and insured has the right to return the policy within 30 days of the policy's delivery and to have the premium refunded if, after examination of the policy, the applicant or insured is not satisfied for any reason. A long-term care insurance policy must have a notice prominently printed on the first page of the policy or attached to the policy stating that the applicant or insured has the right to return the policy within 30 days of the policy's delivery and to have the premium refunded if, after examination of the policy, other than a certificate issued to a group defined in 33-22-1107(5)(a), the applicant or insured is not satisfied for any reason.   (2) An applicant or a person insured under a long-term care insurance policy issued pursuant to a direct response solicitation has the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the applicant or the insured is not satisfied for any reason. A long-term care insurance policy issued pursuant to a direct response solicitation must have a notice prominently printed on the first page or attached to it stating that the applicant or the insured has the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the applicant or the insured is not satisfied for any reason.   (3) If the application of a person for long-term care insurance is denied, any refund due the person must be refunded within 30 days of the denial or return of the application.   History: En. Sec. 10, Ch. 355, L. 1989; amd. Sec. 3, Ch. 240, L. 1995; amd. Sec. 8, Ch. 32, L. 2007.  
  33-22-1120. Extraterritorial jurisdiction. A group long-term care insurance policy or certificate may not be delivered or issued for delivery to a resident of Montana under a group policy issued in another state unless it is approved by:   (1) the commissioner; and   (2) the insurance regulatory official of a state that has statutory and regulatory long-term care insurance requirements substantially similar to those adopted in Montana.   History: En. Sec. 4, Ch. 355, L. 1989; amd. Sec. 64, Ch. 379, L. 1995.  
  33-22-1121. Rules. The commissioner may adopt rules necessary to implement this part, including but not limited to rules that:   (1) establish loss ratio standards for long-term care insurance policies;   (2) promote premium adequacy and protect the policyholder in the event of substantial rate increases;   (3) establish minimum standards for insurance producer training, marketing practices, compensation, and testing;   (4) establish penalties and reporting practices for long-term care insurance;   (5) specify, with respect to nonforfeiture benefits and contingent benefits:   (a) the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies;   (b) the standards for nonforfeiture benefits;   (c) the rules regarding contingent benefits upon lapse, including:   (i) a determination of the specified period of time during which a contingent benefit upon lapse will be available;   (ii) the substantial premium rate increase that triggers a contingent benefit upon lapse as described in 33-22-1116; and   (d) the types of appropriate sale criteria to be communicated at the time of application;   (6) establish a requirement for the mandatory triggering of policy benefits based upon the number of activities of daily living that an individual is capable or incapable of performing; and   (7) are necessary to implement a determination made by the secretary of health and human services pursuant to 45 CFR, parts 160 and 164, as to who is a licensed health care practitioner.   History: (1)En. Sec. 14, Ch. 355, L. 1989; (2)En. Sec. 9, Ch. 355, L. 1989; amd. Sec. 6, Ch. 240, L. 1995; amd. Sec. 16, Ch. 416, L. 1997; amd. Sec. 9, Ch. 32, L. 2007.  
  33-22-1122. Policy waiting periods not cumulative. A waiting or elimination period contained in a long-term care insurance policy under which an insured is required to wait a specified period of time before receiving policy benefits must be concurrent with any 90-day period used to determine whether an individual is a chronically ill individual.   History: En. Sec. 46, Ch. 416, L. 1997.  
  33-22-1123. Delivery of policy -- policy summary -- monthly reports. (1) If an application for a long-term care insurance policy is approved, the issuer shall deliver the policy to the applicant or policyholder not later than 30 days after the date of approval.   (2) (a) At the time of delivery of an individual life insurance policy that provides long-term care benefits within the policy or by rider, a policy summary must be provided to the insured.   (b) In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, and whether or not a request is made, a policy summary must be delivered not later than at the time the policy is delivered.   (c) In addition to complying with any other applicable requirements, the summary must include:   (i) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;   (ii) an illustration of the amount of benefit, the length of benefit, and the guaranteed lifetime benefit, if any, for each covered person;   (iii) any exclusions, reductions, and limitations on benefits of long-term care;   (iv) a statement that any long-term care inflation protection option required by the Administrative Rules of Montana is or is not available under this policy;   (d) If applicable to the policy type, the summary must also include:   (i) a disclosure of the effects of other exercising rights under the policy;   (ii) a disclosure of guarantees related to long-term care costs of insurance charges; and   (iii) current and projected maximum lifetime benefits.   (3) The required provisions of the policy summary may be incorporated into a basic illustration required to be delivered in accordance with administrative rules or into the life insurance policy summary.   (4) Any time a long-term care benefit funded through a life insurance vehicle by the acceleration of the death benefits is in benefit payment status, a monthly report must be provided to the policyholder. The report must include:   (a) any long-term care benefits paid out during the month;   (b) an explanation of any changes in the policy, such as to death benefits or cash values, due to long-term care benefits being paid out; and   (c) the amount of long-term care benefits existing or remaining.   History: En. Sec. 47, Ch. 416, L. 1997; amd. Sec. 10, Ch. 32, L. 2007.  
  33-22-1124. Denial of claims. If a claim under a long-term care insurance policy is denied, the issuer shall, not later than 60 days after the date of a written request by the policyholder, certificate holder, or the representative of either of them:   (1) provide a written explanation of the reasons for the denial; and   (2) provide all information possessed by the issuer relating to the denial.   History: En. Sec. 48, Ch. 416, L. 1997; amd. Sec. 11, Ch. 32, L. 2007.  
  33-22-1125. Benefit triggers. (1) A long-term care insurance policy may not be delivered or issued for delivery in this state unless it complies with the requirements of this section and applicable rules for the triggering of mandatory provision of benefits.   (2) (a) A long-term care insurance policy must condition the payment of benefits on a determination of the insured's inability to perform activities of daily living or on cognitive impairment.   (b) Eligibility for the payment of benefits may not be more restrictive than requiring a deficiency in the ability to perform not more than three of the activities of daily living or requiring the presence of cognitive impairment.   (c) Insurers may use activities of daily living to trigger covered benefits that are in addition to those contained in the definition under 33-22-1107 or rules as long as they are defined in the policy.   (3) An insurer may use additional provisions for the determination of when benefits are payable under a policy. However, the provisions may not restrict or be in lieu of the requirements contained in subsections (1) and (2).   (4) For purposes of this section, the determination of a deficiency may not be more restrictive than:   (a) requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or   (b) if the deficiency is due to the presence of a cognitive impairment, the need for supervision or verbal cueing by another person in order to protect the insured or others.   (5) Assessments of activities of daily living and cognitive impairment must be performed by licensed or certified professionals, such as physicians, nurses, or social workers.   (6) Long-term care insurance policies must include a clear description of the process of appealing and resolving benefit determinations.   History: En. Sec. 49, Ch. 416, L. 1997; amd. Sec. 12, Ch. 32, L. 2007.  
  33-22-1126. Additional standards for qualified long-term care contracts -- definitions. (1) For the purposes of this section, the following definitions apply:   (a) (i) "Chronically ill individual" has the meaning provided by section 7702B(c)(2) of the Internal Revenue Code, 26 U.S.C. 7702B(c)(2), and means any individual who has been certified by a licensed health care practitioner as:   (A) being unable to perform without substantial assistance from another individual at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or   (B) requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.   (ii) The term may not include an individual otherwise meeting the requirements of subsection (1)(a)(i)(A) or (1)(a)(i)(B) unless within the preceding 12-month period a licensed health care practitioner has certified that the individual meets the requirements of subsection (1)(a)(i)(A) or (1)(a)(i)(B).   (b) "Licensed health care practitioner" means a physician, as defined in section 1861(r)(1) of the Social Security Act, 42 U.S.C. 1395x(r)(1), a registered professional nurse, licensed social worker, or other individual who meets the requirements prescribed by the secretary of the treasury.   (c) "Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual, including the protection from threats to health and safety due to severe cognitive impairment.   (d) "Qualified long-term care services" means services that meet the requirements of section 7702(c)(1) of the Internal Revenue Code, 26 U.S.C. 7702(c)(1), and that:   (i) provide necessary diagnostic, preventative, therapeutic, curative, treatment, mitigation, and rehabilitative services;   (ii) provide maintenance or personal care services that are required by a chronically ill individual; and   (iii) are provided pursuant to a plan of care prescribed by a licensed health care practitioner.   (2) A qualified long-term care insurance contract must condition the payment of benefits on a certification of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.   (3) Certifications regarding activities of daily living and cognitive impairment required pursuant to subsection (2) must be performed by the following licensed or certified professionals:   (a) physicians or registered professional nurses;   (b) licensed social workers; or   (c) other individuals who meet the requirements prescribed by the secretary of the treasury.   (4) Certifications required pursuant to subsection (2) may be performed by a licensed health care professional at the direction of the insurer as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period.   (5) Qualified long-term care insurance contracts must include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.   History: En. Sec. 13, Ch. 32, L. 2007.  
  33-22-1127. Incontestability period. (1) Upon a showing of misrepresentation that is material to the acceptance for coverage, a policy that has been in force for less than 6 months may be rescinded by the insurer or the insurer may deny an otherwise valid long-term care insurance claim.   (2) Upon a showing of misrepresentation that is both material to the acceptance for coverage and that pertains to the condition for which benefits are sought, a policy that has been in force for at least 6 months but less than 2 years may be rescinded by the insurer or the insurer may deny an otherwise valid long-term care insurance claim.   (3) After a policy has been in force for 2 years, it is not contestable upon the grounds of misrepresentation alone. The policy may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.   (4) (a) A long-term care insurance policy may be field-issued if the compensation to the field issuer is not based on the number of policies sold.   (b) For purposes of subsection (4)(a), "field-issued" means a policy issued by a producer or a third-party administrator pursuant to the underwriting authority granted to the producer or third-party administrator by an insurer and using the insurer's underwriting guidelines.   (5) If an insurer has paid benefits under the long-term care insurance policy, the benefit payments may not be recovered by the insurer if the policy is rescinded.   (6) In the event of the death of the insured, this section may not be applied to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In that situation, the remaining death benefits under the policy must be governed by Title 33, chapter 20. In all other situations, this section applies to life insurance policies that accelerate benefits for long-term care.   History: En. Sec. 14, Ch. 32, L. 2007.  
  33-22-1128. Insurance producer training requirements. (1) An individual may not sell, solicit, or negotiate long-term care insurance unless the individual is licensed as an insurance producer for disability or life insurance, has completed a one-time training course on or before July 1, 2008, and completes ongoing training within every 24-month period following July 1, 2008.   (2) The training requirements of this section may be approved as continuing education courses under Title 33, chapter 17, part 12.   (3) The one-time training course required by this section may not be less than 8 hours, and the ongoing training required by this section may not be less than 4 hours for each 24-month period.   (4) (a) The training must consist of topics related to long-term care insurance, long-term care services, and, if applicable, qualified state long-term care insurance partnership programs.   (b) The training must address but is not limited to:   (i) state and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid;   (ii) available long-term care services and providers;   (iii) changes or improvements in long-term care services or providers;   (iv) alternatives to the purchase of private long-term care insurance;   (v) the effect of inflation on benefits and the importance of inflation protection; and   (vi) consumer suitability standards and guidelines.   (5) The training required by this section may not include training that is specific to the insurer or a company product or that includes any sales or marketing information, materials, or training, other than those required by state or federal law.   (6) (a) An insurer subject to this section shall obtain verification that an insurance producer acting on the insurer's behalf receives the training required by this section before the insurance producer is permitted to sell, solicit, or negotiate the insurer's long-term care insurance products.   (b) The insurer shall maintain records subject to this state's record retention requirements and make the verification of the insurance producer's compliance with training requirements available to the commissioner upon request.   (7) (a) An insurer subject to this section shall maintain records with respect to the training of its insurance producers concerning the distribution of its policies that will allow the commissioner to provide assurance to the department of public health and human services that insurance producers have received the required training and that the insurance producers have demonstrated an understanding of the insurer's policies and the relationship of the policies to public and private coverage of long-term care, including medicaid, in this state.   (b) The records must be maintained in accordance with this state's record retention requirements and must be made available to the commissioner upon request.   (8) The satisfaction of the training requirements required by this section in any state must be considered to satisfy the training requirements in this state.   History: En. Sec. 15, Ch. 32, L. 2007.  
  33-22-1129. Penalties. In addition to any other penalty provided for in Title 33, an insurer or an insurance producer found to have violated any requirement of this state relating to the regulation of long-term care insurance or the marketing of long-term care insurance is subject to a fine of up to three times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.   History: En. Sec. 16, Ch. 32, L. 2007.  
  33-22-1201. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 1, Ch. 606, L. 1991.  
  33-22-1202. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 2, Ch. 606, L. 1991; amd. Sec. 26, Ch. 504, L. 1995; amd. Sec. 85, Ch. 546, L. 1995.  
  33-22-1203. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 3, Ch. 606, L. 1991.  
  33-22-1204. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 4, Ch. 606, L. 1991.  
  33-22-1205. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 5, Ch. 606, L. 1991.  
  33-22-1301. Short title -- purpose. This part may be cited as the "Montana Reinsurance Association Act". The purpose of this act is to establish a Montana-based public reinsurance program in order to stabilize the individual health insurance market, maintain competition, and reduce premiums.   History: En. Sec. 1, Ch. 210, L. 2019.  
  33-22-1302. Reinsurance association -- mandatory membership -- exceptions. (1) The Montana reinsurance association is established as a nonprofit legal entity. As a condition of doing business, an insurer that has issued or renewed disability insurance, as defined in 33-1-207, regardless of license type, in this state in the past 12 months must be a member of the association.   (2) Disability insurers are exempt from the requirement to be association members and are not subject to the assessment in 33-22-1313 if the insurers solely issue or administer one or more of the following coverage types under the Montana Insurance Code:   (a) self-funded multiple employer welfare arrangements licensed under chapter 35;   (b) disability insurance sold through a fraternal benefit society as described in chapter 7;   (c) excepted benefits as defined in 33-22-140;   (d) long-term care insurance as described in chapter 22, part 11; or   (e) disability income insurance as defined in 33-1-235.   History: En. Sec. 2, Ch. 210, L. 2019.  
  33-22-1303. Definitions. As used in this part, the following definitions apply:   (1) "Association" means the Montana reinsurance association provided for in this part.   (2) "Attachment point" means the threshold amount for claims costs incurred by an eligible health insurer for an enrolled individual's covered benefits in a benefit year, beyond which the claims costs for benefits are eligible for reinsurance payments.   (3) "Benefit year" means the calendar year for which an eligible health insurer provides coverage through an individual health insurance policy.   (4) "Board" means the association's board of directors provided for in 33-22-1306.   (5) "Coinsurance rate" means the rate at which the association will reimburse an eligible health insurer for claims incurred for an enrolled individual's covered benefits in a benefit year above the attachment point and below the reinsurance cap.   (6) "Eligible health insurer" means a health insurer, health service corporation, or health maintenance organization that:   (a) offers individual health insurance coverage in the individual market, as defined in 33-22-140;   (b) offers a qualified health plan as defined in 42 U.S.C. 18021(a) that does not discriminate on the basis of health status in rating or issuance, covers all essential health benefits, and does not impose lifetime or annual limits or exclude preexisting conditions; and   (c) incurs claims costs for an individual enrollee's covered benefits in the applicable benefit year.   (7) "Major medical" health insurance includes individual market and employer group health insurance that:   (a) is guaranteed available;   (b) is guaranteed renewable;   (c) does not impose preexisting condition exclusions;   (d) (i) offers essential health benefits as defined in 42 U.S.C. 18022; or   (ii) for large employer group coverage, meets the federal requirements for minimum value;   (e) pays medical claims, with no lifetime or annual limits; and   (f) complies with the federal limits for maximum out-of-pocket.   (8) "Payment parameters" means the attachment point, reinsurance cap, and coinsurance rate for the Montana reinsurance program.   (9) "Program" means the Montana reinsurance program operated by the Montana reinsurance association.   (10) "Reinsurance cap" means the maximum amount of each claim incurred by an eligible health insurer for an enrolled individual's covered benefits in a benefit year, after which the claims costs for benefits are no longer eligible for reinsurance payments.   (11) "Reinsurance payments" means an amount paid by the association to an eligible health insurer under the program.   History: En. Sec. 3, Ch. 210, L. 2019.  
  33-22-1304 and 33-22-1305 reserved.  
  33-22-1306. Association board of directors. (1) The association is governed by a board of directors consisting of five directors who have experience in health care, health insurance, or finance as follows:   (a) three directors, one each from the eligible health insurers with the largest enrollment in the individual market. If there are fewer than three, the board shall select another director from a health insurance issuer that markets primarily major medical insurance.   (b) one insurer director appointed by the commissioner who is a participating member of the association; and   (c) one director appointed by the governor to represent the public interest.   (2) The board of directors may be reimbursed by the association for travel expenses but may not otherwise be compensated for their services.   (3) Each director has one vote.   (4) Initial appointments must be finalized no later than May 1, 2019, and the board shall meet for the first time no later than May 8, 2019.   History: En. Sec. 4, Ch. 210, L. 2019.  
  33-22-1307. Duties of commissioner -- rulemaking. (1) The commissioner shall:   (a) oversee the activities of the association and the board;   (b) examine the affairs of the board and program;   (c) approve the plan of operation set by the board as needed within 30 days of receiving the plan or amendments to the plan from the board;   (d) with the assistance of the association, collect the assessment and the federal funding designated for this program;   (e) designate staff to attend meetings of the board and the association as an ex officio member; and   (f) require all eligible health insurers to calculate the premium amount the eligible health insurer would have charged for the benefit year if the Montana reinsurance program had not been established. The eligible health insurer shall submit this information as part of its rate filing. The commissioner shall consider this information as part of the rate review.   (2) The commissioner may adopt rules necessary to implement this part. Any proposed administrative rules must be submitted to the board for review and comment before the proposed rules are submitted to the secretary of state.   History: En. Sec. 5, Ch. 210, L. 2019.  
  33-22-1308. Board duties -- powers. (1) The board shall:   (a) adopt a plan of operation and the reinsurance parameters for the following year, no later than June 15, 2019, in accordance with the requirements of this part, and update the plan of operation and reinsurance parameters, if needed, no later than May 1 of each succeeding year. The board shall submit its plan of operation to the commissioner for approval.   (b) establish administrative and accounting procedures for the association and the program;   (c) select an association administrator in accordance with 33-22-1309 who will pay reinsurance claims in accordance with the plan of operation; and   (d) set the budget for the reinsurance program for each policy year, including the assessment levels as provided in 33-22-1313 for the various members of the association.   (2) The board may:   (a) enter into contracts as necessary to carry out the purposes of this part;   (b) appoint appropriate actuarial or other committees as necessary to provide technical assistance and any other functions within the authority of the association; and   (c) apply for funds or grants from public or private sources.   (3) The board may be audited by the legislative auditor.   (4) An annual review of the association and the program for solvency and compliance must be performed by an independent certified public accountant using generally accepted accounting principles and submitted to the commissioner and the economic affairs committee of the legislature provided for in 5-5-223 as provided in 5-11-210 for review by June 30 of each year, beginning in 2020.   (5) The board shall prepare an annual report on operations and finance and send that report to the economic affairs interim committee as provided in 5-11-210 and the commissioner by June 30 of each year, beginning in 2020.   History: En. Sec. 6, Ch. 210, L. 2019.  
  33-22-1309. Association administrator. (1) The board shall select an administrator, who is either an employee of the nonprofit association or an independent contractor, to administer the reinsurance program pursuant to the parameters decided by the board of directors. The board shall establish qualifications and compensation in the plan of operation for the administrator and the length of the contract of an independent contractor.   (2) The administrator shall:   (a) perform all administrative functions relating to the association;   (b) submit regular reports to the board regarding the operation of the association. The frequency, content, and form of the reports must be set forth in the plan of operation.   (c) pay reinsurance claims as provided for in the plan of operation.   History: En. Sec. 7, Ch. 210, L. 2019.  
  33-22-1310 through 33-22-1312 reserved.  
  33-22-1313. Association member assessments. (1) (a) (i) For 2020 and each year thereafter, the commissioner shall assess each member insurer 1.2% of its total premium volume covering Montana residents, from the prior calendar year, regardless of type of license.  (ii) For purposes of subsection (1)(a)(i), total premium volume may not include premiums that member insurers collect on any coverage issued for excepted benefits as defined in 33-22-140.   (b) The board shall determine the timing of the assessment.   (c) The commissioner shall consider the board's recommendation when determining the assessment amounts.   (d) The commissioner shall verify the amount of each insurer's assessment based on annual financial statements and other reports determined to be necessary.   (2) The association shall determine and report to the commissioner the association's reinsurance payments and other expenses for the previous calendar year, including administrative expenses and any incurred but not reported claims for the previous calendar year.   (a) The report must consider investment income and other appropriate gains.   (b) The report must include an estimate of the assessments needed to cover the expected reinsurance claims for the following calendar year.   (3) If assessments and other funds collected by the association exceed the actual losses and administrative expenses of the association, the board shall use the excess funds to offset future claims or to reduce future assessments.   (4) The commissioner may, after notice and hearing:   (a) suspend or revoke the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment;   (b) impose a penalty on any insurer that fails to pay an assessment when due; or   (c) use any power granted to the commissioner to collect any unpaid assessment.   (5) An eligible health insurer may not submit claims for reinsurance payments unless the insurer has a medical loss ratio of 80% or greater, as defined in 45 CFR 158.232(f).   History: En. Sec. 8, Ch. 210, L. 2019; amd. Sec. 6, Ch. 471, L. 2021. 
  33-22-1314. Payment parameters. (1) The board shall design and adjust the payment parameters to ensure that the payment parameters will:   (a) stabilize or reduce premium rates in the individual market;   (b) increase or maintain participation in the individual market;   (c) mitigate the impact high-cost individuals have on premium rates in the individual market;   (d) consider any federal funding available for the plan; and   (e) consider the total amount available to fund the plan.   (2) The attachment point must be set by the board at $40,000 or more but may not exceed the reinsurance cap.   (3) The coinsurance rate must be set by the board between 50% and 80%.   (4) The reinsurance cap must be set by the board at $1 million or less.   (5) The board may adjust the payment parameters annually to the extent necessary to secure federal approval of the state innovation waiver.   History: En. Sec. 9, Ch. 210, L. 2019.  
  33-22-1315. Calculation of reinsurance payments. (1) Each reinsurance payment must be calculated with respect to an eligible health insurer's incurred claims costs for an individual enrollee's covered benefits in the applicable benefit year. If the claims costs do not exceed the attachment point, the reinsurance payment is $0. If the claims costs exceed the attachment point, the reinsurance payment must be calculated as the product of the coinsurance rate and the less of:   (a) the claims costs minus the attachment point; or   (b) the reinsurance cap minus the attachment point.   (2) The board shall ensure that the reinsurance payments made to the eligible health insurer do not exceed the total amount paid by the eligible health insurer for any eligible claim.   (3) For purposes of this section, "total amount paid" means the amount paid by the eligible health insurer based on the allowed amount less any deductible, coinsurance, or copayment.   History: En. Sec. 10, Ch. 210, L. 2019.  
  33-22-1316. Administration of reinsurance payments. (1) Claims that are incurred during a benefit year and are submitted for reimbursement in the following benefit year by the date established by the board in the plan of operation will be allocated to the benefit year in which they are incurred. Claims submitted after the date established by the board following the benefit year in which they were incurred will be allocated to the next benefit year in accordance with the board's operating rules, policies, and procedures.  (2) If funds accumulated in the reinsurance program account in the state special revenue fund with respect to a benefit year are expected to be insufficient to pay all program expenses, claims for reimbursement, and other disbursements allocable to that benefit year, all claims for reimbursement allocable to that benefit year must be reduced proportionately to the extent necessary to prevent a deficiency in the funds for that benefit year. Any reduction in claims for reimbursement with respect to a benefit year must apply to all claims that are allocated to that benefit year without regard to when those claims were submitted for reimbursement, and any reduction must be applied to each claim in the same proportion.   (3) If funds accumulated in the reinsurance program account in the state special revenue fund exceed the actual claims for reimbursement and program expenses of the association in a given benefit year, the board shall use such excess funds to pay reinsurance claims in successive benefit years and may recommend to the commissioner a reduction in the assessment amount for the following year.   (4) For each applicable benefit year, the board shall notify eligible health insurers of reinsurance payments to be made for the applicable benefit year by the date established by the board in the plan of operation in the year following the applicable benefit year.   (5) By December 31 of the year following the applicable benefit year, the board shall disburse all applicable reinsurance payments payable to an eligible health insurer.   History: En. Sec. 11, Ch. 210, L. 2019; amd. Sec. 7, Ch. 471, L. 2021. 
  33-22-1317. Eligible health insurer requests for reinsurance payments. (1) An eligible health insurer shall:   (a) make requests for reinsurance payment in accordance with any requirements established by the board;   (b) provide the association with access to data according to the rules and timeline established by the board in the plan of operation or by the commissioner in the administrative rules. The data environment utilized must be compatible with the federal risk adjustment program.   (c) maintain documents and records sufficient to substantiate the requests for reinsurance payments made pursuant to this part for a period of at least 6 years;   (d) apply all managed care, utilization review, case management, preferred provider arrangements, claims processing, and other methods of operation as appropriate to each claim without regard to whether that claim is eligible for or may be paid by reinsurance;   (e) make records available upon request from the commissioner or the board for purposes of verification, investigation, audit, or other review of reinsurance payment requests; and   (f) repay to the reinsurance program account in the state special revenue fund any reinsurance overpayments as determined by the commissioner as a result of an investigation, audit, or other review.   (2) Data collected from eligible health insurers under this section is confidential and not subject to public inspection.   History: En. Sec. 12, Ch. 210, L. 2019.  
  33-22-1318 and 33-22-1319 reserved.  
  33-22-1320. Liability of association members. An association member may not be held liable for the acts or omissions of the association board or the association membership.   History: En. Sec. 13, Ch. 210, L. 2019.  
  33-22-1321. State and federal special revenue accounts -- reinsurance program. (1) (a) There is a reinsurance program account in the state special revenue fund established by 17-2-102. The account must be administered by the commissioner for the benefit of the program.   (b) There must be deposited in the account:   (i) all assessments collected under 33-22-1313;   (ii) any interest and income earned on the account; and   (iii) any other money from any other source accepted for the benefit of the account.   (c) The account may be used only to provide funding for the administration, operation, and claims expenses incurred by the program created in 33-22-1302.   (2) There is an account in the federal special revenue fund to the credit of the board and administered by the commissioner for the benefit of the program. There must be deposited in the account:   (a) federal funding allocated as a result of a section 1332 waiver application;   (b) any federal or grant funding; and   (c) any interest and income earned on the account.   History: En. Sec. 14, Ch. 210, L. 2019.  
  33-22-1322. State innovation waiver. The commissioner, the governor, and the board shall jointly apply, no later than July 1, 2019, to the U.S. secretary of health and human services under 42 U.S.C. 18052 for a state innovation waiver and federal pass-through funding to implement this part for benefit years beginning January 1, 2020, and future years to maximize federal funding.   History: En. Sec. 15, Ch. 210, L. 2019.  
  33-22-1501. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 1, Ch. 595, L. 1985; amd. Sec. 15, Ch. 798, L. 1991; amd. Sec. 5, Ch. 357, L. 1995; amd. Sec. 17, Ch. 416, L. 1997; amd. Sec. 1, Ch. 173, L. 1999; amd. Sec. 1, Ch. 453, L. 2003; amd. Sec. 29, Ch. 469, L. 2005; amd. Sec. 1, Ch. 133, L. 2011; amd. Sec. 1, Ch. 404, L. 2013; amd. Sec. 23, Ch. 63, L. 2015.  
  33-22-1502. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 2, Ch. 595, L. 1985; amd. Sec. 2, Ch. 367, L. 2001; amd. Sec. 2, Ch. 453, L. 2003; amd. Sec. 30, Ch. 469, L. 2005; amd. Sec. 2, Ch. 404, L. 2013; amd. Sec. 24, Ch. 63, L. 2015.  
  33-22-1503. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 3, Ch. 595, L. 1985; amd. Sec. 6, Ch. 357, L. 1995; amd. Sec. 2, Ch. 173, L. 1999; amd. Sec. 2, Ch. 528, L. 1999.  
  33-22-1504. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 4, Ch. 595, L. 1985; amd. Sec. 16, Ch. 798, L. 1991; amd. Sec. 7, Ch. 357, L. 1995; amd. Sec. 3, Ch. 173, L. 1999; amd. Sec. 3, Ch. 528, L. 1999; amd. Sec. 2, Ch. 133, L. 2011; amd. Sec. 3, Ch. 404, L. 2013; amd. Sec. 25, Ch. 63, L. 2015.  
  33-22-1505. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 13, Ch. 595, L. 1985.  
  33-22-1506 through 33-22-1510 reserved.  
  33-22-1511. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 5, Ch. 595, L. 1985; amd. Sec. 26, Ch. 798, L. 1991.  
  33-22-1512. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 8, Ch. 595, L. 1985; amd. Sec. 27, Ch. 798, L. 1991; amd. Sec. 8, Ch. 357, L. 1995; amd. Sec. 18, Ch. 416, L. 1997; amd. Sec. 1, Ch. 475, L. 2001; amd. Sec. 41, Ch. 380, L. 2003; amd. Sec. 3, Ch. 133, L. 2011.  
  33-22-1513. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 9, Ch. 595, L. 1985; amd. Sec. 31, Ch. 112, L. 1991; amd. Sec. 17, Ch. 798, L. 1991; amd. Sec. 29, Ch. 349, L. 1993; amd. Sec. 19, Ch. 416, L. 1997; amd. Sec. 4, Ch. 528, L. 1999; amd. Sec. 3, Ch. 367, L. 2001; amd. Sec. 2, Ch. 475, L. 2001; amd. Sec. 42, Ch. 380, L. 2003; amd. Sec. 3, Ch. 453, L. 2003; amd. Sec. 31, Ch. 469, L. 2005; amd. Sec. 26, Ch. 63, L. 2015.  
  33-22-1514. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 10, Ch. 595, L. 1985; amd. Sec. 28, Ch. 798, L. 1991; amd. Sec. 5, Ch. 528, L. 1999; amd. Sec. 32, Ch. 469, L. 2005; amd. Sec. 11, Ch. 120, L. 2013.  
  33-22-1515. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 11, Ch. 595, L. 1985; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 29, Ch. 798, L. 1991; amd. Sec. 9, Ch. 357, L. 1995; amd. Sec. 5, Ch. 173, L. 1999; amd. Sec. 33, Ch. 469, L. 2005.  
  33-22-1516. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 12, Ch. 595, L. 1985; amd. Sec. 30, Ch. 798, L. 1991; amd. Sec. 10, Ch. 357, L. 1995; amd. Sec. 20, Ch. 416, L. 1997; amd. Sec. 6, Ch. 173, L. 1999; amd. Sec. 4, Ch. 453, L. 2003; amd. Sec. 34, Ch. 469, L. 2005.  
  33-22-1517. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 1, Ch. 357, L. 1995; amd. Sec. 35, Ch. 469, L. 2005; amd. Sec. 16, Ch. 399, L. 2007.  
  33-22-1518. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 2, Ch. 357, L. 1995.  
  33-22-1519 and 33-22-1520 reserved.  
  33-22-1521. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 6, Ch. 595, L. 1985; amd. Sec. 31, Ch. 798, L. 1991; amd. Sec. 11, Ch. 357, L. 1995; amd. Sec. 152, Ch. 42, L. 1997; amd. Sec. 7, Ch. 173, L. 1999; amd. Sec. 4, Ch. 367, L. 2001; amd. Sec. 4, Ch. 133, L. 2011.  
  33-22-1522. Repealed. Sec. 34, Ch. 798, L. 1991.   History: En. Sec. 7, Ch. 595, L. 1985.  
  33-22-1523. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 41, Ch. 416, L. 1997.  
  33-22-1524. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 1, Ch. 528, L. 1999; amd. Sec. 5, Ch. 453, L. 2003.  
  33-22-1601. Subrogation rights. A disability insurance policy subject to this chapter may contain a provision providing that, to the extent necessary for reimbursement of benefits paid to or on behalf of the insured, the insurer is entitled to subrogation, as provided for in 33-22-1602, against a judgment or recovery received by the insured from a third party found liable for a wrongful act or omission that caused the injury necessitating benefit payments.   History: En. Sec. 1, Ch. 365, L. 1987.  
  33-22-1602. Notice -- shared costs of third-party action -- limitation. (1) If an insured intends to institute an action for damages against a third party, the insured shall give the insurer reasonable notice of the intention to institute the action.   (2) The insured may request that the insurer pay a proportionate share of the reasonable costs of the third-party action, including attorney fees.   (3) An insurer may elect not to participate in the cost of the action. If an election is made, the insurer waives 50% of any subrogation rights granted to it by 33-22-1601.   (4) The insurer's right of subrogation granted in 33-22-1601 may not be enforced until the injured insured has been fully compensated for the insured's injuries.   History: En. Sec. 3, Ch. 365, L. 1987; amd. Sec. 1232, Ch. 56, L. 2009.  
  33-22-1701. Short title. This part may be cited as the "Preferred Provider Agreements Act".   History: En. Sec. 1, Ch. 638, L. 1987.  
  33-22-1702. Purpose. The purpose of this part is to allow a health care insurer providing disability insurance benefits to negotiate and contract with health care providers to:   (1) provide health care services to its insureds or subscribers at a reduction in the fees customarily charged by the provider; or   (2) enter into agreements in which the participating providers accept negotiated fees as payment in full for health care services the health care insurer is obligated to provide or pay for under the health benefit plan.   History: En. Sec. 2, Ch. 638, L. 1987.  
  33-22-1703. Definitions. As used in this part, the following definitions apply:   (1) "Emergency medical condition" means a condition manifesting itself by symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in any of the following:   (a) the covered person's health would be in serious jeopardy;   (b) the covered person's bodily functions would be seriously impaired; or   (c) a bodily organ or part would be seriously damaged.   (2) "Emergency services" means health care items or services furnished or required to evaluate and treat an emergency medical condition.   (3) "Health benefit plan" means the health insurance policy or subscriber arrangement between the insured or subscriber and the health care insurer that defines the covered services and benefit levels available.   (4) "Health care insurer" means:   (a) an insurer that provides disability insurance as defined in 33-1-207;   (b) a health service corporation as defined in 33-30-101;   (c) a fraternal benefit society as described in 33-7-105; or   (d) any other entity regulated by the commissioner that provides health coverage except a health maintenance organization.   (5) "Health care services" means health care services or products rendered or sold by a provider within the scope of the provider's license or legal authorization or services provided under Title 33, chapter 22, part 7.   (6) "Insured" means an individual entitled to reimbursement for expenses of health care services under a policy or subscriber contract issued or administered by an insurer.   (7) "Preferred provider" means a provider or group of providers who have contracted to provide specified health care services.   (8) "Preferred provider agreement" means a contract between or on behalf of a health care insurer and a preferred provider.   (9) "Provider" means an individual or entity licensed or legally authorized to provide health care services or services covered within Title 33, chapter 22, part 7.   (10) "Subscriber" means a certificate holder or other person on whose behalf the health care insurer is providing or paying for health care coverage.   History: En. Sec. 3, Ch. 638, L. 1987; amd. Sec. 67, Ch. 713, L. 1989; amd. Sec. 40, Ch. 586, L. 1991; amd. Sec. 32, Ch. 451, L. 1993; amd. Sec. 1, Ch. 413, L. 1997.  
  33-22-1704. Preferred provider agreements authorized. (1) Notwithstanding any other provision of law to the contrary, a health care insurer may:   (a) enter into agreements with providers relating to health care services that may be rendered to insureds or subscribers on whose behalf the health care insurer is providing health care coverage, including preferred provider agreements relating to:   (i) the amounts an insured may be charged for services rendered; and   (ii) the amount and manner of payment to the provider; and   (b) issue or administer policies or subscriber contracts in this state that include incentives for the insured to use the services of a provider that has entered into an agreement with the insurer pursuant to subsection (1)(a).   (2) A preferred provider agreement issued or delivered in this state may not unfairly deny health benefits for health care services covered.   (3) A preferred provider agreement entered into or renewed after March 26, 1993, must provide each health care provider with the opportunity to participate on the basis of a competitive bid or offer. For each health care service that an insurer proposes to obtain for its insureds from a preferred provider in the geographic area covered by the proposal, the insurer shall provide all known providers of the health care service in that area with an equal opportunity to submit a competitive bid or offer to become a preferred provider. Except as provided in subsection (5), the insurer shall issue a request for proposals and shall select the lowest cost bid or offer. If only one bid or offer is received, the insurer may enter into a preferred provider agreement with the health care provider.   (4) If a bid or an offer is not received in response to a request for proposals under subsection (3), the insurer may not establish a preferred provider agreement for that service in the geographic area except pursuant to a new request for proposals.   (5) An insurer may reserve the right in its request for proposals to reject bids or offers submitted in response to the request, including the lowest cost bid or offer. A bid or offer must be rejected in the manner established in the request for proposals. An insurer may not enter into a preferred provider agreement for a health care service except pursuant to a request for proposals.   History: En. Sec. 4, Ch. 638, L. 1987; amd. Sec. 1, Ch. 714, L. 1991; amd. Sec. 1, Ch. 202, L. 1993.  
  33-22-1705. Incentives in health benefit plans. (1) A health care insurer may issue a policy or a health benefit plan that provides for incentives for covered persons to use the health care services of preferred providers. The policy or health benefit plan must contain at least:   (a) a provision that if a covered person receives emergency care for services specified in the preferred provider agreement and cannot reasonably reach a preferred provider, the care rendered during the course of the emergency will be reimbursed as though the covered person had been treated by a preferred provider; and   (b) a provision that clearly identifies the difference in benefit levels for health care services of a preferred provider and benefit levels for the same health care services of a nonpreferred provider.   (2) A health care insurer may not require hospital staff privileges as criteria for designation as a preferred provider in a preferred provider agreement.   History: En. Sec. 5, Ch. 638, L. 1987.  
  33-22-1706. Permissible and mandatory provisions in provider agreements, insurance policies, and subscriber contracts. (1) A provider agreement, insurance policy, or subscriber contract issued or delivered in this state may contain components designed to control the cost and improve the quality of health care for insureds and subscribers as provided in this part.   (2) All terms or conditions of an insurance policy or subscriber contract, except those already approved by the commissioner, are subject to the prior approval of the commissioner.   (3) Provisions designed to control cost and improve the quality of health care under this section include but are not limited to those that set a payment difference for reimbursement of a nonpreferred provider as compared to a preferred provider and those designed to give policyholders or subscribers an incentive to choose a particular provider consistent with the other provisions of this part.   (4) (a) A health benefit plan that contains a payment difference provision and that the commissioner has determined to have an adequate provider network is not subject to subsection (4)(b).   (b) A health benefit plan that contains a payment difference provision and has not been determined to have an adequate provider network may not exceed a 25% payment difference in the reimbursement level for a preferred provider, and the commissioner shall review differences between copayments, deductibles, and other cost-sharing arrangements under this subsection (4)(b).   (c) For the purposes of this subsection (4), a provider network is adequate if:   (i) the network includes at least 80% of the licensed individual physicians actively practicing in the state of Montana;   (ii) the network includes at least 80% of the licensed individual nonphysician health care providers actively practicing in the state of Montana; and   (iii) the network includes at least 90% of those facilities licensed and operating as hospitals in the state of Montana.   (5) A health benefit plan or other plan offering prepaid dental services under this part shall offer its insureds the right to obtain dental care from any licensed dental care provider of their choice subject to the same terms and conditions imposed under this section.   History: En. Sec. 6, Ch. 638, L. 1987; amd. Sec. 1, Ch. 265, L. 1989; amd. Sec. 1, Ch. 306, L. 2013.  
  33-22-1707. Rules. The commissioner may adopt rules necessary to implement the provisions of this part.   History: En. Sec. 7, Ch. 638, L. 1987; amd. Sec. 2, Ch. 413, L. 1997.  
  33-22-1801. Short title. This part may be cited as the "Small Employer Health Insurance Availability Act".   History: En. Sec. 22, Ch. 606, L. 1993.  
  33-22-1802. Purpose. (1) This part must be interpreted and construed to effectuate the following express legislative purposes:   (a) to promote the availability of health insurance coverage to small employers regardless of health status or claims experience;   (b) to prevent abusive rating practices;   (c) to require disclosure of rating practices to purchasers;   (d) to establish rules regarding renewability of coverage;   (e) to establish limitations on the use of preexisting condition exclusions;   (f) to provide for the development of basic and standard health benefit plans to be offered to all small employers;   (g) to provide for the establishment of a reinsurance program; and   (h) to improve the overall fairness and efficiency of the small employer health insurance market.   (2) This part is not intended to provide a comprehensive solution to the problem of affordability of health care or health insurance.   History: En. Sec. 23, Ch. 606, L. 1993.  
  33-22-1803. Definitions. As used in this part, the following definitions apply:   (1) "Actuarial certification" means a written statement by a member of the American academy of actuaries or other individual acceptable to the commissioner that a small employer carrier is in compliance with the provisions of 33-22-1809, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans.   (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a specified entity or person.   (3) "Assessable carrier" means all carriers of disability insurance, including excess of loss and stop loss disability insurance.   (4) "Base premium rate" means, for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under the rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage.   (5) "Basic health benefit plan" means a health benefit plan, except a uniform health benefit plan, developed by a small employer carrier, that has a lower benefit value than the small employer carrier's standard benefit plan.   (6) "Benefit value" means a numerical value based on the expected dollar value of benefits payable to an insured under a health benefit plan. The benefit value must be calculated by the small employer carrier using an actuarially based method and must take into account all health care expenses covered by the health benefit plan and all cost-sharing features of the health benefit plan, including deductibles, coinsurance, copayments, and the insured individual's maximum out-of-pocket expenses. The benefit value must apply equally to indemnity-type health benefit plans and to managed care health benefit plans, including health maintenance organization-type plans.   (7) "Bona fide association" means an association that:   (a) has been actively in existence for at least 5 years;   (b) was formed and has been maintained in good faith for purposes other than obtaining insurance;   (c) does not condition membership in the association on a health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee;   (d) makes health insurance coverage offered through the association available to a member regardless of a health status-related factor relating to the member or an individual eligible for coverage through a member; and   (e) does not make health insurance coverage offered through the association available other than in connection with a member of the association.   (8) "Carrier" means any person who provides a health benefit plan in this state subject to state insurance regulation. The term includes but is not limited to an insurance company, a fraternal benefit society, a health service corporation, and a health maintenance organization. For purposes of this part, companies that are affiliated companies or that are eligible to file a consolidated tax return must be treated as one carrier, except that the following may be considered as separate carriers:   (a) an insurance company or health service corporation that is an affiliate of a health maintenance organization located in this state;   (b) a health maintenance organization located in this state that is an affiliate of an insurance company or health service corporation; or   (c) a health maintenance organization that operates only one health maintenance organization in an established geographic service area of this state.   (9) "Case characteristics" means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that gender, claims experience, health status, and duration of coverage are not case characteristics for purposes of this part.   (10) "Class of business" means all or a separate grouping of small employers established pursuant to 33-22-1808.   (11) "Dependent" means:   (a) a spouse;   (b) an unmarried child under 25 years of age:   (i) who is not an employee eligible for coverage under a group health plan offered by the child's employer for which the child's premium contribution amount is no greater than the premium amount for coverage as a dependent under a parent's individual or group health plan;   (ii) who is not a named subscriber, insured, enrollee, or covered individual under any other individual health insurance coverage, group health plan, government plan, church plan, or group health insurance;   (iii) who is not entitled to benefits under 42 U.S.C. 1395, et seq.; and   (iv) for whom the parent has requested coverage;   (c) a child of any age who is disabled and dependent upon the parent as provided in 33-22-506 and 33-30-1003; or   (d) any other individual defined as a dependent in the health benefit plan covering the employee.   (12) (a) "Eligible employee" means an employee who works on a full-time basis with a normal workweek of 30 hours or more, except that at the sole discretion of the employer, the term may include an employee who works on a full-time basis with a normal workweek of between 20 and 40 hours as long as this eligibility criteria is applied uniformly among all of the employer's employees. The term includes a sole proprietor, a partner of a partnership, and an independent contractor if the sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer. The term also includes those persons eligible for coverage under 2-18-704.   (b) The term does not include an employee who works on a part-time, temporary, or substitute basis.   (13) "Established geographic service area" means a geographic area, as approved by the commissioner and based on the carrier's certificate of authority to transact insurance in this state, within which the carrier is authorized to provide coverage.   (14) (a) "Health benefit plan" means any hospital or medical policy or certificate providing for physical and mental health care issued by an insurance company, a fraternal benefit society, or a health service corporation or issued under a health maintenance organization subscriber contract.   (b) The term does not include coverage of excepted benefits, as defined in 33-22-140, if coverage is provided under a separate policy, certificate, or contract of insurance.   (15) "Index rate" means, for each class of business for a rating period for small employers with similar case characteristics, the average of the applicable base premium rate and the corresponding highest premium rate.   (16) "New business premium rate" means, for each class of business for a rating period, the lowest premium rate charged or offered or that could have been charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage.   (17) "Premium" means all money paid by a small employer and eligible employees as a condition of receiving coverage from a small employer carrier, including any fees or other contributions associated with the health benefit plan.   (18) "Rating period" means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect.   (19) "Restricted network provision" means a provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on the use of health care providers that have entered into a contractual arrangement with the carrier pursuant to Title 33, chapter 22, part 17, or Title 33, chapter 31, to provide health care services to covered individuals.   (20) "Small employer" means a person, firm, corporation, partnership, or bona fide association that is actively engaged in business and that, with respect to a calendar year and a plan year, employed at least two but not more than 50 eligible employees during the preceding calendar year and employed at least two employees on the first day of the plan year. In the case of an employer that was not in existence throughout the preceding calendar year, the determination of whether the employer is a small or large employer must be based on the average number of employees reasonably expected to be employed by the employer in the current calendar year. In determining the number of eligible employees, companies are considered one employer if they:   (a) are affiliated companies;   (b) are eligible to file a combined tax return for purposes of state taxation; or   (c) are members of a bona fide association.   (21) "Small employer carrier" means a carrier that offers health benefit plans that cover eligible employees of one or more small employers in this state.   (22) "Standard health benefit plan" means a health benefit plan that is developed by a small employer carrier.   History: En. Sec. 24, Ch. 606, L. 1993; amd. Sec. 1, Ch. 377, L. 1995; amd. Sec. 65, Ch. 379, L. 1995; amd. Sec. 21, Ch. 416, L. 1997; amd. Sec. 1, Ch. 103, L. 1999; amd. Sec. 47, Ch. 472, L. 1999; amd. Sec. 36, Ch. 469, L. 2005; amd. Sec. 6, Ch. 356, L. 2007; amd. Sec. 14, Ch. 227, L. 2011.  
  33-22-1804. Applicability and scope. (1) This part applies to a health benefit plan marketed through a small employer that provides coverage to the employees of a small employer in this state if any of the following conditions are met:   (a) a portion of the premium or benefits is paid by or on behalf of the small employer;   (b) an eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium;   (c) the health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of section 106, 125, or 162 of the Internal Revenue Code, except a plan or program that is funded entirely by contributions from the employees; or   (d) all of the premium is paid by the employee who obtains coverage through the employer's group health benefit plan.   (2) This part does not apply to an individual health benefit plan for which the entire premium is paid by an employee through payroll deduction or other means.   (3) Unless prohibited by a written opinion from a federal agency, by final regulations implementing Public Law 104-191, or by a ruling by a court of competent jurisdiction, this part does not apply to an individual health benefit plan if the eligible employee or dependent is directly or indirectly reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium. However, this part does apply to an individual health benefit plan if the employer making the direct or indirect reimbursement for any portion of the premium has had in place an employer-sponsored group health benefit plan in the 12 months preceding the reimbursement.   History: En. Sec. 25, Ch. 606, L. 1993; amd. Sec. 2, Ch. 377, L. 1995; amd. Sec. 22, Ch. 416, L. 1997; amd. Sec. 1, Ch. 403, L. 1999; amd. Sec. 3, Ch. 349, L. 2013; amd. Sec. 27, Ch. 63, L. 2015.  
  33-22-1805 through 33-22-1807 reserved.  
  33-22-1808. Establishment of classes of business. (1) A small employer carrier may establish a separate class of business only to reflect substantial differences in expected claims experience or administrative costs that are related to the following reasons:   (a) The small employer carrier uses more than one type of system for the marketing and sale of health benefit plans to small employers.   (b) The small employer carrier has acquired a class of business from another small employer carrier.   (c) The small employer carrier provides coverage to one or more association groups that meet the requirements of 33-22-501(2).   (2) A small employer carrier may establish up to nine separate classes of business under subsection (1).   (3) The commissioner shall adopt rules to provide for a period of transition in order for a small employer carrier to come into compliance with subsection (2) in the case of acquisition of an additional class of business from another small employer carrier.   (4) The commissioner may approve the establishment of additional classes of business upon application to the commissioner and a finding by the commissioner that the action would enhance the fairness and efficiency of the small employer health insurance market.   History: En. Sec. 26, Ch. 606, L. 1993.  
  33-22-1809. Restrictions relating to premium rates. (1) Premium rates for health benefit plans under this part are subject to the following provisions:   (a) The index rate for a rating period for any class of business may not exceed the index rate for any other class of business by more than 20%.   (b) For each class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage or the rates that could be charged to the employer under the rating system for that class of business may not vary from the index rate by more than 25% of the index rate.   (c) The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following:   (i) the percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period; in the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate, provided that the change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers;   (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods of less than 1 year, because of the claims experience, health status, or duration of coverage of the employees or dependents of the small employer, as determined from the small employer carrier's rate manual for the class of business; and   (iii) any adjustment because of a change in coverage or a change in the case characteristics of the small employer, as determined from the small employer carrier's rate manual for the class of business.   (d) Adjustments in rates for claims experience, health status, and duration of coverage may not be charged to individual employees or dependents. Any adjustment must be applied uniformly to the rates charged for all employees and dependents of the small employer.   (e) If a small employer carrier uses industry as a case characteristic in establishing premium rates, the rate factor associated with any industry classification may not vary from the average of the rate factors associated with all industry classifications by more than 15%.   (f) A small employer carrier shall:   (i) apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. Rating factors must produce premiums for identical groups that differ only by the amounts attributable to plan design and that do not reflect differences because of the nature of the groups. Differences among base premium rates may not be based in any way on the actual or expected health status or claims experience of the small employer groups that choose or are expected to choose a particular health benefit plan.   (ii) treat all health benefit plans issued or renewed in the same calendar month as having the same rating period.   (g) For the purposes of this subsection (1), a health benefit plan that includes a restricted network provision may not be considered similar coverage to a health benefit plan that does not include a restricted network provision.   (2) A small employer carrier may not transfer a small employer involuntarily into or out of a class of business. A small employer carrier may not offer to transfer a small employer into or out of a class of business unless the offer is made to transfer all small employers in the class of business without regard to case characteristics, claims experience, health status, or duration of coverage since the insurance was issued.   (3) The commissioner may suspend for a specified period the application of subsection (1)(a) for the premium rates applicable to one or more small employers included within a class of business of a small employer carrier for one or more rating periods upon a filing by the small employer carrier and a finding by the commissioner either that the suspension is reasonable in light of the financial condition of the small employer carrier or that the suspension would enhance the fairness and efficiency of the small employer health insurance market.   (4) In connection with the offering for sale of any health benefit plan to a small employer, a small employer carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of each of the following:   (a) the extent to which premium rates for a specified small employer are established or adjusted based upon the actual or expected variation in claims costs or upon the actual or expected variation in health status of the employees of small employers and the employees' dependents;   (b) the provisions of the health benefit plan concerning the small employer carrier's right to change premium rates and the factors, other than claims experience, that affect changes in premium rates;   (c) the provisions relating to renewability of policies and contracts; and   (d) the provisions relating to any preexisting condition.   (5) (a) Each small employer carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.   (b) Each small employer carrier shall file with the commissioner annually, on or before March 15, an actuarial certification certifying that the carrier is in compliance with this part and that the rating methods of the small employer carrier are actuarially sound. The actuarial certification must be in a form and manner and must contain information as specified by the commissioner. A copy of the actuarial certification must be retained by the small employer carrier at its principal place of business.   (c) A small employer carrier shall make the information and documentation described in subsection (5)(a) available to the commissioner upon request. Except in cases of violations of the provisions of this part and except as agreed to by the small employer carrier or as ordered by a court of competent jurisdiction, the information must be considered proprietary and trade secret information and is not subject to disclosure by the commissioner to persons outside of the department.   (6) The commissioner may not require prior approval of the rating methods used by small employer carriers or the premium rates of the health benefit plans offered to small employers.   History: En. Sec. 27, Ch. 606, L. 1993; amd. Sec. 3, Ch. 377, L. 1995; amd. Sec. 9, Ch. 378, L. 1995; amd. Sec. 23, Ch. 416, L. 1997; amd. Sec. 48, Ch. 472, L. 1999; amd. Sec. 30, Ch. 271, L. 2009.  
  33-22-1810. Renewability of coverage. (1) A health benefit plan subject to the provisions of this part is renewable with respect to all eligible employees or their dependents, at the option of the small employer, except in any of the following cases:   (a) nonpayment of the required premium;   (b) fraud or misrepresentation of the small employer or with respect to coverage of individual insureds or their representatives;   (c) noncompliance with the carrier's minimum participation requirements;   (d) noncompliance with the carrier's employer contribution requirements;   (e) repeated misuse of a restricted network provision;   (f) election by the small employer carrier to not renew all of its health benefit plans delivered or issued for delivery to small employers in this state, in which case the small employer carrier shall:   (i) provide advance notice of this decision under this subsection (1)(f) to the commissioner in each state in which it is licensed; and   (ii) at least 180 days prior to the nonrenewal of all small employer health benefit plans by the carrier, provide notice of the decision not to renew coverage to all affected small employers and to the commissioner in each state in which an affected insured individual is known to reside. Notice to the commissioner under this subsection (1)(f) must be provided at least 3 working days prior to the notice to the affected small employers.   (g) the commissioner finds that the continuation of the coverage would:   (i) not be in the best interests of the policyholders or certificate holders; or   (ii) impair the carrier's ability to meet its contractual obligations.   (2) If the commissioner makes a finding under subsection (1)(g), the commissioner shall assist affected small employers in finding replacement coverage.   (3) (a) A small employer carrier that elects not to renew all of its health benefit plans under subsection (1)(f) is prohibited from writing new business in the small employer market in this state for a period of 5 years from the date of notice to the commissioner.   (b) The provisions of 33-22-524(3) apply to a small employer carrier that elects to renew only a portion, but not all, of its small employer health benefit plans.   (4) In the case of a small employer carrier doing business in one established geographic service area of the state, the rules set forth in this section apply only to the carrier's operations in that service area.   History: En. Sec. 28, Ch. 606, L. 1993; amd. Sec. 61, Ch. 227, L. 2001.  
  33-22-1811. Availability of coverage -- required plans. (1) (a) As a condition of transacting business in this state with small employers, each small employer carrier must have approved for issuance to small employer groups at least two health benefit plans.   (b) (i) A small employer carrier shall issue all plans marketed under this part to any eligible small employer that applies for a plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with this part.   (ii) In the case of a small employer carrier that establishes more than one class of business pursuant to 33-22-1808, the small employer carrier shall maintain and offer to eligible small employers all plans marketed under this part in each established class of business. A small employer carrier may apply reasonable criteria in determining whether to accept a small employer into a class of business, provided that:   (A) the criteria are not intended to discourage or prevent acceptance of small employers applying for a health benefit plan;   (B) the criteria are not related to the health status or claims experience of the small employers' employees;   (C) the criteria are applied consistently to all small employers that apply for coverage in that class of business; and   (D) the small employer carrier provides for the acceptance of all eligible small employers into one or more classes of business.   (iii) The provisions of subsection (1)(b)(ii) may not be applied to a class of business into which the small employer carrier is no longer enrolling new small businesses.   (2) (a) A small employer carrier shall, pursuant to 33-1-501, file the basic health benefit plans and the standard health benefit plans to be used by the small employer carrier.   (b) The commissioner may at any time, after providing notice and an opportunity for a hearing to the small employer carrier, disapprove the continued use by a small employer carrier of a basic or standard health benefit plan on the grounds that the plan does not meet the requirements of this part.   (3) Health benefit plans covering small employers must comply with the following provisions:   (a) A health benefit plan may not:   (i) because of a preexisting condition, deny, exclude, or limit benefits for a covered individual for losses incurred more than 12 months following the individual's enrollment date. A health benefit plan may not define a preexisting condition exclusion more restrictively than 33-22-140.   (ii) use a preexisting condition exclusion more restrictive than exclusions allowed under 33-22-514.   (b) A health benefit plan must waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period of time that an individual was previously covered by creditable coverage that provided benefits with respect to those services if the creditable coverage was continuous to a date not more than 63 days prior to the submission of an application for new coverage. A health benefit plan may determine waivers of time periods applicable to preexisting condition exclusions or limitations on the basis of prior coverage of benefits within each of several classes or categories as specified in regulations implementing Public Law 104-191, rather than as provided in this subsection (3)(b). This subsection (3)(b) does not preclude application of any waiting period applicable to all new enrollees under the health benefit plan.   (c) A health benefit plan may exclude coverage for late enrollees for 18 months or for an 18-month preexisting condition exclusion, provided that if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period may not exceed 18 months from the date on which the individual enrolls for coverage under the health benefit plan.   (d) (i) Requirements used by a small employer carrier in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employees and minimum employer contributions, must be applied uniformly among all small employers that have the same number of eligible employees and that apply for coverage or receive coverage from the small employer carrier. For the purpose of meeting minimum participation requirements of groups of four or more, a small employer carrier may not consider employees who, because they are covered under another health plan, waive coverage under the small employer's plan as part of the group of eligible employees. However, a small employer carrier may require at least two eligible employees to participate in a plan.   (ii) A small employer carrier may vary the application of minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group.   (e) (i) If a small employer carrier offers coverage to a small employer, the small employer carrier shall offer coverage to all of the eligible employees of a small employer and their dependents. A small employer carrier may not offer coverage only to certain individuals in a small employer group or only to part of the group, except in the case of late enrollees as provided in subsection (3)(c).   (ii) A small employer carrier may not modify a plan marketed under this part with respect to a small employer or any eligible employee or dependent, through riders, endorsements, or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.   (iii) A small employer carrier shall secure a waiver of coverage from each eligible employee who declines, at the sole discretion of the eligible employee, an offer of coverage under a health benefit plan provided by the small employer. The waiver must be signed by the eligible employee and must certify that the employee was informed of the availability of coverage under the health benefit plan and of the penalties for late enrollment. The waiver may not require the eligible employee to disclose the reasons for declining coverage.   (iv) A small employer carrier may not issue coverage to a small employer if the carrier or a producer for the carrier has evidence that the small employer induced or pressured an eligible employee to decline coverage due to the health status or risk characteristics of the eligible employee or of the dependents of the eligible employee.   (4) (a) A small employer carrier may not be required to offer coverage or accept applications pursuant to subsection (1) in the case of the following:   (i) to an employer whose employees do not work or reside within the small employer carrier's established geographic service area for a network plan, as defined in 33-22-140; or   (ii) within an area where the small employer carrier reasonably anticipates and demonstrates to the satisfaction of the commissioner that it will not have the capacity within its established geographic service area to deliver service adequately to the members of a group because of its obligations to existing group policyholders and enrollees. The small employer carrier may not deny coverage under this subsection unless the small employer carrier acts uniformly without regard to claims experience or health status-related factors of employers, employees, or dependents.   (b) A small employer carrier may not be required to provide coverage to small employers pursuant to subsection (1) for which the commissioner determines that the small employer carrier does not have the financial reserves necessary to underwrite additional coverage and that the small employer carrier has denied coverage of small employers uniformly throughout the state and without regard to the claims experience and health status-related factors of the applicant small employer groups. The small employer carrier exempted from providing coverage under this subsection may not offer coverage to small employer groups in this state for 180 days after the date on which coverage is denied or until the small employer carrier has demonstrated to the commissioner that the small employer carrier has sufficient financial reserves to underwrite additional coverage, whichever is later.   History: En. Sec. 29, Ch. 606, L. 1993; amd. Sec. 4, Ch. 377, L. 1995; amd. Sec. 95, Ch. 379, L. 1995; amd. Sec. 3, Ch. 522, L. 1995; amd. Sec. 24, Ch. 416, L. 1997; amd. Sec. 1, Ch. 87, L. 1999; amd. Sec. 49, Ch. 472, L. 1999; amd. Sec. 17, Ch. 169, L. 2013.  
  33-22-1812. Repealed. Sec. 13, Ch. 377, L. 1995.   History: En. Sec. 31, Ch. 606, L. 1993.  
  33-22-1813. Standards to ensure fair marketing. (1) Each small employer carrier shall actively market health benefit plan coverage, including the basic and standard health benefit plans, to eligible small employers in the state.   (2) (a) Except as provided in subsection (2)(b), a small employer carrier or producer may not directly or indirectly engage in the following activities:   (i) encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status of the employer's employees or the claims experience, industry, occupation, or geographic location of the small employer;   (ii) encouraging or directing small employers to seek coverage from another carrier because of the health status of the employer's employees or the claims experience, industry, occupation, or geographic location of the small employer.   (b) The provisions of subsection (2)(a) do not apply with respect to information provided by a small employer carrier or producer to a small employer regarding the established geographic service area or a restricted network provision of a small employer carrier.   (3) (a) Except as provided in subsection (3)(b), a small employer carrier may not, directly or indirectly, enter into any contract, agreement, or arrangement with a producer that provides for or results in the compensation paid to a producer for the sale of a health benefit plan to be varied because of the health status of the employer's employees or the claims experience, industry, occupation, or geographic location of the small employer.   (b) Subsection (3)(a) does not apply with respect to a compensation arrangement that provides compensation to a producer on the basis of the percentage of a premium, provided that the percentage may not vary because of the health status of the employer's employees or the claims experience, industry, occupation, or geographic area of the small employer.   (4) A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to a producer, if any, for the sale of a basic or standard health benefit plan.   (5) A small employer carrier may not terminate, fail to renew, or limit its contract or agreement of representation with a producer for any reason related to the health status of the employer's employees or the claims experience, industry, occupation, or geographic location of the small employers placed by the producer with the small employer carrier.   (6) A small employer carrier or producer may not induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment.   (7) Denial by a small employer carrier of health insurance coverage for a small employer must be in writing and must state the reason or reasons for the denial.   (8) The commissioner may adopt rules setting forth additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in this state.   (9) (a) A violation of this section by a small employer carrier or a producer is an unfair trade practice under 33-18-102.   (b) If a small employer carrier enters into a contract, agreement, or other arrangement with an administrator who holds a certificate of registration pursuant to 33-17-603 to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the administrator is subject to this section as if the administrator were a small employer carrier.   History: En. Sec. 35, Ch. 606, L. 1993; amd. Sec. 50, Ch. 472, L. 1999.  
  33-22-1814. Restoration of terminated coverage. The commissioner may promulgate rules to require small employer carriers, as a condition of transacting business with small employers in this state after January 1, 1994, to reissue a health benefit plan to any small employer whose health benefit plan has been terminated or not renewed by the carrier after July 1, 1993. The commissioner may prescribe the terms for the reissuance of coverage that the commissioner finds are reasonable and necessary to provide continuity of coverage to small employers.   History: En. Sec. 36, Ch. 606, L. 1993.  
  33-22-1815. Qualifications for voluntary purchasing pool. A voluntary purchasing pool of disability insurance purchasers may be formed solely for the purpose of obtaining disability insurance upon compliance with the following provisions:   (1) It contains at least 51 eligible employees.   (2) It establishes requirements for membership. The voluntary purchasing pool shall accept for membership any small employers and may accept for membership any employers with at least 51 eligible employees that otherwise meet the requirements for membership. However, the voluntary purchasing pool may not exclude any small employers that otherwise meet the requirements for membership on the basis of claim experience, occupation, or health status.   (3) It holds an open enrollment period at least once a year during which new members can join the voluntary purchasing pool.   (4) It offers coverage to eligible employees of member employers and to the employees' dependents. Coverage may not be limited to certain employees of member small employers except as provided in 33-22-1811(3)(c).   (5) It does not assume any risk or form self-insurance plans among its members.   (6) (a) Disability insurance policies, certificates, or contracts offered through the voluntary purchasing pool must rate the entire purchasing pool group as a whole and charge each insured person based on a community rate within the common group, adjusted for case characteristics as permitted by the laws governing group disability insurance.   (b) Rates for voluntary purchasing pool groups must be set pursuant to the provisions of 33-22-1809.   (c) At its discretion, premiums may be paid to the disability insurance policies, certificates, or contracts by the voluntary purchasing pool or by member employers.   (7) A person marketing disability insurance policies, certificates, or contracts for a voluntary purchasing pool must be licensed as an insurance producer.   History: En. Sec. 2, Ch. 375, L. 1995; amd. Sec. 51, Ch. 472, L. 1999; amd. Sec. 1, Ch. 376, L. 2003; amd. Sec. 16, Ch. 595, L. 2005; amd. Sec. 27, Ch. 151, L. 2017.  
  33-22-1816. Commissioner powers and duties -- application for registration -- reporting insolvency. (1) The commissioner shall develop forms for registration of an organization as a voluntary purchasing pool.   (2) An organization seeking to be registered as a voluntary purchasing pool shall make application to the commissioner. The commissioner shall register an organization as a voluntary purchasing pool upon proof of fulfillment of the qualifications provided in 33-22-1815.   (3) Except as provided in subsection (5), on March 1 of each year, the voluntary purchasing pool shall provide a report and financial statement for the previous calendar year to the commissioner so that the commissioner may determine:   (a) whether the operation of the voluntary purchasing pool is fiscally sound;   (b) whether the voluntary purchasing pool is bearing any risk; and   (c) the number of individuals covered.   (4) The annual report of the voluntary purchasing pool must disclose its total administrative cost.   (5) A voluntary purchasing pool may choose to operate on a fiscal year other than on the calendar year. A voluntary purchasing pool that establishes a fiscal year that is other than the calendar year shall provide the report required in subsection (3) to the commissioner within 60 days of the voluntary purchasing pool's fiscal yearend.   History: En. Sec. 3, Ch. 375, L. 1995; amd. Sec. 52, Ch. 472, L. 1999; amd. Sec. 1, Ch. 87, L. 2009; amd. Sec. 28, Ch. 151, L. 2017.  
  33-22-1817. Collection of charges and premiums. (1) All insurance or premiums collected by a voluntary purchasing pool on behalf of or for an insurer and all return premiums received from the insurer are held by the voluntary purchasing pool in a fiduciary capacity. These funds must be remitted immediately to the person entitled to them or must be deposited promptly in a fiduciary bank account established and maintained by the administrator of the voluntary purchasing pool. If deposited charges or premiums are collected on behalf of or for more than one insurer, the voluntary purchasing pool shall either keep or require the bank in which the fiduciary account is maintained to keep records clearly recording the deposits to and withdrawals from the account on behalf of each insurer. The voluntary purchasing pool shall promptly obtain and keep copies of all these records and shall, upon request of an insurer, furnish the insurer with copies of the records pertaining to deposits and withdrawals on behalf of or for the insurer.   (2) The voluntary purchasing pool may not pay a claim by withdrawals from the fiduciary account. Withdrawals from the fiduciary account must be made, as provided in the written agreement between the voluntary purchasing pool and the insurer, for:   (a) remittance to an insurer entitled to the remittance;   (b) deposit in an account maintained in the name of the insurer;   (c) payment to a group policyholder for remittance to the insurer entitled to the payment; or   (d) remittance of return premiums to the person entitled to the premium.   History: En. Sec. 4, Ch. 375, L. 1995.  
  33-22-1818. Repealed. Sec. 3, Ch. 103, L. 1999.   History: En. Sec. 30(1)-(3), Ch. 606, L. 1993; amd. Sec. 7, Ch. 377, L. 1995; amd. Sec. 1, Ch. 15, L. 1997.  
  33-22-1819. Repealed. Sec. 3, Ch. 103, L. 1999.   History: En. Sec. 30(4)-(15), Ch. 606, L. 1993; amd. Sec. 8, Ch. 377, L. 1995; amd. Sec. 66, Ch. 379, L. 1995; amd. Sec. 2, Ch. 15, L. 1997; amd. Sec. 25, Ch. 416, L. 1997; amd. Sec. 35, Ch. 531, L. 1997; amd. Sec. 2, Ch. 103, L. 1999.  
  33-22-1820. Periodic market evaluation -- report. The commissioner may study and report at least every 3 years to the governor or other interested persons on the effectiveness of this part. The report must analyze the effectiveness of this part in promoting rate stability, product availability, and coverage affordability. The report may contain recommendations for actions to improve the overall effectiveness, efficiency, and fairness of the small employer health insurance markets. The report must address whether carriers and producers are fairly and actively marketing or issuing health benefit plans to small employers in fulfillment of the purposes of this part. The report may contain recommendations for market conduct or other regulatory standards or action.   History: En. Sec. 32, Ch. 606, L. 1993; amd. Sec. 9, Ch. 377, L. 1995; amd. Sec. 36, Ch. 531, L. 1997.  
  33-22-1821. Waiver of certain laws. A small employer carrier may exclude any category of licensed health care practitioner and any benefit or coverage for health care services otherwise required by law or rule from a basic health benefit plan delivered or issued for delivery in this state.   History: En. Sec. 33, Ch. 606, L. 1993; amd. Sec. 10, Ch. 377, L. 1995; amd. Sec. 15, Ch. 227, L. 2011.  
  33-22-1822. Administrative procedure. The commissioner shall adopt rules in accordance with the Montana Administrative Procedure Act to implement and administer this part.   History: En. Sec. 34, Ch. 606, L. 1993.  
  33-22-1823 through 33-22-1826 reserved.  
  33-22-1827. Repealed. Sec. 24, Ch. 227, L. 2011.   History: En. Sec. 5, Ch. 377, L. 1995; amd. Sec. 5, Ch. 410, L. 1997; amd. Sec. 26, Ch. 416, L. 1997.  
  33-22-1828. Repealed. Sec. 24, Ch. 227, L. 2011.   History: En. Sec. 6, Ch. 377, L. 1995; amd. Sec. 27, Ch. 416, L. 1997; amd. Sec. 37, Ch. 531, L. 1997.  
  33-22-1901. Scope -- purpose. The provisions of this part apply to all health benefit plans offered to persons who receive health care services in this state. The purpose of this part is to ensure that obstetricians and gynecologists may be participating primary care physicians under health benefit plans offered to patients who receive health care services in this state and that persons covered by health benefit plans have direct access to the services of a participating obstetrician or gynecologist of their choice.   History: En. Sec. 1, Ch. 198, L. 1997.  
  33-22-1902. Definitions. As used in this part, the following definitions apply:   (1) "Covered person" means a policyholder, subscriber, certificate holder, enrollee, or other individual who is participating in a health benefit plan.   (2) "Health benefit plan" means any individual or group plan, policy, certificate, subscriber contract, contract of insurance provided by a managed care plan, preferred provider agreement, or health maintenance organization subscriber contract that is issued, delivered, issued for delivery, or renewed in this state by a health carrier that pays for, purchases, or furnishes health care services to covered persons who receive health care services in this state. For the purposes of this part, a health benefit plan located or domiciled outside of the state of Montana is subject to the provisions of this part if it receives, processes, adjudicates, pays, or denies claims for health care services submitted by or on behalf of covered persons who reside or who receive health care services in the state of Montana.   (3) "Health carrier" means a disability insurer, health care insurer, health maintenance organization, accident and sickness insurer, fraternal benefit society, nonprofit hospital service corporation, health service corporation, health care service plan, preferred provider organization or arrangement, multiple employer welfare arrangement, or any other person, firm, corporation, joint venture, or similar business entity.   (4) "Obstetrician or gynecologist" means a physician who is board-eligible or board-certified by the American board of obstetrics and gynecology.   (5) "Participating obstetrician or gynecologist" means an obstetrician or gynecologist who is employed by or under contract with a health benefit plan.   (6) "Primary care physician" means a physician who has the responsibility for providing initial and primary care to patients, for maintaining the continuity of patient care, and for initiating referrals for specialist care.   History: En. Sec. 2, Ch. 198, L. 1997.  
  33-22-1903. Obstetricians or gynecologists as primary care physicians. (1) Each health benefit plan that provides coverage for primary care or obstetrical or gynecological care must allow obstetricians and gynecologists to participate as primary care physicians. The health carrier that provides the health benefit plan shall contract with a sufficient number of obstetricians and gynecologists to ensure that covered persons have access to the options under this section without unreasonable delay if there are obstetricians or gynecologists practicing in the geographic service areas in which the plan operates who are willing to participate in the plan. An obstetrician or gynecologist may not be required to accept primary care physician status if the obstetrician or gynecologist does not wish to be designated as a primary care physician. A health benefit plan must use the same criteria with regard to credentials and other selection criteria for a participating obstetrician or gynecologist as are applied by the health benefit plan with respect to other physicians who are participating in the health benefit plan. An obstetrician or gynecologist wishing to accept designation as a primary care physician must meet the same criteria with regard to credentials and other selection criteria for a participating primary care physician as other physicians who are participating as primary care physicians in the health benefit plan.   (2) Each health benefit plan must allow a covered person to select any participating obstetrician or gynecologist of the covered person's choice as the covered person's primary care physician.   History: En. Sec. 3, Ch. 198, L. 1997.  
  33-22-1904. Self-referral for obstetrical or gynecological care permitted. (1) A health benefit plan must permit self-referral to any participating obstetrician or gynecologist by a covered person who has not selected a participating obstetrician or gynecologist as the covered person's primary care physician for services covered under the health benefit plan. This self-referral is for the purpose of receiving any obstetrical or gynecological examination or care and primary and preventative obstetrical and gynecological services required as a result of any obstetrical or gynecological examination or condition. This self-referral must be allowed without prior authorization or precertification from the health benefit plan or covered person's primary care physician, but the health benefit plan may require the covered person to notify the plan prior to self-referral.   (2) The services covered by this section may be limited to those services defined by the most recent published recommendations of the American college of obstetricians and gynecologists. The self-referral permitted by this section may be limited to one participating obstetrician or gynecologist for obstetrical care and one participating obstetrician or gynecologist for gynecological care of the covered person's choice annually.   (3) The participating obstetrician or gynecologist and the covered person shall comply with the health benefit plan's coordination and referral policies. The health benefit plan may require the participating obstetrician or gynecologist to whom the covered person self-refers to discuss with the covered person's primary care physician any services or treatment the participating obstetrician or gynecologist recommends for the covered person.   (4) Self-referral under this section may not affect the covered person's coverage under the health benefit plan. It is the intent of this section that a covered person must at all times have direct access to the covered services of the participating obstetrician or gynecologist of the covered person's choice under any health benefit plan.   History: En. Sec. 4, Ch. 198, L. 1997.  
  33-22-1905. Surcharges not allowed. A health benefit plan may not impose a surcharge or additional copayments or deductibles upon a covered person who seeks or receives health care services under 33-22-1903 or 33-22-1904 unless similar surcharges or additional copayments or deductibles are imposed for other types of health care services not described in 33-22-1903 and 33-22-1904.   History: En. Sec. 5, Ch. 198, L. 1997.  
  33-22-1906. Payment of covered services provided by certified advanced practice registered nurses. A health benefit plan may not deny payment for covered services provided to a covered person under 33-22-1903 and 33-22-1904 by a certified advanced practice registered nurse practicing in collaboration with the participating obstetrician or gynecologist. This section may not be construed to expand the definitions of participating obstetrician or gynecologist or primary care physician in 33-22-1902 to include certified advanced practice registered nurses.   History: En. Sec. 6, Ch. 198, L. 1997.  
  33-22-1907. Disclosure. Each health benefit plan shall disclose in all of its plan literature, in clear, accurate language, the covered person's option to seek the care described in this part without preapproval, preauthorization, or referral.   History: En. Sec. 7, Ch. 198, L. 1997.  
  33-22-1908. Enforcement. If the commissioner determines that a health benefit plan does not comply with this part or that a health carrier has not complied with a provision of this part, the commissioner may:   (1) recommend a correction plan that must be followed by the health carrier;   (2) institute corrective action that must be followed by the health carrier;   (3) suspend or revoke the certificate of authority or deny the health carrier's application for a certificate of authority; or   (4) use any of the commissioner's enforcement powers to obtain the health carrier's compliance with this part.   History: En. Sec. 8, Ch. 198, L. 1997.  
  33-22-201. Format and content. An individual policy of disability insurance may not be delivered or issued for delivery to any person in this state unless it otherwise complies with this code and complies with the following:   (1) The entire money and other considerations for the policy must be expressed in the policy.   (2) The time when the insurance takes effect and terminates must be expressed in the policy.   (3) The policy may insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who is the policyholder, any two or more eligible members of that family, including husband, wife, dependent children or any children under a specified age that may not exceed 25 years, and any other person dependent upon the policyholder.   (4) The style, arrangement, and overall appearance of the policy may not give undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers must be plainly printed in lightfaced type of a style in general use, the size of which must be uniform and not less than 10 point with a lowercase, unspaced alphabet length not less than 120 point.   (5) The "text" must include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions.   (6) The exceptions and reductions of indemnity must be set forth in the policy and, other than those contained in 33-22-204 through 33-22-215 and 33-22-221 through 33-22-230, must be printed, at the insurer's option, either included with the benefit provision to which they apply or under an appropriate caption such as "Exceptions" or "Exceptions and Reductions", except that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of the exception or reduction must be included with the benefit provision to which it applies.   (7) The policy may not contain a provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless the portion is set forth in full in the policy, except in the case of the incorporation of or reference to a statement of rates or classification of risks or short-rate table filed with the commissioner.   History: En. Sec. 352, Ch. 286, L. 1959; amd. Sec. 1, Ch. 74, L. 1973; amd. Sec. 1, Ch. 83, L. 1974; R.C.M. 1947, 40-4002(1) thru (3), (5) thru (8); amd. Sec. 1, Ch. 342, L. 1979; amd. Sec. 30, Ch. 451, L. 1993; amd. Sec. 58, Ch. 379, L. 1995; amd. Sec. 3, Ch. 26, L. 2019.  
  33-22-202. Required provisions -- captions -- omissions -- substitutions -- order. (1) Except as provided in subsection (2), each policy delivered or issued for delivery to any person in this state must contain the provisions specified in 33-22-204 through 33-22-215, as those provisions appear. However, the insurer may, at its option, substitute for one or more of the provisions corresponding provisions of different wording approved by the commissioner and not less favorable in any respect to the insured or the beneficiary. Each provision must be preceded by the applicable caption shown or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the commissioner may approve.   (2) If any provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the commissioner, shall omit from the policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of a provision in a manner that makes the provision contained in the policy consistent with the coverage provided by the policy.   (3) The provisions that are the subject of 33-22-204 through 33-22-215, 33-22-221 through 33-22-230, and 33-22-232 or any corresponding provisions used in accordance with the cited sections must be printed in the consecutive order of the provisions in the sections. However, at the option of the insurer, any provision may appear as a unit in any part of the policy with other provisions to which it may be logically related if the resulting policy is not in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.   History: En. Secs. 353, 378, Ch. 286, L. 1959; R.C.M. 1947, 40-4003, 40-4028; amd. Sec. 26, Ch. 198, L. 1979; amd. Sec. 31, Ch. 451, L. 1993; amd. Sec. 59, Ch. 379, L. 1995; amd. Sec. 4, Ch. 26, L. 2019.  
  33-22-203. Requirement of other jurisdictions -- statutes -- violation. (1) Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of parts 1 through 4 of this chapter and which is prescribed or required by the law of the state or country under which the insurer is organized.   (2) Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country.   (3) No policy provision which is not subject to parts 1 through 4 of this chapter shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this chapter.   (4) A policy delivered or issued for delivery to any person in this state in violation of parts 1 through 4 of this chapter shall be held valid but shall be construed as provided in parts 1 through 4 of this chapter. When any provision in a policy subject to parts 1 through 4 of this chapter is in conflict with any provision of parts 1 through 4 of this chapter, the rights, duties, and obligations of the insurer, the insured, and the beneficiary shall be governed by the provisions of parts 1 through 4 of this chapter.   History: En. Secs. 380, 381, Ch. 286, L. 1959; R.C.M. 1947, 40-4030, 40-4031.  
  33-22-204. Entire contract -- changes. There shall be a provision as follows:   "Entire Contract; Changes: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No insurance producer has authority to change this policy or to waive any of its provisions."   History: En. Sec. 354, Ch. 286, L. 1959; R.C.M. 1947, 40-4004; amd. Sec. 1, Ch. 713, L. 1989.  
  33-22-205. Time limit on certain defenses. (1) There shall be a provision as follows:   "Time Limit on Certain Defenses: (1) After 2 years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such 2-year period.   (2) No claim for loss incurred or disability (as defined in the policy) commencing after 2 years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy."   (2) Policy provision (1) of subsection (1) shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial 2-year period or to limit the application of 33-22-222 through 33-22-226 in the event of misstatement with respect to age or occupation or other insurance.   (3) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium until at least age 50 or, in the case of a policy issued after age 44, for at least 5 years from its date of issue, may contain in lieu of policy provision (1) of subsection (1) the following provision (from which the clause in parentheses may be omitted at the insurer's option) under the caption "Incontestable":   "After this policy has been in force for a period of 2 years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application."   History: En. Sec. 355, Ch. 286, L. 1959; R.C.M. 1947, 40-4005; amd. Sec. 21, Ch. 303, L. 1981.  
  33-22-206. Grace period. (1) There must be a provision as follows:   "Grace Period: A grace period of .... (insert a number not less than 7 for weekly premium policies, 10 for monthly premium policies, and 31 for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy must continue in force."   (2) A policy in which the insurer reserves the right to refuse renewal must have, at the beginning of the provision contained in subsection (1):   "Unless not less than 30 days prior to the premium due date the insurer has delivered to the insured or has mailed to the insured's last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted."   History: En. Sec. 356, Ch. 286, L. 1959; R.C.M. 1947, 40-4006; amd. Sec. 1222, Ch. 56, L. 2009.  
  33-22-207. Reinstatement. (1) There shall be a provision as follows:   "Reinstatement: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any insurance producer duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or such insurance producer requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the 45th day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than 10 days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement."   (2) The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums:   (a) until at least age 50; or   (b) in the case of a policy issued after age 44, for at least 5 years from its date of issue.   History: En. Sec. 357, Ch. 286, L. 1959; R.C.M. 1947, 40-4007; amd. Sec. 1, Ch. 713, L. 1989.  
  33-22-208. Notice of claim. (1) A policy must contain a provision as follows:   "Notice of Claim: Written notice of claim must be given to the insurer within 6 months after the occurrence or commencement of any loss covered by the policy or as soon after that date as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at .... (insert the location of the office that the insurer may designate for the purpose) or to any authorized insurance producer of the insurer, with information sufficient to identify the insured, is considered notice to the insurer."   (2) In a policy providing a loss-of-time benefit that may be payable for at least 2 years, an insurer may at its option insert the following between the first and second sentences of the provision in subsection (1):   "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least 2 years, the insured shall, at least once in every 6 months after having given notice of the claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of 6 months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer must be excluded in applying this provision. Delay in giving the notice may not impair the insured's right to any indemnity that would otherwise have accrued during the period of 6 months preceding the date on which the notice is actually given."   History: En. Sec. 358, Ch. 286, L. 1959; amd. Sec. 1, Ch. 189, L. 1974; R.C.M. 1947, 40-4008; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1223, Ch. 56, L. 2009.  
  33-22-209. Claim forms. There shall be a provision as follows:   "Claim Forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within 15 days after the giving of such notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character, and the extent of the loss for which claim is made."   History: En. Sec. 359, Ch. 286, L. 1959; R.C.M. 1947, 40-4009.  
  33-22-210. Proofs of loss. There shall be a provision as follows:   "Proofs of Loss: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the insurer is liable and in case of claim for any other loss within 90 days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than 1 year from the time proof is otherwise required."   History: En. Sec. 360, Ch. 286, L. 1959; R.C.M. 1947, 40-4010.  
  33-22-211. Time of payment of claims. There shall be a provision as follows:  "Time of Payment of Claims: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid pursuant to 33-18-232 upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid.... (insert period for payment which must not be less frequently than monthly), and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof."   History: En. Sec. 361, Ch. 286, L. 1959; R.C.M. 1947, 40-4011; amd. Sec. 5, Ch. 471, L. 2021. 
  33-22-212. Payment of claims. (1) There shall be a provision as follows:   "Payment of Claims: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured."   (2) The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer:   "If any indemnity of this policy shall be payable to the estate of the insured or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $.... (insert an amount which shall not exceed $1,000), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment.   Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person."   History: En. Sec. 362, Ch. 286, L. 1959; R.C.M. 1947, 40-4012.  
  33-22-213. Physical examination and autopsy. There shall be a provision as follows:   "Physical Examinations and Autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law."   History: En. Sec. 363, Ch. 286, L. 1959; R.C.M. 1947, 40-4013.  
  33-22-214. Legal actions. There shall be a provision as follows:   "Legal Actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of 3 years after the written proof of loss is required to be furnished."   History: En. Sec. 364, Ch. 286, L. 1959; R.C.M. 1947, 40-4014.  
  33-22-215. Change of beneficiary. (1) There shall be a provision as follows:   "Change of Beneficiary: Unless the insured makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries or to any other changes in this policy."   (2) The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.   History: En. Sec. 365, Ch. 286, L. 1959; R.C.M. 1947, 40-4015.  
  33-22-216. Repealed. Sec. 36, Ch. 451, L. 1993.   History: En. Sec. 3, Ch. 699, L. 1991.  
  33-22-217 through 33-22-220 reserved.  
  33-22-221. Optional policy provisions -- substitutes. Except as provided in 33-22-202(2), a policy delivered or issued for delivery to a person in this state may not contain provisions related to the matters in 33-22-222 through 33-22-230 unless those provisions use words that are the same as those that appear in the applicable section. However, the insurer may, at its option, use in lieu of a repetitious provision a corresponding provision of different wording approved by the commissioner if the different wording is not less favorable in any respect to the insured or the beneficiary. Any provision contained in the policy must be preceded individually by the appropriate caption or, at the option of the insurer, by the appropriate individual or group captions or subcaptions that the commissioner may approve.   History: En. Sec. 366, Ch. 286, L. 1959; R.C.M. 1947, 40-4016; amd. Sec. 5, Ch. 26, L. 2019.  
  33-22-222. Change of occupation. There may be a provision as follows:   "Change of Occupation: If the insured is injured or contracts sickness after having changed the insured's occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to a classified occupation, the insurer will pay only the portion of the indemnities provided in this policy that the premium paid would have purchased at the rates and within the limits fixed by the insurer for the more hazardous occupation. If the insured changes the insured's occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of the change of occupation, will reduce the premium rate accordingly and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of the proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates must be those that have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued. However, if the filing was not required, then the classification of occupational risk and the premium rates must be those last made effective by the insurer in that state prior to the occurrence of the loss or prior to the date of proof of change in occupation."   History: En. Sec. 367, Ch. 286, L. 1959; R.C.M. 1947, 40-4017; amd. Sec. 1224, Ch. 56, L. 2009.  
  33-22-223. Misstatement of age. There may be a provision as follows:   "Misstatement of Age: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age."   History: En. Sec. 368, Ch. 286, L. 1959; R.C.M. 1947, 40-4018.  
  33-22-224. Other insurance in this insurer. (1) There may be a provision as follows:   "Other Insurance in This Insurer: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured are in force concurrently with this policy, making the aggregate indemnity for .... (insert type of coverage or coverages) in excess of $.... (insert maximum limit of indemnity or indemnities), the excess insurance is void and all premiums paid for the excess must be returned to the insured or to the insured's estate."   (2) Instead of the provision in subsection (1), there may be the following:   "Insurance effective at any one time on the insured under a similar policy or policies in this insurer is limited to the one policy elected by the insured, the insured's beneficiary, or the insured's estate, as appropriate, and the insurer will return all premiums paid for all other policies."   History: En. Sec. 369, Ch. 286, L. 1959; R.C.M. 1947, 40-4019; amd. Sec. 1225, Ch. 56, L. 2009.  
  33-22-225. Insurance with other insurers -- provision of service or expense incurred basis. (1) There may be a provision as follows:   "Insurance with Other Insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the 'like amount' of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage."   (2) If the foregoing policy provision is included in a policy which also contains the policy provision set out in 33-22-226, there shall be added to the caption of the foregoing provision the phrase "--Expense Incurred Benefits". The insurer may, at its option, include in this provision a definition of "other valid coverage", approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada and by hospital or medical service organizations and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as "other valid coverage".   History: En. Sec. 370, Ch. 286, L. 1959; R.C.M. 1947, 40-4020.  
  33-22-226. Insurance with other insurers -- other benefits. (1) There may be a provision as follows:   "Insurance with Other Insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined."   (2) If the foregoing policy provision is included in a policy which also contains the policy provision set out in 33-22-225, there shall be added to the caption of the foregoing provision the phrase "--Other Benefits". The insurer may, at its option, include in this provision a definition of "other valid coverage", approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition such term shall not include group insurance or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as "other valid coverage".   History: En. Sec. 371, Ch. 286, L. 1959; R.C.M. 1947, 40-4021.  
  33-22-227. Relation of earnings to insurance. (1) There may be a provision as follows:   "Relation of Earnings to Insurance: If the total monthly amount of loss-of-time benefits promised for the same loss under all valid loss-of-time coverage upon the insured, whether payable on a weekly or monthly basis, exceeds the monthly earnings of the insured at the time disability commenced or the insured's average monthly earnings for the period of 2 years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for the proportionate amount of benefits under this policy that the amount of the monthly earnings or the average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all coverage upon the insured at the time the disability commences and for the return of the part of the premiums paid during the 2 years that exceed the pro rata amount of the premiums for the benefits actually paid under this policy. However, this may not operate to reduce the total monthly amount of benefits payable under all coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in the coverages, whichever is the lesser, and may not operate to reduce benefits other than those payable for loss of time."   (2) The policy provision in subsection (1) may be inserted only in a policy that the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or, in the case of a policy issued after age 44, for at least 5 years from its date of issue. The insurer may, at its option, include in this provision a definition of "valid loss of time coverage", approved as to form by the commissioner. The definition must be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada or to any other coverage the inclusion of which may be approved by the commissioner or any combination of coverages. In the absence of a definition, the term may not include any coverage provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations.   History: En. Sec. 372, Ch. 286, L. 1959; R.C.M. 1947, 40-4022; amd. Sec. 1226, Ch. 56, L. 2009.  
  33-22-228. Unpaid premiums. There may be a provision as follows:   "Unpaid Premiums: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom."   History: En. Sec. 373; Ch. 286, L. 1959; R.C.M. 1947, 40-4023.  
  33-22-229. Conformity with state statutes. There must be a provision or the equivalent thereto as follows:   "Conformity with Montana statutes: The provisions of this policy conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy."   History: En. Sec. 374, Ch. 286, L. 1959; R.C.M. 1947, 40-4024; amd. Sec. 10, Ch. 518, L. 1983; amd. Sec. 33, Ch. 798, L. 1991.  
  33-22-230. Illegal occupation. There may be a provision as follows:   "Illegal Occupation: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation."   History: En. Sec. 375, Ch. 286, L. 1959; R.C.M. 1947, 40-4025.  
  33-22-231. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 376, Ch. 286, L. 1959; R.C.M. 1947, 40-4026.  
  33-22-232. Renewal at option of insurer. (1) Except as provided in subsection (2), disability insurance policies, other than accident insurance only policies, in which the insurer reserves the right to refuse renewal must provide the statement in a policy provision, an endorsement, or an attached rider. The statement must provide that, subject to the insurer's right to terminate the policy upon nonpayment of premium when due, the right to refuse renewal may not be exercised so as to take effect before the renewal date occurring on or after and nearest each policy anniversary or, in the case of lapse and reinstatement, at the renewal date occurring on or after and nearest each anniversary of the last reinstatement and that any refusal of renewal must be without prejudice to any claim originating while the policy is in force. The reference to lapse and reinstatement may be omitted at the insurer's option.   (2) Policies conforming to this section are subject to the guaranteed renewability provisions of 33-22-247 or 33-22-524.   History: En. Sec. 377, Ch. 286, L. 1959; R.C.M. 1947, 40-4027; amd. Sec. 22, Ch. 303, L. 1981; amd. Sec. 26, Ch. 271, L. 2009.  
  33-22-233 through 33-22-240 reserved.  
  33-22-241. Definitions. As used in 33-22-242 and 33-22-243, unless the context indicates otherwise, the following definitions apply:   (1) "Block of business" means an individual disability insurance policy certificate or contract filed and approved by the commissioner pursuant to 33-1-501 and written and sold by a health care insurer to a defined set of individuals. All individuals covered by the policy or contract are considered to be within the block of business.   (2) "Health care insurer" means a disability insurer, a health service corporation, a health maintenance organization, or a fraternal benefit society.   (3) (a) "Individual health benefit plan" means any hospital or medical expense policy or certificate, subscriber contract, or contract of insurance provided by a prepaid hospital or medical service plan or health maintenance organization subscriber contract and issued for delivery to an individual.   (b) Individual health benefit plan does not include a self-funded group health plan; a self-funded multiemployer group health plan; a group conversion plan; an insured group health plan; accident-only, specified disease, short-term hospital or medical, hospital confinement indemnity, credit, dental, vision, medicare supplement, long-term care, or disability income insurance; coverage issued as a supplement to liability insurance; workers' compensation or similar insurance; or automobile medical payment insurance.   (4) "Qualifying previous coverage" means benefits or coverage provided under:   (a) medicare or medicaid;   (b) group health insurance or a health benefit plan that provides benefits similar to or exceeding benefits provided under the plan being applied for; or   (c) an individual health benefit plan, including coverage issued by a health maintenance organization, a prepaid hospital or medical care plan, or a fraternal benefit society, that provides benefits similar to or exceeding the plan being applied for.   History: En. Sec. 1, Ch. 527, L. 1995.  
  33-22-242. Waiver of preexisting condition exclusion -- exclusion prohibited. (1) A health care insurer shall waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services in an individual health benefit plan for the period of time that an individual was previously covered by qualifying previous coverage that provided benefits with respect to those services, if the qualifying previous coverage was continuous to a date not more than 30 days prior to the date of application for new coverage.   (2) A health care insurer that offers individual health insurance coverage to a federally defined eligible individual may not impose a preexisting condition exclusion with respect to that coverage.   History: En. Sec. 2, Ch. 527, L. 1995; amd. Sec. 7, Ch. 416, L. 1997.  
  33-22-243. Premium increases to be distributed proportionately. (1) A health care insurer may increase the health benefit plan charges for an individual policy, certificate, or contract previously issued by that insurer because of a change in the attained age of the insured. Increases in premium, certificate, or contract charges for individual policies, certificates, or contracts previously issued by that insurer, based on factors other than attained age, must be distributed proportionately across the block of business as defined in 33-22-241.   (2) As used in this section, the following definitions apply:   (a) (i) "Health benefit plan" means a hospital or medical policy or certificate providing for physical and mental health care issued by an insurance company, a fraternal benefit society, or a health service corporation or issued under a health maintenance organization subscriber contract.   (ii) Health benefit plan does not include:   (A) accident-only, credit, dental, vision, specified disease, medicare supplement, long-term care, or disability income insurance;   (B) coverage issued as a supplement to liability insurance, workers' compensation insurance, or similar insurance; or   (C) automobile medical payment insurance.   (b) "Health care insurer" or "insurer" means a disability insurer, a health service corporation, a health maintenance organization, or a fraternal benefit society.   (3) The provisions of Title 33, chapter 1, parts 3 and 7, apply to this section.   History: En. Sec. 3, Ch. 527, L. 1995.  
  33-22-244. Disclosure standards -- individual policy. (1) In order to provide for full and fair disclosure in the sale of disability insurance, an individual disability insurance policy may not be delivered or issued for delivery in this state unless an outline of coverage is filed with and approved by the insurance commissioner in accordance with 33-1-501 and is delivered to the applicant at the time the application is made.   (2) The outline of coverage must include:   (a) a general description of the principal benefits and coverages provided by the policy;   (b) a general description of the insured's financial responsibility under the policy, including, if applicable, the amount of the deductible, the amount or percentage of copayment, and the maximum annual out-of-pocket expenses to be paid by the insured;   (c) a statement of the maximum lifetime benefit available under the policy;   (d) a statement of the estimated periodic premium to be paid by the insured;   (e) a general description of the factors or case characteristics that the insurer may consider in establishing or changing the premiums and, if applicable, in determining the insurability of the applicant;   (f) a description of any preauthorization or other preapproval requirements for medical care;   (g) a prominently displayed statement of the insured's responsibility for payment of billed charges beyond those charges reimbursed by the insurer when the insured uses health care services from a health care provider who is outside a network of health care providers used by the insurer; and   (h) a general description of the trend of premium increases or decreases for comparable policies issued by the insurer during the preceding 5 years, if the trend data is available.   (3) The outline of coverage may include any other information that the insurer considers relevant to the applicant's selection of an appropriate individual disability policy.   (4) An insurer or producer shall provide to an individual, upon request, an outline of coverage for any health benefit product marketed to the general public. The outline of coverage provided under this subsection may exclude the statement of the estimated periodic premium to be paid by the insured.   (5) Prior to issuance of an individual disability insurance policy, written informational materials describing the policy's cancer screening coverages must be provided to a potential applicant. The informational materials are not subject to filing with and approval of the insurance commissioner.   History: En. Sec. 5, Ch. 527, L. 1995; amd. Sec. 2, Ch. 336, L. 2001; amd. Sec. 2, Ch. 463, L. 2007; amd. Sec. 1, Ch. 207, L. 2009.  
  33-22-245. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 8, Ch. 527, L. 1995; amd. Sec. 1, Ch. 504, L. 1997.  
  33-22-246. Preexisting conditions relating to individual market. (1) Except as provided in subsection (2), a health insurance issuer offering individual health insurance coverage may not exclude coverage for a preexisting condition unless:   (a) medical advice, diagnosis, care, or treatment was recommended to or received by the participant or beneficiary within the 3 years preceding the effective date of coverage; and   (b) coverage for the condition is excluded for not more than 12 months.   (2) A health insurance issuer offering health insurance coverage may not impose a preexisting condition exclusion on a federally defined eligible individual because of a preexisting condition.   History: En. Sec. 37, Ch. 416, L. 1997.  
  33-22-247. Guaranteed renewability of individual health insurance coverage. (1) Except as provided in this section, a health insurance issuer that provides individual health insurance coverage to an individual shall renew or continue the coverage in force at the option of the individual.   (2) A health insurance issuer may nonrenew or discontinue health insurance coverage of an individual in the individual market only if:   (a) the individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or if the health insurance issuer has not received timely premium payments;   (b) the individual has performed an act or practice that constitutes fraud or has made an intentional misrepresentation of a material fact under the terms of the coverage;   (c) the health insurance issuer is ceasing to offer coverage in the individual market in accordance with this section and applicable state law;   (d) in the case of a health insurance issuer that offers health insurance coverage in the individual market through a network plan, the individual no longer lives, resides, or works in the service area of the health insurance issuer or in an area for which the health insurance issuer is authorized to do business, but only if the coverage is terminated under this subsection (2)(d) uniformly without regard to any health status-related factor of covered individuals; or   (e) in the case of health insurance coverage that is made available in the individual market only through one or more bona fide associations, as defined in 33-22-1803, the membership of the individual in the bona fide association ceases, but only if the coverage is terminated under this subsection (2)(e) uniformly without regard to any health status-related factor of a covered individual.   (3) A health insurance issuer may not discontinue offering a particular type of individual health insurance coverage offered in the individual market unless in accordance with applicable state law and unless:   (a) the health insurance issuer gives notice to each covered individual provided coverage of this type in the individual market of the discontinuation at least 90 days prior to the date of the discontinuation of the coverage;   (b) the health insurance issuer offers to each individual in the individual market provided coverage of this type the option to purchase any other individual health coverage currently being offered by the health insurance issuer to individuals in the individual market; and   (c) in exercising the option to discontinue coverage of this type and in offering the option of coverage under subsection (3)(b), the health insurance issuer acts uniformly, without regard to the claims experience of individuals or any health status-related factor of individuals who may become eligible for the coverage.   (4) (a) A health insurance issuer may not discontinue offering all health insurance coverage in the individual market unless in accordance with applicable state law and unless:   (i) the health insurance issuer provides notice of discontinuation to the commissioner and each covered individual at least 180 days prior to the date of the discontinuation of coverage; and   (ii) all health insurance issued or delivered for issuance in Montana in the individual market is discontinued and coverage under the health insurance coverage in the individual market is not renewed.   (b) In the case of a discontinuation under subsection (4)(a) in the individual market, the health insurance issuer may not provide for the issuance of any health insurance coverage in the individual market during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not renewed.   (5) A health insurance issuer may modify upon renewal health insurance coverage for a policy form offered to individuals in the individual market if the modification is consistent with applicable state law and effective on a uniform basis among all individuals with that policy form.   (6) In the case of health insurance coverage that is made available by a health insurance issuer in the individual market to individuals only through one or more bona fide associations, references to "individual" under this section include a reference to the bona fide association of which the individual is a member.   History: En. Sec. 38, Ch. 416, L. 1997.  
  33-22-248 through 33-22-260 reserved.  
  33-22-261. Terminated. Sec. 14, Ch. 325, L. 2003.   History: En. Sec. 1, Ch. 325, L. 2003.  
  33-22-262. Terminated. Sec. 14, Ch. 325, L. 2003.   History: En. Sec. 2, Ch. 325, L. 2003; amd. Sec. 1, Ch. 174, L. 2005; amd. Sec. 3, Ch. 463, L. 2007.  
  33-22-263. Terminated. Sec. 14, Ch. 325, L. 2003.   History: En. Sec. 3, Ch. 325, L. 2003.  
  33-22-2001. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 1, Ch. 595, L. 2005; amd. Sec. 38, Ch. 44, L. 2007; amd. Sec. 17, Ch. 399, L. 2007.  
  33-22-2002. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 2, Ch. 595, L. 2005; amd. Sec. 18, Ch. 399, L. 2007; amd. Sec. 16, Ch. 227, L. 2011; amd. Sec. 18, Ch. 169, L. 2013.  
  33-22-2003. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 3, Ch. 595, L. 2005.  
  33-22-2004. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 4, Ch. 595, L. 2005; amd. Sec. 19, Ch. 399, L. 2007; amd. Sec. 2, Ch. 87, L. 2009; amd. Sec. 17, Ch. 227, L. 2011; amd. Sec. 1, Ch. 331, L. 2013.  
  33-22-2005. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 5, Ch. 595, L. 2005.  
  33-22-2006. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 6, Ch. 595, L. 2005; amd. Sec. 3, Ch. 87, L. 2009; amd. Sec. 18, Ch. 227, L. 2011; amd. Sec. 2, Ch. 331, L. 2013.  
  33-22-2007. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 7, Ch. 595, L. 2005; amd. Sec. 4, Ch. 87, L. 2009; amd. Sec. 3, Ch. 331, L. 2013.  
  33-22-2008. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 8, Ch. 595, L. 2005; amd. Sec. 5, Ch. 87, L. 2009; amd. Sec. 19, Ch. 227, L. 2011; amd. Sec. 4, Ch. 331, L. 2013.  
  33-22-2009. Repealed. Sec. 54, Ch. 151, L. 2017.   History: En. Sec. 9, Ch. 595, L. 2005; amd. Sec. 29, Ch. 396, L. 2017.  
  33-22-301. Coverage of newborn under disability policy. (1) Each policy of disability insurance or certificate issued must contain a provision granting immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant of any insured.   (2) The coverage for newborn infants must be the same as provided by the policy for the other covered persons. However, for newborn infants there may not be waiting or elimination periods. A deductible or reduction in benefits applicable to the coverage for newborn infants is not permissible unless it conforms and is consistent with the deductible or reduction in benefits applicable to all other covered persons.   (3) A policy or certificate of insurance may not be issued or amended in this state if it contains any disclaimer, waiver, or other limitation of coverage relative to the accident and sickness coverage or insurability of newborn infants of an insured from and after the moment of birth.   (4) The policy or contract may require notification of the birth of a child and payment of a required premium or subscription fee to be furnished to the insurer or nonprofit or indemnity corporation within 31 days of the birth in order to have the coverage extend beyond 31 days.   History: (1), (2)En. 40-4002.1 by Sec. 2, Ch. 74, L. 1973; amd. Sec. 2, Ch. 83, L. 1974; Sec. 40-4002.1, R.C.M. 1947; (3)En. Sec. 352, Ch. 286, L. 1959; amd. Sec. 1, Ch. 74, L. 1973; amd. Sec. 1, Ch. 83, L. 1974; Sec. 40-4002, R.C.M. 1947; R.C.M. 1947, 40-4002.1, 40-4002(4); (4)En. Sec. 23, Ch. 303, L. 1981; amd. Sec. 4, Ch. 139, L. 1987; amd. Sec. 60, Ch. 379, L. 1995; amd. Sec. 4, Ch. 325, L. 2003; amd. Sec. 25, Ch. 151, L. 2017.  
  33-22-302. Age limits -- effect on coverage. (1) (a) Except as provided in subsection (1)(b), if any disability policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective and if that date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after that date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted.   (b) Policies conforming to subsection (1)(a) are subject to the guaranteed renewability provisions of 33-22-247 or 33-22-524.   (2) In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective or would have ceased prior to the acceptance of the premium or premiums, then the liability of the insurer is limited to the refund, upon request, of all premium or premiums paid for the period not covered by the policy.   History: En. Sec. 382, Ch. 286, L. 1959; R.C.M. 1947, 40-4032; amd. Sec. 27, Ch. 271, L. 2009.  
  33-22-303. Coverage for well-child care. (1) Each medical expense policy of disability insurance or certificate issued under the policy that is delivered, issued for delivery, renewed, extended, or modified in this state by a disability insurer and that provides coverage for a family member of the insured or subscriber must provide coverage for well-child care for children from the moment of birth through 7 years of age. Benefits provided under this coverage are exempt from any deductible provision that may be in force in the policy or certificate issued under the policy.   (2) Coverage for well-child care under subsection (1) must include:   (a) a history, physical examination, developmental assessment, anticipatory guidance, and laboratory tests, according to the schedule of visits adopted under the early and periodic screening, diagnosis, and treatment services program provided for in 53-6-101; and   (b) routine immunizations according to the schedule for immunizations recommended by the immunization practices advisory committee of the U.S. department of health and human services.   (3) Minimum benefits may be limited to one visit payable to one provider for all of the services provided at each visit cited in this section.   (4) This section does not apply to disability income, specified disease, accident-only, medicare supplement, or hospital indemnity policies.   (5) For purposes of this section:   (a) "developmental assessment" and "anticipatory guidance" mean the services described in the Guidelines for Health Supervision II, published by the American academy of pediatrics; and   (b) "well-child care" means the services described in subsection (2) and delivered by a physician or a health care professional supervised by a physician.   (6) When a policy of disability insurance or a certificate issued under the policy provides coverage or benefits to a resident of this state, it is considered to be delivered in this state within the meaning of this section, whether the insurer that issued or delivered the policy or certificate is located inside or outside of this state.   History: En. Sec. 1, Ch. 199, L. 1991; amd. Sec. 61, Ch. 379, L. 1995; amd. Sec. 39, Ch. 380, L. 2003; amd. Sec. 2, Ch. 390, L. 2007.  
  33-22-304. Continuation of coverage for individuals with disabilities -- individual contracts. (1) An individual hospital or medical expense insurance policy or hospital or medical service plan contract delivered or issued for delivery in this state that provides that coverage of a dependent child terminates upon attainment of the limiting age for dependent children specified in the policy or contract must also provide in substance that attainment of the limiting age may not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of intellectual disability or physical disability and chiefly dependent upon the policyholder or subscriber for support and maintenance. Proof of intellectual disability or physical disability and dependency must be furnished to the insurer or hospital or medical service plan corporation by the policyholder or subscriber within 31 days of the child's attainment of the limiting age and subsequently as may be required by the insurer or corporation. Proof may not be required more frequently than annually after the 2-year period following the child's attainment of the limiting age.   (2) Notwithstanding any other exemption or contrary law, the provisions of this section have equal application to hospital or medical expense insurance policies and hospital and medical service plan contracts.   History: (1)En. 40-3738 by Sec. 1, Ch. 298, L. 1971; Sec. 40-3738, R.C.M. 1947; (2)En. Sec. 2, Ch. 298, L. 1971; Sec. 40-3740, R.C.M. 1947; R.C.M. 1947, 40-3738, 40-3740; amd. Sec. 22, Ch. 472, L. 1997; amd. Sec. 2, Ch. 68, L. 2013.  
  33-22-305. Short title. Sections 33-22-305 through 33-22-311 may be cited as the "Individual Family Disability Insurance Continuity of Coverage Act".   History: En. Sec. 1, Ch. 245, L. 1981.  
  33-22-306. Purpose. The purpose of 33-22-305 through 33-22-311 is to provide for the right of covered family members under individual family disability insurance policies to continuity of coverage upon the death of the named insured, the divorce, annulment of marriage, or legal separation of the spouse from the named insured, or any other condition specifically stated in such disability insurance policies under which coverage would otherwise terminate as to the covered spouse or covered dependent children of the named insured.   History: En. Sec. 2, Ch. 245, L. 1981.  
  33-22-307. Continuity of coverage. (1) Subject to the requirements of 33-22-305 through 33-22-311 and on the date specified in the policy under which coverage otherwise terminates because of the death of the named insured or for any other reason specified in 33-22-306, as to covered family members, other than for nonpayment of premium, nonrenewal of the policy, or the expiration of the term for which the policy is issued, a covered person, other than one eligible for medicare or any other similar federal or state disability insurance program, including the spouse and any covered dependent child of the last-named insured or the representative of the child, has the right to continuation of coverage under provisions that, at the option of the carrier, are consistent with:   (a) the continuation of the policy, with the person exercising the right of continuation designated as the named insured;   (b) the issuance of a converted policy with the person exercising the conversion right designated as the named insured; or   (c) both (1)(a) and (1)(b).   (2) When continuation of coverage or conversion is made in the name of the spouse of the named insured, the coverage may, at the option of the spouse, include covered dependent children for whom the spouse has the responsibility for care and support.   History: En. Sec. 3, Ch. 245, L. 1981; amd. Sec. 43, Ch. 472, L. 1999.  
  33-22-308. Form of coverage -- requirements -- evidence of insurability -- preexisting conditions. (1) Coverage continued through the issuance of a converted policy shall consist of the form of coverage then being offered by the carrier as a conversion policy in the jurisdiction where the person exercising the conversion right resides that most nearly approximates the coverage of the policy from which conversion is exercised. Continued and converted coverages, other than those provided through the exercise of continuation or conversion rights contained in optionally renewable or limited right of renewal contracts, must contain:   (a) provisions allowing the person exercising the continuation or conversion the right to renew the coverage until the attainment of the age of eligibility for medicare or any other similar federal or state disability insurance program, subject to the right of the carrier to nonrenew all such policies in this state as a class; or   (b) other renewal provisions that are not less favorable to the insured than those contained in the policy from which conversion is exercised.   (2) Coverage provided through continuation or conversion may not require additional evidence of insurability except as to overinsurance and may not impose any preexisting condition limitations or other contractual time limitations other than those remaining unexpired under the policy or contract from which continuation or conversion is exercised.   History: En. Sec. 4, Ch. 245, L. 1981.  
  33-22-309. Notice. The eligible covered family member exercising the continuation or conversion right must notify the carrier and make payment of the applicable premium within 31 days following the date such coverage otherwise terminates as specified in the policy or contract from which continuation or conversion is being exercised.   History: En. Sec. 5, Ch. 245, L. 1981.  
  33-22-310. Nonduplication. Benefits otherwise payable under a converted policy may be reduced:   (1) so they are not, during the first policy year of the converted policy, in excess of those benefits that would have been payable had the coverage under the policy from which conversion is exercised not terminated; and   (2) by the amount of benefits, if any, payable as to the same loss under the policy from which conversion is exercised.   History: En. Sec. 6, Ch. 245, L. 1981.  
  33-22-311. Overinsurance. The carrier is not required to issue a converted policy if at the time of application the applicant:   (1) (a) has coverage under other disability insurance policies, health service corporation contracts, or self-insured health benefit plans providing similar benefits;   (b) is eligible for coverage under a group policy or contract providing similar benefits;   (c) is provided with similar benefits required by any statute; or   (d) is covered under any national, state, or governmental plan; and   (2) has coverage under subsection (1) that, together with the converted policy, would result in overinsurance according to the carrier's underwriting standards.   History: En. Sec. 7, Ch. 245, L. 1981.  
  33-22-401. Repealed. Sec. 1, Ch. 143, L. 2009.   History: En. Sec. 383, Ch. 286, L. 1959; R.C.M. 1947, 40-4033.  
  33-22-501. Group disability insurance defined -- eligible groups. Group disability insurance is that form of disability insurance covering groups of persons as defined in this section, with or without one or more members of their families or one or more of their dependents, or covering one or more members of the families or one or more dependents of the groups of persons and issued upon the following bases:   (1) under a policy issued to an employer or trustees of a fund established by an employer, who must be considered the policyholder, insuring employees of the employer for the benefit of persons other than the employer. The term "employees" as used in this subsection includes the officers, managers, and employees of the employer, the individual proprietor or partner if the employer is an individual proprietor or partnership, the officers, managers, and employees of subsidiary or affiliated corporations, the individual proprietors, partners, and employees of individuals and firms, if the business of the employer and the individual or firm is under common control through stock ownership, contract, or otherwise. The term "employees" as used in this subsection may include retired employees. A policy issued to insure employees of a public body may provide that the term "employees" includes elected or appointed officials. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with the trusteeship.   (2) under a policy issued to an association, including a labor union, that has been organized and is maintained in good faith for purposes other than that of obtaining insurance or of insuring members, employees, or employees of members of the association for the benefit of persons other than the association or its officers or trustees. The term "employees" as used in this subsection may include retired employees.   (3) under a policy issued to the trustees of a fund established by two or more employers in the same or related industry or by one or more labor unions or by one or more employers and one or more labor unions or by an association as defined in subsection (2), in which the trustees are considered the policyholder, to insure employees of the employers or members of the unions or of the association or employees of members of the association for the benefit of persons other than the employers or the unions or the association. The term "employees" as used in this subsection may include the officers, managers, and employees of the employer and the individual proprietor or partners if the employer is an individual proprietor or partnership. The term "employees" as used in this subsection may include retired employees. The policy may provide that the term "employees" includes the trustees or their employees, or both, if their duties are principally connected with the trusteeship.   (4) under a policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state to insure any class or classes of individuals that could be insured under a group life policy;   (5) under a policy issued to a voluntary purchasing pool or to the member employers of a voluntary purchasing pool that is formed solely for the purpose of obtaining insurance as provided in 33-22-1815;   (6) under a policy issued to cover any other substantially similar group that, in the discretion of the commissioner, may be subject to the issuance of a group disability policy or contract.   History: En. Sec. 385, Ch. 286, L. 1959; amd. Sec. 3, Ch. 74, L. 1973; amd. Sec. 3, Ch. 83, L. 1974; R.C.M. 1947, 40-4101(intro.), (1) thru (5); amd. Sec. 1, Ch. 375, L. 1995.  
  33-22-502. Required provisions of group policies. Each group disability insurance policy delivered or issued for delivery in this state must contain in substance the following provisions:   (1) a provision that, in the absence of fraud, all statements made by applicants or the policyholder or by an insured person must be considered representations and not warranties and that a statement made for the purpose of effecting insurance may not avoid the insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to the policyholder or to the insured person or the insured person's beneficiary;   (2) a provision that the insurer will furnish to the policyholder for delivery to each employee or member of the insured group a statement in summary form of the essential features of the insurance coverage of the employee or member and to whom benefits are payable. If dependents are included in the coverage, only one certificate is required to be issued for each family unit.   (3) a provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy;   (4) a provision or the equivalent that reads:   "Conformity with Montana statutes. The provisions of this policy conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy."   History: En. Sec. 386, Ch. 286, L. 1959; amd. Sec. 4, Ch. 74, L. 1973; amd. Sec. 4, Ch. 83, L. 1974; R.C.M. 1947, 40-4102(part); amd. Sec. 11, Ch. 798, L. 1991; amd. Sec. 1227, Ch. 56, L. 2009.  
  33-22-503. Continuation of benefits to dependents. Any group disability policy which contains provisions for the payment by the insurer of benefits for expenses incurred on account of hospital, nursing, medical, or surgical services for members of the family or dependents of a person in the insured group may provide for the continuation of such benefit provisions, or any part or parts thereof, after the death of the person in the insured group.   History: En. Sec. 385, Ch. 286, L. 1959; amd. Sec. 3, Ch. 74, L. 1973; amd. Sec. 3, Ch. 83, L. 1974; R.C.M. 1947, 40-4101(6).  
  33-22-504. Newborn infant coverage. (1) A group disability policy or certificate of insurance delivered or issued for delivery in this state may not be issued or amended in this state if it contains any disclaimer, waiver, preexisting condition exclusion, or other limitation of coverage relative to the accident and sickness coverage or insurability of newborn infants of persons covered under the policy from and after the moment of birth.   (2) A policy or certificate subject to this section, must contain a provision granting immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant of any person covered under the policy.   (3) The coverage for newborn infants must be the same as provided by the policy for other covered persons. However, for newborn infants there may not be waiting or elimination periods. A deductible or reduction in benefits applicable to the coverage for newborn infants is not permissible unless it conforms and is consistent with the deductible or reduction in benefits applicable to all other covered persons.   (4) This section does not apply to medicare supplement policies issued by reason of age.   (5) When a group disability policy or certificate issued under the policy provides for coverage or benefits for a resident of this state, the policy or certificate is considered delivered in this state within the meaning of this section regardless of whether the insurer issuing the policy or certificate is located in this state.   (6) The policy or certificate may require notification of the birth of a child and payment of a required premium or subscription fee to be furnished to the insurer or nonprofit or indemnity corporation within 31 days of the birth in order to have the coverage extend beyond 31 days.   History: En. Secs. 385, 386, Ch. 286, L. 1959; amd. Secs. 3, 4, Ch. 74, L. 1973; amd. Secs. 3, 4, Ch. 83, L. 1974; R.C.M. 1947, 40-4101(7), 40-4102(part); amd. Sec. 1, Ch. 384, L. 1987; amd. Sec. 62, Ch. 379, L. 1995; amd. Sec. 8, Ch. 416, L. 1997.  
  33-22-505. Direct payment of hospital and medical services. Any group disability policy may on request by the group policyholder provide that all or any portion of any indemnities provided by any such policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering such services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid.   History: En. Sec. 387, Ch. 286, L. 1959; R.C.M. 1947, 40-4103.  
  33-22-506. Continuation of coverage for persons with disabilities -- group contracts. (1) A group hospital or medical expense insurance policy or hospital or medical service plan contract delivered or issued for delivery in this state that provides that coverage of a dependent child of an employee or other member of the covered group terminates upon attainment of the limiting age for dependent children specified in the policy or contract must also provide in substance that attainment of the limiting age may not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of intellectual disability or physical disability and chiefly dependent upon the employee or member for support and maintenance. Proof of intellectual disability or physical disability and dependency must be furnished to the insurer or hospital or medical service plan corporation by the employee or member within 31 days of the child's attainment of the limiting age and subsequently as may be required by the insurer or corporation. Proof may not be required more frequently than annually after the 2-year period following the child's attainment of the limiting age.   (2) Notwithstanding any other exemption or contrary law, the provisions of this section have equal application to hospital or medical expense insurance policies and hospital and medical service plan contracts.   History: (1)En. 40-3739 by Sec. 1, Ch. 298, L. 1971; Sec. 40-3739, R.C.M. 1947; (2)En. Sec. 2, Ch. 298, L. 1971; Sec. 40-3740, R.C.M. 1947; R.C.M. 1947, 40-3739, 40-3740; amd. Sec. 23, Ch. 472, L. 1997; amd. Sec. 3, Ch. 68, L. 2013.  
  33-22-507. Continuing group coverage after reduction of work schedule. A person covered by a group disability insurance policy issued or renewed after October 1, 1981, under 33-22-501(1) may, for a period of 1 year, with the consent of the employer or the trustees, continue coverage under group disability policy during the person's employment notwithstanding any reduction of the person's regular work schedule to less than the minimum time required to qualify for membership in the group, and the premium charged the person must be equal to that charged other members of the group of the same risk class.   History: En. Sec. 3, Ch. 579, L. 1981; amd. Sec. 1228, Ch. 56, L. 2009.  
  33-22-508. Conversion on termination of eligibility. (1) A group disability insurance policy or certificate of insurance must contain a provision that if the insurance or any portion of the insurance on a person or the person's dependents or family members covered under the policy ceases because of termination of the person's membership in a group eligible for coverage under the policy, because of termination of the person's employment, as a result of a person's employer discontinuing the employer's business, or as a result of a person's employer discontinuing the group disability insurance policy and not providing for any other group disability insurance or plan and if the person had been insured for a period of 3 months and is not insured under another major medical disability insurance policy or plan, the person is entitled to have issued to the person by the insurer, without evidence of insurability, group disability coverage or an individual disability policy or, in the absence of an individual disability policy issued by the insurer, a group disability policy issued by the insurer on the person or on the person's dependents or family members if application for the individual policy is made and the first premium tendered to the insurer within 31 days after the termination of the group coverage.   (2) A group insurer may meet the requirements of this section by contracting with another insurer to issue conversion policies as described in subsections (5) and (6). The conversion carrier must be authorized to act as an insurer in this state, and the commissioner shall approve the conversion policies pursuant to 33-1-501.   (3) The individual policy or group policy, at the option of the insured, may be on any form then customarily issued by the insurer to individual or group policyholders, with the exception of a policy the eligibility for which is determined by affiliation other than by employment with a common entity. In addition, the insurer or conversion carrier shall make available a conversion policy as required by subsection (6).   (4) The premium for the individual policy or group policy must be at no more than 200% of the insurer's customary rate applicable to the group policy being terminated at the time of the conversion. If the person entitled to conversion under this section has been insured for more than 3 years, the premium may not be more than 150% of the customary rate of the policy being terminated at the time of the conversion. The customary rate is that rate that is normally issued for medically underwritten policies without discount for healthy lifestyles.   (5) A conversion carrier shall offer an individual or group conversion policy that provides the same schedule of benefits and covers the same eligible expenses as those being terminated. The premium for the policy must be calculated as described in subsection (4).   (6) The insurer or conversion carrier shall also make available a conversion policy, certificate, or membership contract that provides at least the level of benefits provided by the insurer's lowest cost basic health benefit plan, as defined in 33-22-1803. The conversion rate may not exceed 150% of the highest rate charged for that plan. This subsection does not apply to disability plans that provide only excepted benefits as defined in 33-22-140.   (7) The effective date and time of the conversion policy must be established to ensure that there is no break in coverage between the termination of the group policy coverage and the inception of the conversion policy.   History: En. Sec. 4, Ch. 579, L. 1981; amd. Sec. 2, Ch. 384, L. 1987; amd. Sec. 1, Ch. 200, L. 1991; amd. Sec. 9, Ch. 699, L. 1991; amd. Sec. 63, Ch. 379, L. 1995; amd. Sec. 11, Ch. 527, L. 1995; amd. Sec. 30, Ch. 531, L. 1997; amd. Sec. 1, Ch. 228, L. 1999; amd. Sec. 54, Ch. 227, L. 2001; amd. Sec. 28, Ch. 469, L. 2005; amd. Sec. 13, Ch. 227, L. 2011.  
  33-22-509. Preexisting conditions. The converted policy may not exclude, as a preexisting condition, any conditions covered by the group contract, including pregnancy of the insured or the insured's spouse or dependents covered by the group contract at the time of conversion.   History: En. Sec. 7, Ch. 579, L. 1981; amd. Sec. 3, Ch. 384, L. 1987.  
  33-22-510. Insured's family -- conversion entitlement. Subject to the conditions set forth in this section, the conversion privilege is also available:   (1) to the surviving spouse, if any, at the death of the employee or member, with respect to the spouse and children whose coverage under the group policy terminates by reason of the death, otherwise to each surviving child whose coverage under the group policy terminates by reason of the death, or if the group policy provides for continuation of dependent's coverage following the employee's or member's death, at the end of the continuation;   (2) to the spouse of the employee or member upon termination of coverage of the spouse, by reason of ceasing to be a qualified family member under the group policy, while the employee or member remains under the group policy, including children whose coverage under the group policy terminates at the same time; or   (3) to a child solely with respect to the child upon termination of child's coverage by reason of ceasing to be a qualified family member under the group policy if a conversion privilege is not otherwise provided in this section with respect to the termination.   History: En. Sec. 8, Ch. 579, L. 1981; amd. Sec. 1229, Ch. 56, L. 2009.  
  33-22-511. Applicability. Notwithstanding any provision of Title 33 or other law to the contrary, it shall be lawful for an insurer and insured to agree to any terms in an insurance contract that provides more favorable terms for the benefit of the insured than authorized in Title 33 or other provisions of law.   History: En. Sec. 9, Ch. 579, L. 1981.  
  33-22-512. Coverage for well-child care. (1) Each group disability policy or certificate of insurance that is delivered, issued for delivery, renewed, extended, or modified in this state by a disability insurer and that provides coverage for a family member of the insured or subscriber must provide coverage for well-child care for children from the moment of birth through 7 years of age. Benefits provided under this coverage are exempt from any deductible provision that may be in force in the policy or certificate issued under the policy.   (2) Coverage for well-child care under subsection (1) must include:   (a) a history, physical examination, developmental assessment, anticipatory guidance, and laboratory tests, according to the schedule of visits adopted under the early and periodic screening, diagnosis, and treatment services program provided for in 53-6-101; and   (b) routine immunizations according to the schedule for immunizations recommended by the immunization practices advisory committee of the U.S. department of health and human services.   (3) Minimum benefits may be limited to one visit payable to one provider for all of the services provided at each visit cited in this section.   (4) This section does not apply to disability income, specified disease, accident-only, medicare supplement, or hospital indemnity policies or certificates.   (5) For purposes of this section:   (a) "developmental assessment" and "anticipatory guidance" mean the services described in the Guidelines for Health Supervision II, published by the American academy of pediatrics; and   (b) "well-child care" means the services described in subsection (2) and delivered by a physician or a health care professional supervised by a physician.   (6) When a group disability policy or certificate of insurance issued under the policy provides coverage or benefits to a resident of this state, it is considered to be delivered in this state within the meaning of this section, whether the insurer that issued or delivered the policy or certificate is located inside or outside of this state.   History: En. Sec. 2, Ch. 199, L. 1991; amd. Sec. 40, Ch. 380, L. 2003; amd. Sec. 3, Ch. 390, L. 2007.  
  33-22-513. Limitation of eligibility on conversion. An individual who purchases a policy of insurance under 33-22-508 ceases to be eligible for a conversion policy if the individual insured by the policy:   (1) fails to pay the premium on the policy purchased under 33-22-508; or   (2) enrolls under another major medical disability insurance policy or plan, except that the individual may maintain the conversion policy during any waiting period established under any new disability insurance policy or plan that the insured individual purchases.   History: En. Sec. 3, Ch. 200, L. 1991; amd. Sec. 15, Ch. 399, L. 2007.  
  33-22-514. Preexisting conditions relating to group market. (1) A group health plan or a health insurance issuer offering group health insurance coverage may not exclude coverage for a preexisting condition unless:   (a) medical advice, diagnosis, care, or treatment was recommended or received by the participant or beneficiary within the 6-month period ending on the enrollment date;   (b) exclusion of coverage extends for a period of not more than 12 months or 18 months in the case of a late enrollee; and   (c) the period of the preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.   (2) Genetic information may not be excluded as a preexisting condition in the absence of a diagnosis of the condition related to the genetic information.   (3) Pregnancy may not be excluded as a preexisting condition.   History: En. Sec. 39, Ch. 416, L. 1997; amd. Sec. 44, Ch. 472, L. 1999.  
  33-22-515. Coverage of autism spectrum disorders. (1) Each group disability policy, certificate of insurance, or membership contract that is delivered, issued for delivery, renewed, extended, or modified in this state must provide coverage for diagnosis and treatment of autism spectrum disorders for a covered child 18 years of age or younger.   (2) Coverage under this section must be provided to a child who is diagnosed with one of the following disorders as defined by the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders:   (a) autistic disorder;   (b) Asperger's disorder; or   (c) pervasive developmental disorder not otherwise specified.   (3) (a) Coverage under this section must include:   (i) habilitative or rehabilitative care that is prescribed, provided, or ordered by a licensed physician or licensed psychologist, including but not limited to professional, counseling, and guidance services and treatment programs that are medically necessary to develop and restore, to the maximum extent practicable, the functioning of the covered child;   (ii) medications prescribed by a physician licensed under Title 37, chapter 3;   (iii) psychiatric or psychological care; and   (iv) therapeutic care that is provided by a speech-language pathologist, audiologist, occupational therapist, or physical therapist licensed in this state.   (b) (i) Habilitative and rehabilitative care includes medically necessary interactive therapies derived from evidence-based research, including applied behavior analysis, which is also known as Lovaas therapy, discrete trial training, pivotal response training, intensive intervention programs, and early intensive behavioral intervention.   (ii) Applied behavior analysis covered under this section must be provided by an individual who is licensed by the behavior analyst certification board or is certified by the department of public health and human services as a family support specialist with an autism endorsement.   (4) (a) Coverage for treatment of autism spectrum disorders under this section may be limited to a maximum benefit of:   (i) $50,000 a year for a child 8 years of age or younger; and   (ii) $20,000 a year for a child 9 years of age through 18 years of age.   (b) Benefits provided under this section may not be construed as limiting physical health benefits that are otherwise available to the covered child.   (5) (a) Coverage under this section may be subject to deductibles, coinsurance, and copayment provisions.   (b) Special deductible, coinsurance, copayment, or other limitations that are not generally applicable to other medical care covered under the plan may not be imposed on the coverage for autism spectrum disorders provided for under this section.   (6) When treatment is expected to require continued services, the insurer may request that the treating physician provide a treatment plan consisting of diagnosis, proposed treatment by type and frequency, the anticipated duration of treatment, the anticipated outcomes stated as goals, and the reasons the treatment is medically necessary. The treatment plan must be based on evidence-based screening criteria. The insurer may ask that the treatment plan be updated every 6 months.   (7) As used in this section, "medically necessary" means any care, treatment, intervention, service, or item that is prescribed, provided, or ordered by a physician or psychologist licensed in this state and that will or is reasonably expected to:   (a) prevent the onset of an illness, condition, injury, or disability;   (b) reduce or improve the physical, mental, or developmental effects of an illness, condition, injury, or disability; or   (c) assist in achieving maximum functional capacity in performing daily activities, taking into account both the functional capacity of the recipient and the functional capacities that are appropriate for a child of the same age.   (8) This section applies to the state employee group insurance program, the university system employee group insurance program, any employee group insurance program of a city, town, school district, or other political subdivision of this state, and any self-funded multiple employer welfare arrangement that is not regulated by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.   (9) This section does not apply to disability income, hospital indemnity, medicare supplement, accident-only, vision, dental, specific disease, or long-term care policies.   History: En. Sec. 1, Ch. 359, L. 2009.  
  33-22-516 through 33-22-520 reserved.  
  33-22-521. Disclosure standards -- group policy. (1) In order to provide for full and fair disclosure in the sale of disability insurance, a group disability insurance policy may not be delivered or issued for delivery in this state unless an outline of coverage is filed with and approved by the insurance commissioner in accordance with 33-1-501 and is delivered to the applicant at the time the application is made.   (2) The outline of coverage must include:   (a) a general description of the principal benefits and coverages provided by the policy;   (b) a general description of the insured's financial responsibility under the policy, including, if applicable, the amount of the deductible, the amount or percentage of copayment, and the maximum annual out-of-pocket expenses to be paid by the insured;   (c) a statement of the maximum lifetime benefit available under the policy;   (d) a statement of the estimated periodic premium to be paid by the insured;   (e) a general description of the factors or case characteristics that the insurer may consider in establishing or changing the premiums and, if applicable, in determining the insurability of the applicant;   (f) a description of any preauthorization or other preapproval requirements for medical care;   (g) a prominently displayed statement of the insured's responsibility for payment of billed charges beyond those charges reimbursed by the insurer when the insured uses health care services from a health care provider who is outside a network of health care providers used by the insurer; and   (h) a general description of the trend of premium increases or decreases for comparable policies issued by the insurer during the preceding 5 years, if the trend data is available.   (3) If applicable, the outline of coverage must disclose that the policy does not contain coverage for mental illness or chemical dependency.   (4) The outline of coverage may include any other information that the insurer considers relevant to the applicant's selection of an appropriate group disability policy.   (5) An insurer or producer shall provide to an individual, upon request, an outline of coverage for any health benefit product marketed to the general public. The outline of coverage provided under this subsection may exclude the statement of the estimated periodic premium to be paid by the insured.   (6) An outline of coverage must also be sent to an employee when an employee is sent a certificate of insurance.   (7) Prior to issuance of a group disability insurance policy, written informational materials describing the policy's cancer screening coverages must be provided to a prospective applicant. The informational materials are not subject to filing with and approval of the insurance commissioner.   History: En. Sec. 6, Ch. 527, L. 1995; amd. Sec. 3, Ch. 336, L. 2001; amd. Sec. 4, Ch. 463, L. 2007; amd. Sec. 2, Ch. 207, L. 2009.  
  33-22-522. Repealed. Sec. 22, Ch. 169, L. 2013.   History: En. Sec. 9, Ch. 527, L. 1995; amd. Sec. 2, Ch. 504, L. 1997.  
  33-22-523. Special enrollment periods. (1) A group health plan and a health insurance issuer offering group health insurance coverage in connection with a group health plan shall permit an employee or a dependent of an employee who is eligible, but not enrolled, for coverage under the terms of the group health plan to enroll for coverage under the terms of the group health plan if:   (a) the employee or dependent was covered under a group health plan or had health insurance coverage at the time that coverage was previously offered to the employee or dependent;   (b) the employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or health insurance issuer required the statement at the time and provided the employee with notice of the requirement and the consequences of the requirement at the time;   (c) the employee's or dependent's coverage described in subsection (1)(a) was:   (i) under a COBRA continuation provision and was exhausted; or   (ii) not under a COBRA continuation provision and was terminated as a result of loss of eligibility for the coverage or because employer contributions toward the coverage were terminated; and   (d) under the terms of the group health plan, the employee requests the enrollment not later than 30 days after the date of exhaustion of coverage described in subsection (1)(c)(i) or termination of coverage or employer contribution described in subsection (1)(c)(ii).   (2) (a) A group health plan must provide for a dependent special enrollment period described in subsection (2)(b) during which a dependent may be enrolled under the group health plan as a dependent of the individual if the person becomes a dependent of the individual through marriage, birth, adoption, or placement for adoption. In the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage.   (b) A dependent special enrollment period under this subsection (2) is a period of not less than 30 days that begins on the later of:   (i) the date dependent coverage is made available; or   (ii) the date of the marriage, birth, adoption, or placement for adoption.   (3) If an individual seeks to enroll a dependent during the first 30 days of the dependent special enrollment period, the coverage of the dependent becomes effective:   (a) in the case of marriage, not later than the first day of the first month beginning after the date on which the completed request for enrollment is received;   (b) in the case of a dependent's birth, as of the date of birth; or   (c) in the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.   History: En. Sec. 35, Ch. 416, L. 1997; amd. Sec. 45, Ch. 472, L. 1999.  
  33-22-524. Guaranteed renewability of coverage for employers in group market. (1) Except as provided in this section, if a health insurance issuer offers health insurance coverage in the small group market or large group market in connection with a group health plan, the health insurance issuer shall renew or continue the coverage in force at the option of the plan sponsor.   (2) A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small group market or large group market if:   (a) the plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or if the health insurance issuer has not received timely premium payments;   (b) the plan sponsor has performed an act or practice that constitutes fraud or has made an intentional misrepresentation of material fact under the terms of the coverage;   (c) the plan sponsor has failed to comply with a material plan provision relating to employer contribution or group health plan participation rules;   (d) the health insurance issuer is ceasing to offer coverage in that group market in accordance with this section and applicable state law;   (e) in the case of a health insurance issuer that offers health insurance coverage in the group market through a network plan, there is no longer any enrollee in connection with the group health plan who lives, resides, or works in the service area of the health insurance issuer and, in the case of the small group market, if the health insurance issuer would deny enrollment with respect to the plan under 33-22-1811(4)(a)(i); or   (f) in the case of health insurance coverage that is made available in the small group market or large group market only through one or more bona fide associations, the membership of an employer in the bona fide association ceases, but only if the coverage is terminated under this subsection (2)(f) uniformly without regard to any health status-related factor of a covered individual.   (3) A health insurance issuer may not discontinue offering a particular type of group health insurance coverage offered in the small group market or large group market unless in accordance with applicable state law and unless:   (a) the issuer provides notice to each plan sponsor, participant, and beneficiary provided coverage of this type in that group market of the discontinuation at least 90 days prior to the date of the discontinuation of the coverage;   (b) the issuer offers to each plan sponsor provided coverage of this type in the market the option to purchase any other health insurance coverage currently being offered by the health insurance issuer to a group health plan in the market; and   (c) the health insurance issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor of any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for the coverage.   (4) (a) A health insurance issuer may not discontinue offering all health insurance coverage in the small group market, the large group market, or both the small group market and the large group market, unless in accordance with applicable state law and unless:   (i) the issuer provides notice of discontinuation to the commissioner and to each plan sponsor, participant, and beneficiary covered at least 180 days prior to the date of the discontinuation of coverage; and   (ii) all health insurance issued or delivered for issuance in Montana in the group market or markets is discontinued and coverage under the health insurance coverage in the group market or markets is not renewed.   (b) In the case of a discontinuation under this section in a group market, the health insurance issuer may not provide for the issuance of any health insurance coverage in the group market for a period of 5 years beginning on the date of the discontinuation of the last health insurance coverage not renewed.   (5) A health insurance issuer may modify upon renewal health insurance coverage for a product offered to a group health plan in the large group market or in the small group market if, for coverage that is available in the small group market other than only through one or more bona fide associations, modification is consistent with applicable state law and effective on a uniform basis among group health plans with that product.   (6) In the case of health insurance coverage that is made available by a health insurance issuer in the small group market or large group market to employers only through one or more bona fide associations, references to "plan sponsor" under this section include those employers.   History: En. Sec. 40, Ch. 416, L. 1997; amd. Sec. 46, Ch. 472, L. 1999.  
  33-22-525. Guaranteed renewability in multiple employer welfare arrangements. A group health plan that is a multiple employer welfare arrangement, as defined by 29 U.S.C. 1002, may not deny an employer whose employees are covered under the group health plan continued access to the same or different coverage under the terms of the group health plan other than:   (1) for nonpayment of contributions;   (2) for fraud or other intentional misrepresentation of material fact by the employer;   (3) for noncompliance with material plan provisions;   (4) because the group health plan is ceasing to offer any coverage in a geographic area;   (5) in the case of a group health plan that offers benefits through a network plan, because there is no longer any individual enrolled through the employer who lives, resides, or works in the service area of the network plan and the group health plan applies to this section uniformly without regard to the claims experience of employers or any health status-related factor of those individuals or their dependents; or   (6) for failure to meet the terms of an applicable collective bargaining agreement, to renew a collective bargaining or other agreement requiring or authorizing contributions to the group health plan, or to employ employees covered by the agreement.   History: En. Sec. 42, Ch. 416, L. 1997.  
  33-22-526. Group health discrimination prohibited. (1) (a) A group health plan or a health insurance issuer offering group health insurance coverage may not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of the group health plan based on any of the following health status-related factors of the individual or a dependent of the individual:   (i) health status;   (ii) medical condition, including both physical and mental illnesses;   (iii) claims experience;   (iv) receipt of health care;   (v) medical history;   (vi) genetic information;   (vii) evidence of insurability, including conditions arising out of acts of domestic violence; or   (viii) disability.   (b) This subsection does not:   (i) require a group health plan or group health insurance coverage to provide particular benefits other than those provided under the terms of the group health plan or group health insurance coverage; or   (ii) prevent the group health plan or group health insurance coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the group health plan or group health insurance coverage.   (c) For purposes of subsection (1)(a), rules for eligibility to enroll under a group health plan include rules defining an applicable waiting period for the enrollment.   (2) (a) A group health plan and a health insurance issuer offering health insurance coverage in connection with a group health plan may not require an individual, as a condition of enrollment or continued enrollment under the group health plan, to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the group health plan on the basis of any health status-related factor of the individual or of an individual enrolled under the plan as a dependent of the individual.   (b) This subsection (2) does not:   (i) restrict the amount that an employer may be charged for coverage under a group health plan; or   (ii) prevent a group health plan and a health insurance issuer offering group health insurance coverage from establishing premium discounts or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.   History: En. Sec. 44, Ch. 416, L. 1997.  
  33-22-527 through 33-22-529 reserved.  
  33-22-530. Notice required for cancellation for nonpayment of group health insurance. (1) A health insurance issuer shall provide at least 15 days prior notification of cancellation for nonpayment of premium for group health insurance coverage.   (2) The notice must be sent to the policyholder at the policyholder's last-known address and must specify the date of cancellation of coverage. The insurer shall attach a properly executed proof of mailing to this notice and maintain a copy of the proof of mailing in its records.   (3) The health insurance issuer shall hold for processing of payment any claims for covered benefits incurred during the 15-day notification period for nonpayment of premium for group health insurance coverage. Upon receipt of the premium, claims held for the 15-day notification period must be processed for payment.   (4) The policy continues in full force and effect, subject to the requirements of subsection (3), until the proper 15-day notice has been given, unless the coverage has already been replaced.   (5) The 15-day period begins to run from the date of the proof of mailing.   (6) The issuer may collect premiums for any time period that the coverage remains in effect.   (7) When coverage is actually canceled, notice must also be mailed to all certificate holders at:   (a) their last-known home addresses if available; or   (b) the business address of the group policyholder.   (8) The notice of cancellation to certificate holders must be separate from the certificate of creditable coverage required in 33-22-142, although it may be mailed simultaneously with the certificate.   History: En. Sec. 2, Ch. 384, L. 2003; amd. Sec. 28, Ch. 271, L. 2009.  
  33-22-601. Blanket disability insurance defined. Blanket disability insurance is hereby declared to be that form of disability insurance covering groups of persons as enumerated in one of the following subsections:   (1) under a policy or contract issued to any common carrier or to any operator, owner, or lessee of a means of transportation, who or which shall be deemed the policyholder, covering a group defined as all persons or all persons of a class who may become passengers on such common carrier or such means of transportation;   (2) under a policy or contract issued to an employer, who shall be deemed the policyholder, covering all employees, dependents, or guests, defined by reference to specified hazards incident to the activities or operations of the employer or any class of employees, dependents, or guests similarly defined;   (3) under a policy or contract issued to a school or other institution of learning, camp or sponsor thereof; or to the head or principal thereof, who or which shall be deemed the policyholder, covering students or campers. Supervisors and employees may be included.   (4) under a policy or contract issued in the name of any religious, charitable, recreational, educational, or civic organization, which shall be deemed the policyholder, covering participants in activities sponsored by the organization;   (5) under a policy or contract issued to a sports team or sponsors thereof, which shall be deemed the policyholder, covering members, officials, and supervisors;   (6) under a policy or contract issued in the name of any volunteer fire department, first aid, or other such volunteer group, or agency having jurisdiction thereof, which shall be deemed the policyholder, covering all of the members of such fire department or group;   (7) under a policy or contract issued to cover any other risk or class of risks which in the discretion of the commissioner may be properly eligible for blanket disability insurance. The discretion of the commissioner may be exercised on an individual risk basis or class of risks, or both.   History: En. Sec. 388, Ch. 286, L. 1959; R.C.M. 1947, 40-4104.  
  33-22-602. Required provisions of blanket policies. An insurer authorized to write disability insurance in this state has the power to issue blanket disability insurance. A blanket policy may not be issued or delivered in this state unless a copy of the policy form is filed in accordance with 33-1-501. A blanket policy must contain provisions that in the opinion of the commissioner are at least as favorable to the policyholder and the individual insured as the following provisions:   (1) the policy and the application constitute the entire contract between the parties, all statements made by the policyholder are, in absence of fraud, considered representations and not warranties, and statements may not be used in defense to a claim under the policy unless it is contained in a written application;   (2) written notice of sickness or of injury must be given to the insurer within 20 days after the date when the sickness or injury occurred. Failure to give notice within 20 days may not invalidate or reduce a claim if the insured shows that it was not reasonably possible to give the required notice and that notice was given as soon as was reasonably possible.   (3) the insurer will furnish to the policyholder forms for filing proof of loss. If forms are not furnished within 15 days after the insured provided notice of sickness or injury, the claimant is considered to have complied with the requirements of the policy as to proof of loss upon submitting, within the time established in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made.   (4) in the case of a claim for loss of time for disability, written proof of the loss must be furnished to the insurer within 30 days after the commencement of the period for which the insurer is liable and subsequent written proof of the continuance of the disability must be furnished to the insurer at intervals established by the insurer. In the case of a claim for any other loss, written proof of the loss must be furnished to the insurer within 90 days after the date of the loss. Failure to furnish proof within 90 days may not invalidate or reduce a claim if the insured shows it was not reasonably possible to furnish the required proof and that proof was furnished as soon as was reasonably possible.   (5) except as provided in 33-22-137, all benefits payable under the policy other than benefits for loss of time are payable immediately upon receipt of written proof of the loss. Subject to proof of loss, all accrued benefits payable under the policy for loss of time must be paid at least every 30 days during the period for which the insurer is liable. Any balance remaining unpaid at the termination of the period of liability must be paid immediately upon receipt of the proof of loss.   (6) the insurer at its own expense has the right and opportunity to examine the person of the insured when and as often as reasonably required during the pendency of a claim under the policy and also the right and opportunity to make an autopsy in case of death when it is not prohibited by law;   (7) an action at law or in equity may not be brought to recover a loss under the policy sooner than 60 days after written proof of loss has been furnished in accordance with the requirements of the policy and no later than 3 years after the time written proof of loss is required to be furnished.   History: En. Sec. 389, Ch. 286, L. 1959; R.C.M. 1947, 40-4105; amd. Sec. 29, Ch. 271, L. 2009.  
  33-22-603. Application and certificates not required. An individual application shall not be required from a person covered under a blanket disability policy or contract, nor shall it be necessary for the insurer to furnish each person a certificate.   History: En. Sec. 390, Ch. 286, L. 1959; R.C.M. 1947, 40-4106.  
  33-22-604. Payment of claims -- discharge. (1) (a) Subject to subsection (1)(b), all benefits under a blanket disability policy must be payable to:   (i) the person insured or to the person's designated beneficiary or beneficiaries or to the person's estate, except that if the person insured is a minor or is mentally incompetent, the benefits may be made payable to the parent, guardian, or other person actually supporting the person; or   (ii) the employer, if the entire cost of the insurance has been borne by the employer.   (b) The policy may provide that all or any portion of any indemnities provided by the policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering the services, but the policy may not require that the service be rendered by a particular hospital or person.   (2) Payment made as provided in subsection (1) discharges the insurer's obligation with respect to the amount of insurance paid.   History: En. Sec. 391, Ch. 286, L. 1959; R.C.M. 1947, 40-4107; amd. Sec. 1230, Ch. 56, L. 2009.  
  33-22-701. Short title -- purpose -- scope of part -- exceptions. (1) This part may be cited as the "Montana Mental Health Parity Act".   (2) The purpose of this part is to ensure that Montana law applies the same level of parity between mental health and physical health benefits as existed in federal law on January 1, 2017.   (3) The provisions of this part apply to all policies and certificates of individual and group health insurance and group health plans offered to, renewed for, or issued to Montana residents by any health insurance issuer.   (4) This part does not apply to a short-term travel policy, a blanket disability policy as defined in 33-22-601, or excepted benefits as defined in 33-22-140.   History: En. Sec. 1, Ch. 197, L. 1979; amd. Sec. 1, Ch. 535, L. 1981; amd. Sec. 1, Ch. 593, L. 1983; amd. Sec. 4, Ch. 384, L. 1987; amd. Sec. 2, Ch. 348, L. 1999; amd. Sec. 55, Ch. 227, L. 2001; amd. Sec. 2, Ch. 245, L. 2017.  
  33-22-702. Definitions. For purposes of this part, the following definitions apply:  (1) "Inpatient benefits" are as set forth in 33-22-705.   (2) "Mental health benefits" means benefits with respect to items or services for mental health conditions, as defined under the terms of the plan or health insurance coverage and in accordance with applicable federal and state law. Any condition defined by the plan or coverage as being or as not being a mental health condition must be defined to be consistent with generally recognized independent standards of current medical practice, including but not limited to the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders.   (3) "Mental health treatment center" means a treatment facility organized to provide care and treatment for mental illness or severe mental illness through multiple modalities or techniques pursuant to a written treatment plan approved and monitored by a qualified health care provider and a treatment facility that is:   (a) licensed as a mental health treatment center by the state;   (b) funded or eligible for funding under federal or state law; or   (c) affiliated with a hospital under a contractual agreement with an established system for patient referral.   (4) (a) "Mental illness" means a clinically significant behavioral or psychological syndrome or pattern that occurs in a person and that is associated with:   (i) present distress or a painful symptom;   (ii) a disability or impairment in one or more areas of functioning; or   (iii) a significantly increased risk of suffering death, pain, disability, or an important loss of freedom.   (b) Mental illness must be considered as a manifestation of a behavioral, psychological, or biological dysfunction in a person.   (c) Mental illness does not include:   (i) a developmental disorder;   (ii) a speech disorder;   (iii) a psychoactive substance use disorder;   (iv) an eating disorder, except for bulimia and anorexia nervosa; or   (v) an impulse control disorder, except for intermittent explosive disorder and trichotillomania.   (5) "Outpatient benefits" are as set forth in 33-22-705.   (6) "Primary care behavioral health model" means an evidence-based, integrated behavioral health care service delivery model delivered in primary or specialty care settings that recognizes licensed psychologists as consultants as well as direct service providers.   (7) "Psychiatric collaborative care model" means the evidence-based, integrated behavioral health service delivery method in which care:   (a) is delivered by a primary care team consisting of a primary care provider and a care manager who work in collaboration with a psychiatric consultant, including but not limited to a psychiatrist;   (b) is directed by the primary care team;   (c) includes structured care management with regular assessments of clinical status using validated tools and modification of treatment as appropriate; and   (d) involves regular consultations between the psychiatric consultant and the primary care team to review the clinical status and care of patients and to make recommendations.   (8) "Qualified health care provider" means a person licensed as a physician, psychologist, social worker, clinical professional counselor, marriage and family therapist, or addiction counselor or another appropriate licensed health care practitioner.   (9) "Severe mental illness" means the following disorders as defined by the American psychiatric association:   (a) schizophrenia;   (b) schizoaffective disorder;   (c) bipolar disorder;   (d) major depression;   (e) panic disorder;   (f) obsessive-compulsive disorder; and   (g) autism.   (10) "Substance use disorder" means the uncontrollable or excessive use of an addictive substance, including but not limited to alcohol, morphine, cocaine, heroin, opium, cannabis, barbiturates, amphetamines, tranquilizers, or hallucinogens, and the resultant physiological or psychological dependency that develops with continued use of the addictive substance and that requires medical care or other appropriate treatment as determined by a licensed addiction counselor or other appropriate medical practitioner.   (11) "Substance use disorder benefits" means benefits with respect to items or services for substance use disorders, as defined under the terms of the plan or health insurance coverage and in accordance with applicable federal and state law. Any disorder defined by the plan as being or as not being a substance use disorder must be defined to be consistent with generally recognized independent standards of current medical practice, including but not limited to the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders.   (12) "Substance use disorder treatment center" means a treatment facility that:   (a) provides a program for the treatment of substance use disorders pursuant to a written treatment plan approved and monitored by a qualified health care provider; and   (b) is licensed or approved by the department of public health and human services under 53-24-208 or is licensed or approved by the state where the facility is located.   History: En. Sec. 2, Ch. 197, L. 1979; amd. Sec. 2, Ch. 535, L. 1981; amd. Sec. 2, Ch. 593, L. 1983; amd. Sec. 2, Ch. 302, L. 1985; amd. Sec. 2, Ch. 98, L. 1987; amd. Sec. 2, Ch. 606, L. 1987; amd. Sec. 1, Ch. 262, L. 1991; amd. Sec. 1, Ch. 448, L. 1995; amd. Sec. 83, Ch. 546, L. 1995; amd. Sec. 3, Ch. 348, L. 1999; amd. Sec. 1, Ch. 23, L. 2001; amd. Sec. 56, Ch. 227, L. 2001; amd. Sec. 3, Ch. 245, L. 2017; amd. Sec. 2, Ch. 277, L. 2021; amd. Sec. 2, Ch. 323, L. 2021. 
  33-22-703. Coverage for mental illness, severe mental illness, and substance use disorders -- definition. (1) A health insurance issuer that issues, modifies, or renews individual or group health insurance coverage or a group health plan shall provide for the necessary care and treatment of mental illness, severe mental illness, and substance use disorders at a level of benefits that is no less favorable than the level provided for physical illness generally, including:   (a) inpatient benefits;   (b) outpatient benefits;   (c) emergency care; and   (d) prescription drugs.   (2) For the purposes of this section, "no less favorable" means the same level of parity as required under the Mental Health Parity and Addiction Equity Act of 2008 and related federal regulations as of January 1, 2017.   (3) Coverage for a child with autism who is 18 years of age or younger must comply with 33-22-515(3) through 33-22-515(5) if the child is diagnosed with:   (a) autistic disorder;   (b) Asperger's disorder; or   (c) pervasive developmental disorder not otherwise specified.   History: En. Sec. 3, Ch. 197, L. 1979; amd. Sec. 3, Ch. 535, L. 1981; amd. Sec. 3, Ch. 593, L. 1983; amd. Sec. 5, Ch. 139, L. 1987; amd. Sec. 5, Ch. 384, L. 1987; amd. Sec. 2, Ch. 448, L. 1995; amd. Sec. 150, Ch. 42, L. 1997; amd. Sec. 9, Ch. 416, L. 1997; amd. Sec. 1, Ch. 477, L. 1999; amd. Sec. 57, Ch. 227, L. 2001; amd. Sec. 15, Ch. 55, L. 2015; amd. Sec. 4, Ch. 245, L. 2017.  
  33-22-704. Repealed. Sec. 9, Ch. 245, L. 2017.   History: En. Sec. 4, Ch. 197, L. 1979; amd. Sec. 4, Ch. 535, L. 1981; amd. Sec. 4, Ch. 593, L. 1983; amd. Sec. 6, Ch. 384, L. 1987; amd. Sec. 4, Ch. 348, L. 1999; amd. Sec. 58, Ch. 227, L. 2001.  
  33-22-705. Inpatient and outpatient benefits -- use of psychiatric collaborative care or primary care behavioral health model. (1) (a) Inpatient benefits are benefits payable for charges made by:  (i) a hospital or freestanding inpatient facility for the necessary care and treatment of mental illness, severe mental illness, or substance use disorder furnished to a covered person while confined as an inpatient; or   (ii) a qualified health care provider for the necessary care and treatment of mental illness, severe mental illness, or substance use disorder furnished to a covered person while confined as an inpatient.   (b) Care and treatment of a substance use disorder in a freestanding inpatient facility must be in a substance use disorder treatment center.   (c) Inpatient benefits include payment for medically monitored and medically managed intensive inpatient services and clinically managed high-intensity residential services.   (2) Outpatient benefits are benefits payable for:   (a) reasonable charges made by a hospital for the necessary care and treatment of mental illness, severe mental illness, or substance use disorder furnished to a covered person while not confined as an inpatient;   (b) reasonable charges for services rendered or prescribed by a qualified health care provider for the necessary care and treatment for mental illness, severe mental illness, or substance use disorder furnished to a covered person while not confined as an inpatient;   (c) reasonable charges made by a mental health or substance use disorder treatment center for the necessary care and treatment of a covered person provided in the treatment center while not confined as an inpatient;   (d) reasonable charges for services rendered by a qualified health care provider, hospital, mental health treatment center, or substance use disorder treatment center in an acute or subacute partial hospitalization or intensive outpatient treatment setting; or   (e) reasonable charges for outpatient benefits listed in this subsection (2) that are delivered through the psychiatric collaborative care model or primary care behavioral health model. The charges must be reimbursed through the use of the following common procedural terminology billing codes established by the American medical association:   (i) 99492;   (ii) 99493;   (iii) 99494;   (iv) 99484, the code for care management services for behavioral health conditions;   (v) 96156, 96158, 96159, 96164, 96165, 96167, 96168, 96170, and 96171, the codes for health behavior assessment and intervention; and   (vi) 99446, 99447, 99448, 99449, and 99451, the codes for interprofessional telephone/internet/electronic health record consultations.   History: En. Sec. 1, Ch. 98, L. 1987; amd. Sec. 12, Ch. 606, L. 1987; amd. Sec. 1, Ch. 262, L. 1991; amd. Sec. 84, Ch. 546, L. 1995; amd. Sec. 11, Ch. 507, L. 1997; amd. Sec. 2, Ch. 477, L. 1999; amd. Sec. 2, Ch. 23, L. 2001; amd. Sec. 105, Ch. 483, L. 2001; amd. Sec. 5, Ch. 245, L. 2017; amd. Sec. 3, Ch. 277, L. 2021. 
  33-22-706. Repealed. Sec. 9, Ch. 245, L. 2017.   History: En. Sec. 1, Ch. 348, L. 1999; amd. Sec. 1, Ch. 367, L. 2001; amd. Sec. 5, Ch. 325, L. 2003; amd. Sec. 3, Ch. 359, L. 2009; amd. Sec. 22, Ch. 63, L. 2015.  
  33-22-707. Parity compliance records. A health insurance issuer that issues, modifies, or renews individual or group health insurance coverage that provides mental health or substance use disorder benefits shall submit a report to the commissioner on or before April 1 of the year following the effective date of this section, and upon request of the commissioner for each year thereafter, that complies with the mental health and substance use disorder parity analysis requirements of 42 U.S.C. 300gg-26(a)(8).  History: En. Sec. 1, Ch. 323, L. 2021. 
  33-22-708 and 33-22-709 reserved. 
  33-22-710. Rulemaking. The commissioner may adopt rules to implement the provisions of this part.   History: En. Sec. 6, Ch. 245, L. 2017.  
  33-22-801. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 1, Ch. 61, L. 1965; R.C.M. 1947, 40-5401.  
  33-22-802. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 2, Ch. 61, L. 1965; R.C.M. 1947, 40-5402.  
  33-22-803. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 3, Ch. 61, L. 1965; R.C.M. 1947, 40-5403(part).  
  33-22-804. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 5, Ch. 61, L. 1965; R.C.M. 1947, 40-5405; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 68, Ch. 596, L. 1993.  
  33-22-805. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 7, Ch. 61, L. 1965; R.C.M. 1947, 40-5407(part); amd. Sec. 1, Ch. 713, L. 1989.  
  33-22-806. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 8, Ch. 61, L. 1965; R.C.M. 1947, 40-5408.  
  33-22-807 through 33-22-810 reserved.  
  33-22-811. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 3, Ch. 61, L. 1965; R.C.M. 1947, 40-5403(part).  
  33-22-812. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 6, Ch. 61, L. 1965; R.C.M. 1947, 40-5406(part); amd. Sec. 24, Ch. 303, L. 1981.  
  33-22-813. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Secs. 3, 4, Ch. 61, L. 1965; R.C.M. 1947, 40-5403(part), 40-5404; amd. Sec. 13, Ch. 345, L. 1979; amd. Sec. 1, Ch. 713, L. 1989.  
  33-22-814. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 7, Ch. 61, L. 1965; R.C.M. 1947, 40-5407(part).  
  33-22-815. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 6, Ch. 61, L. 1965; R.C.M. 1947, 40-5406(part).  
  33-22-816. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Sec. 6, Ch. 61, L. 1965; R.C.M. 1947, 40-5406(part).  
  33-22-901. Short title. This part may be cited as the "Medicare Supplement Insurance Minimum Standards Act".   History: En. Sec. 1, Ch. 298, L. 1981.  
  33-22-902. Purpose. The purpose of this part is to establish minimum standards for medicare supplement policies and certificates and to establish a regulatory program that meets the requirements of 42 U.S.C. 1395ss(p)(1)(A).   History: En. Sec. 2, Ch. 298, L. 1981; amd. Sec. 1, Ch. 163, L. 1993.  
  33-22-903. Definitions. As used in this part, the following definitions apply:   (1) "Applicant" means:   (a) in the case of an individual medicare supplement policy, the person who seeks to contract for insurance benefits; and   (b) in the case of a group medicare supplement policy, the proposed certificate holder.   (2) "Certificate" means a certificate delivered or issued for delivery in this state under a group medicare supplement policy.   (3) "Certificate form" means the form on which the certificate is delivered or issued for delivery by the issuer.   (4) "Entity" means an insurer as defined in 33-1-201, a health service corporation as defined in 33-30-101, and a health maintenance organization as defined in 33-31-102.   (5) "Health care expenses":   (a) means expenses of a health maintenance organization associated with the delivery of health care services that are analogous to incurred losses of an insurer;   (b) does not include home office and overhead costs, advertising costs, commissions and other acquisition costs, taxes, capital costs, administrative costs, or claims processing costs.   (6) "Issuer" includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any entity delivering or issuing for delivery in this state medicare supplement policies or certificates.   (7) "Medicare" means Health Insurance for the Aged, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.   (8) "Medicare supplement policy" means a group or individual policy of disability insurance or a subscriber contract of a health service corporation, other than a policy issued pursuant to a contract under 42 U.S.C. 1395ss(g)(1), or a policy issued under a demonstration project authorized pursuant to amendments to the federal Social Security Act, that is advertised, marketed, or designed primarily as a supplement to reimbursements under medicare for the hospital, medical, or surgical expenses of persons eligible for medicare. The term does not include:   (a) a policy or contract of one or more employers or labor organizations or of the trustees of a fund established by one or more employers or labor organizations, or a combination of employers, organizations, and trustees, for employees or former employees, or a combination of current and former employees, or for members or former members, or a combination of current and former members, of the labor organizations; or   (b) individual policies or contracts issued pursuant to a conversion privilege under a policy or contract of group or individual insurance when the group or individual policy or contract includes provisions that are inconsistent with the requirements of this part or policies issued to employees or members as additions to franchise plans in existence on April 8, 1981.   (9) "Policy form" means the form on which the policy is delivered or issued for delivery by the issuer.   History: En. Sec. 3, Ch. 298, L. 1981; amd. Sec. 2, Ch. 682, L. 1989; amd. Sec. 2, Ch. 163, L. 1993; amd. Sec. 31, Ch. 531, L. 1997.  
  33-22-904. Standards for policy provisions -- rules. (1) A medicare supplement policy or certificate in force in this state may not contain benefits that duplicate benefits provided by medicare.   (2) The commissioner shall adopt reasonable rules to establish specific standards for policy provisions of medicare supplement policies and certificates. A requirement of this code relating to minimum required policy benefits, other than the minimum standards contained in this part, may not apply to medicare supplement policies and certificates. The standards are in addition to and in accordance with applicable laws of this state, including the provisions of Title 33, chapter 22, and may cover but are not limited to:   (a) terms of renewability;   (b) initial and subsequent conditions of eligibility;   (c) nonduplication of coverage;   (d) probationary periods;   (e) benefit limitations, exceptions, and reductions;   (f) elimination periods;   (g) requirements for replacement;   (h) recurrent conditions; and   (i) definitions of terms.   (3) The commissioner may adopt reasonable rules that prohibit policy or certificate provisions not otherwise specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair, or unfairly discriminatory to any person insured or proposed for coverage under a medicare supplement policy or certificate.   (4) Notwithstanding any other provisions of the law, a medicare supplement policy or certificate may not exclude or limit benefits for losses incurred more than 6 months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.   (5) The commissioner may adopt rules necessary to conform medicare supplement policies and certificates to the requirements of federal law and federal regulations, including but not limited to rules:   (a) requiring refunds or credits if the policies or certificates do not meet loss requirements;   (b) establishing a uniform methodology for calculating and reporting loss ratios;   (c) ensuring public access to policies, premiums, and loss ratio information of issuers of medicare supplement insurance;   (d) establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases; and   (e) establishing a policy for holding public hearings prior to approval of premium increases.   History: En. Sec. 4, Ch. 298, L. 1981; amd. Sec. 3, Ch. 682, L. 1989; amd. Sec. 3, Ch. 163, L. 1993.  
  33-22-905. Minimum standards for benefits and payment of claims -- rules. The commissioner shall adopt reasonable rules to establish minimum standards for benefits, payment of claims, marketing practices, compensation arrangements, and reporting practices for medicare supplement policies and certificates.   History: En. Sec. 5, Ch. 298, L. 1981; amd. Sec. 4, Ch. 682, L. 1989; amd. Sec. 4, Ch. 163, L. 1993.  
  33-22-906. Loss ratio standards and filing requirements -- limits on compensation. (1) Medicare supplement policies and certificates must return to policyholders or certificate holders benefits that are reasonable in relation to the premium charged. The commissioner shall adopt reasonable rules to establish minimum standards for loss ratios of medicare supplement policies and certificates on the basis of incurred claims experience or incurred health care expenses, where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums for the entire period for which rates are computed to provide coverage and in accordance with accepted actuarial principles and practices. Every entity providing medicare supplement insurance benefits to a resident of this state shall make premium adjustments:   (a) necessary to produce an expected loss ratio under the policy or certificate that meets the minimum loss ratio standards for medicare supplement policies and certificates as established by rule; and   (b) expected to result in a loss ratio at least as great as that originally anticipated by the entity when it established current premiums for the medicare supplement policy or certificate.   (2) The commissioner shall by rule establish the timing and manner of the premium adjustments. Every entity providing medicare supplement policies or certificates in this state shall annually file with the commissioner its rates, rating schedule, and supporting documentation demonstrating that it is in compliance with the applicable loss ratio standards of this part. An entity transacting medicare supplement insurance in this state may not adjust its rates more than twice a year and may not adjust its rates for the first year a policy is in force, except to allow for changes in federal laws or regulations relating to medicare. Each filing of rates and rating schedules must demonstrate that the actual and expected losses in relation to premiums complies with the requirements of this part.   (3) An entity may not provide compensation to its insurance producers that is greater than the renewal compensation that would be paid on an existing policy or certificate if:   (a) the existing policy or certificate were replaced by another policy or certificate with the same insurer and the new benefits are substantially similar to the benefits under the old policy or certificate; and   (b) the old policy or certificate was issued by the same insurer or insurance group.   History: En. Sec. 6, Ch. 298, L. 1981; amd. Sec. 5, Ch. 682, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 5, Ch. 163, L. 1993; amd. Sec. 26, Ch. 151, L. 2017.  
  33-22-907. Disclosure standards -- informational brochure -- rules. (1) In order to provide for full and fair disclosure in the sale of medicare supplement policies and certificates, a medicare supplement policy may not be delivered or issued for delivery in this state and a certificate may not be delivered pursuant to a group medicare supplement policy delivered or issued for delivery in this state unless an outline of coverage is delivered to the applicant at the time that application is made. The outline of coverage must be filed with the commissioner as required by 33-1-501. The filing must be made at least 60 days in advance of the date that the outline of coverage is delivered to any resident of this state.   (2) (a) The commissioner shall prescribe the format and content of the outline of coverage required by subsection (1).   (b) For purposes of this section, "format" means style, arrangements, and overall appearance, including such items as the size, color, and prominence of type and the arrangement of text and captions.   (c) The outline of coverage must include:   (i) a description of the principal benefits and coverage provided in the policy or certificate;   (ii) a statement of the exceptions, reductions, and limitations contained in the policy or certificate;   (iii) a statement of the renewal provisions, including any reservation by the issuer of a right to change premiums and disclosure of the existence of any automatic renewal premium increases based on the policyholder's or certificate holder's age;   (iv) a statement that the outline of coverage is a summary of the policy or certificate issued or applied for and that the policy or certificate should be consulted to determine governing contractual provisions.   (3) The commissioner may prescribe by rule a standard form and the contents of an informational brochure for persons eligible for medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and to improve the buyer's understanding of medicare. Except in the case of direct response insurance policies, the commissioner may require by rule that the information brochure be provided to any prospective insureds eligible for medicare at the same time that the outline of coverage is delivered. With respect to direct response insurance policies, the commissioner may require by rule that the prescribed brochure be provided upon request, but not later than the time of policy delivery, to any prospective insureds eligible for medicare.   (4) The commissioner may adopt reasonable rules for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for medicare, other than:   (a) medicare supplement policies or certificates; or   (b) disability income policies.   (5) The commissioner may further adopt reasonable rules to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies or certificates by persons eligible for medicare.   (6) As soon as practicable, but no later than 30 days before the annual effective date of a medicare benefit change, every entity providing medicare supplement insurance or benefits to a resident of this state shall notify its policyholders and certificate holders, in a format that the commissioner prescribes by rule, of the changes that it has made to the medicare supplement policy or certificate.   History: En. Sec. 7, Ch. 298, L. 1981; amd. Sec. 6, Ch. 682, L. 1989; amd. Sec. 6, Ch. 163, L. 1993; amd. Sec. 32, Ch. 531, L. 1997.  
  33-22-908. Notice of free examination. Medicare supplement policies and certificates must have a notice prominently printed on the first page of the policy or certificate or attached to the policy or certificate stating in substance that the applicant has the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. The issuer shall pay any refund made pursuant to this section directly to the applicant in a timely manner.   History: En. Sec. 8, Ch. 298, L. 1981; amd. Sec. 7, Ch. 682, L. 1989; amd. Sec. 7, Ch. 163, L. 1993.  
  33-22-909. Administrative procedures. Rules adopted pursuant to this part are subject to the provisions of 33-1-313 and Title 2, chapter 4.   History: En. Sec. 9, Ch. 298, L. 1981.  
  33-22-910. Filing requirements for advertising. Every issuer of medicare supplement policies or certificates in this state shall provide to the commissioner for the commissioner's approval a copy of any medicare supplement advertising intended for use in this state, whether through written, radio, or television medium.   History: En. Sec. 8, Ch. 682, L. 1989; amd. Sec. 8, Ch. 163, L. 1993; amd. Sec. 33, Ch. 531, L. 1997.  
  33-22-911. Penalties. In addition to any other penalties for violations of the insurance code, the commissioner may after hearing require issuers violating any provision of or rule adopted under Title 33, chapter 16, or this part to cease marketing a medicare supplement policy or certificate in this state that is related directly or indirectly to the violation or take action that is necessary to comply with the provisions of Title 33, chapter 16, or this part or the rules adopted under Title 33, chapter 16, or this part, or both.   History: En. Sec. 9, Ch. 682, L. 1989; amd. Sec. 9, Ch. 163, L. 1993.  
  33-22-912 through 33-22-920 reserved.  
  33-22-921. Discontinuance or nonrenewal -- alternate policy or certificate -- same insurer. (1) If a disability insurer discontinues or does not renew a medicare supplement policy product or certificate and offers an alternate medicare supplement policy or certificate to its insureds within this state, it may not deny benefits under the replacing policy or certificate to an insured who receives treatment for a condition that was a covered expense under the replaced policy or certificate and is a covered expense under the replacing policy or certificate if the insured enrolls in and pays the premium for the replacing policy or certificate within 31 days after the termination of the replaced policy or certificate.   (2) A disability insurer who discontinues or does not renew a medicare supplement policy product or certificate and offers an alternate medicare supplement policy or certificate shall base its premium for the alternate policy or certificate on the rates currently in place for that policy or certificate.   (3) If the insured has not satisfied the preexisting condition limitation under the replaced medicare supplement policy or certificate, any period of time that was covered by that policy or certificate must be credited toward the preexisting condition limitation period of the replacing policy or certificate.   History: En. Sec. 1, Ch. 125, L. 1987; amd. Sec. 12, Ch. 798, L. 1991.  
  33-22-922. Discontinuance or nonrenewal -- alternate policy -- unauthorized bulk reinsurance. (1) Alternate medicare supplement coverage as provided in 33-22-921 must be offered to its insureds by a disability insurer that:   (a) bulk cedes its medicare supplement policy business to an insurer that does not meet the requirements of chapter 2;   (b) authorizes the bulk reinsurer to administer the medicare supplement policies on its behalf; and   (c) discontinues or does not renew a medicare supplement policy product.   (2) The premium for the alternate policy referred to in subsection (1) must be based on actuarially justified rates.   History: En. Sec. 2, Ch. 125, L. 1987.  
  33-22-923. Replacement policy or certificate -- different insurer. (1) If a disability insurer replaces a medicare supplement policy or certificate, it may not deny benefits under the replacing policy or certificate to an insured who receives treatment for a condition that was a covered expense under the replaced policy or certificate and is a covered expense under the replacing policy or certificate if the insured pays the premium for the replacing policy or certificate when due or within 31 days after the termination of the replaced policy or certificate.   (2) An insurer who replaces a medicare supplement policy or certificate shall base its premium for the replacement policy or certificate on the rates currently in place for that policy or certificate.   (3) If the insured has not satisfied the preexisting condition limitation under the replaced medicare supplement policy or certificate, any period of time that was covered by that policy or certificate must be credited toward the preexisting condition limitation period of the replacing policy or certificate.   (4) To receive the benefits of subsections (1) through (3), a person shall submit to the replacing insurer proof of prior coverage, evidence of benefits provided under the previous policy or certificate, and the effective date and the date of termination of coverage under the previous policy or certificate.   History: En. Sec. 3, Ch. 125, L. 1987; amd. Sec. 13, Ch. 798, L. 1991.  
  33-22-924. Renewal requirement. (1) If a person pays a renewal premium on the date it is due or within 31 days after it is due, an insurer may not refuse to renew a medicare supplement policy or certificate unless the insurer:   (a) refuses to renew all policies or certificates in this state that are of the same form and issued to persons of the same class; and   (b) offers a replacement policy or certificate at actuarially justified rates.   (2) If an insurer refuses to renew all policies or certificates in this state that are of the same form and issued to persons of the same class, the policies or certificates will remain in force during the grace period stated in the replaced policy or certificate. An insurer's refusal to renew a policy or certificate may not affect a claim that arose under the discontinued policy or certificate during the period in which an insured was confined without interruption to a medical care facility for treatment.   History: En. Sec. 4, Ch. 125, L. 1987; amd. Sec. 14, Ch. 798, L. 1991.  
  33-23-101. Repealed. Sec. 4, Ch. 425, L. 1979.   History: En. Sec. 411, Ch. 286, L. 1959; amd. Sec. 5, Ch. 234, L. 1977; R.C.M. 1947, 40-4401.  
  33-23-102. Existence of insurance not to be made evident. No attempt may be made in the trial of an action brought against a political subdivision of the state, municipality, or any public body, corporation, commission, board, agency, organization, or other public entity to suggest the existence of any insurance which covers in whole or in part any judgment or award which may be rendered in favor of plaintiff.   History: En. Sec. 1, Ch. 240, L. 1963; amd. Sec. 6, Ch. 234, L. 1977; R.C.M. 1947, 40-4402; amd. Sec. 1, Ch. 425, L. 1979.  
  33-23-103. Casualty insurance policy -- conformity with state statutes. A casualty insurance policy relative to a risk resident, located, or to be performed in this state must contain a provision or the equivalent thereto as follows:   "Conformity with Montana statutes. The provisions of this policy conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy."   History: En. Sec. 23, Ch. 798, L. 1991.  
  33-23-201. Motor vehicle liability policies to include uninsured motorist coverage -- rejection by insured. (1) A motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle may not be delivered or issued for delivery in this state, with respect to any motor vehicle registered and principally garaged in this state, unless coverage is provided in the policy or supplemental to the policy, in limits for bodily injury or death set forth in 61-6-103, under provisions filed with and approved by the commissioner, for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting from the injury, sickness, or disease, caused by an accident arising out of the operation or use of the motor vehicle. An uninsured motor vehicle is a land motor vehicle, the ownership, the maintenance, or the use of which is not insured or bonded for bodily injury liability at the time of the accident.   (2) The named insured has the right to reject the coverage. Unless the named insured requests the coverage in writing, the coverage need not be provided in or supplemental to a renewal policy when the named insured had rejected the coverage in connection with the policy previously issued to the named insured by the same insurer.   History: En. Sec. 1, Ch. 31, L. 1967; amd. Sec. 2, Ch. 526, L. 1975; R.C.M. 1947, 40-4403; amd. Sec. 7, Ch. 139, L. 1987; amd. Sec. 40, Ch. 83, L. 1989; amd. Sec. 1233, Ch. 56, L. 2009.  
  33-23-202. Reimbursement for total loss of motor vehicle based on actual replacement value. Each motor vehicle insurance policy issued to residents of this state that provides that reimbursement for total loss of a motor vehicle be based on a "book" value rather than on the actual replacement value is void as to that provision, and reimbursement must be made for actual replacement value except as provided in 27-1-306.   History: En. Sec. 1, Ch. 182, L. 1969; R.C.M. 1947, 40-4404; amd. Sec. 8, Ch. 139, L. 1987; amd. Sec. 2, Ch. 71, L. 1997.  
  33-23-203. Limitation of liability under motor vehicle liability policy. (1) Unless a motor vehicle liability policy specifically provides otherwise, the limits of insurance coverage available under each part of the policy must be determined as follows, regardless of the number of motor vehicles insured under the policy, the number of policies issued by the same company covering the insured, or the number of separate premiums paid:   (a) the limits of insurance coverages available for any one accident are the limits specified for each coverage available under the policy insuring the motor vehicle involved in the accident;   (b) if the motor vehicle involved in the accident is not insured under a policy, the limits of the insurance coverages available for any one accident are the highest limits of the coverages specified under one policy for one motor vehicle insured under that policy; and   (c) the limits of the coverages specified under one policy or under more than one policy issued by the same company may not be added together to determine the limits of insurance coverages available under the policy or policies for any one accident if the premiums charged for the coverage by the insurer actuarially reflect the limiting of coverage separately to the vehicles covered by the policy and the premium rates have been filed with the commissioner.   (2) A motor vehicle liability policy may also provide for other reasonable limitations, exclusions, reductions of coverage, or subrogation clauses that are designed to prevent duplicate payments for the same element of loss under the motor vehicle liability policy or under another casualty policy that provides coverage for an injury that necessitates damages or benefit payments or to prevent the adding together of insurance coverage limits in one policy or from more than one policy issued by the same company.   (3) An insurer that charges a premium for a specified coverage shall clearly inform or notify the insured in writing of the limits of the coverage with respect to the premium charged and whether the coverage from one policy or motor vehicle may be added to the coverage of another policy or motor vehicle.   (4) This section is not intended to create coverage for a motor vehicle that would otherwise be uninsured.   History: En. Sec. 1, Ch. 212, L. 1981; amd. Sec. 9, Ch. 139, L. 1987; amd. Sec. 1, Ch. 263, L. 1997; amd. Sec. 1, Ch. 495, L. 1997; amd. Sec. 1, Ch. 201, L. 2007.  
  33-23-204. Definitions. As used in this part, the following definitions apply:   (1) (a) "Motor vehicle" means a vehicle propelled by its own power and designed primarily to transport persons or property on the highways of the state.   (b) The term does not include a bicycle or a moped, as defined in 61-8-102, an electric personal assistive mobility device, as defined in 61-1-101, or a motorized nonstandard vehicle, as defined in 61-1-101.   (2) "Motor vehicle liability policy" means a policy of automobile or motor vehicle insurance against liability required under Title 61, chapter 6, parts 1 and 3, and all additional coverages included in or added to the policy by rider, endorsement, or otherwise, whether or not required under Title 61, including, without limitation, uninsured, underinsured, and medical payment coverages.   History: En. Sec. 6, Ch. 139, L. 1987; amd. Sec. 2, Ch. 495, L. 1997; amd. Secs. 5, 11, 12, Ch. 468, L. 2005; amd. Sec. 38, Ch. 542, L. 2005; amd. Sec. 2, Ch. 374, L. 2015.  
  33-23-205 through 33-23-210 reserved.  
  33-23-211. Limitations on basis for cancellation. (1) A notice of cancellation of a motor vehicle liability policy is effective only if it is based on one or more of the following reasons:   (a) nonpayment of premium; or   (b) the driver's license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates a motor vehicle insured under the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or the 180 days immediately preceding its effective date.   (2) This section does not apply to any policy or coverage which has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy.   (3) Modification of motor vehicle physical damage coverage by the inclusion of a deductible not exceeding $100 may not be deemed a cancellation of the coverage or of the policy.   (4) This section does not apply to nonrenewal of a motor vehicle liability policy.   History: En. Sec. 3, Ch. 262, L. 1971; R.C.M. 1947, 40-4407; amd. Sec. 10, Ch. 139, L. 1987.  
  33-23-212. Notice required for cancellation -- statement that insurer will specify reason upon request -- exception. (1) A cancellation by an insurer of a motor vehicle liability insurance policy is not effective prior to the mailing or delivery to the named insured, at the address shown in the policy, of a written notice of the cancellation stating the date on which, not less than 45 days after the date of the mailing or delivery, the cancellation becomes effective. Other provisions of this code may not be construed as affecting the requirements provided in this subsection (1).   (2) A notice of cancellation of a policy to which 33-23-211 applies is not effective unless mailed or delivered by the insurer to the named insured at least 45 days prior to the effective date of cancellation. However, if cancellation is for nonpayment of premium, at least 10 days' notice of cancellation accompanied by the reason must be given. Unless the reason accompanies or is included in the notice of cancellation, the notice of cancellation must state or be accompanied by a statement that upon written request of the named insured, mailed or delivered to the insurer not less than 21 days prior to the effective date of cancellation, the insurer shall specify the reason for the cancellation.   (3) Subsection (2) does not apply to nonrenewal.   History: En. Secs. 1, 4, 7, Ch. 262, L. 1971; R.C.M. 1947, 40-4405, 40-4408, 40-4411; amd. Sec. 11, Ch. 139, L. 1987; amd. Sec. 41, Ch. 83, L. 1989; amd. Sec. 53, Ch. 472, L. 1999; amd. Sec. 4, Ch. 339, L. 2003; amd. Sec. 43, Ch. 380, L. 2003.  
  33-23-213. Notice to insured of ground for cancellation -- commissioner to ensure compliance. Whenever an insurer gives notice of cancellation of a motor vehicle liability policy, upon request of the insured, the insurer, within 15 days of receipt of the request, shall furnish to the insured a statement setting forth the ground or grounds upon which the notice of cancellation is based. If the insurer fails to comply with the provisions of this section, the insured may apply to the commissioner for a certificate of the facts or information desired. The commissioner shall exercise any power conferred upon the commissioner by law that may be necessary to ensure compliance with this section.   History: En. Sec. 2, Ch. 262, L. 1971; R.C.M. 1947, 40-4406; amd. Sec. 12, Ch. 139, L. 1987; amd. Sec. 1234, Ch. 56, L. 2009.  
  33-23-214. Advance notice required for nonrenewal -- exceptions. (1) An insurer shall renew a motor vehicle liability policy unless it mails or delivers to the named insured, at the address shown in the policy, at least 45 days' advance notice of its intention not to renew. The notice must contain or be accompanied by a statement that upon written request made not later than 1 month following the termination date of the policy of the named insured mailed or delivered to the insurer, the insurer will notify the insured in writing, within 15 days of the insured's request, of the reason or reasons for the nonrenewal.   (2) Notwithstanding the failure of an insurer to comply with this section, the motor vehicle liability policy must terminate on the effective date of any other replacement or succeeding motor vehicle liability policy procured by the insured with respect to any motor vehicle designated in both policies.   (3) This section does not apply where the named insured has failed to discharge when due any of the insured's obligations in connection with the payment of premiums for the policy or the renewal of the policy or any installment payments for the policy, whether payable directly to the insurer or its insurance producer or indirectly under any premium finance plan or extension of credit.   (4) This section does not apply in any of the following cases:   (a) if the insurer has manifested its willingness to renew;   (b) in case of nonpayment of premium. However, notwithstanding the failure of an insurer to comply with this section, the policy must terminate on the effective date of any other insurance policy with respect to any motor vehicle designated in both policies.   (c) if the insured's insurance producer or broker has secured other coverage acceptable to the insured at least 20 days prior to the anniversary date of the policy or termination of the policy period.   (5) Renewal of a motor vehicle liability policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of the renewal.   (6) A notice of nonrenewal of a motor vehicle liability policy under this section, for a policy that has a term of less than 6 months, is effective only when based on one or more of the reasons listed in 33-23-211.   History: En. Sec. 5, Ch. 262, L. 1971; amd. Sec. 1, Ch. 249, L. 1975; R.C.M. 1947, 40-4409; amd. Sec. 13, Ch. 139, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 5, Ch. 339, L. 2003.  
  33-23-215. No liability for statements in connection with cancellation or nonrenewal. There may be no liability on the part of and no cause of action of any nature may arise against the commissioner or against any insurer, its authorized representative, its insurance producers, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them in any written notice of cancellation or nonrenewal or for statements made or evidence submitted at any hearings conducted in connection therewith.   History: En. Sec. 8, Ch. 262, L. 1971; R.C.M. 1947, 40-4412; amd. Sec. 14, Ch. 139, L. 1987; amd. Sec. 1, Ch. 713, L. 1989.  
  33-23-216. Retention and proof of notice. (1) A notice of cancellation or of intention not to renew or of reasons for cancellation of insurance issued under terms of this chapter must be retained for a period of 3 years by the insurer or the insurer's insurance producer within this state and must be made available within this state for examination or inspection by the commissioner or the insurer's insurance producers at any time within the 3-year period upon reasonable notice.   (2) Proof of mailing of notice of cancellation or of intention not to renew or of reasons for cancellation to the named insured at the address shown in the policy or to the named insured's last-known address is sufficient proof of notice.   History: En. Sec. 6, Ch. 262, L. 1971; amd. Sec. 2, Ch. 469, L. 1977; R.C.M. 1947, 40-4410; amd. Sec. 15, Ch. 139, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1235, Ch. 56, L. 2009.  
  33-23-217. Return of unearned premiums. If an insurer cancels a motor vehicle policy covering a commercial or private motor vehicle for nonpayment of a premium, the insurer shall process the cancellation on a pro rata basis. The insurer shall return whatever gross unearned premium is due under the motor vehicle policy to the insured. For purposes of this section, the term "unearned premium" means that part of the original premium, including deposits, not yet earned by the insurer and therefore due the insured if the policy is canceled.   History: En. Sec. 1, Ch. 121, L. 1987.  
  33-23-218 through 33-23-220 reserved.  
  33-23-221. Definitions. As used in 33-23-221 through 33-23-226, the following definitions apply:   (1) "Benefit" means any rebate, discount, abatement, credit, reduction of premium, or other advantage to the policyholder provided under the terms of a telematics agreement.   (2) "Policyholder" means a person who is a present named insured in a motor vehicle liability policy as defined in 33-23-204.   (3) "Recorded data" means the data collected, stored, or transmitted by a recording device identifying performance or operation information about a motor vehicle including:   (a) speed;   (b) direction;   (c) location; and   (d) internal controls and diagnostics, such as steering performance, brake performance, or computer diagnostics.   (4) "Recording device" means a device, mechanism, or system installed in or used in conjunction with a motor vehicle that collects, stores, or transmits recorded data. The term includes the following to the extent that they involve recorded data:   (a) event data recorders;   (b) sensing and diagnostic modules;   (c) electronic control modules;   (d) automatic crash notification systems;   (e) geographic information systems;   (f) cellular phones;   (g) personal digital assistants; and   (h) any other device that collects, stores, or transmits recorded data.   (5) "Telematics agreement" means a written agreement between an insurer and a policyholder of the insurer regarding use of a recording device in a motor vehicle to collect or store recorded data or transmit recorded data to the insurer or to a third party designated by the insurer.   History: En. Sec. 1, Ch. 304, L. 2015.  
  33-23-222. Telematics agreement disclosures. (1) A telematics agreement must be signed by the policyholder.   (2) A telematics agreement must disclose the following:   (a) if the insurer or a third party designated by the insurer provides the recording device, the categories of recorded data the recording device is capable of collecting, storing, or transmitting;   (b) the identification of any third party that may collect, store, transmit, or receive the recorded data in relation to the terms of the telematics agreement;   (c) the categories of recorded data that may be collected, stored, or transmitted;   (d) the purposes for which the insurer or a third party may use the recorded data;   (e) the length of time the insurer or third party may collect, store, transmit, or otherwise retain the data; and   (f) the terms of any benefit associated with the telematics agreement.   History: En. Sec. 2, Ch. 304, L. 2015.  
  33-23-223. Insurer obligations for telematics agreement -- termination. (1) An insurer may provide a benefit to a policyholder for participating in a telematics agreement.   (2) Except as provided in subsection (4), an insurer may not cancel, refuse to issue, or refuse to renew a motor vehicle insurance policy solely because a policyholder refuses to:   (a) enter into or consent to a telematics agreement; or   (b) provide access to recorded data from a recording device.   (3) An insurer:   (a) may not reduce coverage, increase a premium, place in a less favorable rate tier, or deny a claim to a policyholder if the policyholder refuses to enter into or consent to a telematics agreement, except as provided in subsection (4) or (7); and   (b) may not, based upon analysis of recorded data collected in connection with the telematics agreement, reduce coverage, increase a premium, place in a less favorable rate tier, deny a claim, or reduce or refuse to provide a benefit to a policyholder, except as provided in subsections (4), (5), and (7).   (4) Subsections (2) and (3) do not apply to a motor vehicle insurance policy:   (a) based upon the policyholder driving a minimum or maximum number of miles or driving within a certain range of miles; and   (b) that requires a policyholder to use a recording device for purposes of determining mileage.   (5) An insurer may adjust the benefit provided under subsection (1) to the extent that an analysis of the recorded data collected through the telematics agreement accurately represents the policyholder's driving habits.   (6) An insurer offering a telematics agreement shall offer all its policyholders under that policy type an equal opportunity to enter into a telematics agreement except to the extent the recording device used under the telematics agreement is not compatible with the motor vehicle of the policyholder.   (7) (a) An insurer may terminate a telematics agreement and any associated benefit if a policyholder materially fails to comply with a term of the telematics agreement.   (b) Termination of a telematics agreement and any associated benefit under this subsection (7) does not constitute a midterm premium increase as provided in 33-15-1108.   (8) An insurer shall terminate a telematics agreement and any associated benefit upon the request of the policyholder.   History: En. Sec. 3, Ch. 304, L. 2015.  
  33-23-224. Ownership of data. Recorded data collected, stored, or transmitted by a recording device under a telematics agreement:   (1) is personal information as defined in 33-19-104; and   (2) may not be used by an insurer or third party named in the telematics agreement for uses other than those disclosed in the telematics agreement.   History: En. Sec. 4, Ch. 304, L. 2015.  
  33-23-225. Application -- exclusion. (1) The provisions of 33-23-221 through 33-23-226 apply to a telematics agreement entered into between a policyholder and an insurer.   (2) The provisions of 33-23-221 through 33-23-226 do not apply to a manufacturer of a motor vehicle or supplier of an aftermarket device or services or to its respective subsidiaries or affiliates that embed in or provide a recording device for a motor vehicle as long as the manufacturer or supplier or the respective subsidiaries or affiliates is not acting as an insurer.   History: En. Sec. 5, Ch. 304, L. 2015.  
  33-23-226. Rulemaking. The commissioner may adopt rules necessary to implement the provisions of 33-23-221 through 33-23-226.   History: En. Sec. 6, Ch. 304, L. 2015.  
  33-23-301. Cancellation or increase of premium rates by reason of unfounded claims prohibited. Whenever an action for damages is filed against or a claim or demand for damages is made to an insurer of a physician and surgeon, dentist, registered nurse, nursing home administrator, licensed physical therapist, podiatrist, psychologist, osteopath, chiropractor, pharmacist, optometrist, or veterinarian, duly licensed as such under the laws of this state, or against a licensed hospital or long-term care facility as the employer of any such person, in an action, claim, or demand for error, omission, professional negligence, or performance of services without consent, and such action, claim, or demand is later determined to be unfounded and no payment is made by the insurer to the claimant on behalf of such licensee or licensed hospital or long-term care facility or is finally determined to establish nonliability to plaintiff by such licensee or licensed hospital or long-term care facility, the fact of such litigation, claim, or demand shall not be a ground for cancellation or for any increase in insurance premium rates of the professional liability insurance during the term of the policy.   History: En. Sec. 1, Ch. 210, L. 1971; amd. Sec. 1, Ch. 303, L. 1973; R.C.M. 1947, 40-4413.  
  33-23-302. Cancellation or alteration of policy -- increase of premium rates -- written notice required. Any insurer who insures a person licensed in the practice of medicine, as defined in 37-3-102, a dentist, registered nurse, nursing home administrator, registered physical therapist, podiatrist, licensed psychologist, osteopath, chiropractor, pharmacist, optometrist, or veterinarian, licensed under the laws of this state, or a licensed hospital or long-term care facility as the employer of any person identified in this section against liability for error, omission, professional negligence, or performance of services without consent may not cancel or alter the policy insuring the person or increase the premium rates on the policy without first providing the insured 60 days' written notice of the insurer's intention to cancel or alter the policy or increase the premium rates.   History: En. Sec. 1, Ch. 14, L. 1971; amd. Sec. 2, Ch. 303, L. 1973; R.C.M. 1947, 40-4414; amd. Sec. 18, Ch. 798, L. 1991; amd. Sec. 6, Ch. 339, L. 2003.  
  33-23-303 through 33-23-309 reserved.  
  33-23-310. Medical malpractice insurance report by insurer. (1) Each insurer engaged in issuing medical malpractice professional liability insurance in this state shall include the following, by profession and based upon the insurer's experience in this state, in its annual statement to the commissioner of insurance:   (a) the number of medical malpractice insureds as of December 31 of the preceding calendar year;   (b) the amount of direct premiums written and direct premiums paid for medical malpractice insurance during the preceding calendar year;   (c) the number of medical malpractice claims made against its insureds during the preceding calendar year;   (d) the number of medical malpractice claims that were closed and that had a direct loss paid during the preceding calendar year, together with the total amount of direct losses paid for all closed claims for that year;   (e) the number of medical malpractice claims that were still open and had no direct losses paid as of December 31 of the preceding calendar year;   (f) the number of claims filed against its insureds in state and federal courts during the preceding calendar year, including the number of claims that were closed:   (i) without settlement during the preceding calendar year;   (ii) with a settlement during the preceding calendar year and the total amount paid for those claims;   (iii) during the preceding calendar year and that went to trial and the number that resulted in a judgment or verdict for the plaintiff, the number that resulted in a judgment or verdict for the insured, and the number that resulted in some other judgment or verdict;   (g) the total direct losses paid for claims against its medical malpractice insureds that went to trial and were closed during the preceding year; and   (h) other information and statistics that the commissioner of insurance requires.   (2) For purposes of this section:   (a) "insurer" has the meaning provided in 33-1-201; and   (b) "profession" includes the categories of physician, osteopath, podiatrist, dentist, optometrist, registered nurse, licensed practical nurse, or health care facility as defined in 50-5-101.   History: En. Sec. 1, Ch. 213, L. 2005.  
  33-23-311. Repealed. Sec. 73, Ch. 227, L. 2001.   History: (1)En. 40-2827 by Sec. 1, Ch. 212, L. 1977; Sec. 40-2827, R.C.M. 1947; (2)En. 40-2828 by Sec 2, Ch. 212, L. 1977; Sec. 40-2828, R.C.M. 1947; (3)En. 40-2829 by Sec. 3, Ch. 212, L. 1977; Sec. 40-2829, R.C.M. 1947; R.C.M. 1947, 40-2827, 40-2828, 40-2829.  
  33-23-312. Cancellation or nonrenewal of all policies. Any insurer insuring a person described in 33-23-302 who elects to cancel or not renew all policies for all persons identified in 33-23-302 shall provide notice of the decision to cancel or not renew coverage to all affected persons described in 33-23-302 at least 120 days prior to cancellation or nonrenewal.   History: En. Sec. 7, Ch. 339, L. 2003.  
  33-23-401. Written notice required for cancellation or nonrenewal of insurance policies on homes. An insurer may not cancel or refuse to renew any policy insuring private residences, including but not limited to fire, home owner, theft, or liability insurance on any home occupied by the insured as a domicile, without first giving to the insured 45 days' notice in writing, including in the notice a statement of the specific reason or reasons for canceling or not renewing the policy, except that a policy may be canceled for nonpayment of premiums, in which case, the notice to the insured may not be less than 20 days.   History: En. Secs. 1, 2, Ch. 374, L. 1971; amd. Secs. 1, 2, Ch. 82, L. 1975; R.C.M. 1947, 40-4415, 40-4416; amd. Sec. 8, Ch. 339, L. 2003; amd. Sec. 3, Ch. 263, L. 2005; amd. Sec. 30, Ch. 396, L. 2017.  
  33-23-501. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 1, Ch. 475, L. 2005.  
  33-23-502. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 2, Ch. 475, L. 2005.  
  33-23-503. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 3, Ch. 475, L. 2005.  
  33-23-504 through 33-23-506 reserved.  
  33-23-507. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 4, Ch. 475, L. 2005.  
  33-23-508. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 5, Ch. 475, L. 2005.  
  33-23-509. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 6, Ch. 475, L. 2005.  
  33-23-510. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 7, Ch. 475, L. 2005.  
  33-23-511. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 8, Ch. 475, L. 2005.  
  33-23-512. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 9, Ch. 475, L. 2005.  
  33-23-513. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 10, Ch. 475, L. 2005.  
  33-23-514. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 11, Ch. 475, L. 2005.  
  33-23-515. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 12, Ch. 475, L. 2005.  
  33-23-516 through 33-23-518 reserved.  
  33-23-519. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 13, Ch. 475, L. 2005.  
  33-23-520. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 14, Ch. 475, L. 2005.  
  33-23-521. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 15, Ch. 475, L. 2005.  
  33-23-522. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 16, Ch. 475, L. 2005.  
  33-23-523. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 17, Ch. 475, L. 2005.  
  33-23-524. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 18, Ch. 475, L. 2005.  
  33-23-525. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 19, Ch. 475, L. 2005.  
  33-23-526. Repealed. Sec. 2, Ch. 21, L. 2021.  History: En. Sec. 20, Ch. 475, L. 2005.  
  33-24-101. Measure of the indemnity -- rescission for fraud. If there is no valuation in the policy and unless a basis more favorable to the insured is provided for in the policy, the measure of indemnity in an insurance against fire is the expense, at the time that the loss is payable, of replacing the thing lost or injured, in the condition in which it was at the time of the injury; but a valuation, fraudulent in fact, entitles the insurer to rescind the contract.   History: En. Sec. 409, Ch. 286, L. 1959; R.C.M. 1947, 40-4301.  
  33-24-102. Insuring improvements -- insurance equal to true value. Whenever any policy of insurance is written to insure any improvements upon real property in this state against loss or damage and the property insured is considered to be a total loss, without criminal fault on the part of the insured or the insured's assigns, the amount of insurance written in the policy must be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages. The payment of money as a premium for insurance must be prima facie evidence that the party paying the insurance premium is the owner of the property insured. However, any insurance company may assert fraud in obtaining the policy as a defense to a suit on the policy.   History: En. Sec. 410, Ch. 286, L. 1959; R.C.M. 1947, 40-4302; amd. Sec. 25, Ch. 303, L. 1981; amd. Sec. 1236, Ch. 56, L. 2009.  
  33-24-103. Specific valuation -- loss equal to insured value. (1) This section applies to policies, except motor vehicle insurance policies, that insure specific listed items of personal property against any loss or damage.   (2) If the insurer places specific valuations upon particular items of covered property and bases the premium charge on these valuations, then the insurer shall compute any total loss or total damage to the property, when covered, at the stated valuation with no deductions or offsets except for the selected deductible in the policy.   History: En. 40-4303 by Sec. 1, Ch. 96, L. 1974; R.C.M. 1947, 40-4303; amd. Sec. 26, Ch. 303, L. 1981; amd. Sec. 37, Ch. 469, L. 2005.  
  33-24-104. Tax lien on insured property destroyed by fire. If taxes are due and unpaid on property covered by fire insurance and damaged or destroyed by fire, the government entity owed the taxes has a lien on fire insurance proceeds paid in relation to that property in the amount of the unpaid taxes.   History: En. Sec. 2, Ch. 447, L. 1989.  
  33-24-105. Property insurance policy -- conformity with state statutes. A property insurance policy relative to a risk resident, located, or to be performed in this state must contain a provision or the equivalent thereto as follows:   "Conformity with Montana statutes. The provisions of this policy conform to the minimum requirements of Montana law and control over any conflicting statutes of any state in which the insured resides on or after the effective date of this policy."   History: En. Sec. 24, Ch. 798, L. 1991.  
  33-24-201. Short title. This part may be cited as the "Portable Electronics Insurance Act".   History: En. Sec. 1, Ch. 406, L. 2013.  
  33-24-202. Definitions. As used in this part, the following definitions apply:   (1) "Customer" means a person who purchases portable electronics or services related to the use of portable electronics.   (2) "Enrolled customer" means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics.   (3) "Location" means any physical location in this state or any website, call center site, or similar location directed to residents of this state.   (4) "Portable electronics" means electronic devices that are portable in nature and their accessories.   (5) (a) "Portable electronics insurance" means insurance providing coverage for the repair or replacement of portable electronics that may provide coverage for portable electronics against loss, theft, inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss. Portable electronics insurance also includes any agreement in which a person or any legal entity, in exchange for consideration paid, agrees to provide for the future repair, replacement, or provision of portable electronics.   (b) The term does not include:   (i) a service contract governed by Title 30, chapter 14, part 13;   (ii) a policy of insurance covering a seller's or a manufacturer's obligations under a warranty; or   (iii) a homeowner's, renter's, private passenger automobile, commercial, or similar policy.   (6) "Portable electronics transaction" means:   (a) the sale or lease of portable electronics by a vendor to a customer; or   (b) the sale of a service related to the use of portable electronics by a vendor to a customer.   (7) "Supervising entity" means a business entity that is a licensed insurer or insurance producer that is authorized by a licensed insurer to supervise the administration of a portable electronics insurance program.   (8) (a) "Vendor" means a person in the business of engaging in portable electronics transactions directly or indirectly.   (b) The term does not include a cooperative organized and transacting business in this state pursuant to Title 35, chapter 18, its subsidiaries, or any other entity affiliated with the cooperative or its subsidiaries through common ownership.   History: En. Sec. 2, Ch. 406, L. 2013.  
  33-24-203. Licensure of vendors -- rulemaking. (1) A vendor must hold a limited lines insurance producer license to sell or offer coverage under a policy of portable electronics insurance.   (2) A license issued under this part authorizes any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions.   (3) The supervising entity shall maintain a registry of vendor locations that are authorized to sell or solicit portable electronics insurance coverage in this state. Upon request by the commissioner and with 10 days' notice to the supervising entity, the registry must be open to inspection and examination by the commissioner during regular business hours of the supervising entity.   (4) A license issued under this part authorizes the licensee and its employees or authorized representatives to engage in those activities that are permitted in this part.   (5) The commissioner may adopt rules to implement the provisions of this part.   History: En. Sec. 3, Ch. 406, L. 2013.  
  33-24-204. Requirements for sale of portable electronics insurance. (1) At each location where portable electronics insurance is offered to customers, brochures or other written materials must be made available to a prospective customer that:   (a) disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's insurance policy, renter's insurance policy, or other source of coverage;   (b) state that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;   (c) summarize the material terms of the insurance coverage, including:   (i) the identity of the insurer;   (ii) the identity of the supervising entity;   (iii) the amount of any applicable deductible and how it is to be paid;   (iv) benefits of the coverage; and   (v) key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment;   (d) summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event that the customer fails to comply with any equipment return requirements; and   (e) state that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and that the person paying the premium shall receive a refund of any applicable unearned premium.   (2) The written materials required by this section are not subject to filing with or approval by the commissioner.   (3) Portable electronics insurance may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy, subject to 33-1-221 through 33-1-229, issued to a vendor of portable electronics for its enrolled customers.   (4) Eligibility and underwriting standards for customers electing to enroll in coverage must be established by the supervising entity for each portable electronics insurance program.   History: En. Sec. 4, Ch. 406, L. 2013.  
  33-24-205. Authority of vendors of portable electronics. (1) An employee or authorized representative of a vendor may sell or offer portable electronics insurance to a customer and is not subject to licensure as an insurance producer under this title provided that:   (a) the vendor obtains a limited lines insurance producer license to authorize its employees or authorized representatives to sell or offer portable electronics insurance;   (b) the insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the program, including development of a training program for employees and authorized representatives of the vendors. The training required by this subsection (1)(b) must comply with the following:   (i) the training must be delivered to employees and authorized representatives of a vendor who is directly engaged in the activity of selling or offering portable electronics insurance;   (ii) the training may be provided in electronic form. If the training is conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance product that is conducted and overseen by licensed insurance producers or adjusters employed by the supervising entity; and   (iii) each employee and authorized representative individually must receive basic instruction about the portable electronics insurance offered to customers and the disclosures required under 33-24-204;   (c) employees or authorized representatives of a vendor of portable electronics may not advertise, represent, or otherwise represent to the public that they are nonlimited lines licensed insurance producers.   (2) Employees or authorized representatives of a vendor of portable electronics may not be compensated based primarily on the number of customers enrolled for portable electronics insurance coverage but may receive compensation for activities under the limited lines insurance producer license that is incidental to their overall compensation.   (3) (a) The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services must be separately itemized on the enrolled customer's bill.   (b) If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services.   (c) Vendors that are billing and collecting the charges are not required to maintain the funds in a segregated account if the vendor is authorized by the insurer to hold the funds in an alternative manner and remits the amounts to the supervising entity within 60 days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance are considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive compensation for billing and collection services.   History: En. Sec. 5, Ch. 406, L. 2013.  
  33-24-206. Application for vendor license -- fees. (1) An applicant for a license under this part shall file with the commissioner an application on forms prescribed by the commissioner.   (2) The application must provide:   (a) the name, residence address, and other information required by the commissioner for an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendor's compliance with the requirements of this part, and if the vendor derives more than 50% of its revenue from the sale of portable electronics insurance, the information required by this subsection (2)(a) must be provided for all officers, directors, and shareholders of record having beneficial ownership of 10% or more of any class of securities registered under federal securities law; and   (b) the location of the applicant's home office.   (3) Any vendor engaging in portable electronics insurance transactions on or before August 1, 2013, shall apply for licensure within 90 days of the application being made available by the commissioner. Any applicant commencing operations after August 1, 2013, shall obtain a license prior to offering portable electronics insurance.   (4) Initial licenses issued under this part are valid for a period of 24 months.   (5) Each vendor of portable electronics licensed under this part shall pay to the commissioner a fee determined by the commissioner as follows:   (a) for a vendor that is engaged in portable electronics transactions at 10 or fewer locations in the state, the fee may not exceed $100 for an initial license or for each renewal; and   (b) for a vendor that is engaged in portable electronics transaction at more than 10 locations in the state, the fee may not exceed $1,000 for an initial license or $500 for each renewal.   History: En. Sec. 6, Ch. 406, L. 2013.  
  33-24-207. Suspension or revocation of vendor license. If a vendor of portable electronics or its employee or authorized representative violates any provision of this part, the commissioner may do any of the following after notice and the opportunity for a hearing:   (1) impose fines not to exceed $500 for each violation or $5,000 in the aggregate for violations;   (2) impose other penalties that the commissioner considers reasonable to carry out the purpose of this part, including:   (a) suspending the privilege of transacting portable electronics insurance under this part at specific business locations where violations have occurred; or   (b) suspending or revoking the ability of individual employees or authorized representatives to act under the license.   History: En. Sec. 7, Ch. 406, L. 2013.  
  33-24-208. Termination of portable electronics insurance. (1) Except as provided in subsections (3) through (5), an insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance upon providing the vendor policyholder and enrolled customers with at least 30 days' notice.   (2) If the insurer changes the terms and conditions of a policy of portable electronics insurance, the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating that a change in the terms and conditions has occurred and a summary of material changes.   (3) An insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon 15 days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim under the coverage.   (4) An insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy for nonpayment of premium with at least 10 days' notice.   (5) An insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy without prior notice:   (a) if the enrolled customer ceases to have an active service agreement with the vendor of portable electronics; or   (b) if an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within 30 calendar days after exhaustion of the limit. If the notice of exhaustion is not timely sent, the customer's enrollment must continue regardless of the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer.   (6) When a portable electronics insurance policy is terminated by a vendor policyholder, the vendor policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice must be mailed or delivered to the enrolled customer at least 30 days prior to the termination.   (7) Any notice or correspondence with respect to a policy of portable electronics insurance required by this section or other applicable law must be in writing and sent within the required notice period. Notices and correspondence may be sent either by mail or by electronic means as set forth in this subsection. If the notice or correspondence is mailed, it must be sent to the vendor of portable electronics at the vendor's mailing address specified for the purpose and to an affected enrolled customer's last-known mailing address on file with the insurer. The insurer or vendor of portable electronics shall maintain proof of mailing in a form authorized or accepted by the United States postal service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it must be sent to the vendor of portable electronics at the vendor's electronic mail address specified for the purpose and to an affected enrolled customer's last-known electronic mail address as provided by each enrolled customer to the insurer or vendor of portable electronics. For purposes of this subsection, an enrolled customer's provision of an electronic mail address to the insurer or vendor of portable electronics is considered to be consent to receive notices and correspondence by electronic means. The insurer or vendor of portable electronics shall maintain proof that the notice or correspondence was sent.   (8) Notices or correspondence required by this part or otherwise required by law may be sent on behalf of an insurer or vendor by the supervising entity appointed by the insurer.   History: En. Sec. 8, Ch. 406, L. 2013.  
  33-24-209. Portable electronics insurance claims. (1) An individual who collects claim information from or furnishes claim information to insureds or claimants and who conducts data entry, including entering data into an automated claims adjudication system, is exempt from licensure under this title if no more than 25 of these individuals are under the supervision of one licensed independent adjuster or licensed insurance producer who is exempt from licensure pursuant to 33-17-102(1)(b)(iii).   (2) For purposes of portable electronics insurance claims, residents of Canada may not be licensed as nonresident adjusters unless they have obtained a resident license in another state or designated another state as their home state.   (3) For purposes of this section, "automated claims adjudication system" means a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of portable electronics insurance claims that:   (a) may be utilized only by a licensed independent adjuster, licensed insurance producer, or supervised individual operating pursuant to this section;   (b) must comply with all claims payment requirements of this title; and   (c) must be certified as compliant with this section by a licensed independent adjuster that is an officer of the entity that employs the individuals operating pursuant to this section.   History: En. Sec. 9, Ch. 406, L. 2013.  
  33-24-301. Short title -- purpose.This part may be cited as the "Self-Storage Insurance Act". The purpose of this act is to coordinate with the Self-Storage Facilities Act, Title 70, chapter 6, part 6, and allow for operators of the facilities to offer self-storage insurance to their renters.  History: En. Sec. 1, Ch. 121, L. 2021. 
  33-24-302. Definitions. As used in this part, the following definitions apply:  (1) "Authorized representative" means an individual authorized by an operator to sell or offer self-storage insurance coverage in accordance with this part.   (2) "Location" means any physical location in this state.   (3) (a) "Operator" means a business entity that is the owner, operator, lessor, or sublessor of a self-storage facility or an agent or another person authorized to manage the facility or to receive rent from a renter under a rental agreement.   (b) The term does not include a warehouse operator if the warehouse operator issues a warehouse receipt, bill of lading, or other document of title for the personal property stored. The operator may be a resident or nonresident of this state.   (4) "Personal property" means movable property not affixed to land.   (5) "Rental agreement" means a written agreement or lease that establishes or modifies the terms, conditions, or rules concerning the use and occupancy of a leased space at a self-storage facility.   (6) "Renter" means a person entitled to the use of a leased space at a self-storage facility under a rental agreement or the person's successors or assigns.   (7) "Self-storage facility" means real property consisting of individual storage spaces in which a renter customarily stores and removes personal property on a self-service basis.   (8) "Self-storage insurance" means insurance offered in connection with and incidental to the rental of a leased space at a self-storage facility and which provides coverage to renters for the loss of or damage to personal property occurring at the facility or when the property is in transit to or from the facility during the term of the rental agreement. Self-storage insurance coverage may be offered on a month-to-month or other periodic basis under an individual, commercial, or group policy.   (9) "Supervising entity" means a business entity that is a licensed insurer or insurance producer that is authorized by a licensed insurer to supervise the administration of a self-storage insurance program.   History: En. Sec. 2, Ch. 121, L. 2021. 
  33-24-303. Licensure of operators -- rulemaking. (1) An operator must hold a limited lines insurance producer license in order to sell or offer self-storage insurance coverage. An operator is not required to hold a license solely to display and make available to renters and prospective renters brochures and other promotional materials created by or on behalf of an authorized insurer.  (2) A license issued under this part authorizes the operator and the employees and authorized representatives of the operator to sell and offer self-storage insurance coverage to renters at each location at which the operator conducts business.   (3) The supervising entity shall maintain a registry of the locations where the operator sells or offers self-storage insurance coverage in this state. On request by the commissioner and with 10 days' notice to the supervising entity, the registry must be open to inspection and examination by the commissioner during regular business hours of the supervising entity.   (4) A license issued under this part authorizes the operator and its employees and authorized representatives to engage in those activities that are permitted in this part.   (5) Operators and their employees and authorized representatives are exempt from all prelicensing examination and continuing education requirements.   (6) The commissioner may adopt rules to implement the provisions of this part.   History: En. Sec. 3, Ch. 121, L. 2021. 
  33-24-304. Brochures and materials explaining self-storage coverage. (1) At each location where self-storage insurance coverage is offered to renters, written or electronic brochures or materials must be made available to renters that:  (a) disclose that self-storage insurance may provide a duplication of coverage already provided by a renter's homeowner's insurance policy, renter's insurance policy, or other source of coverage;   (b) state that the enrollment by the renter in a self-storage insurance program offered by the operator is not required in order to rent a leased space at the self-storage facility;   (c) provide a copy of the actual self-storage insurance coverage, or summarize the material terms of the insurance coverage, including:   (i) the identity of the insurer;   (ii) the identity of the supervising entity, if different from the insurer;   (iii) the amount of any applicable deductible and how it is to be met;   (iv) benefits of the coverage; and   (v) key terms and conditions of the coverage;   (d) summarize the process for filing a claim; and   (e) state that a renter that purchases self-storage insurance coverage may cancel the coverage at any time and that the person paying the premium must receive a refund of any applicable unearned premium.   (2) The written or electronic brochures or materials required by this section are not subject to filing with or approval by the commissioner.   History: En. Sec. 4, Ch. 121, L. 2021. 
  33-24-305. Authority of operators. (1) An employee or authorized representative of an operator may sell and offer self-storage insurance coverage to a renter and is not subject to licensure as an insurance producer under this title provided that:  (a) the operator obtains a limited lines insurance producer license to authorize its employees or authorized representatives to sell and offer self-storage insurance coverage;   (b) the insurer issuing the self-storage insurance either directly supervises or appoints a supervising entity to supervise the administration of the program, including development of a training program for employees and authorized representatives of the operator. The training required by this subsection (1)(b) must comply with the following:   (i) the training must be delivered to employees and authorized representatives of an operator who are directly engaged in the activity of selling and offering self-storage insurance coverage;   (ii) if the training is provided in an electronic form, the supervising entity shall implement a supplemental education program regarding the self-storage insurance that is conducted and overseen by licensed insurance producers or adjusters; and   (iii) each employee and authorized representative who is directly engaged in the activity of selling and offering self-storage insurance must receive basic instruction about the self-storage insurance offered to renters and the disclosures required under 33-24-304(1); and   (c) employees and authorized representatives of an operator may not advertise, represent, or otherwise hold out to the public that they are nonlimited lines licensed insurance producers unless otherwise licensed.   (2) Employees or authorized representatives of an operator may not be compensated based primarily on the number of renters enrolled for self-storage insurance coverage but may receive compensation for activities under the limited lines insurance producer license that is incidental to their overall compensation.   (3) (a) The charges for self-storage insurance coverage may be billed and collected by the operator and its employees and authorized representatives. If billed by the operator, the charges for self-storage insurance coverage must be separately itemized on the renter's bill.   (b) Operators that are billing and collecting the charges are not required to maintain the funds in a segregated account if the operator is authorized by the insurer or supervising entity to hold the funds in an alternative manner and remits the premiums to the insurer or supervising entity within 60 days of receipt. All premiums received by an operator from a renter for the sale of self-storage insurance are considered funds held by the operator in a fiduciary capacity for the benefit of the insurer. Operators may receive compensation for billing and collection services.   History: En. Sec. 5, Ch. 121, L. 2021. 
  33-24-306. Application for operator license -- fees. (1) An applicant for a license under this part shall file with the commissioner an application on forms prescribed by the commissioner. The applicant may be a resident or nonresident of this state.  (2) (a) The application must provide:   (i) the name, residence address, and other information required by the commissioner for an authorized representative of the operator or supervising entity that is designated by the applicant as the person responsible for the operator's compliance with the requirements of this part; and   (ii) the location of the operator's home office.   (b) If the operator derives more than 50% of its revenue from the sale of self-storage insurance, the information required by subsection (2)(a) must be provided for all officers, directors, and shareholders of record having beneficial ownership of 10% or more of any class of securities registered under federal securities law.   (3) Initial licenses issued under this part are valid for a period of 24 months.   (4) Each operator licensed under this part shall pay to the commissioner a fee determined by the commissioner as follows:   (a) for an operator that sells self-storage insurance at 10 or fewer locations in the state, the fee may not exceed $100 for an initial license or for each renewal; and   (b) for an operator that sells self-storage insurance at more than 10 locations in the state, the fee may not exceed $250 for an initial license or $100 for each renewal.   History: En. Sec. 6, Ch. 121, L. 2021. 
  33-24-307. Suspension or revocation of operator license. If an operator or its employee or authorized representative violates any provision of this part, the commissioner may do any of the following after notice and the opportunity for a hearing:  (1) impose fines not to exceed $500 for each violation or $5,000 in the aggregate for violations; or   (2) impose other penalties that the commissioner considers reasonable to carry out the purpose of this part, including:   (a) suspending the privilege of transacting self-storage insurance under this part at specific business locations where violations have occurred; or   (b) suspending or revoking the ability of individual employees or authorized representatives to act under the license.   History: En. Sec. 7, Ch. 121, L. 2021. 
  33-25-101. Renumbered 33-25-211. Code Commissioner, 1985.  
  33-25-102. Renumbered 33-25-212. Code Commissioner, 1985.  
  33-25-103. Repealed. Sec. 22, Ch. 519, L. 1985.   History: En. Sec. 415, Ch. 286, L. 1959; R.C.M. 1947, 40-4601; amd. Sec. 2, Ch. 84, L. 1983.  
  33-25-104. Short title. This chapter may be cited as the "Montana Title Insurance Act".   History: En. Sec. 1, Ch. 519, L. 1985.  
  33-25-105. Definitions. As used in this chapter, the following definitions apply:   (1) "Abstract" means a written representation, provided pursuant to a contract and expected to be relied upon by the person who has contracted for the receipt of that representation, listing all recorded conveyances, instruments, or documents which, under the laws of this state, impart constructive notice regarding the chain of title to real property described in the abstract. Abstract includes "abstract of title".   (2) "Applicant" means a person, whether or not a prospective insured, who applies to a title insurer or title insurance producer for a title insurance policy, but does not include a title insurance producer.   (3) "Approved attorney" means an attorney authorized to practice law in this state, except an agent or employee of a title insurer, whose certification as to the status of the title to real property a title insurer is willing to accept as the basis for issuance of a title insurance policy.   (4) "Associate" means a:   (a) corporation, partnership, or other business entity organized for profit, of which a producer of title business is a director, officer, partner, employee, or owner of 5% or more of its equity or capital;   (b) franchisor or franchisee of a producer of title business;   (c) spouse, parent, or child of a producer of title business;   (d) corporation, partnership, or other business entity that controls, is controlled by, or is under common control with a producer of title business; or   (e) person with whom a producer of title business or an associate has an agreement, arrangement, understanding, or course of conduct having the purpose or substantial effect of evading the provisions of this title.   (5) "Controlled business" means that portion of the business of title insurance in this state of a title insurer or title insurance producer that is referred to it by a producer or associate having a financial interest in the title insurer or title insurance producer.   (6) "Financial interest" means a legal or beneficial interest that entitles the holder, directly or indirectly, to 1% or more of the net profits or net worth of the entity in which the interest is held.   (7) "Preliminary report" means an offer to issue a title insurance policy subject to any exceptions stated in the report or other matters that may be incorporated by reference therein. Preliminary report includes a commitment or binder.   (8) "Producer of title business" or "producer" means a person, corporation, partnership, or other business entity, including an officer, director, or owner of 5% or more of the equity or capital thereof, engaged in this state in the trade, business, occupation, or profession of:   (a) buying or selling interests in real property;   (b) making loans secured by interests in real property; or   (c) acting as broker, insurance producer, or representative of a person described in subsection (8)(a) or (8)(b).   (9) "Rate" means fees for:   (a) issuing a title insurance policy, including any service charge or fee for the issuance;   (b) abstracting, searching, and examining title to real property when prepared or issued in contemplation of or in conjunction with the issuance of a title insurance policy; and   (c) preparing or issuing preliminary reports, commitments, binders, or similar products prepared or issued in contemplation of or in conjunction with the issuance of a title insurance policy.   (10) "Refer" means to direct, cause to be directed, or exercise an influence over the direction of title insurance business, whether or not the consent or approval of another person is sought or obtained with respect to the referral.   (11) "Title insurance business" means:   (a) issuing or offering to issue a title insurance policy as an insurer;   (b) transacting or proposing to transact any of the following as a title insurer or title insurance producer, in contemplation of or in conjunction with the issuance of a title insurance policy:   (i) soliciting or negotiating the issuance of a title insurance policy;   (ii) guaranteeing, warranting, or otherwise insuring the correctness of title searches;   (iii) handling escrows, settlements, or closings;   (iv) executing title insurance policies, reports, commitments, binders, and endorsements;   (v) effecting contracts of reinsurance; or   (vi) abstracting, searching, or examining titles;   (c) transacting, as a title insurer or insurance producer, matters subsequent to the issuance of a title insurance policy and arising out of the policy; or   (d) doing or proposing to do business that, in substance, is equivalent to any of the activities described in subsections (11)(a) through (11)(c) in a manner designed to evade the provisions of this title.   (12) "Title insurance policy" means a contract by which, subject to its stated terms and conditions, a title insurer insures or indemnifies the insured against loss or damage sustained by reason of:   (a) defects in or liens or encumbrances on the title to the stated property;   (b) unmarketability of the title to the stated property; or   (c) invalidity or unenforceability of liens or encumbrances on the stated property.   (13) (a) "Title insurance producer" means a person who holds a valid title insurance producer's license and is authorized in writing by a title insurer to:   (i) solicit title insurance business;   (ii) collect rates;   (iii) determine insurability in accordance with underwriting rules and standards of the insurer; or   (iv) issue policies of the title insurer.   (b) Title insurance producer does not include an approved attorney.   (14) "Title insurer" means an insurer formed and authorized under the laws of this state to transact the business of title insurance in this state or a foreign or alien insurer so authorized.   (15) "Title plant" means a set of privately maintained records in which entries have been made of documents imparting constructive notice, under the law, of matters affecting title to real property, an interest therein, or an encumbrance thereon, that have been filed or recorded in the jurisdiction for which the title plant is maintained and from which the ownership of real property within the jurisdiction can be ascertained and liens, encumbrances, defects, and clouds on title to the real property can be determined.   History: En. Sec. 2, Ch. 519, L. 1985; amd. Secs. 1, 3, Ch. 713, L. 1989.  
  33-25-106. Application. (1) This chapter applies to all title insurers, title insurance rating organizations, title insurance producers, applicants for title insurance, title insurance policyholders, and all other persons engaged in title insurance business in this state.   (2) This chapter does not authorize the practice of law by a person who is not licensed to practice law in this state, and this chapter does not authorize the commissioner to regulate the practice of law.   History: En. Sec. 3, Ch. 519, L. 1985; amd. Sec. 3, Ch. 713, L. 1989.  
  33-25-107 through 33-25-110 reserved.  
  33-25-111. Abstracts of title distinguished from title insurance policy and preliminary report. (1) A title insurance policy is not an abstract of title or representation as to the condition of title to the stated property.   (2) A preliminary report is not an abstract of title. The rights, duties, and liabilities applicable to the preparation and issuance of an abstract of title are not applicable to the issuance of a preliminary report. A preliminary report does not constitute a representation as to the condition of title to real property, but constitutes a statement of the terms and conditions upon which the issuer is willing to issue its title insurance policy.   History: En. Sec. 4, Ch. 519, L. 1985.  
  33-25-201. Escrow, closing, or settlement services -- title indemnification -- maintenance of accounts -- maintenance of nominal or short-term accounts -- rules. (1) A title insurer or title insurance producer may provide escrow, settlement, or closing services, or any combination of those services and may operate as an escrow, settlement, or closing agent subject to the provisions of subsections (2) through (9).   (2) A title insurer or title insurance producer shall:   (a) deposit funds accepted in connection with an escrow, settlement, closing, or title indemnification in a separate fiduciary trust account in a bank or other financial institution insured by an agency of the federal government and segregate the funds by escrow, settlement, closing, or title indemnification in its records. The funds are the property of the person entitled to the funds under the terms of the escrow, settlement, closing, or title indemnification and are not subject to debts of the title insurer or title insurance producer. A title insurer or title insurance producer may use the funds only in accordance with the terms of the individual escrow, settlement, closing, or title indemnification under which the funds are accepted.   (b) except as provided in subsections (3) through (7), pay any interest received on funds deposited with it in connection with an escrow, settlement, closing, or title indemnification to the depositing person or as otherwise provided by the terms of the escrow, settlement, closing, or title indemnification;   (c) maintain separate records of all receipts and disbursements of escrow, settlement, closing, or title indemnification funds; and   (d) comply with rules adopted by the commissioner pertaining to escrow, settlement, closing, or title indemnification transactions.   (3) In the absence of written instructions to the contrary, a title insurer or title insurance producer may maintain a pooled, interest-bearing, depository account for deposit of trust funds that are nominal in amount or expected to be held for a short period of time. The account must comply with the following provisions:   (a) The account may include only trust funds that are nominal in amount or that are expected to be held for a short period of time.   (b) Interest from the account may not be made available to the title insurer or title insurance producer.   (c) The determination of whether trust funds are nominal in amount or to be held for a short period of time is to be determined by each title insurer or title insurance producer.   (d) Notification to parties whose funds are nominal in amount or to be held for a short period of time is not required.   (4) An interest-bearing account established pursuant to subsection (3) may be established with any financial institution that is authorized by federal or state law to do business in the state in which the title insurer's or title insurance producer's office is situated and that is a member of the federal deposit insurance corporation. Funds deposited in the accounts must be subject to withdrawal upon request and without delay.   (5) (a) The Montana land title association shall establish the Montana land title foundation for the administration of the funds generated by the interest on trust accounts program for the following purposes:   (i) to support Montana nonprofit charitable organizations;   (ii) to provide continuing education programs for licensed title insurance agents; and   (iii) to promote knowledge and awareness of the real estate and title insurance industries.   (b) The foundation shall establish bylaws for the administration of the foundation in accordance with subsections (5)(a)(i) through (5)(a)(iii).   (6) A title insurer or title insurance producer depositing funds in an account created pursuant to subsections (3) and (4) shall direct the depository institution to:   (a) at least quarterly, remit interest and dividends, less any service charges or fees, on the average monthly balance on the account or as otherwise computed in accordance with the institution's standard accounting practice for other depositors to the Montana land title association foundation; and   (b) transmit with each remittance to the foundation a statement showing the name of the title insurer or title insurance producer for whom the remittance is sent and the rate of interest applied.   (7) The Montana land title association foundation shall maintain records of each remittance and statement received from depository institutions for a period of at least 3 years and shall, upon request, promptly make available to a title insurer or title insurance producer the records and statements pertaining to the title insurer's or title insurance producer's account.   (8) All interest transmitted to the Montana land title association foundation must, after deductions for necessary and reasonable administrative expenses of the foundation for operating the interest on trust accounts program, be distributed by the foundation for the purposes set forth in subsections (5)(a)(i) through (5)(a)(iii) in whatever proportion the foundation determines is appropriate.   (9) A title insurance producer shall keep books of account, records, and vouchers pertaining to any escrow, closing, settlement, or title indemnification business transacted, in a manner that allows the commissioner or the commissioner's authorized representative to readily ascertain, under the authority of 33-1-402, whether the title insurance producer has complied with all applicable provisions of this title.   History: En. Sec. 7, Ch. 519, L. 1985; amd. Secs. 1, 3, Ch. 713, L. 1989; amd. Sec. 1, Ch. 250, L. 1995.  
  33-25-202. Sharing of rate proceeds. Title insurers and insurance producers may share rate proceeds between or among themselves in any combination and may accept commissions as provided in 33-17-1103, unless the sharing of rate proceeds is an unlawful rebate or inducement under this title or is a payment of a forwarding fee or finders fee.   History: En. Sec. 11, Ch. 519, L. 1985; amd. Sec. 61, Ch. 713, L. 1989.  
  33-25-203 through 33-25-210 reserved.  
  33-25-211. Guaranty fund -- investments. (1) A title insurer shall establish and maintain the guaranty fund required under 33-2-517 and may invest in necessary plant and equipment and in other investments as authorized under this section.   (2) In addition to other investments eligible under this part, a title insurer may invest and have invested an amount not exceeding 50% of its paid-in capital stock in its title plant, in equipment, and with the commissioner's consent, in stock of abstract companies and of title insurance producers.   (3) Investments authorized by this section may not be credited against the insurer's required guaranty fund or unearned premium reserve provided for under 33-2-517.   (4) A title plant and equipment may not be allowed as an asset in any determination of the insurer's financial condition at a value greater than actual cost.   History: En. Sec. 417, Ch. 286, L. 1959; R.C.M. 1947, 40-4603; Sec. 33-25-101, MCA 1983; redes. 33-25-211 by Code Commissioner, 1985; amd. Sec. 47, Ch. 304, L. 1999.  
  33-25-212. Rates filed with commissioner. (1) A title insurer shall file with the commissioner a complete schedule of rates to be charged by it for title insurance as to property located in this state. The rates must be all-inclusive of the total charge for insurance as specified in the policy and must be accompanied by supporting data.   (2) A rate may not be excessive, inadequate, or unreasonably discriminatory.   (3) A title insurer may not quote or charge any rate for title insurance other than the applicable rate previously filed by it with the commissioner.   History: En. Sec. 416, Ch. 286, L. 1959; R.C.M. 1947, 40-4602; amd. Sec. 27, Ch. 303, L. 1981; Sec. 33-25-102, MCA 1983; redes. 33-25-212 by Code Commissioner, 1985; amd. Sec. 20, Ch. 399, L. 2007.  
  33-25-213. Limitations on authority. (1) An insurer that transacts or is licensed to transact a class or kind of insurance other than title insurance is not eligible for the issuance or renewal of a license to transact the business of title insurance in this state and may not transact, underwrite, or issue title insurance. An insurer authorized to transact any combination of kinds of insurance, including title insurance, under an existing certificate of authority may continue to do so until the certificate of authority is renewed effective June 1, 1986.   (2) A title insurer may not engage in the business of guaranteeing payment of the principal or interest of bonds or mortgages.   (3) A title insurer may not engage in the business of guaranteeing the obligations of other persons, except its title insurance producers or approved attorneys in the normal course of its business.   History: En. Sec. 5, Ch. 519, L. 1985; amd. Sec. 3, Ch. 713, L. 1989.  
  33-25-214. Underwriting standards -- record retention. (1) A title insurer may not issue a title insurance policy unless it, its title insurance producer, or an approved attorney has conducted a reasonable search and examination of the title and made a determination of insurability of title in accordance with sound underwriting practices. The title insurer or title insurance producer shall preserve and retain in its files evidence of the examination of title and determination of insurability. The title insurer or title insurance producer may keep original evidence or may establish in the regular course of business a system of recording, copying, or reproducing evidence by any process that accurately and legibly reproduces, or forms a durable medium for reproducing, the contents of the original.   (2) Subsection (1) does not apply to:   (a) a title insurer assuming liability through a contract of reinsurance; or   (b) a title insurer acting as coinsurer if one of the other coinsuring title insurers has complied with subsection (1).   (3) Except as allowed by rules adopted by the commissioner, a title insurer or title insurance producer may not knowingly issue any title insurance product or commitment to insure unless all outstanding enforceable recorded liens or other interests against the property title to be insured are shown.   (4) An insurer issuing a policy in violation of this section is estopped, as a matter of law, to deny the validity of the policy as to any claim or demand of the insured arising under the policy.   History: En. Sec. 6, Ch. 519, L. 1985; amd. Sec. 62, Ch. 713, L. 1989; amd. Sec. 21, Ch. 399, L. 2007.  
  33-25-215. Report of claims. A title insurance producer must immediately report every loss claim to the title insurer that issued the policy against which the claim is presented.   History: En. Sec. 9, Ch. 519, L. 1985; amd. Sec. 3, Ch. 713, L. 1989.  
  33-25-216. Notice of issuance of mortgagee policy. (1) A title insurer or title insurance producer that issues a mortgagee's policy of title insurance on a loan made simultaneous to the purchase of all or part of the property securing the loan, when an owner's policy has not been ordered, shall inform the borrower in writing that the mortgagee's policy is to be issued, that the mortgagee's policy does not protect the borrower, and that the borrower may obtain an owner's title insurance policy for the borrower's protection. This notice must be provided, on a form prescribed by the commissioner, before issuance of the mortgagee's policy.   (2) If the borrower elects not to purchase an owner's title insurance policy, the title insurer or title insurance producer shall obtain from the borrower a statement in writing that the notice has been received and that the borrower waives the right to purchase an owner's title insurance policy. If the buyer refuses to provide the statement and waiver, the title insurer or title insurance producer shall indicate the refusal in the file. The statement and waiver must be on a form prescribed by the commissioner and must be retained by the title insurer or title insurance producer for at least 5 years after receipt.   History: En. Sec. 15, Ch. 519, L. 1985; amd. Sec. 3, Ch. 713, L. 1989; amd. Sec. 1237, Ch. 56, L. 2009.  
  33-25-301. Refusal, suspension, or revocation of title insurance producer's license. (1) In addition to the causes provided in 33-17-1001, the commissioner may refuse to license an applicant or renew the license of a person as a title insurance producer or may suspend or revoke a title insurance producer's license or may fine a title insurance producer or applicant, after notice and opportunity for a hearing, if the commissioner finds that the license applicant or licensee has:   (a) made a material misstatement in an application for a title insurance producer license;   (b) commingled funds belonging to applicants, escrow participants, or others;   (c) intentionally misrepresented the terms of a title insurance policy to an applicant or policyholder or has misrepresented material facts to, concealed material facts from, or made false statements to a party to an escrow, settlement, or closing transaction;   (d) in conducting affairs as a title insurance producer, used coercive practices or demonstrated financial irresponsibility;   (e) aided, abetted, or assisted another person in violating the provisions of this title or a rule adopted by the commissioner.   (2) The commissioner may impose any other appropriate penalty provided for in this title.   (3) The commissioner may refuse, suspend, or revoke the license of a person licensed as a title insurance producer for the actions described in subsection (1) committed by any individual designated in the license.   History: En. Sec. 10, Ch. 519, L. 1985; amd. Sec. 63, Ch. 713, L. 1989; amd. Sec. 62, Ch. 227, L. 2001.  
  33-25-302. Disapproval of agency contracts. (1) The commissioner may disapprove a title agency contract between a title insurance producer and title insurer, upon appropriate notice to the parties to the contract, if the commissioner finds that the contract, together with all amendments and related documents:   (a) does not provide for adequate monitoring of the insurance producer's financial transactions; or   (b) provides for inadequate, unreasonable, or excessive amounts to be paid to or retained by the title insurance producer. Factors the commissioner may consider in this determination include but are not limited to the insurance producer's duties under the contract and the general level of amounts paid to or retained by other title insurance producers in the state performing or assuming comparable duties.   (2) A person may not act as a title insurance producer under an agency contract that has been disapproved by the commissioner.   History: En. Sec. 8, Ch. 519, L. 1985; amd. Sec. 64, Ch. 713, L. 1989; amd. Sec. 1238, Ch. 56, L. 2009.  
  33-25-401. Prohibited practices -- referrals -- splitting charges -- exemptions. (1) Except as provided in subsection (2), a person may not:   (a) give or accept a fee, rebate, or thing of value pursuant to an agreement or understanding that title insurance business will be referred to a title insurance producer; or   (b) give or accept a portion, split, or percentage of a charge made or received for title insurance business in connection with a transaction involving real property in this state, other than for services actually performed.   (2) (a) A person may pay a return on an investment, based on a percentage of an ownership interest in a title insurance agency, if:   (i) at or prior to the time of a referral, a disclosure of the existence of the arrangement is made to the person being referred and, in connection with the referral, the person is provided a written estimate of the charge or range of charges generally made by the title insurance producer to which the person is referred; and   (ii) the person is not required to use a particular insurance producer.   (b) The following arrangements are not a violation of subsection (2)(a)(ii):   (i) an arrangement that requires a buyer, borrower, or seller to pay for the services of an attorney, credit reporting agency, or real estate appraiser chosen by a lender to represent the lender's interest in a real estate transaction; or   (ii) an arrangement by which an attorney or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as insurance producer or through a separate corporate title insurance agency that may be established by that attorney or law firm and operated as an adjunct to the attorney's or firm's law practice.   (c) Failure to disclose a controlled business relationship is not a violation of subsection (2)(a)(i) if the failure was not intentional and resulted from a bona fide error, proven by a preponderance of the evidence.   (3) This section does not prohibit:   (a) the payment of a fee to an attorney for services actually rendered or by a title insurance producer for services actually performed in the issuance of a title insurance policy; or   (b) payment of a bona fide salary, compensation, or other payment for goods or facilities actually furnished or for services actually performed.   History: En. Sec. 12, Ch. 519, L. 1985; amd. Sec. 65, Ch. 713, L. 1989; amd. Sec. 1239, Ch. 56, L. 2009.  
  33-25-402. Prohibited practices -- penalties -- treble damages, court costs, and attorney fees -- injunction. (1) A person found to have violated the provisions of 33-25-401 is jointly and severally liable to the person charged for the title insurance business involved in the violation for an amount equal to three times the amount of the charge paid for the business.   (2) In a civil action based on 33-25-401 and this section, the court may award to the prevailing party court costs plus reasonable attorney fees.   (3) The commissioner may bring a civil action to enjoin a violation of 33-25-401.   History: En. Sec. 13, Ch. 519, L. 1985.  
  33-25-403. Prohibited practices -- producer and associates -- prohibition of favored insurance producer or insurer. A producer or associate may not, directly or indirectly, require as a condition, agreement, or understanding of providing another person a loan, loan extension, credit, sale, property, contract, lease, or service that the other person obtain title insurance of any kind from a particular title insurer or title insurance producer. A title insurer or title insurance producer may not knowingly participate in a plan or transaction prohibited by this section.   History: En. Sec. 14, Ch. 519, L. 1985; amd. Sec. 66, Ch. 713, L. 1989.  
  33-26-101. Corporations as sureties. (1) In all cases where an undertaking or bond, with any number of sureties, is authorized or required by any law of this state, any corporation with a paid-up capital of not less than $100,000, incorporated under the laws of this state for the purpose of making, guaranteeing, or becoming a surety upon bonds or undertakings required or authorized by law, may become and must be accepted as security or as a sole and sufficient security upon the undertaking or bond, and the corporate surety must be subject to all liabilities and entitled to all the rights of natural persons as sureties.   (2) Whenever the liabilities of any corporation described in subsection (1) exceed its assets, the state auditor shall require the deficiency to be paid up in 60 days, and if it is not paid up, then the state auditor shall issue a certificate showing the extent of the deficiency and shall publish the certificate once a week for 3 weeks in a daily paper published in the town or city in which the principal office of the corporation is located, and until the deficiency is paid up, the company may not be accepted as a surety on any undertaking or bond. In estimating the condition of a company, the state auditor shall allow as assets only assets that are allowed under existing laws at the time and shall charge as liabilities, in addition to 80% of the capital stock, all outstanding indebtedness of the company and the premium reserved equal to 50% of the premiums charged by the company on all risks then in force.   History: Ap. p. Sec. 1, p. 70, L. 1893; re-en. Sec. 1900, C. Civ. Proc. 1895; re-en. Sec. 7193, Rev. C. 1907; re-en. Sec. 9826, R.C.M. 1921; Cal. C. Civ. Proc. Sec. 1056; re-en. Sec. 9826, R.C.M. 1935; Sec. 93-8711, R.C.M. 1947; Ap. p. Sec. 2, p. 70, L. 1893; re-en. Sec. 1901, C. Civ. Proc. 1895; re-en. Sec. 7195, Rev. C. 1907; re-en. Sec. 9827, R.C.M. 1921; Cal. C. Civ. Proc. Sec. 1057; re-en. Sec. 9827, R.C.M. 1935; Sec. 93-8712, R.C.M. 1947; R.C.M. 1947, 93-8711, 93-8712(part); amd. Sec. 1240, Ch. 56, L. 2009.  
  33-26-102. Requisites of undertakings or bonds of individuals. In all cases where an undertaking or bond or undertaking with sureties is authorized or required by any law of this state, the officer taking the same must, except in the case of corporations as mentioned in 33-26-101, require the sureties to accompany it with an affidavit that they are each responsible and are residents and householders or freeholders within the state and are each worth the sum specified in the undertaking or bond, over and above all their just debts and liabilities, exclusive of property exempt from execution. When the amount specified in the undertaking or bond exceeds $3,000 and there are more than two sureties thereon, they may state in their affidavits that they are severally worth amounts less than the amount specified in the undertaking or bond if the whole amount be equivalent to that of two sufficient sureties.   History: Ap. p. Sec. 433, p. 131, Bannack Stat.; re-en. Sec. 593, p. 157, Cod. Stat. 1871; re-en. Sec. 523, p. 177, L. 1877; re-en. Sec. 523, 1st Div. Rev. Stat. 1879; re-en. Sec. 540, 1st Div. Comp. Stat. 1887; en. Sec. 1899, C. Civ. Proc. 1895; re-en. Sec. 7192, Rev. C. 1907; re-en. Sec. 9825, R.C.M. 1921; re-en. Sec. 9825, R.C.M. 1935; Sec. 93-8710, R.C.M. 1947; Ap. p. Sec. 2, p. 70, L. 1893; re-en. Sec. 1901, C. Civ. Proc. 1895; re-en. Sec. 7195, Rev. C. 1907; re-en. Sec. 9827, R.C.M. 1921; Cal. C. Civ. Proc. Sec. 1057; re-en. Sec. 9827, R.C.M. 1935; Sec. 93-8712, R.C.M. 1947; R.C.M. 1947, 93-8710, 93-8712(part).  
  33-26-103. Rights of surety insurer to give bond. A surety insurer authorized as such under this code shall have the power to become the surety on bonds and undertakings required by law, subject to all the rights and liabilities of private persons. This section shall not be deemed to limit in any way the powers, obligations, and liabilities of such insurers as provided for in other provisions of this code.   History: En. Sec. 412, Ch. 286, L. 1959; R.C.M. 1947, 40-4501.  
  33-26-104. Surety insurers as sole surety on official bonds -- release. (1) Whenever any bond, undertaking, recognizance, or other obligation is by law or the charter, ordinance, or rules of any municipality, board, body, organization or public officer required or permitted to be made, given, tendered, or filed, with surety or sureties, and whenever the performance of any act, duty, or obligation or the refraining from any act is required or permitted to be guaranteed, such bond, undertaking, obligation, recognizance, or guaranty may be executed by a surety insurer qualified to act as surety or guarantor as in this code provided. Such execution by such insurer of such bond, undertaking, obligation, recognizance, or guaranty shall be in all respects a full and complete compliance with every requirement of the law, charter, ordinance, or rule that such bond, undertaking, obligation, recognizance, or guaranty shall be executed by one surety or by one or more sureties or that such surety shall be a resident or householder or freeholder, or either or both, or possessed of any other qualifications. All courts, judges, heads of departments, boards, bodies, municipalities, and public officers of every character shall accept and treat accordingly such bond, undertaking, obligation, recognizance, or guaranty when so executed by such insurer, as conforming to and fully and completely complying with every such requirement of every such law, charter, ordinance, or rule.   (2) A surety insurer may be released from its liability on a bond referred to in this section upon the same terms and conditions as are by law prescribed for the release of individual sureties.   History: En. Secs. 413, 414, Ch. 286, L. 1959; R.C.M. 1947, 40-4502, 40-4503.  
  33-26-105. Surety companies not permitted to furnish bonds where indemnity required. No foreign or other surety company shall be permitted to furnish the bond for any state, county, or city official, where such company requires in addition to the payment of reasonable premiums any indemnity or other security.   History: En. Sec. 1, Ch. 6, L. 1911; re-en. Sec. 6234, R.C.M. 1921; re-en. Sec. 6234, R.C.M. 1935; R.C.M. 1947, 40-1725.  
  33-26-106. Cost of surety bond to be allowed in account of officer. Any court or officer whose duty it is to pass upon the account of any person or corporation required by law to give a bond may, whenever such person or corporation has given any such surety company as surety upon such bond, allow in the settlement of such account a reasonable sum for the expense of procuring such surety.   History: En. Sec. 23, Ch. 139, L. 1909; re-en. Sec. 6228, R.C.M. 1921; re-en. Sec. 6228, R.C.M. 1935; R.C.M. 1947, 40-1724.  
  33-26-107. Deposit of money in bank for safekeeping by executors and other fiduciaries on agreement with surety. It is lawful for any executor, administrator, guardian, receiver, trustee, or other party of whom a bond, undertaking, or other obligation is required to agree with the entity's surety or sureties for the deposit of any or all money and assets for which the entity and the surety or sureties are or may be held responsible with a bank, savings bank, safe-deposit, or trust company, authorized by law to do business, or with another depository approved by the court or a judge, if the deposit is otherwise proper, for safekeeping, and in a manner that prevents the withdrawal of the money or assets or any part of the money or assets without the written consent of the surety or sureties or an order of court or a judge made on notice to the surety or sureties that the court or judge may direct. The agreement may not in any manner release from or change the liability of the principal or sureties as established by the terms of the bond.   History: En. Sec. 1, Ch. 146, L. 1943; R.C.M. 1947, 40-1703; amd. Sec. 1241, Ch. 56, L. 2009.  
  33-26-108. Rulemaking authority for surety insurers. The commissioner may adopt rules regarding surety insurers who sell, solicit, or negotiate commercial bail bonds. The rules must include but are not limited to rules regarding the receipt of collateral, the description of collateral received, the penalty for failure to return collateral, and an annual list of forfeitures of bonds.   History: En. Sec. 4, Ch. 427, L. 2003.  
  33-27-101. (Temporary) Short title. Sections 15-30-2118, 15-30-2141, 15-31-117, 15-31-118, and this chapter may be cited as the "Independent Liability Fund Act".  33-27-101. (Effective January 1, 2024) Short title. Sections 15-30-2118, 15-31-117, 15-31-118, and this chapter may be cited as the "Independent Liability Fund Act".  History: En. Sec. 1, Ch. 564, L. 1987; amd. Sec. 50, Ch. 503, L. 2021. 
  33-27-102. (Temporary) Purpose. The purpose of 15-30-2118, 15-30-2141, 15-31-117, 15-31-118, and this chapter is to create a means by which small businesses operating in Montana may establish independent liability funds to set aside assets or make investments to meet any liability claims that might be made against the small businesses by third parties.  33-27-102. (Effective January 1, 2024) Purpose. The purpose of 15-30-2118, 15-31-117, 15-31-118, and this chapter is to create a means by which small businesses operating in Montana may establish independent liability funds to set aside assets or make investments to meet any liability claims that might be made against the small businesses by third parties.  History: En. Sec. 2, Ch. 564, L. 1987; amd. Sec. 51, Ch. 503, L. 2021. 
  33-27-103. (Temporary) Definitions. As used in 15-30-2118, 15-30-2141, 15-31-117, 15-31-118, and this chapter, the following definitions apply:  (1) "Fiscal year" means the 12-month period used by a particular small business in preparing and filing its Montana individual income tax, corporate income tax, or alternative corporate income tax return.   (2) "Independent liability fund" means a collection of money, assets, and investments that has been set aside by a small business to meet the needs of any liability claims, except workers' compensation claims, brought against it by third parties.   (3) "Liability claim" means any legal or extralegal action by a third party asserting a right to compensation for a wrong done to it by a small business with an independent liability fund.   (4) "Small business" means any commercial or nonprofit enterprise qualified to do business in the state and qualified as a small business under the criteria established by the federal small business administration on April 20, 1987.   (5) "Third party" means a person other than an employee or the management of a small business or of a subsidiary or closely related enterprise of a small business.   33-27-103. (Effective January 1, 2024) Definitions. As used in 15-30-2118, 15-31-117, 15-31-118, and this chapter, the following definitions apply:  (1) "Fiscal year" means the 12-month period used by a particular small business in preparing and filing its Montana individual income tax, corporate income tax, or alternative corporate income tax return.   (2) "Independent liability fund" means a collection of money, assets, and investments that has been set aside by a small business to meet the needs of any liability claims, except workers' compensation claims, brought against it by third parties.   (3) "Liability claim" means any legal or extralegal action by a third party asserting a right to compensation for a wrong done to it by a small business with an independent liability fund.   (4) "Small business" means any commercial or nonprofit enterprise qualified to do business in the state and qualified as a small business under the criteria established by the federal small business administration on April 20, 1987.   (5) "Third party" means a person other than an employee or the management of a small business or of a subsidiary or closely related enterprise of a small business.   History: En. Sec. 3, Ch. 564, L. 1987; amd. Sec. 36, Ch. 268, L. 2013; amd. Sec. 52, Ch. 503, L. 2021. 
  33-27-104. Rules. (1) The commissioner has authority to implement this chapter and to make any rules and regulations required to carry out the purposes of this chapter.   (2) The commissioner shall by rule establish criteria for ascertaining the inviolability and health of each independent liability fund and shall initiate sanctions against funds that are not secure or viable.   History: En. Sec. 19, Ch. 564, L. 1987.  
  33-27-105 through 33-27-110 reserved.  
  33-27-111. Right to establish independent liability fund. A small business operating in the state may establish an independent liability fund to provide for defense, settlement, or payment of any liability claims against it by a third party.   History: En. Sec. 4, Ch. 564, L. 1987.  
  33-27-112. Establishment of independent liability fund. A small business shall notify the commissioner, on a form supplied by the commissioner, of its intention to establish an independent liability fund. The small business shall fully and clearly designate the money, assets, or investments it is setting aside for its independent liability fund.   History: En. Sec. 5, Ch. 564, L. 1987.  
  33-27-113. Additions to independent liability fund. Within the limits provided in 33-27-114, a small business may make such additions to its independent liability fund as it considers appropriate.   History: En. Sec. 6, Ch. 564, L. 1987.  
  33-27-114. Limit on the amount of fund. The independent liability fund of any small business may not be greater than the larger of the following:   (1) the total of all legally required liability insurance; or   (2) five times the gross sales of the small business in its most recent fiscal year.   History: En. Sec. 7, Ch. 564, L. 1987.  
  33-27-115. Composition of independent liability fund. The money, assets, and investments contributed to an independent liability fund must meet the criteria established for investments by an insurance company in chapter 12 and must be valued as those assets and investments would be valued.   History: En. Sec. 8, Ch. 564, L. 1987; amd. Sec. 48, Ch. 304, L. 1999.  
  33-27-116. Inviolability of fund. Once money, assets, or investments have been contributed to an independent liability fund, they may not be used or removed from the fund except in the manner prescribed by 33-27-117 and 33-27-119.   History: En. Sec. 12, Ch. 564, L. 1987.  
  33-27-117. Deduction of costs. (1) The actual costs of administering an independent liability fund may be deducted from the fund or from income arising out of the money, assets, and investments in the fund. Such costs include the cost of defending against or negotiating a settlement of any liability claim, as well as the full amount of any claim paid.   (2) A small business may not deduct the cost of any in-house administration of its independent liability fund. The commissioner may review any third-party arrangement for administration of an independent liability fund to ascertain whether such costs are deductible under this section.   History: En. Sec. 13, Ch. 564, L. 1987.  
  33-27-118. Taxation of independent liability fund contributions. The net value of independent liability fund contributions for any given fiscal year is taxed in accordance with 33-2-705(2)(a).   History: En. Sec. 16, Ch. 564, L. 1987; amd. Sec. 3, Ch. 377, L. 2015.  
  33-27-119. Termination of independent liability fund. (1) A small business with an independent liability fund may terminate the independent liability fund by:   (a) providing a trust to administer any principal remaining in its fund and to pay any outstanding claims for whichever is longer:   (i) any legally required period of insurance coverage; or   (ii) 5 years; or   (b) substituting an equivalent liability insurance policy plus five times the amount of the deductible for any legally required period of insurance coverage or 5 years, whichever is longer.   (2) If an equivalent insurance policy as provided for in subsection (1)(b) cannot be procured for the full period required, the small business shall deposit the estimated premium for the required equivalent insurance policy in a suitable trust account. The trust account must be used to purchase liability insurance for the required period of insurance coverage.   (3) The principal of an independent liability fund must remain inviolate, except as it is needed to pay just claims, for the full applicable termination period as provided in subsection (1). However, income from the principal not needed for administrative costs may be paid during the termination period to the person or persons who are designated to ultimately receive the principal of the fund, and the income is taxable to that person or persons.   History: En. Sec. 17, Ch. 564, L. 1987; amd. Sec. 3, Ch. 111, L. 2001.  
  33-28-101. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:   (1) "Affiliated company" means any company in the same corporate system as a parent, an industrial insured, or a member by virtue of common ownership, control, operation, or management.   (2) "Association" means any legal association of sole proprietorships or business entities that has been in continuous existence for at least 1 year unless the 1-year requirement is waived by the commissioner and the members of which collectively, or the association itself:   (a) owns, controls, or holds with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;   (b) has complete voting control over an association captive insurance company incorporated as a mutual insurer;   (c) constitutes all of the subscribers of an association captive insurance company formed as a reciprocal insurer; or   (d) owns, controls, or holds with power to vote all of the outstanding ownership interests of an association captive insurance company organized as a limited liability company.   (3) "Association captive insurance company" means any company that insures risks of the members and the affiliated companies of members.   (4) "Branch business" means any insurance business transacted by a branch captive insurance company in this state.   (5) "Branch captive insurance company" means any foreign captive insurance company authorized by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state.   (6) "Branch operations" means any business operations of a branch captive insurance company in this state.   (7) (a) "Business entity" means a corporation, limited liability company, or other legal entity formed by an organizational document.   (b) The term does not include a sole proprietor.   (8) "Captive insurance company" means any pure captive insurance company, association captive insurance company, protected cell captive insurance company, special purpose captive insurance company, or industrial insured captive insurance company formed or authorized under the provisions of this chapter.   (9) "Captive reinsurance company" means a captive insurance company authorized in this state that reinsures the risk ceded by any other insurer.   (10) "Captive risk retention group" means a captive insurance risk retention group formed under the laws of this chapter and pursuant to Title 33, chapter 11.   (11) "Cash equivalent" means any short-term, highly liquid investment that is:   (a) readily convertible to known amounts of cash; and   (b) so near to its maturity that it presents insignificant risk of changes in value because of changes in interest rates. Only an investment with an original maturity of 3 months or less qualifies as a cash equivalent.   (12) (a) "Controlled unaffiliated business entity" means a business entity or sole proprietorship:   (i) that is not in a parent's corporate system consisting of the parent and affiliated companies;   (ii) that has an existing, controlling contractual relationship with the parent or an affiliated company; and   (iii) whose risks are managed by a pure captive insurance company.   (b) The commissioner may promulgate rules that further define a controlled unaffiliated business entity.   (13) "Excess workers' compensation insurance" means, in the case of an employer that has insured or self-insured its workers' compensation risks in accordance with applicable state or federal law, insurance that is in excess of a specified per-incident or aggregate limit established by the commissioner.   (14) "Foreign captive insurance company" means any captive insurance company formed under the laws of any jurisdiction other than this state.   (15) "Industrial insured" means an insured:   (a) who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;   (b) whose aggregate annual premiums for insurance on all risks total at least $25,000; and   (c) who has at least 25 full-time employees.   (16) "Industrial insured captive insurance company" means any company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies.   (17) "Industrial insured group" means any group that meets either of the following:   (a) the group collectively:   (i) owns, controls, or holds with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer; or   (ii) has complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or   (b) the group is a captive risk retention group.   (18) "Member" means a sole proprietorship or business entity that belongs to an association.   (19) "Mutual insurer" means a business entity without capital stock and with a governing body elected by the policyholders.   (20) "Organizational document" means articles of incorporation, articles of organization, a subscribers' agreement, a charter, or any other document that establishes a business entity.   (21) "Parent" means a sole proprietorship, business entity, or individual that directly or indirectly owns, controls, or holds with power to vote more than 50% of the outstanding voting securities of a captive insurance company.   (22) "Participant" means a sole proprietorship or business entity and any affiliates that are insured by a protected cell captive insurance company in which the losses of the participant are limited through a participant contract to the participant's share of the assets of one or more protected cells identified in the participant contract.   (23) "Participant contract" means a contract by which a protected cell captive insurance company insures the risks of a participant and limits the losses of each participant in the contract.   (24) "Protected cell" means a separate account established by a protected cell captive insurance company formed or authorized under the provisions of this chapter, in which an identified pool of assets and liabilities are segregated and insulated, as provided in this chapter, from the remainder of the protected cell captive insurance company's assets and liabilities in accordance with the terms of one or more participant contracts to fund the liability of the protected cell captive insurance company with respect to the participants as set forth in the participant contracts. All protected cells must be incorporated.   (25) "Protected cell assets" means all assets, contract rights, and general intangibles identified with and attributable to a specific protected cell of a protected cell captive insurance company.   (26) "Protected cell captive insurance company" means any captive insurance company:   (a) in which the minimum capital and surplus required by applicable law are provided by one or more sponsors;   (b) that is formed or authorized under the provisions of this chapter;   (c) that insures the risks of separate participants through participant contracts;   (d) that funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the protected cell captive insurance company's general account; and   (e) that is incorporated or formed as a limited liability company.   (27) "Protected cell liabilities" means all liabilities and other obligations identified with and attributable to a specific protected cell of a protected cell captive insurance company.   (28) "Pure captive insurance company" means any company that insures risks of its parent and affiliated companies and controlled unaffiliated business entities.   (29) "Sole proprietorship" means an individual doing business in a noncorporate form.   (30) "Special purpose captive insurance company" means a captive insurance company that is formed or authorized under this chapter that does not meet the definition of any other type of captive insurance company defined in this section or is formed by, on behalf of, or for the benefit of a political subdivision of this state.   (31) "Sponsor" means any entity that meets the requirements of 33-28-301 and 33-28-302 and is approved by the commissioner to provide all or part of the capital and surplus required by the applicable law and to organize and operate a protected cell captive insurance company.   History: En. Sec. 1, Ch. 298, L. 2001; amd. Sec. 8, Ch. 383, L. 2003; amd. Sec. 1, Ch. 518, L. 2007; amd. Sec. 1, Ch. 75, L. 2011; amd. Sec. 2, Ch. 229, L. 2015; amd. Sec. 1, Ch. 335, L. 2015; amd. Sec. 29, Ch. 151, L. 2017; amd. Sec. 1, Ch. 223, L. 2019.  
  33-28-102. Certificates of authority -- lines of business -- definition. (1) A captive insurance company, when permitted by its organizational document, may apply to the commissioner for a certificate of authority to provide property insurance, casualty insurance, life insurance, disability income insurance, surety insurance, marine insurance, and health insurance coverage or a group health plan as defined in 33-22-140, except that:   (a) a pure captive insurance company may not insure any risks other than those of its parent and affiliated companies and controlled unaffiliated business entities;   (b) an industrial insured captive insurance company may not insure any risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;   (c) an association captive insurance company may not insure any risks other than those of the members or affiliated companies of members;   (d) a special purpose captive insurance company may not provide insurance or reinsurance for risks unless approved by the commissioner;   (e) a captive insurance company or a branch captive insurance company may not:   (i) provide personal lines of insurance, including but not limited to motor vehicle or homeowner's insurance coverage or any component of those coverages;   (ii) accept or cede reinsurance except as provided in 33-28-203;   (iii) provide health insurance coverage or a group health plan unless the captive insurance company or branch captive insurance company is only providing health insurance coverage or a group health plan for the parent company and its affiliated companies; or   (iv) write workers' compensation insurance on a direct basis; and   (f) a protected cell captive insurance company may not insure any risks other than those of its participants.   (2) A captive insurance company may not write any insurance business unless:   (a) it first obtains from the commissioner a certificate of authority under this section;   (b) its board of directors, board of managing members, or a reciprocal insurer's subscribers' advisory committee holds at least one meeting each year in this state;   (c) it maintains its principal place of business in this state; and   (d) it designates a registered agent to accept service of process, files the name and contact information and any subsequent changes regarding the registered agent with the commissioner, and agrees that whenever the registered agent cannot be found with reasonable diligence, the commissioner's office may act as an agent of the captive insurance company with respect to any action or proceeding and may be served in accordance with 33-1-605 and 33-1-606.   (3) (a) Before receiving a certificate of authority and with respect to a captive insurance company formed as a business entity, a captive insurance company shall:   (i) file with the commissioner a certified copy of its organizational documents, a statement under oath of an officer of the business entity showing its financial condition, and any other statements or documents required by the commissioner; and   (ii) submit to the commissioner for approval a description of the coverages, deductibles, coverage limits, and rates, together with any additional information that the commissioner may reasonably require; and   (iii) provide a statement to the commissioner that addresses the following:   (A) the character, reputation, financial standing, and purposes of the organizers;   (B) the character, reputation, financial responsibility, insurance experience, and business qualifications of any officers, directors, or managing members; and   (C) any other factors that the commissioner considers appropriate.   (b) If there is a subsequent material change in any of the items in the description provided for in subsection (3)(a), the captive insurance company shall submit to the commissioner for approval an appropriate revision and may not offer any additional kinds of insurance until the commissioner approves a revision of the description. The captive insurance company shall inform the commissioner of any change in rates within 30 days of the adoption of the change.   (c) In addition to the information required by subsections (3)(a) and (3)(b), each applicant captive insurance company shall file with the commissioner evidence of the following:   (i) the amount and liquidity of its assets relative to the risks to be assumed;   (ii) the adequacy of the expertise, experience, and character of the person or persons who will manage it;   (iii) the overall soundness of its plan of operation;   (iv) the adequacy of the loss prevention programs of its parent, members, or industrial insureds as applicable; and   (v) any other factors considered relevant by the commissioner in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations.   (d) In addition to the information required by this section, each applicant that is a protected cell captive insurance company shall file with the commissioner the following:   (i) a business plan demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner and how it will report the experience to the commissioner;   (ii) a statement acknowledging that all financial records of the protected cell captive insurance company, including records pertaining to any protected cells, must be made available for inspection or examination by the commissioner or the commissioner's designated agent;   (iii) all contracts or sample contracts between the protected cell captive insurance company and any participants; and   (iv) evidence that expenses will be allocated to each protected cell in a fair and equitable manner.   (e) In addition to the requirements of subsection (3)(a), a captive insurance company formed as a reciprocal insurer must file with the commissioner a certified copy of the power of attorney of its attorney-in-fact, a certified copy of its subscribers' agreement, a statement under oath of its attorney-in-fact showing its financial condition, and any other statements or documents required by the commissioner;   (f) Information submitted pursuant to this subsection (3) must remain confidential and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company, except that:   (i) the information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted the information is a party, upon a showing by the party seeking to discover the information that the information sought is relevant to and necessary for the furtherance of the action or case, the information sought is unavailable from other nonconfidential sources, and a subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner;   (ii) the commissioner may, in the commissioner's discretion, disclose the information to a public officer having jurisdiction over the regulation of insurance in another state or to a public official of the federal government, as long as the public official agrees in writing to maintain the confidentiality of the information and the laws of the state in which the public official serves, if applicable, require the information to be and to remain confidential.   (4) (a) Each captive insurance company, individual series of members as defined in 35-8-102 of a limited liability company, and protected cell shall pay to the commissioner a nonrefundable fee of $200 for the examining, investigating, and processing of its application, and the commissioner is authorized to retain legal, financial, and examination services from outside the department, the reasonable cost of which may be charged to the applicant.   (b) The provisions of Title 33, chapter 1, part 4, apply to examinations, investigations, and processing conducted under the authority of this section. In addition, each captive insurance company, individual series of members as defined in 35-8-102 of a limited liability company, and protected cell shall pay a fee for the year of registration and a renewal fee for each subsequent year of $300.   (5) If the commissioner is satisfied that the documents and statements that the applicant captive insurance company has filed comply with the provisions of this chapter and applicable provisions of Title 33, the commissioner may grant a certificate authorizing the company to do insurance business in this state. The certificate is effective until March 1 of each year and may be renewed upon proper compliance with this chapter.   History: En. Sec. 2, Ch. 298, L. 2001; amd. Sec. 9, Ch. 383, L. 2003; amd. Sec. 4, Ch. 518, L. 2007; amd. Sec. 2, Ch. 28, L. 2009; amd. Sec. 2, Ch. 75, L. 2011; amd. Sec. 20, Ch. 227, L. 2011; amd. Sec. 2, Ch. 335, L. 2015; amd. Sec. 11, Ch. 60, L. 2019; amd. Sec. 2, Ch. 223, L. 2019.  
  33-28-103. Names of captive insurance companies. A captive insurance company may not adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the state of Montana.   History: En. Sec. 3, Ch. 298, L. 2001.  
  33-28-104. Minimum capital surplus -- letter of credit. (1) A captive insurance company may not be issued a certificate of authority unless it possesses and maintains unimpaired paid-in capital and surplus of:   (a) in the case of a pure captive insurance company, not less than $250,000;   (b) in the case of an industrial insured captive insurance company, including a captive risk retention group, not less than $500,000;   (c) in the case of an association captive insurance company, not less than $500,000;   (d) in the case of a special purpose captive insurance company, an amount determined by the commissioner after giving due consideration to the company's business plan, feasibility study, and pro forma documents, including the nature of the risks to be insured;   (e) in the case of a protected cell captive insurance company, not less than $500,000. However, if the protected cell captive insurance company does not assume any risks, the risks insured by the protected cells are homogenous, and if there are not more than 10 cells, the commissioner may reduce the amount required in this subsection (1)(e) to an amount not less than $250,000.   (f) in the case of a branch captive insurance company, not less than the applicable amount of capital and surplus required in subsections (1)(a) through (1)(e), as determined based upon the organizational form of the foreign captive insurance company. The minimum capital and surplus must be jointly held by the commissioner and the branch captive insurance company in a bank of the federal reserve system approved by the commissioner.   (g) in the case of a captive reinsurance company, not less than 50% of the capital that would be required for that type of captive insurance company.   (2) The commissioner may require additional capital and surplus based upon the type, volume, and nature of insurance business transacted.   (3) Capital and surplus may be in the form of cash, cash equivalent, or an irrevocable letter of credit on a form prescribed by the commissioner and issued by a bank chartered by the state of Montana, a member bank of the federal reserve system, or a bank chartered by another state if that state-chartered bank is approved by the commissioner.   History: En. Sec. 4, Ch. 298, L. 2001; amd. Sec. 10, Ch. 383, L. 2003; amd. Sec. 5, Ch. 518, L. 2007; amd. Sec. 31, Ch. 271, L. 2009; amd. Sec. 3, Ch. 75, L. 2011; amd. Sec. 19, Ch. 169, L. 2013; amd. Sec. 3, Ch. 335, L. 2015; amd. Sec. 3, Ch. 223, L. 2019.  
  33-28-105. Formation of captive insurance companies. (1) A captive insurance company must be formed or organized as a business entity as provided in this chapter.   (2) An association captive insurance company or an industrial insured captive insurance company may be:   (a) incorporated as a stock insurer with its capital divided into shares and held by the stockholders;   (b) incorporated as a mutual insurer without capital stock, the governing body of which is elected by the members of its association or associations;   (c) organized as a reciprocal insurer under Title 33, chapter 5, except that the requirements of 33-5-201(1) do not apply; or   (d) organized as a manager-managed limited liability company.   (3) A captive insurance company incorporated or organized in this state must be incorporated or organized by at least one incorporator or organizer who is a resident of this state.   (4) The capital stock of a captive insurance company incorporated as a stock insurer may be authorized with no par value.   (5) (a) At least one of the members of the board of directors of a captive insurance company must be a resident of this state. A captive risk retention group must have a minimum of five directors.   (b) In the case of a captive insurance company formed as a limited liability company, at least one of the managers must be a resident of the state. A captive risk retention group formed as a limited liability company is not required to have a manager who is a resident of this state, but the company must maintain a board of directors, of which one board member must be a resident of the state.   (c) In the case of a reciprocal insurer, at least one of the members of the subscribers' advisory committee must be a resident of the state. A captive risk retention group formed as a reciprocal insurer must have a minimum of five members of the subscribers' advisory committee.   (6) (a) A captive insurance company formed as a corporation or another business entity has the privileges and is subject to the provisions of general corporation law or the laws governing other business entities, as well as the applicable provisions contained in this chapter.   (b) In the event of conflict between the provisions of general corporation law or the laws governing other business entities and this chapter, the provisions of this chapter control.   (7) (a) (i) A captive insurance company formed as a reciprocal insurer has the privileges and is subject to the provisions of Title 33, chapter 5, except 33-5-201(1), in addition to the applicable provisions of this chapter. If there is a conflict between Title 33, chapter 5, and this chapter, the provisions of this chapter control.   (ii) The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of a subscribers' advisory committee to consist of at least one-third of the number of its members.   (b) A captive risk retention group has the privileges and is subject to the provisions of Title 33, chapter 11, and this chapter. If there is a conflict between Title 33, chapter 11, and this chapter, the provisions of this chapter prevail.   (8) Except as provided in 33-28-111, the provisions of Title 33, chapter 3, pertaining to mergers, consolidations, conversions, mutualizations, and voluntary dissolutions apply in determining the procedures to be followed by captive insurance companies in carrying out any of those transactions.   (9) (a) With respect to a branch captive insurance company, the foreign captive insurance company shall apply to the secretary of state for a certificate of authority to transact business in this state.   (b) A branch captive insurance company established pursuant to the provisions of this chapter to write in this state only insurance or reinsurance of the employee benefit business of its parent and affiliated companies is subject to provisions of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq. In addition to the general provisions of this chapter, the provisions of this section apply to branch captive insurance companies.   (c) A branch captive insurance company may not do any insurance business in this state unless it maintains the principal place of business for its branch operations in this state.   History: En. Sec. 5, Ch. 298, L. 2001; amd. Sec. 11, Ch. 383, L. 2003; amd. Sec. 1, Ch. 205, L. 2005; amd. Sec. 38, Ch. 469, L. 2005; amd. Sec. 6, Ch. 518, L. 2007; amd. Sec. 3, Ch. 28, L. 2009; amd. Sec. 4, Ch. 335, L. 2015; amd. Sec. 30, Ch. 151, L. 2017; amd. Sec. 3, Ch. 304, L. 2017; amd. Sec. 9, Ch. 117, L. 2019; amd. Sec. 4, Ch. 223, L. 2019.  
  33-28-106. Dividends. (1) A captive insurance company may not pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the commissioner.   (2) Approval of an ongoing plan for the payment of dividends or other distributions must be conditioned upon retention, at the time of each payment, of capital surplus in excess of the amounts specified by or determined in accordance with formulas approved by the commissioner.   History: En. Sec. 6, Ch. 298, L. 2001; amd. Sec. 7, Ch. 518, L. 2007.  
  33-28-107. Reports and statements. (1) A captive insurance company is not required to make an annual report except as provided in this section.   (2) (a) Except as provided in subsection (2)(b), on or before April 1 of each year, each captive insurance company shall submit to the commissioner a report of its financial condition in a form and manner as required by the commissioner, verified by oath of two of its executive officers. On or before March 1 of each year, a captive risk retention group shall submit to the commissioner a report of its financial condition in a form and manner as required by the commissioner and verified by oath by two of its executive officers.   (b) A captive insurance company, other than a captive risk retention group, may make written application for filing the required report on a fiscal yearend basis. If an alternative reporting date is granted:   (i) the required report is due 90 days after fiscal yearend; and   (ii) in order to provide sufficient information to support the premium tax return, a captive insurance company shall file a report acceptable to the commissioner prior to April 1 of each year for the prior calendar yearend.   (c) Each captive insurance company shall report using generally accepted accounting principles, unless the commissioner requires the use of statutory accounting principles, with any necessary or useful modifications or additions required by the commissioner. The commissioner may also require the report to be supplemented by additional information.   (d) On or before April 1 of each year, each branch captive insurance company shall submit to the commissioner a copy of all reports and statements required to be filed under the laws in which the foreign captive insurance company is formed, verified by oath of two of its executive officers. If the commissioner is satisfied that the annual report filed by the foreign captive insurance company in its domiciliary jurisdiction provides adequate information concerning the financial condition of the foreign captive insurance company, the commissioner may waive the requirement for completion of the captive annual statement for business written in the foreign jurisdiction.   (3) The commissioner shall consider financial statements filed pursuant to this section as confidential.   (4) (a) Captive risk retention groups shall file reports and statements in accordance with Title 33, chapter 2, part 7, except that a captive risk retention group may file using generally accepted accounting principles. The filing may include letters of credit that are established, issued, or confirmed by a bank chartered in this state, a member of the federal reserve system, or a bank chartered by another state if that state-chartered bank is acceptable to the commissioner.   (b) The filings in subsection (4)(a) are required on an annual and quarterly basis.   History: En. Sec. 7, Ch. 298, L. 2001; amd. Sec. 12, Ch. 383, L. 2003; amd. Sec. 8, Ch. 518, L. 2007; amd. Sec. 4, Ch. 28, L. 2009; amd. Sec. 4, Ch. 75, L. 2011; amd. Sec. 21, Ch. 227, L. 2011; amd. Sec. 5, Ch. 223, L. 2019.  
  33-28-108. Examinations and investigations. (1) (a) Except for captive risk retention groups as provided in subsection (1)(b), the commissioner or some competent person appointed by the commissioner may examine the affairs, transactions, accounts, records, and assets of each captive insurance company as often as the commissioner considers advisable.  (b) The commissioner or some competent person appointed by the commissioner shall examine the affairs, transactions, accounts, records, and assets of each captive risk retention group as often as the commissioner considers advisable, but no less frequently than every 5 years.   (c) The expenses and charges of the examination must be paid to the commissioner by the company or companies examined.   (2) The provisions of Title 33, chapter 1, part 4, apply to examinations conducted under this section.   (3) Except as provided in subsection (4), all examination reports, preliminary examination reports or results, working papers, recorded information, documents, and their copies produced by, obtained by, or disclosed to the commissioner or any other person in the course of an examination made under this section are confidential, are not subject to subpoena, and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company or upon court order.   (4) (a) Subsection (3) does not prevent the commissioner from using information obtained pursuant to this section in furtherance of the commissioner's regulatory authority under Title 33. The commissioner may, in the commissioner's discretion, grant access to information obtained pursuant to this section to public officers having jurisdiction over the regulation of insurance in any other state or country or to law enforcement officers of this state or any other state or agency of the federal government at any time, as long as the officers receiving the information agree in writing to hold it in a manner consistent with this section.   (b) Captive risk retention group reports produced pursuant to the examination requirements of this section are public records as defined in 2-6-1002.   (5) Except as provided in subsection (6), the provisions of this section apply to all business written by a captive insurance company.   (6) The examination for a branch captive insurance company may only be of branch business and branch operations if the branch captive insurance company has satisfied the requirements of 33-28-107(2)(d) to the satisfaction of the commissioner.   (7) As a condition of authorization of a branch captive insurance company, the foreign captive insurance company shall grant authority to the commissioner for examination of the affairs of the foreign captive insurance company in the jurisdiction in which the foreign captive insurance company is formed.   History: En. Sec. 8, Ch. 298, L. 2001; amd. Sec. 13, Ch. 383, L. 2003; amd. Sec. 9, Ch. 518, L. 2007; amd. Sec. 22, Ch. 227, L. 2011; amd. Sec. 5, Ch. 335, L. 2015; amd. Sec. 53, Ch. 348, L. 2015; amd. Sec. 4, Ch. 304, L. 2017; amd. Sec. 1, Ch. 55, L. 2021. 
  33-28-109. Suspension or revocation of certificate of authority. (1) The certificate of authority of a captive insurance company doing insurance business in this state may be suspended by the commissioner for any of the following reasons:   (a) insolvency or impairment of capital or surplus;   (b) failure to meet and maintain the requirements of 33-28-104;   (c) refusal or failure to submit an annual report, as required by 33-28-107, or any other report or statement required by law or by lawful order of the commissioner;   (d) failure to comply with the provisions of its own charter, bylaws, or other organizational document;   (e) failure to submit to examination or to perform any legal obligation as required by 33-28-108;   (f) use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders;   (g) failure to pay the tax provided for in 33-28-201; or   (h) failure otherwise to comply with the laws of this state.   (2) If the commissioner finds, upon examination, hearing, or other evidence, that any captive insurance company has committed any of the acts specified in subsection (1), the commissioner may suspend or revoke the company's certificate of authority if the commissioner considers it in the best interest of the public or the policyholders of the captive insurance company.   (3) If the certificate of authority has not been terminated within the period of suspension, the company's certificate of authority may be reinstated if the commissioner finds that the causes of the suspension have been removed or that the insurer is otherwise in compliance with the requirements of this code.   History: En. Sec. 9, Ch. 298, L. 2001; amd. Sec. 6, Ch. 335, L. 2015; amd. Sec. 31, Ch. 151, L. 2017.  
  33-28-110. Excess workers' compensation insurance -- reinsurance of self-insured plans. (1) A captive insurance company may provide excess workers' compensation insurance to its parent and affiliated companies, unless the laws of the state having jurisdiction over the transaction prohibit providing the insurance.   (2) A captive insurance company may reinsure workers' compensation of a qualified self-insured plan of its parent and affiliated companies.   History: En. Sec. 5, Ch. 383, L. 2003; Sec. 33-28-305, MCA 2005; redes. 33-28-110 by Sec. 21(1), Ch. 518, L. 2007.  
  33-28-111. Captive mergers. (1) A merger between captive stock insurers must meet the requirements of 33-3-217 and 33-28-105, except that the commissioner may provide notice to the public of the proposed merger prior to approval or disapproval of the merger in place of holding a hearing, at the commissioner's discretion.   (2) A merger between captive mutual insurers must meet the requirements of 33-3-218 and 33-28-105, except that the commissioner may provide notice to the public of the proposed merger prior to approval or disapproval of the merger in place of holding a hearing, at the commissioner's discretion.   (3) (a) An association captive insurance company or industrial insured group formed as a stock or mutual insurer may be converted to or merged with a reciprocal insurer pursuant to this section.   (b) A plan for conversion or merger must:   (i) be fair and equitable to the shareholders in the case of a stock insurer or the policyholders in the case of a mutual insurer; and   (ii) provide for the purchase of the shares of any nonconsenting shareholder of a stock insurer or the policyholder interest of any nonconsenting policyholder of a mutual insurer.   (c) In order to convert to a reciprocal insurer, the conversion must be accomplished under a reasonable plan and procedure approved by the commissioner. The commissioner may not approve the plan unless it:   (i) provides for a hearing upon notice to the insurer, directors, officers, and stockholders or policyholders who have the right to appear at the hearing, unless the commissioner waives or modifies the requirements for the hearing;   (ii) provides for the conversion of the existing stockholder or policyholder interests into subscriber interests in the resulting reciprocal insurer proportionate to stockholder or policyholder interests;   (iii) (A) in the case of a stock insurer, is approved by a majority of the shareholders who are entitled to vote and who are represented at a regular or special meeting at which a quorum is present either in person or by proxy; or   (B) in the case of a mutual insurer, by a majority of the voting interests of the policyholders who are represented at a regular or special meeting at which a quorum is present either in person or by proxy; and   (iv) meets the requirements of 33-28-105.   (d) If the commissioner approves a plan of conversion, the certificate of authority for the converting insurer must be amended to state that it is a reciprocal insurer. The conversion is effective and the corporate existence of the converting entity ceases to exist on the date on which the amended certificate is issued to the attorney-in-fact of the reciprocal insurer. The resulting reciprocal insurer shall file the articles of the merger or conversion with the secretary of state.   History: En. Sec. 1, Ch. 151, L. 2017; amd. Sec. 6, Ch. 223, L. 2019.  
  33-28-112 through 33-28-119 reserved.  
  33-28-120. Captive insurance regulatory and supervision account. (1) There is an account in the state special revenue fund called the captive insurance regulatory and supervision account, which may be referred to as the captive account.  (2) The purpose of the captive account is to provide the financial means for the commissioner to administer this chapter and for reimbursement of reasonable expenses incurred in promoting captive insurance in this state.   (3) (a) Twenty percent of the premium tax collected under 33-28-201 and all fees and assessments received by the commissioner pursuant to the administration of this chapter must be deposited in the captive account.   (b) All fines and administrative penalties collected pursuant to this chapter must be deposited in the general fund.   (4) All payments from the captive account for the maintenance of staff and associated expenses, including necessary contractual services, may only be disbursed from the state treasury upon warrants issued by the commissioner, after receipt by the commissioner of proper documentation regarding services rendered and expenses incurred.   (5) At the end of each fiscal year, the balance in the captive account must be transferred to the general fund.   History: En. Sec. 2, Ch. 518, L. 2007; amd. Sec. 15, Ch. 6, Sp. L. November 2017; amd. Sec. 1, Ch. 420, L. 2021. 
  33-28-201. Tax on premiums collected. (1) (a) Each captive insurance company shall pay to the commissioner, on or before March 1 of each year, a tax on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.   (b) The tax on direct premiums collected in this state must be calculated as follows:   (i) 0.4% on the first $20 million; and   (ii) 0.3% on each subsequent dollar collected.   (2) (a) Each captive insurance company shall pay to the commissioner on or before March 1 of each year a tax on assumed reinsurance premiums.   (b) A reinsurance tax does not apply to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to subsection (1).   (c) A reinsurance premium tax is not payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if the transaction is part of a plan to discontinue the operations of the other insurer and if the intent of the parties to the transaction is to renew or maintain the business with the captive insurance company.   (d) The amount of the reinsurance tax must be calculated as follows:   (i) 0.225% on the first $20 million of assumed reinsurance premiums;   (ii) 0.150% on the next $20 million of assumed reinsurance premiums; and   (iii) 0.050% on each subsequent dollar of assumed reinsurance premiums.   (3) (a) (i) Except as provided in subsections (3)(a)(ii) and (3)(a)(iii), if the aggregate taxes to be paid by a captive insurance company calculated under subsections (1) and (2) amount to less than $5,000 in any year, the captive insurance company shall pay a tax of $5,000 for that year.   (ii) In the calendar year in which a captive insurance company that is subject to the minimum tax is first authorized, the tax must be prorated on a quarterly basis as follows:   (A) $5,000 if authorized in the first quarter;   (B) $3,750 if authorized in the second quarter;   (C) $2,500 if authorized in the third quarter; and   (D) $1,250 if authorized in the fourth quarter.   (iii) In the calendar year in which a captive insurance company that is subject to the minimum tax surrenders its certificate of authority, the tax must be prorated on a quarterly basis as follows:   (A) $1,250 if surrendered in the first quarter;   (B) $2,500 if surrendered in the second quarter;   (C) $3,750 if surrendered in the third quarter; and   (D) $5,000 if surrendered in the fourth quarter.   (b) Each protected cell in a protected cell captive insurance company must be considered separately in determining the aggregate tax to be paid by the protected cell captive insurance company. If the protected cell captive insurance company insures any risks in addition to the protected cells, the determination of the aggregate tax to be paid by the protected cell captive insurance company must also include the premium on those risks.   (c) Each series of members as defined in 35-8-102 of a limited liability company formed as a special purpose captive insurance company must be considered separately pursuant to this section, except that the minimum tax as described in subsection (3)(a) must be considered in the aggregate.   (4) Aggregate taxes to be paid by a captive insurance company, other than a protected cell captive insurance company, under this section may not exceed $100,000 in any year.   (5) Two or more captive insurance companies under common ownership and control must be taxed as though they were a single captive insurance company.   (6) For the purposes of this section, "common ownership and control" means:   (a) in the case of stock corporations, the direct or indirect ownership of 80% or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders; and   (b) in the case of mutual insurers, the direct or indirect ownership of 80% or more of the surplus and the voting power of two or more insurers by the same member or members.   (7) Only the branch business of a branch captive insurance company is subject to taxation under the provisions of this section.   (8) The tax provided for in this section must be calculated on an annual basis notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium must be prorated for the purposes of determining the tax.   History: En. Sec. 10, Ch. 298, L. 2001; amd. Sec. 14, Ch. 383, L. 2003; amd. Sec. 2, Ch. 205, L. 2005; amd. Sec. 10, Ch. 518, L. 2007; amd. Sec. 5, Ch. 28, L. 2009; amd. Sec. 7, Ch. 335, L. 2015; amd. Sec. 7, Ch. 223, L. 2019.  
  33-28-202. Legal investments. (1) (a) An industrial insured captive insurance company, an association captive insurance company, and a captive risk retention group shall comply with the investment requirements contained in Title 33, chapter 12, and the rules promulgated in accordance with these provisions.   (b) The commissioner may approve the use of alternative reliable methods of valuation and rating.   (c) When a captive insurance company's admitted assets total less than $5 million, the commissioner may approve an investment of up to 20% of admitted assets in rated credit instruments in any one investment that meets the requirements of 33-12-303(1)(c).   (2) A pure captive insurance company or protected cell captive insurance company is not subject to any restrictions on allowable investments, except that the commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the company.   (3) Any captive insurance company may make loans to any of its affiliates. Loans may not be made without prior written approval of the commissioner and must be evidenced by a note in a form approved by the commissioner. Loans of minimum capital and surplus funds required by 33-28-104 are prohibited.   History: En. Sec. 11, Ch. 298, L. 2001; amd. Sec. 39, Ch. 469, L. 2005; amd. Sec. 11, Ch. 518, L. 2007; amd. Sec. 6, Ch. 28, L. 2009; amd. Sec. 5, Ch. 75, L. 2011; amd. Sec. 20, Ch. 169, L. 2013.  
  33-28-203. Reinsurance. (1) Subject to the prior approval of the commissioner, a captive insurance company may provide reinsurance on risks ceded by any other insurer.   (2) (a) Any captive insurance company may take credit for reserves on risks or portions of risks ceded to reinsurers complying with the provisions of 33-2-1216 and 33-2-1217.   (b) Prior approval of the commissioner is required for ceding or taking credit for reserves on risks or portions of risks ceded to reinsurers not complying with 33-2-1216 and 33-2-1217.   (3) (a) In addition to the credit allowed to reinsurers in 33-2-1216 and 33-2-1217, a captive insurance company may, if approved by the commissioner, take credit for reserves on risks or portions of risks ceded to a pool, exchange, or association acting as a reinsurer that has been authorized by the commissioner.   (b) The commissioner may require any documents, financial information, or other evidence that a pool, exchange, or association will be able to provide adequate security for its financial obligations.   (c) The commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange, or association that, in the commissioner's judgment, are necessary and proper to provide adequate security for the ceding captive insurance company and for the protection and consequent benefit of the public at large.   History: En. Sec. 12, Ch. 298, L. 2001.  
  33-28-204. Rating organizations. A captive insurance company is not required to join a rating organization.   History: En. Sec. 13, Ch. 298, L. 2001.  
  33-28-205. Exemption from compulsory organizations. A captive insurance company may not join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state, and a captive insurance company, its insureds, its parent, any affiliated company, or any member of an association may not receive any benefit from the plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of the captive insurance company.   History: En. Sec. 14, Ch. 298, L. 2001; amd. Sec. 12, Ch. 518, L. 2007.  
  33-28-206. Rules. The commissioner may adopt rules necessary to implement the provisions of this chapter. The rules may include but are not limited to rules relating to forms, payment of fees, authorization, capital and surplus, formation of companies, reports, examinations, investigations, redomestications, captive risk retention groups, risk-based capital and holding company systems, letters of credit, risks managed by pure captive insurance companies, standards to ensure that parent or affiliated companies are able to exercise control of the risk management function of any controlled unaffiliated entities to be insured by the pure captive insurance companies, the use of deductible reimbursement with workers' compensation, and suspension and revocation of licenses.   History: En. Sec. 15, Ch. 298, L. 2001; amd. Sec. 13, Ch. 518, L. 2007; amd. Sec. 8, Ch. 335, L. 2015.  
  33-28-207. Applicable laws. (1) The following apply to captive insurance companies:   (a) the definitions of commissioner and department provided in 33-1-202, property insurance provided in 33-1-210, casualty insurance provided in 33-1-206, life insurance provided in 33-1-208, health insurance coverage and group health plans provided in 33-22-140, and disability income insurance provided in 33-1-235;   (b) the limitation provided in 33-2-705 on the imposition of other taxes;   (c) the provisions relating to supervision, rehabilitation, and liquidation of insurance companies as provided for in Title 33, chapter 2, part 13;   (d) the provisions of 33-1-311, 33-1-604 through 33-1-606, 33-2-112, 33-3-431, 33-18-201, 33-18-203, 33-18-205, and 33-18-242;   (e) the provisions relating to dissolution and liquidation in Title 33, chapter 3, part 6, except that a pure captive insurance company may proceed with voluntary dissolution and liquidation after prior notice to and approval of the commissioner without following the provisions of Title 33, chapter 3, part 6; and   (f) the authority of the commissioner under 33-2-701(6) to impose a fine for failure to timely file an annual statement, except that the annual statement requirements in 33-28-107 apply.   (2) This chapter may not be construed as exempting a captive insurance company, its parent, or affiliated companies from compliance with the laws governing workers' compensation insurance.   (3) A captive insurance company or branch captive insurance company that writes health insurance coverage or group health plans as defined in 33-22-140 shall comply with applicable state and federal laws.   (4) The following provisions apply to captive risk retention groups:   (a) those relating to actuarial opinions in Title 33, chapter 1, part 14;   (b) those relating to risk-based capital in Title 33, chapter 2, part 19; and   (c) those relating to insurance holding company systems in Title 33, chapter 2, part 11.   (5) Except as expressly provided in this chapter, the provisions of Title 33 do not apply to captive insurance companies.   History: En. Sec. 16, Ch. 298, L. 2001; amd. Secs. 15, 17, Ch. 383, L. 2003; amd. Sec. 3, Ch. 205, L. 2005; amd. Sec. 14, Ch. 518, L. 2007; amd. Sec. 7, Ch. 28, L. 2009; amd. Sec. 23, Ch. 227, L. 2011; amd. Sec. 9, Ch. 335, L. 2015; amd. Sec. 12, Ch. 60, L. 2019; amd. Sec. 8, Ch. 223, L. 2019.  
  33-28-301. Protected cell captive insurance company. (1) One or more sponsors may form a protected cell captive insurance company.   (2) A protected cell captive insurance company formed or authorized under the provisions of this chapter is subject to the following:   (a) (i) A protected cell captive insurance company may establish one or more protected cells with the prior written approval of the commissioner of a plan of operation or amendments submitted by the protected cell captive insurance company with respect to each protected cell.   (ii) Upon the written approval of the commissioner of the plan of operation, which must include but is not limited to the specific business objectives and investment guidelines of the protected cell, the protected cell captive insurance company in accordance with the approved plan of operation may attribute to the protected cell insurance obligations with respect to its insurance business.   (iii) A protected cell must have its own distinct name or designation that must include the words "protected cell".   (iv) The protected cell captive insurance company shall transfer all assets attributable to a protected cell to one or more separately established and identified protected cell accounts bearing the name or designation of that protected cell. Protected cell assets must be held in the protected cell accounts for the purpose of satisfying the obligations of that protected cell.   (v) An incorporated protected cell may be organized and operated in any form of business organization authorized by the commissioner. Each protected cell of a protected cell captive insurance company must be treated as a captive insurance company for purposes of this chapter, except that the limit on maximum yearly aggregate taxes paid in 33-28-201 does not apply. Unless otherwise permitted by the articles of incorporation or other organizational document of a protected cell captive insurance company, each protected cell of the protected cell captive insurance company must have the same directors, secretary, and registered office as the protected cell captive insurance company.   (b) All attributions of assets and liabilities between a protected cell and the protected cell captive insurance company's general account must be in accordance with the plan of operation and participant contracts approved by the commissioner. No other attribution of assets and liabilities may be made by a protected cell captive insurance company between the protected cell captive insurance company's general account and its protected cells. Any attribution of assets and liabilities between the general account and a protected cell must be in cash or in readily marketable securities with established market values.   (c) The creation of a protected cell creates, with respect to that protected cell, a legal person separate from the protected cell captive insurance company. Amounts attributed to a protected cell under this chapter, including assets transferred to a protected cell account, are owned by the protected cell, and the protected cell captive insurance company may not be a trustee or hold itself out to be a trustee with respect to those protected cell assets of that protected cell account. A protected cell captive insurance company may allow for a security interest to attach to protected cell assets or a protected cell account when the security interest is in favor of a creditor of the protected cell and is otherwise allowed under applicable law.   (d) This chapter may not be construed to prohibit the protected cell captive insurance company from contracting with or arranging for an investment adviser, commodity trading adviser, or other third party to manage the protected cell assets of a protected cell if all remuneration, expenses, and other compensation of the third party are payable from the protected cell assets of that protected cell and not from the protected cell assets of other protected cells or the assets of the protected cell captive insurance company's general account.   (e) (i) A protected cell captive insurance company shall establish administrative and accounting procedures necessary to properly identify the one or more protected cells of the protected cell captive insurance company and the protected cell assets and protected cell liabilities attributable to the protected cells. The directors of a protected cell captive insurance company shall keep protected cell assets and protected cell liabilities:   (A) separate and separately identifiable from the assets and liabilities of the protected cell captive insurance company's general account; and   (B) attributable to one protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells.   (ii) If the provisions of this subsection (2)(e) are violated, the remedy of tracing is applicable to protected cell assets commingled with protected cell assets of other protected cells or the assets of the protected cell captive insurance company's general account. The remedy of tracing may not be construed as an exclusive remedy.   (f) When establishing a protected cell, the protected cell captive insurance company shall attribute to the protected cell assets with a value at least equal to the reserves attributed to that protected cell.   (3) Each protected cell must be accounted for separately on the books and records of the protected cell captive insurance company to reflect the financial condition and result of operations of the protected cell, including but not limited to the net income or loss, dividends or other distributions to participants, and any other factor provided in the participant contract or required by the commissioner.   (4) The assets of a protected cell may not be chargeable with liabilities arising from any other insurance business of the protected cell captive insurance company.   (5) A sale, exchange, or other transfer of assets may not be made by a protected cell captive insurance company among any of its protected cells without the consent of the participants of each affected protected cell.   (6) A sale, exchange, transfer of assets, dividend, or distribution may not be made from a protected cell to a sponsor or a participant without the commissioner's prior written approval, which may not be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to the protected cell.   (7) Each protected cell captive insurance company shall file annually with the commissioner any financial reports required by the commissioner and shall include, without limitation, accounting statements detailing the financial experience of each protected cell.   (8) Each protected cell captive insurance company shall notify the commissioner in writing within 20 business days from the time that a protected cell has become impaired or insolvent or is otherwise unable to meets its claim or expense obligations.   (9) A participant contract may not take effect without the commissioner's prior written approval.   (10) An addition of each new protected cell or the withdrawal of any participant of an existing protected cell constitutes a change in the business plan of the protected cell captive insurance company and may not be effective without the commissioner's prior written approval.   (11) The business written by a protected cell captive insurance company, with respect to each cell, must be fronted by an insurance company authorized under the laws of any state or approved by the commissioner.   (12) If a protected cell captive insurance company's business is reinsured, with respect to each cell it must be:   (a) reinsured by a reinsurer authorized or approved by the commissioner; or   (b) secured by a trust fund in the United States for the benefit of policyholders and claimants, which must be funded by an irrevocable letter of credit or other asset that is acceptable to the commissioner, and subject to the following:   (i) the amount of the security provided by the trust fund may not be less than the reserves associated with the liabilities that are not fronted or reinsured, including but not limited to reserves for losses that are allocated for loss adjustment expenses, incurred but not reported losses, and unearned premiums for business written through the participant's protected cell;   (ii) the commissioner may require the protected cell captive insurance company to increase the funding of any trust;   (iii) if the form of security in the trust is a letter of credit, the letter of credit must be established, issued, or confirmed by a bank chartered in this state, a member of the federal reserve system, or a bank chartered by another state if that state-chartered bank is approved by the commissioner; and   (iv) the trust and trust instrument must be in a form and with terms approved by the commissioner.   History: En. Sec. 1, Ch. 383, L. 2003; amd. Sec. 15, Ch. 518, L. 2007; amd. Sec. 6, Ch. 75, L. 2011; amd. Sec. 21, Ch. 169, L. 2013; amd. Sec. 10, Ch. 335, L. 2015; amd. Sec. 9, Ch. 223, L. 2019.  
  33-28-302. Qualification of sponsors. A sponsor of a protected cell captive insurance company must be an insurer authorized under the laws of any state, a reinsurer authorized under the laws of any state, a captive insurance company formed or authorized under this chapter, an insurance producer licensed under chapter 17 of this title and approved by the commissioner, or any other person approved by the commissioner.   History: En. Sec. 2, Ch. 383, L. 2003; amd. Sec. 16, Ch. 518, L. 2007; amd. Sec. 7, Ch. 75, L. 2011; amd. Sec. 11, Ch. 335, L. 2015.  
  33-28-303. Delinquency of protected cell captive insurance company. If delinquency proceedings have been taken against a protected cell captive insurance company:   (1) the assets of a protected cell may not be used to pay any expenses other than those attributable to the protected cell; and   (2) the capital and surplus of the protected cell captive insurance company must be available at all times to pay expenses of or claims against the protected cell captive insurance company.   History: En. Sec. 3, Ch. 383, L. 2003; amd. Sec. 17, Ch. 518, L. 2007.  
  33-28-304. Participants in protected cell captive insurance companies. (1) An individual or business entity may be a participant in a protected cell captive insurance company.   (2) A sponsor may be a participant in a protected cell captive insurance company.   (3) A participant is not required to be a shareholder of a protected cell captive insurance company or its affiliate.   History: En. Sec. 4, Ch. 383, L. 2003; amd. Sec. 18, Ch. 518, L. 2007; amd. Sec. 8, Ch. 75, L. 2011.  
  33-28-305. Renumbered 33-28-110. Sec. 21(1), Ch. 518, L. 2007.  
  33-28-306. Repealed. Sec. 11, Ch. 223, L. 2019.   History: En. Sec. 6, Ch. 383, L. 2003; amd. Sec. 19, Ch. 518, L. 2007; amd. Sec. 32, Ch. 151, L. 2017.  
  33-28-307 through 33-28-309 reserved.  
  33-28-310. Investments by protected cell captive insurance companies. The assets of two or more protected cells may be combined for the purposes of investment by a protected cell captive insurance company, and the combination of the protected cells may not be construed as defeating the segregation of the assets for accounting or other purposes.   History: En. Sec. 3, Ch. 518, L. 2007.  
  33-28-401. Dormant captive insurer. (1) As used in this section, unless the context requires otherwise, "dormant captive insurance company" means a captive insurance company, other than a captive risk retention group, that has:   (a) ceased transacting the business of insurance, including the issuance of insurance policies; and   (b) no remaining liabilities associated with insurance business transactions or insurance policies issued prior to the filing of its application for a certificate of dormancy under this section.   (2) A captive insurance company domiciled in Montana that meets the criteria of this section may apply to the commissioner for a certificate of dormancy. The certificate of dormancy is subject to expiration at the end of a consecutive 5-year period and may not be renewed.   (3) (a) A dormant captive insurance company that has been issued a certificate of dormancy shall:   (i) possess and thereafter maintain unimpaired, paid-in capital and surplus of not less than $25,000;   (ii) within 90 days of each fiscal year end, submit to the commissioner a report of its financial condition, verified by oath of two of its executive officers, in a form as may be prescribed by the commissioner; and   (iii) pay $1,000 annual dormancy tax due on or before March 1 of each year for any portion of the preceding year in which the captive insurance company held a certificate of dormancy. Each series of members as defined in 35-8-102 or protected cell as defined in 33-28-101 is considered separate pursuant to this section for purposes of paying the $1,000 annual dormancy tax under a certificate of dormancy. A dormant captive insurance company is not otherwise liable for any annual renewal as provided in 33-28-102.   (b) A dormant captive insurance company that has been issued a certificate of dormancy may not:   (i) be subject to or liable for the payment of any tax under 33-28-201;   (ii) be subject to examinations as provided in 33-28-108.   (4) A dormant captive insurance company shall apply to the commissioner for approval to surrender its certificate of dormancy and resume conducting the business of insurance prior to issuing any insurance policies.   (5) A certificate of dormancy must be revoked if a dormant captive insurance company no longer meets the criteria of this section.   History: En. Sec. 1, Ch. 304, L. 2017; amd. Sec. 10, Ch. 223, L. 2019.  
  33-3-101. Scope of chapter. This chapter shall apply only to domestic stock insurers and domestic mutual insurers transacting or proposing to transact insurance on the cash premium or legal reserve plan, except that 33-3-414(2) and 33-3-503 shall also apply to foreign and alien insurers.   History: En. Sec. 418, Ch. 286, L. 1959; R.C.M. 1947, 40-4701.  
  33-3-102. Definitions. (1) A "domestic mutual insurer" is an incorporated insurer without capital stock, and the governing body of which is elected by the policyholders.   (2) A "domestic stock insurer" is an incorporated insurer with capital divided into shares and owned by its stockholders.   History: En. Secs. 419, 420, Ch. 286, L. 1959; R.C.M. 1947, 40-4702, 40-4703.  
  33-3-103. Applicability of general corporation statutes. (1) The applicable laws of this state as to domestic corporations formed for profit shall apply as to domestic stock insurers and domestic mutual insurers except where in conflict with the express provisions of this code and the reasonable implications of such provisions.   (2) Except as provided in part 6 of this chapter, 35-14-1401 through 35-14-1405 apply to the voluntary dissolution of a domestic insurer.   History: En. Sec. 421, Ch. 286, L. 1959; R.C.M. 1947, 40-4704; amd. Sec. 1, Ch. 389, L. 1987; amd. Sec. 188, Ch. 368, L. 1991; amd. Sec. 231, Ch. 271, L. 2019.  
  33-3-104. Extinguishment of unused corporate charters. (1) The corporate charter of any corporation formed under the laws of this state for the purpose of becoming an insurer, and which corporation during any period of 36 consecutive months after January 1, 1961, is not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the commissioner under law currently in force, is automatically hereby extinguished and nullified at the expiration of such 36-month period.   (2) The period during which any such corporation referred to in subsection (1) above is the subject of delinquency proceedings under part 13, chapter 2, of this title shall not be counted as part of any such 36-month period.   History: En. Sec. 467, Ch. 286, L. 1959; R.C.M. 1947, 40-4750(2), (3); amd. Sec. 141, Ch. 575, L. 1981.  
  33-3-105. Commissioner's request of biographical information. (1) The commissioner may request from domestic insurers biographical information from officers, directors, and persons in a position to control the activity of the following entities:   (a) insurers provided for in Title 33, chapter 3;   (b) farm mutual insurers provided for in Title 33, chapter 4;   (c) reciprocal insurers provided for in Title 33, chapter 5;   (d) health service corporations provided for in Title 33, chapter 30;   (e) health maintenance organizations provided for in Title 33, chapter 31; and   (f) the state fund provided for in Title 39, chapter 71, part 23.   (2) Officers, directors, or other persons in a position to control the activity of the entities listed in subsection (1) shall submit biographical information on a form prescribed by the commissioner.   History: En. Sec. 2, Ch. 227, L. 2001; amd. Sec. 7, Ch. 62, L. 2019.  
  33-3-201. Incorporation. (1) This section applies to stock and mutual insurers incorporated in this state.   (2) Five or more individuals, none of whom are less than 18 years of age, may incorporate a stock insurer. Ten or more individuals, none of whom are less than 18 years of age, may incorporate a mutual insurer. At least a majority of the incorporators must be citizens of the United States. At least a majority of the incorporators must be residents of this state.   (3) The incorporators shall execute articles of incorporation and acknowledge their execution in the same manner as provided by law for the acknowledgment of deeds. The articles of incorporation must state the purpose for which the corporation is formed and must show:   (a) the name of the corporation. If a mutual corporation, the word "mutual" must be a part of the name. An alternative name or names may be specified for use in jurisdictions where a conflict of name with that of another insurer or organization might otherwise prevent the corporation from being authorized to transact insurance in that jurisdiction.   (b) the duration of its existence, which may be perpetual;   (c) the kinds of insurance, as defined in this code, which the corporation is formed to transact;   (d) if a stock corporation, its authorized capital stock, the number of shares of common stock, and the par value of each share. The par value must be at least $1. Shares without par value or other than one class of voting common stock are not authorized. The articles of incorporation may limit or deny present or future stockholders preemptive or preferential rights to acquire additional issues of the stock, bonds, debentures, or other obligations convertible into stock, of the corporation, subject to the laws of Montana fixing the required representation and proportion of outstanding capital stock required to be represented and voted, for specified action, at any and all corporate meetings, elections, votes, or consent proceedings.   (e) if a stock corporation, the extent, if any, to which shares of its stock are subject to assessment;   (f) if a stock corporation, the number of shares subscribed, if any, by each incorporator;   (g) if a mutual corporation, the maximum contingent liability of its members, other than as to nonassessable policies, for payment of losses and expenses incurred. Any liability must be stated in the articles of incorporation but may not be less than one or more than six times the premium for the member's policy at the annual premium rate for a term of 1 year.   (h) the minimum, not less than 5, and the maximum, not more than 21, number of directors who constitute the board of directors and conduct the affairs of the corporation, and the names, addresses, and terms of the members of the initial board of directors. The term of office of initial directors may not be for more than 1 year after the date of incorporation.   (i) the name of the county, and the city, town, or place within the county, in which its principal office or principal place of business is to be located in this state;   (j) any other provisions, not inconsistent with law, considered appropriate by the incorporators;   (k) the name and residence address of each incorporator and the citizenship of each incorporator who is not a citizen of the United States.   History: En. Sec. 422, Ch. 286, L. 1959; amd. Sec. 7, Ch. 423, L. 1971; amd. Sec. 18, Ch. 100, L. 1973; R.C.M. 1947, 40-4705; amd. Sec. 13, Ch. 380, L. 2003; amd. Sec. 3, Ch. 117, L. 2019.  
  33-3-202. Articles of incorporation -- approval. (1) The incorporators of a proposed domestic insurer shall deliver an electronic copy of the proposed articles of incorporation to the commissioner. The commissioner shall examine the proposed articles of incorporation. If the commissioner finds that the articles comply with this chapter and are not in conflict with the constitution and laws of the United States or of this state, the commissioner shall approve the articles. However, if the commissioner finds that the proposed insurer would not be eligible for a certificate of authority under 33-2-112, the commissioner shall refuse to approve the articles of incorporation and shall provide in writing the reasons for the refusal. The commissioner shall forward the approved articles and the applicable fees to the secretary of state.   (2) If the commissioner finds that the proposed articles of incorporation do not comply with law, the commissioner shall refuse to approve the proposed articles of incorporation and shall provide a written statement of the reasons for the refusal.   (3) The corporation has legal existence as a corporation upon the issuance of the certificate of incorporation by the secretary of state, but the corporation may not transact business as an insurer until it has qualified for and received from the commissioner a certificate of authority as provided in this title.   (4) A copy of the certificate of incorporation, certified by the secretary of state, is admissible in all the courts of this state as prima facie evidence of proper incorporation.   History: En. Sec. 423, Ch. 286, L. 1959; R.C.M. 1947, 40-4706; amd. Sec. 1, Ch. 373, L. 1983; amd. Sec. 5, Ch. 316, L. 1999; amd. Sec. 17, Ch. 472, L. 1999; amd. Sec. 8, Ch. 62, L. 2019; amd. Sec. 4, Ch. 117, L. 2019.  
  33-3-203. Amendment of articles of incorporation -- grounds for disapproval. (1) A domestic stock insurer may amend its articles of incorporation for any lawful purpose by written authorization of the holders of a majority of the voting power of its outstanding capital stock or by affirmative vote of a majority voting at a lawful meeting of stockholders of which the notice given to stockholders included notice of the proposal to amend.   (2) A domestic mutual insurer may amend its articles of incorporation for any lawful purpose by affirmative vote of a majority of those of its members present or represented by proxy at a lawful meeting of its members of which the notice given members included notice of the proposal to amend.   (3) Upon adoption of an amendment, the insurer shall set forth the amendment and the date and manner of the amendment's adoption in articles of amendment. The articles of amendment must be executed by the insurer's president or vice president and secretary or assistant secretary and acknowledged by them before an officer authorized by law to take acknowledgments of deeds. The insurer shall deliver to the commissioner the articles of amendment. If the commissioner finds that the articles of amendment and the amendment comply with law, the amendment must be approved. The amendment is effective when it has been filed with the secretary of state.   (4) If the commissioner finds that the proposed amendment or the articles of amendment do not comply with the law, the commissioner may not approve the amendment or the articles of amendment and shall provide a written statement of reasons for nonapproval. The filing fee is not returnable.   (5) If an amendment of articles of incorporation would reduce the authorized capital stock of a stock insurer below the amount then outstanding, the commissioner may not approve the amendment if the commissioner has reason to believe that the interests of policyholders or creditors of the insurer would be materially prejudiced by the reduction. If a reduction of capital stock is realized, the insurer may require the return of the original certificates of stock held by each stockholder for exchange for new certificates for the number of shares as the stockholder is then entitled in the proportion that the reduced capital bears to the amount of capital stock outstanding as of immediately prior to the effective date of the reduction.   History: En. Sec. 424, Ch. 286, L. 1959; R.C.M. 1947, 40-4707; amd. Sec. 6, Ch. 316, L. 1999; amd. Sec. 29, Ch. 227, L. 2001; amd. Sec. 5, Ch. 117, L. 2019.  
  33-3-204. Initial qualifications -- domestic mutuals. (1) When newly organized, a domestic mutual insurer may be authorized to transact any of the kinds of insurance as are permitted under 33-2-108.   (2) When applying for an original certificate of authority, the insurer must be otherwise qualified therefor under this code and must have unimpaired surplus funds in an amount not less than the amount of paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance as in 33-2-109, subject further to the additional special surplus requirements of 33-2-110 applicable to such stock insurer. The minimum amount of surplus must thereafter be maintained unimpaired and placed on deposit with the commissioner. The deposit is subject to the provisions of chapter 2, part 6, of this title and 33-2-111.   History: En. Sec. 425, Ch. 286, L. 1959; R.C.M. 1947, 40-4708; amd. Sec. 10, Ch. 303, L. 1981.  
  33-3-205. Formation of mutual insurer -- bond. (1) Before soliciting applications for insurance to raise surplus funds to qualify for the original certificate of authority, the incorporators of the proposed insurer shall file with the commissioner a corporate surety bond in the penalty of $50,000, in favor of the state and for the use and benefit of the state and of applicant members and creditors of the corporation. The bond shall be conditioned as follows:   (a) for the prompt return to applicant members of all premiums collected in advance;   (b) for payment of all indebtedness of the corporation; and   (c) for payment of costs incurred by the state in event of any legal proceedings for liquidation or dissolution of the corporation, all in the event the corporation fails to complete its organization and secure a certificate of authority within 1 year after the date of its certificate of incorporation.   (2) In lieu of such bond, the incorporators may deposit with the commissioner $50,000 in cash or United States government bonds, negotiable and payable to the bearer, with a market value at all times of not less than $50,000, to be held in trust upon the same conditions as required for the bond.   (3) Any such bond filed or deposit or remaining portion thereof held under this section shall be released and discharged upon settlement and termination of all liabilities against it.   History: En. Sec. 426, Ch. 286, L. 1959; R.C.M. 1947, 40-4709; amd. Sec. 11, Ch. 303, L. 1981.  
  33-3-206. Applications for insurance in formation of mutual insurer. (1) Upon receipt of the commissioner's approval of the bond or deposit as provided in 33-3-205, the directors and officers of the proposed domestic mutual insurer may commence solicitation of such requisite applications for insurance policies as they may accept and may receive deposits of premiums thereon.   (2) All such applications shall be in writing signed by the applicant, covering subjects of insurance resident, located, or to be performed in this state.   (3) All such applications shall provide that:   (a) issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority;   (b) no insurance is in effect unless and until the certificate of authority has been issued; and   (c) the prepaid premium or deposit and membership or policy fee, if any, shall be refunded in full to the applicant if organization is not completed and the certificate of authority is not issued and received by the insurer before a specified reasonable date, which date shall be not later than 1 year after the date of the certificate of incorporation.   (4) All qualifying premiums collected shall be in cash.   (5) Solicitation for such qualifying applicants for insurance shall be by licensed insurance producers of the corporation, and the commissioner shall, upon the corporation's application therefor, issue temporary insurance producer's licenses expiring on the date specified pursuant to subsection(3)(c) above to individuals qualified as for a resident insurance producer's license except as to the taking or passing of an examination. The commissioner may suspend or revoke any such license for any of the causes and pursuant to the same procedures as are applicable to suspension or revocation of licenses of insurance producers in general under chapter 17.   History: En. Sec. 427, Ch. 286, L. 1959; R.C.M. 1947, 40-4710; amd. Sec. 1, Ch. 713, L. 1989.  
  33-3-207. Formation of mutuals -- trust deposit of premiums -- issuance of policies. (1) All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance therein shall be deposited in trust in a bank or trust company in this state under a written trust agreement consistent with this section and with 33-3-206(3)(c). The corporation shall file an executed copy of such trust agreement with the commissioner.   (2) Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which such applications were solicited, all funds so held in trust shall become the funds of the insurer, and the insurer shall thereafter in due course issue and deliver its policies for which premiums had been paid and accepted. The insurance provided by such policies shall be effective as of the date of the certificate of authority or thereafter as provided by the respective policies.   History: En. Sec. 428, Ch. 286, L. 1959; R.C.M. 1947, 40-4711.  
  33-3-208. Formation of mutuals -- failure to qualify. If the proposed domestic insurer fails to complete its organization and to secure its original certificate of authority within 1 year after the date of its certificate of incorporation, its corporate powers shall cease and the commissioner shall return or cause to be returned to the persons entitled thereto all advance deposits or payments of premiums held in trust under 33-3-207.   History: En. Sec. 429, Ch. 286, L. 1959; R.C.M. 1947, 40-4712.  
  33-3-209 through 33-3-214 reserved.  
  33-3-215. Mutualization of stock insurer. (1) A stock insurer other than a title insurer may become a mutual insurer under a plan and procedure approved by the commissioner after a hearing thereon.   (2) The commissioner shall not approve any plan, procedure, or mutualization unless:   (a) it is equitable to stockholders and policyholders;   (b) it is subject to approval by the holders of not less than three-fourths of the insurer's outstanding capital stock having voting rights and by not less than two-thirds of the insurer's policyholders who vote on such plan in person, by proxy, or by mail pursuant to such notice and procedure as may be approved by the commissioner;   (c) if a life insurer, the right to vote thereon is limited to holders of policies other than term or group policies and whose policies have been in force for more than 1 year;   (d) mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value thereof as determined by competent disinterested appraisers;   (e) the plan provides for the purchase of the shares of any nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by Title 35, chapter 14, part 13, as to rights of nonconsenting stockholders, with respect to consolidation or merger of private corporations;   (f) the plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective; and   (g) the mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the states in which it is then authorized to transact insurance and for the kinds of insurance included in its certificates of authority in such states.   (3) This section shall not apply to mutualization under order of court pursuant to rehabilitation or reorganization of an insurer under chapter 2, part 13.   History: En. Sec. 460, Ch. 286, L. 1959; R.C.M. 1947, 40-4743; amd. Sec. 13, Ch. 198, L. 1979; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 232, Ch. 271, L. 2019.  
  33-3-216. Converting mutual insurer to stock insurer. (1) A mutual insurer may become a stock insurer under a plan and procedure as may be approved by the commissioner after a hearing.   (2) The commissioner may not approve any plan or procedure unless:   (a) it is equitable to the insurer's members;   (b) it is subject to approval by vote of not less than three-fourths of the insurer's current members voting on the plan or procedure in person, by proxy, or by mail at a meeting of members called for the purpose pursuant to reasonable notice and procedure that may be approved by the commissioner. If the insurer is a life insurer, the right to vote may be limited to members who hold policies other than term or group policies and whose policies have been in force for not less than 1 year.   (c) the equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner, which equity must be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds, plus a reasonable present equity in its reserves and in all nonadmitted assets;   (d) the policyholders entitled to participate in the purchase of stock or distribution of assets must include all current policyholders and all existing persons who had been policyholders of the insurer within 3 years prior to the date the plan was submitted to the commissioner;   (e) the plan gives to each policyholder of the insurer, as specified in subsection (2)(d), a preemptive right to acquire the policyholder's proportionate part of all of the proposed capital stock of the insurer, within a designated reasonable period, and to apply upon the purchase of the stock the amount of the policyholder's equity in the insurer as determined under subsection (2)(c);   (f) shares are offered to policyholders at a price not greater than the price to be offered to others but at not more than double the par value of the shares;   (g) the plan provides for payment to each policyholder not electing to apply the policyholder's equity in the insurer for or upon the purchase price of stock to which preemptively entitled of cash in the amount of not less than 50% of the amount of the equity not used for the purchase of stock, and which cash payment together with stock purchased, if any, constitutes full payment and discharge of the policyholder's equity as an owner of the mutual insurer; and   (h) the plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance, together with surplus funds in amount not less than one-half of the required capital.   History: En. Sec. 461, Ch. 286, L. 1959; R.C.M. 1947, 40-4744; amd. Sec. 1132, Ch. 56, L. 2009.  
  33-3-217. Mergers and consolidations of stock insurers. (1) A domestic stock insurer may merge or consolidate with one or more domestic or foreign stock corporations authorized to transact business in this state by complying with the applicable provisions of the statutes of this state governing the merger or consolidation of stock corporations formed for profit but subject to subsections (2) and (3).   (2) A merger or consolidation may not be effectuated unless in advance of the merger or consolidation the plan and agreement for the merger or consolidation have been filed with the commissioner and approved in writing by the commissioner after a hearing. The commissioner shall give approval within a reasonable time after the filing unless the commissioner finds that the plan or agreement:   (a) is contrary to law;   (b) is inequitable to the stockholders of any domestic insurer involved; or   (c) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.   (3) A director, officer, insurance producer, or employee of any insurer that is party to the merger or consolidation may not receive any fee, commission, compensation, or other valuable consideration for in any manner aiding, promoting, or assisting in the merger or consolidation except as set forth in the plan or agreement.   (4) If the commissioner does not approve any plan or agreement, the commissioner shall notify the insurer in writing specifying the reasons for disapproval.   (5) If any domestic insurer involved in the proposed merger or consolidation is authorized to transact insurance in other states, the commissioner may request the insurance commissioner, director of insurance, superintendent of insurance, or other similar public insurance supervisory official of the two other states in which the insurer has in force the larger amounts of insurance to participate in the hearing provided for under subsection (2), with full right to examine all witnesses and evidence and to offer to the commissioner pertinent information and suggestions that they may consider proper.   (6) Any plan or proposal through which a stock insurer proposes to acquire a controlling stock interest in another stock insurer through an exchange of stock of the first insurer, issued by the insurer for the purpose, for the controlling stock of the second insurer is considered to be a plan or proposal of merger of the second insurer into the first insurer for the purposes of this section and is subject to the applicable provisions of this section.   (7) Upon merger or consolidation of a domestic insurer with another insurer under this chapter, the corporate charter of the merged or consolidated domestic insurer must automatically be extinguished and nullified.   History: (1) thru (6)En. Sec. 462, Ch. 286, L. 1959; amd. Sec. 1, Ch. 151, L. 1971; Sec. 40-4745, R.C.M. 1947; (7)En. Sec. 467, Ch. 286, L. 1959; Sec. 40-4750, R.C.M. 1947; R.C.M. 1947, 40-4745, 40-4750(4); amd. Sec. 14, Ch. 198, L. 1979; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1133, Ch. 56, L. 2009.  
  33-3-218. Mergers and consolidations of mutual insurers. (1) A domestic mutual insurer may not merge or consolidate with a stock insurer.   (2) A domestic mutual insurer may merge or consolidate with another mutual insurer under the applicable procedures prescribed by the statutes of this state applying to corporations formed for profit, except as provided in this section.   (3) The plan and agreement for merger or consolidation must be submitted to and approved by at least two-thirds of the members of each mutual insurer involved by voting on the issue at meetings called for the purpose pursuant to reasonable notice and procedure that has been approved by the commissioner. If the insurer is a life insurer, the right to vote may be limited to members whose policies are other than term and group policies and have been in effect for more than 1 year.   (4) A merger or consolidation may not be effectuated unless in advance of the merger or consolidation the plan and agreement for the merger or consolidation have been filed with the commissioner and approved by the commissioner after a hearing. The commissioner shall give approval within a reasonable time after the filing unless the commissioner finds that the plan or agreement:   (a) is inequitable to the policyholders of any domestic insurer involved; or   (b) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state and elsewhere.   (5) If the commissioner does not approve the plan or agreement, the commissioner shall notify the insurers in writing specifying the reasons for disapproval.   (6) Section 33-3-217(5) also applies to mergers and consolidations of mutual insurers.   (7) Upon merger or consolidation of a domestic insurer with another insurer under this chapter, the corporate charter of the merged or consolidated domestic insurer must automatically be extinguished and nullified.   History: En. Secs. 463, 467, Ch. 286, L. 1959; R.C.M. 1947, 40-4746, 40-4750(4); amd. Sec. 1134, Ch. 56, L. 2009.  
  33-3-301. Bylaws of mutual. (1) A domestic mutual insurer must have bylaws for the governing of its affairs. The initial board of directors of the insurer shall adopt original bylaws, subject to the approval of the insurer's members at the next meeting. The members have the power to make, modify, and revoke bylaws.   (2) The bylaws must provide:   (a) that each member is entitled to one vote upon each matter coming to a vote at meetings of members or to more votes in accordance with a reasonable classification of members as set forth in the bylaws and based upon the amount of insurance in force, upon the number of policies held or the amount of the premiums paid by the member, or upon other reasonable factors. A member has the right to vote in person or by written proxy. A proxy may not be irrevocable or for longer than a reasonable period of time.   (b) for election of directors by the members and the number, qualifications, terms of office, and powers of directors;   (c) the time, notice, quorum, and conduct of annual and special meetings of members and voting at the meetings. The bylaws may provide that the annual meeting must be held at a place, date, and time to be set forth in the policy and without giving other notice of the meeting.   (d) the number, designation, election, terms, and powers and duties of the respective corporate officers;   (e) for deposit, custody, disbursement, and accounting as to corporate funds;   (f) for any other reasonable provisions customary, necessary, or convenient for the management or regulation of its corporate affairs.   (3) A provision in the bylaws for determining a quorum of members at any meeting of less than a majority of all the insurer's members is not effective unless approved by the commissioner. This subsection may not affect any other provision of law requiring the vote of a larger percentage of members for a specified purpose.   (4) The insurer shall promptly file with the commissioner a copy, certified by the insurer's secretary, of its bylaws and of every modification of or addition to the bylaws. The commissioner shall disapprove any bylaw provision that the commissioner considers unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members or any class of members. The insurer may not, after receiving written notice of the disapproval and during the existence of the disapproval, effectuate any bylaw provision disapproved.   History: En. Sec. 432, Ch. 286, L. 1959; R.C.M. 1947, 40-4715; amd. Sec. 1135, Ch. 56, L. 2009.  
  33-3-302. Bylaws of stock insurer -- modification. (1) A bylaw adopted at any meeting of stockholders of a domestic insurer may not be modified or revoked except by the stockholders at a subsequent meeting unless the bylaws as adopted or amended by the stockholders grant authority to the board of directors to revoke or modify bylaw provisions. The board of directors may not revoke or modify any bylaw relating to the qualifications, election, terms, or compensation of directors or to the calling or notice of meetings of stockholders. A revocation or modification of bylaws made by the directors under this provision must be presented at the next following meeting of stockholders for the information of the stockholders.   (2) The insurer shall promptly file with the commissioner a copy, certified by the insurer's secretary, of its bylaws and amended bylaws. The commissioner may disapprove any bylaw provision considered by the commissioner to be unlawful. The insurer may not, after receiving written notice of the commissioner's disapproval, enact any disapproved bylaw provision.   History: En. Sec. 433, Ch. 286, L. 1959; R.C.M. 1947, 40-4716; amd. Sec. 30, Ch. 227, L. 2001.  
  33-3-303. Meetings of stockholders or members. (1) Except with the commissioner's consent, meetings of stockholders or members of a domestic insurer must be held in the city or town of its principal office or place of business in this state.   (2) A meeting of stockholders or members may not amend the insurer's articles of incorporation unless the proposal to amend was included in the notice of the meeting.   (3) Except with the commissioner's consent, each insurer shall, during the first 6 months of each calendar year, hold the annual meeting of its stockholders or members to fill vacancies existing or occurring in the board of directors, must receive and shall consider reports of the insurer's officers as to its affairs, and shall transact other business properly brought before it. Not less than 20 days' notice must be given of the meeting in the manner provided in the bylaws, except when notice of the annual meeting of a mutual insurer is contained in its policies.   (4) Special meetings of the stockholders or members may be called at any time for any purpose by the board of directors upon not less than 10 days' notice, with notice given as provided in the bylaws. The notice must state the purpose of the meeting, and business for which notice was not given may not be transacted at the meeting.   (5) If more than 15 months elapse without an annual stockholders' or members' meeting being held, any stockholder or member may call for an annual meeting to be held. At any time, upon written request of any director or of any stockholders or members holding in the aggregate one-fifth of the voting power of all stockholders or members, it is the duty of the secretary to call a special meeting of stockholders or members to be held at the time that the secretary may fix, not less than 10 or more than 30 days after the receipt of the request. If the secretary fails to issue a call, the director, stockholders, or members making the request may do so.   (6) A stockholders' or members' meeting duly held may be organized for the transaction of business whenever a quorum is present. Except as otherwise provided by law or the articles of incorporation:   (a) the presence, in person or by proxy, of the holders of a majority of the voting power of all stockholders or of all members constitutes a quorum;   (b) the stockholders or members present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders or members to leave less than a quorum;   (c) if any necessary officer fails to attend a meeting, any stockholder or member present may be elected to act temporarily in lieu of the absent officer;   (d) if a meeting cannot be held because a quorum is not present, those present may adjourn the meeting to a time that they determine, but in the case of any meeting called for the election of any director, the adjournment must be to the next day and those who attend the second meeting, although less than a quorum as fixed in this section or in the articles of incorporation, constitute a quorum for the purpose of electing any director; and   (e) an annual or special meeting of stockholders or members may be adjourned to another date without new notice being given.   History: En. Sec. 434, Ch. 286, L. 1959; R.C.M. 1947, 40-4717; amd. Sec. 12, Ch. 531, L. 1997; amd. Sec. 31, Ch. 227, L. 2001.  
  33-3-304. Proxies -- corrupt practices. (1) Every proxy of a stockholder of an insurer, unless coupled with an interest, shall be revocable at will and this provision cannot be waived. The validity of every unrevoked proxy shall cease 11 months after the date of its execution unless some other definite period of validity is expressly provided therein, but in no event shall a proxy, unless coupled with an interest, be voted on after 3 years from the date of its execution.   (2) The revocation of a proxy shall not be effective until notice thereof has been given to the secretary of the insurer.   (3) No person shall buy or sell or barter a vote or proxy, relative to any meeting of stockholders or members of an insurer, or engage in any corrupt or dishonest practice in or relative to the conduct of any such meeting.   History: En. Secs. 435, 436, Ch. 286, L. 1959; R.C.M. 1947, 40-4718, 40-4719; amd. Sec. 23, Ch. 396, L. 2017.  
  33-3-305. Directors -- number and election. (1) The affairs of every domestic insurer must be managed by the number of directors fixed in the insurer's bylaws, which may not be less than 5 or more than 21 directors.   (2) Directors must be elected by the members or stockholders of a domestic insurer, except as provided in 33-3-306, at the time and place and for the terms, not exceeding 3 years, as may be provided in the insurer's bylaws. A majority of directors must be elected from the members or stockholders of the domestic insurer.   (3) The term of a director shall extend until a successor has been elected and has qualified.   History: En. Sec. 437, Ch. 286, L. 1959; R.C.M. 1947, 40-4720; amd. Sec. 11, Ch. 451, L. 1993.  
  33-3-306. Participation of policyholders in election of directors of stock insurer. The bylaws of a domestic stock life insurer may provide a plan for its policyholders to participate with stockholders in the election of its directors.   History: En. Sec. 438, Ch. 286, L. 1959; R.C.M. 1947, 40-4721.  
  33-3-307. Bonding of officers and employees. (1) When acting in a fiduciary capacity, officers and employees of each mutual insurer or stock insurer shall maintain a fidelity bond issued by an authorized corporate surety in favor of the insurer. The commissioner shall consider the insurer's exposure, total assets, and total income in determining the bond amount. In lieu of individual bonds, officers and employees may be covered under a blanket bond for the same respective amounts. The insurer shall file the blanket bond with the commissioner.   (2) The insurer shall pay the premium for the bond.   (3) A bond is not subject to cancellation except upon written notice to both the insurer and the commissioner, delivered not less than 30 days in advance of the effective date of the cancellation.   (4) This section may not be considered to limit the amount of bonded protection that the insurer may carry as to any officer or employee.   (5) The commissioner may adopt rules to determine the bond amount for officers and employees who are subject to the provisions of this section.   History: En. Sec. 439, Ch. 286, L. 1959; R.C.M. 1947, 40-4722; amd. Sec. 13, Ch. 531, L. 1997; amd. Sec. 18, Ch. 472, L. 1999.  
  33-3-308. Prohibited pecuniary interest of officials. (1) Any officer or director or any member of any committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds may not:   (a) deposit or invest the funds except in the insurer's corporate name;   (b) borrow the funds of the insurer;   (c) be pecuniarily interested in any loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of the insurer except as a stockholder or member;   (d) take or receive to the individual's own use any fee, brokerage, commission, gift, or other consideration for or on account of any transaction made by or on behalf of the insurer.   (2)  An insurer may not guarantee any financial obligation of any of its officers or directors.   (3) This section may not prohibit a director or officer or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders.   (4) The commissioner may, by regulations from time to time, define and permit additional exceptions to the prohibition contained in subsection (1) solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer or to a corporation or firm in which a director is interested for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.   History: En. Sec. 440, Ch. 286, L. 1959; R.C.M. 1947, 40-4723; amd. Sec. 1136, Ch. 56, L. 2009.  
  33-3-309. Management and exclusive agency contracts. (1) A domestic insurer may not make any contract under which any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer unless the contract is filed with and approved by the commissioner. The contract must be considered approved unless disapproved by the commissioner within 20 days after date of filing, subject to a reasonable extension of time that the commissioner may require by notice given within 20 days. Any disapproval must be delivered to the insurer in writing, stating the grounds for disapproval.   (2) The commissioner shall disapprove any contract if the commissioner finds that it:   (a) subjects the insurer to excessive charges;   (b) is to extend for an unreasonable length of time;   (c) does not contain fair and adequate standards of performance; or   (d) contains other inequitable provision or provisions that impair the proper interests of stockholders or members of the insurer.   History: En. Sec. 441, Ch. 286, L. 1959; R.C.M. 1947, 40-4724; amd. Sec. 1137, Ch. 56, L. 2009.  
  33-3-310. Agreement not to sell property prohibited. No insurer shall enter into any agreement to withhold from sale any of its property. Disposition of an insurer's property shall be at all times within the control of its board of directors.   History: En. Sec. 444, Ch. 286, L. 1959; R.C.M. 1947, 40-4727.  
  33-3-401. Home office and records -- administrative or civil penalty for unlawful removal of records or assets. (1) Each domestic insurer shall maintain its principal place of business and home office in this state and shall maintain at its principal place of business or home office complete records of its assets, transactions, and affairs in accordance with methods and systems customary or suitable to the kind or kinds of insurance that it transacts. Records of the insurer's operations and other financial records reasonably related to its insurance operations for the preceding 5 years must be maintained and be available to the commissioner or the commissioner's examiner.   (2) Each domestic insurer shall maintain its assets in this state, except for:   (a) real property and appurtenant personal property lawfully owned by the insurer and located outside this state; and   (b) property of the insurer that is customary, necessary, and convenient to enable and facilitate the operation of its branch offices and regional home offices located outside this state as referred to in subsection (4).   (3) Removal of all or a material part of the records or assets of a domestic insurer from this state except pursuant to a plan of merger or consolidation approved by the commissioner under this code or for reasonable purposes and periods of time as may be approved by the commissioner in writing in advance is prohibited. Upon any removal or attempted removal of records or assets or upon retention of records or assets or a material part of the records or assets outside this state beyond the period specified in the commissioner's consent under which the records were removed or upon concealment of or attempt to conceal records or assets in violation of this section, the commissioner may institute delinquency proceedings against the insurer pursuant to the provisions of chapter 2, part 13.   (4) This section does not prohibit or prevent an insurer from:   (a) establishing and maintaining branch offices or regional home offices in other states when necessary or convenient to the transaction of its business and keeping there the detailed records and assets customary and necessary for the servicing of its insurance in force and affairs in the territory served by the out-of-state office, as long as the records and assets are made readily available at that office for examination by the commissioner when requested;   (b) having, depositing, or transmitting funds and assets of the insurer in or to jurisdictions outside of this state as reasonably and customarily required in the regular course of its business;   (c) making deposits under custodial arrangements as provided by 33-2-604(2).   (5) An insurer that fails to maintain records and make them available to the commissioner's staff is subject to the penalties and procedures in 33-1-317, 33-1-318, and 33-2-119.   History: En. Sec. 442, Ch. 286, L. 1959; R.C.M. 1947, 40-4725; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 5, Ch. 798, L. 1991; amd. Sec. 5, Ch. 493, L. 2003; amd. Sec. 8, Ch. 169, L. 2013; amd. Sec. 24, Ch. 396, L. 2017.  
  33-3-402. Vouchers for expenditures. (1) No insurer shall make any disbursement of $100 or more unless evidenced by a voucher correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the person receiving the money.   (2) If the disbursement is for services and reimbursement, the voucher shall describe the services and expenditures.   (3) If the disbursement is in connection with any matter pending before any legislature or public body or before any public official, the voucher shall also correctly describe the nature of the matter and of the insurer's interest therein.   (4) If a voucher cannot be obtained, the expenditure referred to in subsection (1) above shall be evidenced by an affidavit in which is set forth the character and object of the expenditure and the reasons for not obtaining a voucher therefor.   History: En. Sec. 443, Ch. 286, L. 1959; R.C.M. 1947, 40-4726.  
  33-3-403 through 33-3-410 reserved.  
  33-3-411. Contingent liability of mutual members. (1) Each member of a domestic mutual insurer shall, except as otherwise provided in this part with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations. The contingent liability must be expressed in the policy and must be in a maximum amount specified in the insurer's articles of incorporation.   (2) Termination of the policy of any member may not relieve the member of contingent liability for the member's proportion, if any, of the obligations of the insurer that accrued while the policy was in force.   (3) Unrealized contingent liability of members does not constitute an asset of the insurer in any determination of its financial condition.   History: En. Sec. 446, Ch. 286, L. 1959; R.C.M. 1947, 40-4729; amd. Sec. 1138, Ch. 56, L. 2009.  
  33-3-412. Levy of contingent liability. (1) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it by this code for authority to transact the kinds of insurance being transacted and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who held policies providing for contingent liability at any time within the 12 months preceding the date notice of the assessment was mailed to them, and the members are liable to the insurer for the amount assessed.   (2) The assessment must be for an amount that is required to cure the deficiency and to provide a reasonable amount of working funds in excess of the minimum amount of surplus, but the working funds provided may not exceed 5% of the insurer's liabilities as of the date that the amount of the deficiency was determined.   (3) In levying an assessment upon a policy providing for contingent liability, the assessment must be computed on the basis of the premiums earned on the policy during the period to which the assessment relates.   (4) A member may not have an offset against any assessment for which the member is liable on account of any claim for unearned premium or loss payable.   (5) As to life insurance, any part of an assessment upon a member that remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in the notice may, if approved by the commissioner as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.   History: En. Sec. 447, Ch. 286, L. 1959; R.C.M. 1947, 40-4730; amd. Sec. 1139, Ch. 56, L. 2009.  
  33-3-413. Enforcement of contingent liability. (1) Any assessment made by an insurer under 33-3-412 or 33-3-433 shall be deemed to be prima facie correct. The amount of such assessment to be paid by each member as determined by the insurer shall be deemed to be likewise prima facie correct.   (2) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the address of the member last of record with the insurer. Failure of the member to receive the notice so mailed, within the time specified therein for the payment of the assessment or at all, shall be no defense in any action to collect the assessment.   (3) If a member fails to pay the assessment within the period specified in the notice, which period shall not be less than 20 days after mailing, the insurer may institute suit to collect the same.   History: En. Sec. 448, Ch. 286, L. 1959; R.C.M. 1947, 40-4731.  
  33-3-414. Nonassessable policies of mutual insurers. (1) While possessing surplus funds in amount not less than the paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, a domestic mutual insurer may, upon receipt of the commissioner's order so authorizing, extinguish the contingent liability of its members as to all its policies in force and may omit provisions imposing contingent liability in all its policies currently issued.   (2) A foreign or alien mutual insurer may issue nonassessable policies to its members in this state pursuant to its articles of incorporation and the laws of its domicile.   (3) No policy of a domestic mutual insurer which, pursuant to the commissioner's order, is without contingent liability and thereby nonassessable by its terms shall be subject to assessment for any debt or liability of the insurer.   History: En. Sec. 449, Ch. 286, L. 1959; R.C.M. 1947, 40-4732.  
  33-3-415. Insufficient reserves -- nonassessable policies prohibited -- revocation of authority. The commissioner shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked. During the absence of such authority the insurer shall not issue any policy without providing therein for the contingent liability of the policyholder or renew any policy which is renewable at the option of the insurer without endorsing the same to provide for such contingent liability.   History: En. Sec. 450, Ch. 286, L. 1959; R.C.M. 1947, 40-4733.  
  33-3-416 through 33-3-420 reserved.  
  33-3-421. Participating policies. (1) If provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating and nonparticipating basis, and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable and shall not unfairly discriminate as between policyholders within the same such classifications. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged. Any such domestic insurer which prior to January 1, 1961, has been issuing all or part of its policies on a participating basis without specific authorization in its articles of incorporation may continue to issue such policies on a basis not inconsistent with this section.   (2) After the third policy year no dividend otherwise earned shall be made contingent upon the payment of renewal premium on any policy.   History: En. Sec. 451, Ch. 286, L. 1959; R.C.M. 1947, 40-4734.  
  33-3-422. Dividends to stockholders. (1) A domestic stock insurer shall not pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from realized net profits on its business.   (2) A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer under 33-3-431.   (3) A dividend otherwise proper may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value thereof.   History: En. Sec. 452, Ch. 286, L. 1959; R.C.M. 1947, 40-4735.  
  33-3-423. Dividends to mutual policyholders. (1) The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds which represents net realized savings and net realized earnings in excess of the surplus required by law to be maintained.   (2) A dividend otherwise proper may be payable out of such savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.   History: En. Sec. 453, Ch. 286, L. 1959; R.C.M. 1947, 40-4736.  
  33-3-424. Illegal dividends -- administrative or civil penalty. (1) Any director of a domestic stock or mutual insurer who votes for or concurs in declaration or payment of a dividend to stockholders or members other than as authorized under 33-3-422 or 33-3-423 shall be jointly and severally liable, together with other such directors likewise voting for or concurring, for any loss thereby sustained by the insurer.   (2) Any stockholder receiving such an illegal dividend shall be liable in the amount thereof to the insurer.   (3) The commissioner may revoke or suspend the certificate of authority of an insurer which has declared or paid such an illegal dividend.   History: En. Sec. 454, Ch. 286, L. 1959; R.C.M. 1947, 40-4737; amd. Sec. 25, Ch. 396, L. 2017.  
  33-3-425 through 33-3-430 reserved.  
  33-3-431. Borrowed surplus. (1) A domestic stock or mutual insurer may borrow money to defray the expenses of the insurer's organization, to provide the insurer with surplus funds, or for any purpose of the insurer's business upon a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement. The agreement may provide for interest at a rate not to exceed the greater of the rate established in 25-9-205 or a rate that is 6 percentage points per year higher than the prime rate published by the federal reserve system in its statistical release H.15 Selected Interest Rates for bank prime loans dated 3 business days prior to the execution of the agreement. The agreement must specify whether the interest constitutes a liability of the insurer. A commission or promotion expense may not be paid in connection with a loan of the type described in this section.   (2) Money borrowed, together with the interest if stipulated in the agreement, does not form a part of the insurer's legal liabilities except as to the insurer's surplus in excess of the amount stipulated in the agreement or the basis of any setoff. However, until the money or interest, or both, are repaid, financial statements filed or published by the insurer must show as a footnote the amount then unpaid together with any interest accrued but unpaid.   (3) A loan of this type to a mutual or stock insurer is subject to the commissioner's approval. The insurer shall, in advance of the loan, file with the commissioner a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreement are approved unless within 15 days after filing the insurer is notified of the commissioner's disapproval and reasons for the disapproval. The commissioner shall disapprove any proposed loan or agreement if the commissioner finds the loan is unnecessary or excessive for the purpose intended or that the terms of the loan agreement are not fair and equitable to the parties, and to other similar lenders, if any, to the insurer, or that the information filed by the insurer is inadequate.   (4) A loan to a mutual or stock insurer or a substantial portion of the loan must be repaid by the insurer when the loan is no longer reasonably necessary for the purpose originally intended. Repayment of either principal or interest on the loan may not be made by a mutual or stock insurer unless approved in advance by the commissioner.   (5) This section does not apply to loans obtained by the insurer in the ordinary course of business from banks and other financial institutions or to loans secured by pledge or mortgage of assets.   History: En. Sec. 455, Ch. 286, L. 1959; R.C.M. 1947, 40-4738; amd. Sec. 6, Ch. 798, L. 1991; amd. Sec. 34, Ch. 379, L. 1995; amd. Sec. 6, Ch. 469, L. 2005; amd. Sec. 3, Ch. 108, L. 2011.  
  33-3-432. Impairment of capital or assets. (1) If a stock insurer's capital, as represented by the aggregate par value of its outstanding capital stock, becomes impaired or the assets of a mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it under 33-3-204 for authority to transact the kinds of insurance being transacted, the commissioner shall at once determine the amount of deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of such notice.   (2) The deficiency may be made good in cash or in assets eligible under chapter 12 for the investment of the insurer's funds as follows:   (a) if a stock insurer, by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance to be transacted; or   (b) if a mutual insurer, by amendment of its certificate of authority to cover only the kind or kinds of insurance for which the insurer has sufficient surplus under this title.   (3) If the deficiency is not made good and proof is filed with the commissioner within the 60-day period, the insurer is insolvent and the commissioner shall institute delinquency proceedings against it under chapter 2, part 13; except that if the deficiency exists because of increased loss reserves required by the commissioner or because of disallowance by the commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the commissioner may, upon application and good cause shown, extend for not more than an additional 60 days the period within which the deficiency may be made good and proof of making good is filed.   History: En. Sec. 456, Ch. 286, L. 1959; R.C.M. 1947, 40-4739; amd. Sec. 12, Ch. 303, L. 1981; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 44, Ch. 304, L. 1999.  
  33-3-433. Assessment of stockholders or members. (1) Any insurer receiving the commissioner's notice mentioned in 33-3-432(1):   (a) if a stock insurer, by resolution of its board of directors and subject to any limitations upon assessment contained in its articles of incorporation, may assess its stockholders for amounts necessary to cure the deficiency and provide the insurer with a reasonable amount of surplus in addition. If a stockholder fails to pay a lawful assessment after notice given to the stockholder in person or by advertisement in a time and manner approved by the commissioner, the insurer may require the return of the original certificate of stock held by the stockholder and in cancellation and in lieu of the original certificate issue a new certificate for the number of shares that the stockholder may then be entitled to, upon the basis of the stockholder's proportionate interest in the amount of the insurer's capital stock as determined by the commissioner to be remaining at the time of determination of the amount of impairment under 33-3-432, after deducting from the proportionate interest the amount of the unpaid assessment. The insurer may pay for or reissue fractional shares under this subsection.   (b) if a mutual insurer, shall levy such an assessment upon members as is provided for under 33-3-412.   (2) Neither 33-3-432 nor this section may be considered to prohibit the insurer from curing any deficiency through any lawful means other than those referred to in 33-3-432 or this section.   History: En. Sec. 457, Ch. 286, L. 1959; R.C.M. 1947, 40-4740; amd. Sec. 1140, Ch. 56, L. 2009.  
  33-3-434. Directors' liability for losses during deficiency. The directors of the insurer shall be individually liable as to losses incurred under policies issued by the insurer after expiration of the period provided in 33-3-432 for curing any deficiency of the insurer's capital stock or surplus and prior to the curing of the deficiency.   History: En. Sec. 458, Ch. 286, L. 1959; R.C.M. 1947, 40-4741.  
  33-3-435. Stock transfer during impairment of capital. Any transfer of the stock of a domestic insurer made during the existence of any impairment of such insurer's capital does not release the stockholder making the transfer from any liability as a stockholder of such insurer which accrued prior to such transfer.   History: En. Sec. 459, Ch. 286, L. 1959; R.C.M. 1947, 40-4742.  
  33-3-436. Mutual member's share of assets on liquidation. (1) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration must be distributed to existing persons who were its members at any time within 36 months preceding the date that liquidation was authorized or ordered or the date of last termination of the insurer's certificate of authority, whichever date is the earlier.   (2) The distributive share of each member under subsection (1) must be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of membership bear to the aggregate of all premiums earned on the policies of all members. The insurer may, and if the insurer is a life insurer shall, make a reasonable classification of its policies held by members and a formula based upon the classification for determining the equitable distributive share of each member. The classification and formula are subject to the approval of the commissioner.   History: En. Sec. 466, Ch. 286, L. 1959; R.C.M. 1947, 40-4749; amd. Sec. 1141, Ch. 56, L. 2009.  
  33-3-437 through 33-3-440 reserved.  
  33-3-441. Equity securities of domestic stock insurance company -- statement of ownership. (1) When used in 33-3-441 through 33-3-447, the term "equity security" means:   (a) any stock or similar security;   (b) any security convertible, with or without consideration, into an equity security or carrying any warrant or right to subscribe to or purchase an equity security;   (c) any warrant or right described in subsection (1)(b); or   (d) any other security that the commissioner considers to be of a similar nature and considers necessary or appropriate, by rules as the commissioner may prescribe in the public interest or for the protection of investors, to treat as an equity security.   (2) A domestic stock insurance company shall report to the commissioner the name of any person who acquires 10% or more of any class of equity security of the company. The company shall report the name of the person within 30 days of the person acquiring 10% or more of any class of equity security of the company. The company shall provide any other information about the person that the commissioner may require.   (3) If a person has not acquired at least a 10% interest of any class of equity security of a domestic stock insurance company during the last calendar year preceding the annual statement filing date, the company is only required to report in the annual statement the names and percentages of those persons holding at least 10% interest in any class of equity security.   History: En. Secs. 1, 6, Ch. 159, L. 1965; R.C.M. 1947, 40-4751, 40-4756; amd. Sec. 14, Ch. 380, L. 2003.  
  33-3-442. Inside trading of securities -- profit inures to company -- limitation of action to recover -- rules. (1) For the purpose of preventing the unfair use of information that may have been obtained by the beneficial owner, director, or officer by reason of the individual's relationship to the company, any profit realized by the individual from any purchase and sale, or any sale and purchase, of any equity security of the company within any period of less than 6 months, unless the security was acquired in good faith in connection with a debt previously contracted, must benefit and be recoverable by the company, irrespective of any intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding 6 months.   (2) Suit to recover the profit described in subsection (1) may be instituted at law or in equity in any court of competent jurisdiction by the company or by the owner of any security of the company in the name and in behalf of the company if the company fails or refuses to bring suit within 60 days after request or fails to diligently prosecute the suit. However, the suit may not be brought more than 2 years after the date the profit was realized.   (3) This section may not be construed to cover any transaction in which the beneficial owner was not the beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved or any transaction or transactions that the commissioner may exempt by rule as not comprehended within the purpose of this section.   History: En. Sec. 2, Ch. 159, L. 1965; R.C.M. 1947, 40-4752; amd. Sec. 1142, Ch. 56, L. 2009.  
  33-3-443. Short sales of equity securities prohibited -- time for delivery after sale. (1) It is unlawful for any beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company if the person selling the security or the person's principal:   (a) does not own the security sold; or   (b) if the person owns the security, does not deliver it against the sale within 20 days or does not within 5 days after the sale deposit it in the mail or other usual channels of transportation.   (2) A person may not be considered to have violated this section if the person proves that notwithstanding the exercise of good faith the person was unable to make the delivery or deposit within that time or that to do so would cause undue inconvenience or expense.   History: En. Sec. 3, Ch. 159, L. 1965; R.C.M. 1947, 40-4753; amd. Sec. 1143, Ch. 56, L. 2009.  
  33-3-444. Exemptions -- securities held in an investment account -- primary or secondary market -- rules. (1) The provisions of 33-3-442 do not apply to any purchase and sale, or sale and purchase, and the provisions of 33-3-443 do not apply to any sale of an equity security of a domestic stock insurance company not then or later held by a person in an investment account by a broker-dealer in the ordinary course of business and incident to the establishment or maintenance by the broker-dealer of a primary or secondary market, except on an exchange as defined in the Securities Exchange Act of 1934, for the security.   (2) The commissioner may, by rules that the commissioner considers necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.   History: En. Sec. 4, Ch. 159, L. 1965; R.C.M. 1947, 40-4754; amd. Sec. 1144, Ch. 56, L. 2009.  
  33-3-445. Exemptions -- arbitrage transactions. The provisions of 33-3-441 through 33-3-443 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules as the commissioner may adopt in order to carry out the purposes of 33-3-441 through 33-3-447.   History: En. Sec. 5, Ch. 159, L. 1965; R.C.M. 1947, 40-4755.  
  33-3-446. Exemptions -- registered securities -- holding by less than 100 persons. The provisions of 33-3-441 through 33-3-443 shall not apply to equity securities of a domestic stock insurance company if:   (1) such securities shall be registered or shall be required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended; or   (2) such domestic stock insurance company shall not have any class of its equity securities held of record by 100 or more persons on the last business day of the year next preceding the year in which equity securities of the company would be subject to the provisions of 33-3-441 through 33-3-443 except for the provisions of this subsection (2).   History: En. Sec. 7, Ch. 159, L. 1965; R.C.M. 1947, 40-4757.  
  33-3-447. Rules of commissioner -- classifications -- effect. (1) The commissioner may adopt rules that may be necessary for the execution of the functions vested in the commissioner by 33-3-441 through 33-3-446 and may classify domestic stock insurance companies, securities, and other persons or matters within the commissioner's jurisdiction.   (2) A provision of 33-3-441 through 33-3-443 imposing any liability does not apply to any act done or omitted in good faith in conformity with any rule of the commissioner, notwithstanding that the rule may, after the act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.   History: En. Sec. 8, Ch. 159, L. 1965; R.C.M. 1947, 40-4758; amd. Sec. 1145, Ch. 56, L. 2009.  
  33-3-448 and 33-3-449 reserved.  
  33-3-450. Purpose. The purpose of 33-3-450 through 33-3-453 is to authorize domestic insurance companies to utilize modern systems for holding and transferring securities without physical delivery of securities certificates, subject to appropriate rules adopted by the commissioner.   History: En. Sec. 1, Ch. 380, L. 2003.  
  33-3-451. Definitions. As used in this chapter, the following definitions apply:   (1) "Clearing corporation" has the meaning provided in 30-8-112, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a clearing corporation may include a corporation that is organized or existing under the laws of any foreign country and is legally qualified under those laws to effect transactions in securities by computerized book entry.   (2) "Direct participant" means a bank, trust company, or other institution that maintains an account in its name in a clearing corporation and through which an insurance company participates in a clearing corporation.   (3) "Federal reserve book-entry system" means the computerized systems sponsored by the United States department of the treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and those agencies and instrumentalities, respectively, in federal reserve banks through banks that are members of the federal reserve system or that otherwise have access to the computerized systems.   (4) "Member bank" means a national bank, state bank, or trust company that is a member of the federal reserve system and through which an insurance company participates in the federal reserve book-entry system.   (5) "Security" has the meaning provided in 30-8-112.   History: En. Sec. 2, Ch. 380, L. 2003.  
  33-3-452. Use of book-entry systems -- rules. (1) (a) Other provisions of law may not be construed as prohibiting a domestic insurance company from depositing or arranging for the deposit of securities held in or purchased for its general account and its separate accounts in a clearing corporation or the federal reserve book-entry system.   (b) When securities are deposited with a clearing corporation, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of the clearing corporation with any other securities deposited with the clearing corporation by any person, regardless of the ownership of the securities. Certificates representing securities of small denominations may be merged into one or more certificates of larger denominations.   (c) The records of any member bank through which an insurance company holds securities in the federal reserve book-entry system and the records of any custodian bank through which an insurance company holds securities in a clearing corporation at all times must show that the securities are held for the insurance company and for which accounts of the insurance company.   (d) Ownership and other interests in securities subject to this subsection (1) may be transferred by bookkeeping entry on the books of a clearing corporation or in the federal reserve book-entry system without, in either case, physical delivery of certificates representing the securities.   (2) The commissioner may adopt rules that include but are not limited to rules governing the deposit by insurance companies of securities with clearing corporations and in the federal reserve book-entry system and rules pertaining to evidence that must be provided to the commissioner with respect to the recording of securities.   History: En. Sec. 3, Ch. 380, L. 2003.  
  33-3-453. Deposit of securities by insurance companies. (1) Securities qualified for deposit under 33-3-450 through 33-3-453 may be deposited with a clearing corporation or held in the federal reserve book-entry system.   (2) An insurance company that is using securities to help meet the deposit requirements of Title 33, chapter 2, parts 1 and 6, and depositing those securities with a clearing corporation or holding the securities in the federal reserve book-entry system:   (a) may not withdraw the securities without the approval of the commissioner; and   (b) shall provide to the commissioner evidence issued by its custodian or member bank through which the insurance company has deposited the securities in a clearing corporation or through which the securities are held in the federal reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian, other direct participant, or member bank and that the records of the custodian, other direct participant, or member bank reflect that the securities are held subject to the order of the commissioner.   History: En. Sec. 4, Ch. 380, L. 2003; amd. Sec. 11, Ch. 151, L. 2017.  
  33-3-501. Repealed. Sec. 29, Ch. 303, L. 1981.   History: En. Sec. 430, Ch. 286, L. 1959; R.C.M. 1947, 40-4713.  
  33-3-502. Solicitations in other states. (1) A domestic insurer may not knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer.   (2) This section does not prohibit advertising through publication and radio, television, and other broadcasts originating outside the reciprocating state if the insurer is licensed in a majority of the states in which the advertising is disseminated and if the advertising is not specifically directed to residents of the reciprocating state.   (3) This section does not prohibit insurance, covering persons or risks located in a reciprocating state, under contracts solicited and issued in states in which the insurer is then licensed. This section does not prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocating state.   (4) A reciprocating state, as used in this section, is one under the laws of which a similar prohibition is imposed upon and enforced against insurers domiciled in that state.   (5) The commissioner shall suspend or revoke the certificate of authority of a domestic insurer found by the commissioner, after a hearing, to have violated this section.   History: En. Sec. 445, Ch. 286, L. 1959; R.C.M. 1947, 40-4728; amd. Sec. 1146, Ch. 56, L. 2009.  
  33-3-503. Membership in mutuals. (1) Each policyholder of a domestic mutual insurer, other than of a reinsurance contract, is a member of the insurer with all rights and obligations of such membership, and the policy shall so specify.   (2) Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee, or fiduciary may be a member of a domestic, foreign, or alien mutual insurer. Any officer, stockholder, trustee, or legal representative of any such corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of such membership and shall not be personally liable upon any contract of insurance for acting in such representative capacity.   (3) Any domestic corporation may participate as a member of a mutual insurer as an incidental purpose for which such corporation is organized and as much granted as the rights and powers expressly conferred.   History: En. Sec. 431, Ch. 286, L. 1959; R.C.M. 1947, 40-4714.  
  33-3-601. Voluntary dissolution of domestic insurers -- plan of dissolution. (1) At least 60 days before a domestic stock insurer or a for-profit domestic mutual insurer submits a proposed voluntary dissolution to shareholders or policyholders under 35-14-1402 or voluntarily dissolves under 35-14-1401, the insurer shall file the plan for dissolution with the commissioner. The commissioner may require the submission of additional information to establish the financial condition of the insurer or other facts relevant to the proposed dissolution. If the shareholders or policyholders adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the insurer. The commissioner shall approve the dissolution unless, after a hearing, the commissioner finds the insurer is insolvent or may become insolvent in the process of dissolution. If the commissioner approves the voluntary dissolution, the insurer may dissolve under 35-14-1401 through 35-14-1409. The papers required by 35-14-1401 through 35-14-1404 to be filed with the secretary of state must instead be filed with the commissioner. The duties required by 35-14-125 to be performed by the secretary of state must instead be performed by the commissioner. If the commissioner does not approve the voluntary dissolution, the commissioner shall petition the court for liquidation or rehabilitation under Title 33, chapter 2, part 13.   (2) At least 60 days before a nonprofit domestic mutual insurer submits a proposed voluntary dissolution to the board or members under 35-2-721 or voluntarily dissolves under 35-2-720, the insurer shall file the plan for dissolution with the commissioner. The commissioner may require the submission of additional information to establish the financial condition of the insurer or other facts relevant to the proposed dissolution. If the board or members adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the insurer. The commissioner shall approve the dissolution unless, after a hearing, the commissioner finds the insurer is insolvent or may become insolvent in the process of dissolution. If the commissioner approves the voluntary dissolution, the insurer may dissolve under Title 35, chapter 2, part 7, except that 35-2-728(1)(d) does not apply. The papers required by 35-2-720 through 35-2-725 to be filed with the secretary of state must instead be filed with the commissioner. The duties required by 35-2-119 to be performed by the secretary of state must instead be performed by the commissioner. If the commissioner does not approve the voluntary dissolution, the commissioner shall petition the court for liquidation or rehabilitation under Title 33, chapter 2, part 13.   History: En. Sec. 2, Ch. 389, L. 1987; amd. Sec. 189, Ch. 368, L. 1991; amd. Sec. 12, Ch. 151, L. 2017; amd. Sec. 9, Ch. 62, L. 2019; amd. Sec. 233, Ch. 271, L. 2019.  
  33-3-602. Conversion to involuntary liquidation. An insurer may at any time during liquidation under Title 35, chapter 2, part 7, or Title 35, chapter 14, part 14, apply to the commissioner to have the liquidation continued under the commissioner's supervision. Upon receipt of the application, the commissioner shall apply to the court for liquidation under 33-2-1341.   History: En. Sec. 3, Ch. 389, L. 1987; amd. Sec. 190, Ch. 368, L. 1991; amd. Sec. 1147, Ch. 56, L. 2009; amd. Sec. 13, Ch. 151, L. 2017; amd. Sec. 234, Ch. 271, L. 2019.  
  33-3-603. Revocation of voluntary dissolution. If an insurer revokes the voluntary dissolution proceedings under 35-2-724 or 35-14-1404, the insurer shall file a copy of the revocation of voluntary dissolution proceedings with the commissioner.   History: En. Sec. 4, Ch. 389, L. 1987; amd. Sec. 191, Ch. 368, L. 1991; amd. Sec. 14, Ch. 151, L. 2017; amd. Sec. 235, Ch. 271, L. 2019.  
  33-3-604. Distribution of assets of mutual insurer. The maximum amount that a mutual insurer may pay to a policyholder upon dissolution, in addition to the benefits promised in the insurance policy, is the total of the premium payments made by the policyholder with interest at the legal rate compounded annually. Any excess over the amounts must be deposited with the state treasurer to the credit of the state general fund. A person may participate in the distribution of assets of a mutual insurer only if the person has a policy in effect 180 days before the insurer files its plan for dissolution with the commissioner. The amount that a person eligible to participate in the distribution of assets of a mutual insurer may receive must be in the proportion that the premiums paid by the policyholder bear to the total premiums paid to the mutual insurer by all policyholders who had policies in effect 180 days before the insurer filed its plan for dissolution with the commissioner.   History: En. Sec. 5, Ch. 389, L. 1987; amd. Sec. 1148, Ch. 56, L. 2009.  
  33-3-701. Short title. This part may be cited as the "Disclosure of Material Transactions Act".   History: En. Sec. 78, Ch. 379, L. 1995.  
  33-3-702. Report. (1) An insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions have been submitted to the commissioner for review or approval or for information purposes pursuant to other provisions of the insurance code, laws, or regulations or other requirements.   (2) The report required in subsection (1) is due within 15 days after the end of the calendar month in which any of the transactions in subsection (1) occur.   (3) One complete copy of the report, including any exhibits or other attachments, must be filed with:   (a) the insurance department of the state in which the insurer is domiciled; and   (b) the national association of insurance commissioners.   (4) All reports obtained by or disclosed to the commissioner pursuant to this part must be treated confidentially, may not be subject to subpoena, and may not be made public by the commissioner, the national association of insurance commissioners, or any other person, except to insurance departments of other states, without the prior consent of the insurer to which it pertains unless the commissioner, after giving the insurer notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by publication, in which event the commissioner may publish all or any part of the report in the manner the commissioner chooses.   History: En. Sec. 79, Ch. 379, L. 1995.  
  33-3-703. Acquisitions and dispositions of assets. (1) Acquisitions or dispositions of assets that are not material are not required to be reported pursuant to 33-3-702 if the acquisitions or dispositions are not material. For purposes of this part, a material acquisition or the aggregate of any series of related acquisitions during any 30-day period or a disposition or the aggregate of any series of related dispositions during any 30-day period is one that is nonrecurring and not in the ordinary course of business and involves more than 5% of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer's state of domicile.   (2) Asset acquisitions subject to this part include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition, other than the construction or development of real property, by or for the reporting insurer or the acquisition of materials for this purpose.   (3) Asset dispositions subject to this part include each sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment, destruction, or other disposition.   (4) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:   (a) the date of the transaction;   (b) the manner of acquisition or disposition;   (c) the description of the assets involved;   (d) the nature and amount of the consideration given or received;   (e) the purpose or reason for the transaction;   (f) the manner by which the amount of consideration was determined;   (g) the gain or loss recognized or realized as a result of the transaction; and   (h) the names of the persons from whom the assets were acquired or to whom they were disposed.   (5) An insurer is required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that uses a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer cedes substantially all of its direct and assumed business to a pool if the insurer has less than $1 million total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.   History: En. Sec. 80, Ch. 379, L. 1995.  
  33-3-704. Nonrenewals, cancellations, or revisions of ceded reinsurance agreements. (1) A nonrenewal, cancellation, or revision of a ceded reinsurance agreement need not be reported pursuant to 33-3-702 if the nonrenewal, cancellation, or revision is not material. For purposes of this part, a material nonrenewal, cancellation, or revision is one that affects:   (a) property and casualty business, including disability business written by a property and casualty insurer, so that:   (i) more than 50% of the insurer's total ceded written premium is affected; or   (ii) more than 50% of the insurer's total ceded indemnity and loss adjustment reserves are affected;   (b) life, annuity, and disability business, so that more than 50% of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer's most recent annual statement is affected;   (c) either property and casualty or life, annuity, and disability business and causes either of the following events that constitutes a material revision that must be reported:   (i) an authorized reinsurer representing more than 10% of a total cession is replaced by one or more unauthorized reinsurers; or   (ii) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than 10% of a total cession.   (2) However, a filing is not required if:   (a) with respect to property and casualty business, including disability business written by a property and casualty insurer, the insurer's total ceded written premium represents, on an annualized basis, less than 10% of its total written premium for direct and assumed business; or   (b) with respect to life, annuity, and disability business, the total reserve credit taken for business ceded represents, on an annualized basis, less than 10% of the statutory reserve requirement prior to any cession.   (3) The following information is required to be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:   (a) the effective date of the nonrenewal, cancellation, or revision;   (b) the description of the transaction with an identification of the initiator of the transaction;   (c) the purpose or reason for the transaction; and   (d) if applicable, the identity of the replacement reinsurers.   (4) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that uses a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is considered to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1 million total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.   History: En. Sec. 81, Ch. 379, L. 1995.  
  33-30-101. Definitions. As used in this chapter, the following definitions apply:  (1) (a) "Health service corporation" means a nonprofit corporation organized or operating for the purposes of establishing and operating a nonprofit plan or plans under which prepaid hospital care, medical-surgical care, and other health care and services, or reimbursement for the preceding care and services, may be furnished to a member or beneficiary.   (b) The term does not include a direct patient care agreement established pursuant to 50-4-107.   (2) "Health services" means the health care and services provided by hospitals or other health care institutions, organizations, associations, or groups and by doctors of medicine, osteopathy, dentistry, chiropractic, optometry, and podiatry; nursing services; licensed acupuncturist services; licensed social worker, licensed professional counselor, or psychologist services; medical appliances, equipment, and supplies; and drugs, medicines, ambulance services, and other therapeutic services and supplies.   (3) "Membership contract" means any agreement, contract, or certificate by which a health service corporation describes the health services or benefits provided to its members or beneficiaries.   History: En. 40-5901 by Sec. 1, Ch. 319, L. 1975; R.C.M. 1947, 40-5901(1) thru (3); amd. Sec. 14, Ch. 544, L. 1983; amd. Sec. 3, Ch. 606, L. 1987; amd. Sec. 2, Ch. 362, L. 1991; amd. Sec. 10, Ch. 262, L. 2021. 
  33-30-102. Application of chapter -- construction of other related laws. (1) All health service corporations are subject to the provisions of this chapter. In addition to the provisions contained in this chapter, other chapters and provisions of this title apply to health service corporations as follows: [33-2-714;] 33-2-1212; 33-3-307; 33-3-308; 33-3-401; 33-3-431; 33-3-701 through 33-3-704; 33-17-101; Title 33, chapter 2, parts 13, 19, 23, and 24; Title 33, chapter 3, part 6; Title 33, chapter 17, parts 2 and 10 through 12; and Title 33, chapters 1, 10, 12, 15, 18, 19, 22, and 32, except 33-22-111.  (2) A law of this state other than the provisions of this chapter applicable to health service corporations must be construed in accordance with the fundamental nature of a health service corporation, and in the event of a conflict, the provisions of this chapter prevail. (Bracketed reference in subsection (1) to 33-2-714 terminates June 30, 2025, on occurrence of contingency--sec. 48, Ch. 415, L. 2019.)   History: En. 40-5902 by Sec. 2, Ch. 319, L. 1975; R.C.M. 1947, 40-5902; amd. Sec. 3, Ch. 558, L. 1987; amd. Sec. 67, Ch. 379, L. 1995; amd. Sec. 38, Ch. 531, L. 1997; amd. Sec. 63, Ch. 227, L. 2001; amd. Sec. 44, Ch. 380, L. 2003; amd. Sec. 32, Ch. 271, L. 2009; amd. Sec. 32, Ch. 428, L. 2015; amd. Sec. 33, Ch. 151, L. 2017; amd. Sec. 8, Ch. 231, L. 2017; amd. Sec. 8, Ch. 25, L. 2019; amd. Sec. 22, Ch. 415, L. 2019; amd. Sec. 17, Ch. 501, L. 2021. 
  33-30-103. Purposes of health service corporation. A health service corporation may be organized for the purposes of:   (1) (a) establishing and operating a voluntary, nonprofit plan or plans under which health services, or reimbursement therefor, are furnished to persons who become members or beneficiaries; or   (b) acting as agent or intermediary for other health service corporations, for governmental body or agency, or for other corporations, associations, partnerships, or individuals in the field of health care and services; and   (2) research, education, or related activity to further objects within the purview of this chapter.   History: En. 40-5903 by Sec. 3, Ch. 319, L. 1975; R.C.M. 1947, 40-5903.  
  33-30-104. No profit organization may be a health service corporation. No group, association, or organization created for or engaged in business or activity for profit, provision for the incorporation of which is made by any of the corporation laws of this state, may be organized or operated, directly or indirectly, as a health service corporation under this chapter.   History: En. 40-5904 by Sec. 4, Ch. 319, L. 1975; R.C.M. 1947, 40-5904.  
  33-30-105. Examination of health service corporation. (1) If the commissioner believes a health service corporation is unable or potentially unable to fulfill its contractual obligations to its members, the commissioner may conduct an examination of that corporation.   (2) In addition to the examination authorized in subsection (1), at least once every 4 years, the commissioner shall conduct an examination of each health service corporation to determine if the corporation is fulfilling its contractual obligations by prompt satisfaction of claims at the highest monetary level consistent with reasonable dues or fees and that the corporation's management exercises appropriate fiscal controls, operations, and personnel policies to ensure that efficient and economic administration restrains overhead costs for the benefit of its members.   (3) Each health service corporation examined and its officers, employees, and insurance producers shall produce and make available to the commissioner or the commissioner's examiners the accounts, records, documents, files, information, assets, and matters in its possession or control relating to the subject of the examination.   (4) The commissioner or the commissioner's examiner shall make a verified report of the examination.   (5) The report must comprise only facts appearing from the books, papers, records, or documents of the corporation examined or ascertained from the testimony, under oath, of individuals concerning its affairs and conclusions and recommendations as warranted by those facts.   (6) The commissioner shall furnish a copy of the proposed report to the corporation examined not less than 20 days prior to its filing in the commissioner's office. If the corporation requests a hearing, in writing, within the 20-day period, the commissioner shall grant a hearing with respect to the report and may not file the report until after the hearing and after modifications, if any, that the commissioner considers proper.   (7) The health service corporation shall pay for each examination conducted pursuant to subsections (1) and (2) in accordance with 33-1-413.   History: En. 40-5912 by Sec. 12, Ch. 319, L. 1975; R.C.M. 1947, 40-5912; amd. Sec. 3, Ch. 452, L. 1981; amd. Sec. 4, Ch. 558, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1242, Ch. 56, L. 2009.  
  33-30-106. Montana Administrative Procedure Act applicable. All final administrative actions or decisions of the commissioner under this chapter are subject to judicial review under and in accordance with the Montana Administrative Procedure Act.   History: En. 40-5916 by Sec. 16, Ch. 319, L. 1975; R.C.M. 1947, 40-5916.  
  33-30-107. Annual statement. (1) On or before March 1 of each year, each health service corporation shall file an annual statement for the preceding year on the national association of insurance commissioners' health blank form with the commissioner of insurance. This annual statement must be completed in accordance with the annual statement instructions and the Accounting Practices and Procedures Manual of the national association of insurance commissioners. The statement must be accompanied by an actuarial opinion attesting to the insurer's reserves.   (2) The health service corporation shall file a statement containing any other information concerning its financial affairs that may be reasonably requested by the commissioner.   (3) (a) Each health service corporation shall file electronic versions of its annual and quarterly financial statements with the national association of insurance commissioners. The date for submission of the annual statement electronic filing is March 1. The dates for submission of the quarterly statement electronic filing are as follows:   (i) the first quarter filing is due May 15;   (ii) the second quarter filing is due August 15; and   (iii) the third quarter filing is due November 15.   (b) The commissioner may exempt health service corporations operating only in Montana from these filing requirements.   (c) The health service corporation shall pay all fees and costs associated with preparing the annual statement and other filings and submitting them to the national association of insurance commissioners.   (4) The commissioner may, after notice and hearing, suspend or revoke a health service corporation's certificate of authority or impose a fine not to exceed $100 a day and not to exceed $1,000 upon a health service corporation that fails to file an annual statement as required by this part.   History: En. Sec. 1, Ch. 657, L. 1979; amd. Sec. 68, Ch. 379, L. 1995; amd. Sec. 39, Ch. 531, L. 1997; amd. Sec. 54, Ch. 472, L. 1999; amd. Sec. 64, Ch. 227, L. 2001; amd. Sec. 45, Ch. 380, L. 2003; amd. Sec. 28, Ch. 63, L. 2015.  
  33-30-108. Certificate required. (1) A person may not act as a health service corporation and a health service corporation may not conduct business in this state except as authorized by a certificate of authority issued by the commissioner.   (2) The commissioner may issue a certificate of authority after the person has complied with the applicable provisions of this title and has submitted an application on a form prescribed by the commissioner.   (3) A health service corporation is entitled to a continuation of its certificate of authority upon payment of the annual continuation fee specified in 33-30-204 on or before March 1 of each year and upon continued compliance with the provisions of this title.   (4) The commissioner may revoke or suspend any certificate of authority issued under this section for violations of this title.   History: En. Sec. 10, Ch. 558, L. 1987; amd. Sec. 69, Ch. 379, L. 1995; amd. Sec. 65, Ch. 227, L. 2001; amd. Sec. 29, Ch. 63, L. 2015.  
  33-30-109. Health service corporation amended articles. A health service corporation shall submit a copy of any articles of amendment to the commissioner within 5 business days after the articles have been filed with the office of the secretary of state.   History: En. Sec. 3, Ch. 227, L. 2001.  
  33-30-110 reserved.  
  33-30-111. Notice of violation -- conference. If the commissioner shall for any reason have cause to believe that violation of this chapter has occurred or is threatened, the commissioner may give written notice to the health service corporation and to the representatives or other persons who appear to be involved in the suspected violation to arrange a conference with the alleged violators or their authorized representative for the purpose of attempting to ascertain the facts relating to the suspected violation, and in the event it appears that a violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing the violation.   History: En. 40-5920 by Sec. 20, Ch. 319, L. 1975; R.C.M. 1947, 40-5920; amd. Sec. 85, Ch. 370, L. 1987; amd. Sec. 8, Ch. 606, L. 1987.  
  33-30-112. Cease and desist order. (1) The commissioner acting in the name of the state may issue an order directing a health service corporation or a representative of a health service corporation to cease and desist from engaging in any act or practice in violation of the provisions of this chapter.   (2) Within 15 days after service of the order of cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. These hearings shall be conducted under the Montana Administrative Procedure Act.   History: En. 40-5921 by Sec. 21, Ch. 319, L. 1975; R.C.M. 1947, 40-5921; amd. Sec. 86, Ch. 370, L. 1987; amd. Sec. 9, Ch. 606, L. 1987.  
  33-30-113. Injunctive relief. In the case of any violation of the provisions of this chapter if the commissioner elects not to issue a cease and desist order or in the event of noncompliance with a cease and desist order issued under this chapter, the commissioner may institute a proceeding to obtain injunctive relief, receivership, or other appropriate relief in the district court of the county in which the violation occurs or in which the principal place of business of the health service corporation is located. Any proceeding under this section shall conform to the requirements of Title 27, chapter 19 or 20, except that the commissioner shall not be required to allege facts tending to show the lack of an adequate remedy at law or tending to show irreparable damage or loss.   History: En. 40-5922 by Sec. 22, Ch. 319, L. 1975; R.C.M. 1947, 40-5922; amd. Sec. 87, Ch. 370, L. 1987; amd. Sec. 10, Ch. 606, L. 1987.  
  33-30-1001. Newborn infants covered by insurance by health service corporation. A disability insurance plan or group disability insurance plan issued by a health service corporation may not be issued or amended in this state if it contains any disclaimer, waiver, preexisting condition exclusion, or other limitation of coverage relative to the accident and sickness coverage or insurability of newborn infants of the persons insured from and after the moment of birth. Each policy must contain a provision granting immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant of any insured person. The policy or contract may require notification of the birth of a child and payment of a required premium or subscription fee to be furnished to the insurer or nonprofit or indemnity corporation within 31 days of the birth in order to have the coverage extend beyond 31 days.   History: En. Sec. 5, Ch. 74, L. 1973; R.C.M. 1947, 15-2304.1; amd. Sec. 28, Ch. 303, L. 1981; amd. Sec. 73, Ch. 379, L. 1995; amd. Sec. 28, Ch. 416, L. 1997; amd. Sec. 6, Ch. 325, L. 2003.  
  33-30-1002. Disability coverage of services received in state institutions -- coverage of persons eligible for public medical assistance. (1) It is unlawful for any health service corporation issuing membership contracts in Montana to exclude from coverage in a membership contract services rendered the insured while a resident in a Montana state institution if the services to the insured would be covered by the membership contract if rendered to the insured outside a Montana state institution.   (2) A membership contract is considered issued in Montana if the insured purchasing the membership contract is, at the time of purchase, residing in the state of Montana.   (3) If the exclusion prohibited by this section appears in a membership contract issued in Montana after February 14, 1973, the provision is void and the membership contract will be considered to cover services rendered the insured in a Montana state institution if the services would have been covered if rendered to an insured outside a Montana state institution.   (4) Payment for services rendered in a Montana state institution must be to the same extent and at the same rates, according to the provisions of the membership contract, that would be paid for the services if rendered outside a Montana state institution.   (5) A membership contract issued by a health service corporation on or after July 1, 1979, may not deny or reduce benefits to any member on the ground that the person insured is eligible for or receiving public medical assistance provided under Title 53, chapter 2.   History: En. Secs. 1, 2, 3, 4, Ch. 50, L. 1973; R.C.M. 1947, 40-4035(part), 40-4036, 40-4037, 40-4038; amd. Sec. 3, Ch. 169, L. 1979; amd. Sec. 1244, Ch. 56, L. 2009.  
  33-30-1003. Continuation of coverage for persons with disabilities -- individual contracts. (1) An individual hospital or medical service plan contract delivered or issued for delivery in this state that provides that coverage of a dependent child terminates upon attainment of the limiting age for dependent children specified in the contract must also provide in substance that attainment of the limiting age may not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of intellectual disability or physical disability and chiefly dependent upon the subscriber for support and maintenance. Proof of intellectual disability or physical disability and dependency must be furnished to the hospital or medical service plan corporation by the subscriber within 31 days of the child's attainment of the limiting age and subsequently as may be required by the corporation. Proof may not be required more frequently than annually after the 2-year period following the child's attainment of the limiting age.   (2) Notwithstanding any other exemption or contrary law, the provisions of this section have equal application to hospital or medical expense insurance policies and hospital and medical service plan contracts.   History: (1)En. 40-3738 by Sec. 1, Ch. 298, L. 1971; Sec. 40-3738, R.C.M. 1947; (2)En. Sec. 2, Ch. 298, L. 1971; Sec. 40-3740, R.C.M. 1947; R.C.M. 1947, 40-3738(part), 40-3740; amd. Sec. 24, Ch. 472, L. 1997; amd. Sec. 4, Ch. 68, L. 2013.  
  33-30-1004. Continuation of coverage for persons with disabilities -- group contracts. (1) A group hospital or medical service plan contract delivered or issued for delivery in this state that provides that coverage of a dependent child of an employee or other member of the covered group terminates upon attainment of the limiting age for dependent children specified in the contract must also provide in substance that attainment of the limiting age may not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of intellectual disability or physical disability and chiefly dependent upon the employee or member for support and maintenance. Proof of intellectual disability or physical disability and dependency must be furnished to the hospital or medical service plan corporation by the employee or member within 31 days of the child's attainment of the limiting age and subsequently as may be required by the corporation. Proof may not be required more frequently than annually after the 2-year period following the child's attainment of the limiting age.   (2) Notwithstanding any other exemption or contrary law, the provisions of this section have equal application to hospital or medical expense insurance policies and hospital and medical service plan contracts.   History: (1)En. 40-3739 by Sec. 1, Ch. 298, L. 1971; Sec. 40-3739, R.C.M. 1947; (2)En. Sec. 2, Ch. 298, L. 1971; Sec. 40-3740, R.C.M. 1947; R.C.M. 1947, 40-3739(part), 40-3740; amd. Sec. 25, Ch. 472, L. 1997; amd. Sec. 5, Ch. 68, L. 2013.  
  33-30-1005. Right of rescission. Each membership contract, other than a group contract, issued for delivery in this state on or after January 1, 1980, must contain a notice stating in substance that if the person to whom the contract is issued is not satisfied for any reason, the person is permitted to return the contract within 10 days of its delivery or a longer period that the contract may provide and to have refunded the amount of the premium paid. A contract returned pursuant to this section is void from the beginning.   History: En. Sec. 2, Ch. 342, L. 1979; amd. Sec. 1245, Ch. 56, L. 2009.  
  33-30-1006. Continuing group coverage after termination. A person covered by a group hospital or medical service plan contract, issued or renewed by a health service corporation after October 1, 1981, may, for a period of 1 year with the consent of the employer or the trustees, continue coverage under the group contract during the person's employment notwithstanding any reduction of the person's regular work schedule to less than the minimum time required to qualify for membership in the group, and the premium charged must be equal to that charged the members of the group.   History: En. Sec. 5, Ch. 579, L. 1981; amd. Sec. 1246, Ch. 56, L. 2009.  
  33-30-1007. Conversion on termination of eligibility. (1) The group hospital or medical service plan contract issued or renewed by a health service corporation after October 1, 1981, must contain a provision that if the insurance or any portion of it on a person or a person's dependents or family members covered under the policy ceases because of termination of the person's employment or of a person's membership in the class or classes eligible for coverage under the policy as a result of an employer discontinuing the employer's business or as a result of an employer discontinuing the policy issued by the health service corporation and not providing for any other group disability insurance or plan, a person must, if the person has been insured for a period of 3 months and if the person is not insured under another major medical disability insurance policy or plan, be entitled to have issued to the person by the insurer, without evidence of insurability, an individual policy of hospital or medical service insurance on the person or the person's dependents or family members. Application for the individual policy must be made and the first premium tendered to the insurer within 31 days after the termination of group coverage.   (2) The individual policy must, at the option of the insured, be on any of the forms then customarily issued by the insurer to individual policyholders with the exception of those whose eligibility is determined by their affiliation other than by employment with a particular entity. In addition, the health service corporation shall make available a conversion policy as required by subsection (4).   (3) The premium on the individual policy may not be more than 200% of the insurer's then customary rate applicable to the coverage of the individual policy. If the person entitled to conversion under this section has been insured for more than 3 years, the premium may not be more than 150% of the customary rate. The customary rate is that rate that is normally issued for medically underwritten policies without discount for healthy lifestyles.   (4) The health service corporation shall make available an individual conversion policy that provides the level of benefits provided by its lowest cost basic health benefit plan, as defined in 33-22-1803. If the insurer is not a small employer carrier under chapter 22, part 18, the insurer shall make available an individual conversion policy that provides equivalent benefits to a basic health benefit plan. The conversion rate may not exceed 150% of the highest rate charged for that plan.   (5) The premium rate for an individual policy converted from a group plan in accordance with the provisions of subsection (3) may not be increased during the first 6 months of coverage of the individual policy.   History: En. Sec. 6, Ch. 579, L. 1981; amd. Sec. 1, Ch. 309, L. 1983; amd. Sec. 9, Ch. 558, L. 1987; amd. Sec. 2, Ch. 200, L. 1991; amd. Sec. 12, Ch. 527, L. 1995; amd. Sec. 2, Ch. 228, L. 1999; amd. Sec. 6, Ch. 384, L. 2003.  
  33-30-1008. Preexisting conditions. The converted policy may not exclude, as a preexisting condition, any conditions covered by the group contract.   History: En. Sec. 7, Ch. 579, L. 1981.  
  33-30-1009. Insured's family -- conversion entitlement. Subject to the conditions set forth in this section, the conversion privilege is also available:   (1) to the surviving spouse, if any, at the death of the employee or member, with respect to the spouse and children whose coverage under the group policy terminates by reason of the death, otherwise to each surviving child whose coverage under the group policy terminates by reason of the death, or if the group policy provides for continuation of dependent's coverage following the employee's or member's death, at the end of the continuation;   (2) to the spouse of the employee or member upon termination of coverage of the spouse, by reason of ceasing to be a qualified family member under the group policy, while the employee or member remains under the group policy, including children whose coverage under the group policy terminates at the same time; or   (3) to a child solely with respect to the child upon termination of the child's coverage by reason of ceasing to be a qualified family member under the group policy if a conversion privilege is not otherwise provided in this section with respect to the termination.   History: En. Sec. 8, Ch. 579, L. 1981; amd. Sec. 1247, Ch. 56, L. 2009.  
  33-30-1010. Renumbered 33-30-1021. Code Commissioner, 1983.  
  33-30-1011. Dentists performing services common to both medicine and dentistry. A contract or plan may exclude coverage for dental care or services, but no individual or group membership contract or plan issued or renewed on or after October 1, 1983, may disallow payment to a dentist for health care or services for which a physician would be paid, provided the dentist is licensed under the law of this state to perform such care or service.   History: En. Sec. 1, Ch. 471, L. 1983.  
  33-30-1012. Repealed. Sec. 4, Ch. 606, L. 1987.   History: En. Sec. 15, Ch. 572, L. 1985.  
  33-30-1013. Coverage required for services provided by nurse specialists. A health service corporation shall provide, in group and individual insurance contracts, coverage for health services provided by a nurse specialist, as specifically listed in 37-8-202, if health care services that nurse specialists are licensed to perform are covered by the contract.   History: En. Sec. 2, Ch. 329, L. 1987; amd. Sec. 5, Ch. 467, L. 2005.  
  33-30-1014. Coverage for well-child care. (1) Each disability insurance plan or group disability insurance plan that is delivered, issued for delivery, renewed, extended, or modified in this state by a health service corporation and that provides coverage for a family member of the insured or subscriber must provide coverage for well-child care for children from the moment of birth through 7 years of age. Benefits provided under this coverage are exempt from any deductible provision that may be in force in the plan.   (2) Coverage for well-child care under subsection (1) must include:   (a) a history, physical examination, developmental assessment, anticipatory guidance, and laboratory tests, according to the schedule of visits adopted under the early and periodic screening, diagnosis, and treatment services program provided for in 53-6-101; and   (b) routine immunizations according to the schedule for immunizations recommended by the immunization practices advisory committee of the U.S. department of health and human services.   (3) Minimum benefits may be limited to one visit payable to one provider for all of the services provided at each visit cited in this section.   (4) This section does not apply to disability income, specified disease, medicare supplement, or hospital indemnity policies.   (5) For purposes of this section:   (a) "developmental assessment" and "anticipatory guidance" mean the services described in the Guidelines for Health Supervision II, published by the American academy of pediatrics; and   (b) "well-child care" means the services described in subsection (2) and delivered at the intervals required in that subsection by a physician or a health care professional supervised by a physician.   (6) When a disability insurance plan or group disability insurance plan issued by a health service corporation provides coverage or benefits to a resident of this state, it is considered to be delivered in this state within the meaning of this section, whether the health service corporation that issued or delivered the policy or certificate is located inside or outside of this state.   History: En. Sec. 3, Ch. 199, L. 1991; amd. Sec. 4, Ch. 390, L. 2007.  
  33-30-1015. Limitation of eligibility on conversion. A person who purchases a policy of insurance under 33-30-1007 ceases to be eligible for a conversion policy if the person insured by the policy:   (1) fails to pay the premium on the policy purchased under 33-30-1007; or   (2) enrolls under another major medical disability insurance policy or plan, except that the person may maintain the conversion policy during any waiting period established under any new disability insurance policy or plan that the insured person purchases.   History: En. Sec. 4, Ch. 200, L. 1991; amd. Sec. 22, Ch. 399, L. 2007.  
  33-30-1016. Coverage for adopted children from time of placement -- preexisting conditions. (1) Each individual or group membership contract issued or amended by a health service corporation in this state that provides coverage of dependent children of a member must provide coverage for an adopted child of the member to the same extent as for natural children of the member.   (2) The coverage required by this section must be effective from the date of placement for the purpose of adoption and must continue unless the placement is disrupted prior to legal adoption and the child is removed from placement. Coverage at the time of placement must include the necessary care and treatment of medical conditions existing prior to the date of placement.   (3) As used in this section, "placement" has the meaning as defined in 33-22-130.   History: En. Sec. 2, Ch. 387, L. 1991; amd. Sec. 162, Ch. 480, L. 1997.  
  33-30-1017. Coverage required for services provided by naturopathic physicians. A health service corporation shall provide, in group and individual insurance contracts or certificates, coverage for health services provided by a naturopathic physician licensed pursuant to Title 37, chapter 26, if the health care services that naturopathic physicians are licensed to perform are covered by the contract or certificate.   History: En. Sec. 2, Ch. 459, L. 1999.  
  33-30-1018. Coverage required for services provided by physical therapist. A health service corporation shall provide, in group and individual insurance contracts or certificates, coverage for health services provided by a physical therapist licensed pursuant to Title 37, chapter 11, if the health care services that physical therapists are licensed to perform are covered by the contracts or certificates.   History: En. Sec. 2, Ch. 235, L. 2001.  
  33-30-1019. Coverage for services provided under freedom of choice for auxiliary health services. A health service corporation shall provide, in group and individual insurance contracts or certificates, coverage for health services provided by a speech-language pathologist or audiologist licensed pursuant to Title 37, chapter 15, or an addiction counselor licensed under Title 37, chapter 35, if the health care services that speech-language pathologists, audiologists, or addiction counselors are licensed to perform are covered by the contracts or certificates.   History: En. Sec. 2, Ch. 342, L. 2015.  
  33-30-1020.  Coverage for services provided under freedom of choice for mental health services. A health service corporation shall provide, in group and individual insurance contracts, coverage for health services provided by marriage and family therapists licensed under Title 37, chapter 37, if the health care services that marriage and family therapists are licensed to perform are covered by the contracts.   History: En. Sec. 2, Ch. 206, L. 2017.  
  33-30-1021. Applicability. Notwithstanding any provision of Title 33 or other law to the contrary, it shall be lawful for an insurer and insured to agree to any terms in an insurance contract that provides more favorable terms for the benefit of the insured than authorized in Title 33 or other provisions of law.   History: En. Sec. 9, Ch. 579, L. 1981; MCA 1981, 33-30-1010; redes. 33-30-1021 by Code Commissioner, 1983.  
  33-30-1101. Subrogation rights. A hospital or medical service plan contract issued by a health service corporation may contain a provision providing that, to the extent necessary for reimbursement of benefits paid to or on behalf of the insured, the health service corporation is entitled to subrogation, as provided for in 33-30-1102, against a judgment or recovery received by the insured from a third party found liable for a wrongful act or omission that caused the injury necessitating benefit payments.   History: En. Sec. 2, Ch. 365, L. 1987.  
  33-30-1102. Notice -- shared costs of third-party action -- limitation. (1) If an insured intends to institute an action for damages against a third party, the insured shall give the health service corporation reasonable notice of the intention to institute the action.   (2) The insured may request that the health service corporation pay a proportionate share of the reasonable costs of the third-party action, including attorney fees.   (3) A health service corporation may elect not to participate in the cost of the action. If that election is made, the health service corporation waives 50% of any subrogation rights granted to it by 33-30-1101.   (4) The health service corporation's right of subrogation granted in 33-30-1101 may not be enforced until the injured insured has been fully compensated for the insured's injuries.   History: En. Sec. 4, Ch. 365, L. 1987; amd. Sec. 1248, Ch. 56, L. 2009.  
  33-30-201. Reserves -- requirements suspended. (1) The corporation shall maintain at all times unobligated funds adequate to:   (a) provide the hospital, medical-surgical, and other health services made available to its members and beneficiaries; and   (b) meet all costs and expenses.   (2) In addition, reserves of a health service corporation in cash, certificates of deposit, obligations issued or guaranteed by the government of the United States, or other assets approved by the commissioner must be maintained in an amount not less than:   (a) $500,000 or, if authorized under this chapter after October 1, 1999, $750,000; or   (b) an amount equal to 1 month's average income from dues or fees paid to the corporation by its members or beneficiaries, based on an average of the preceding 12 months, whichever is less.   (3) The determination of minimum reserves is subject, as to amounts payable to participating providers of the health services, to any right of the corporation to prorate the amounts under the terms of its health service contracts with providers.   (4) The commissioner may decrease or suspend the requirements of this section if the commissioner finds that the action is in the best interest of the members of the corporation.   History: En. 40-5905 by Sec. 5, Ch. 319, L. 1975; R.C.M. 1947, 40-5905; amd. Sec. 55, Ch. 472, L. 1999; amd. Sec. 30, Ch. 63, L. 2015.  
  33-30-202. Annual report by certified public accountant. (1) All corporations subject to the provisions of this chapter shall file annually with the commissioner, on or before June 1, a financial statement audited by a certified public accountant pursuant to rules promulgated by the commissioner.   (2) (a) The commissioner may establish rules governing the content and preparation of the report required by subsection (1).   (b) The report must include:   (i) the corporation's financial statements for the most recent calendar year;   (ii) an opinion by the certified public accountant concerning the accuracy and fairness of the corporation's representation of its financial statements; and   (iii) other information that the commissioner specifies by rule.   History: En. 40-5911 by Sec. 11, Ch. 319, L. 1975; R.C.M. 1947, 40-5911; amd. Sec. 70, Ch. 379, L. 1995.  
  33-30-203. Premium tax exemption. A health service corporation is exempt from all premium taxes.   History: En. 40-5915 by Sec. 15, Ch. 319, L. 1975; R.C.M. 1947, 40-5915.  
  33-30-204. Fees. (1) Every health service corporation subject to the provisions of this chapter shall pay the following fees to the commissioner for enforcement of the provisions of this chapter:   (a) for a certified copy of any document or other paper filed in the office of the commissioner, per page, 50 cents;   (b) filing of a membership contract, $25;   (c) filing of a membership contract package, $100;   (d) filing annual statement, $25;   (e) issuance of health service corporation certificate of authority, $300; and   (f) annual continuation of health service corporation certificate of authority, $300.   (2) The commissioner shall promptly deposit with the state treasurer, to the credit of the state special revenue fund of the state auditor's office, all fees and certificate of authority fees received under this section.   History: En. 40-5917 by Sec. 17, Ch. 319, L. 1975; R.C.M. 1947, 40-5917; amd. Sec. 1, Ch. 452, L. 1981; amd. Sec. 5, Ch. 558, L. 1987; amd. Sec. 7, Ch. 351, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 71, Ch. 379, L. 1995; amd. Sec. 46, Ch. 380, L. 2003; amd. Sec. 31, Ch. 63, L. 2015.  
  33-30-301. Forms -- filing, approval. A copy of all forms of the membership contract or any type of endorsement or rider shall be filed with and approved by the commissioner of this state and the insurance regulator of the state of domicile of the health service corporation in accordance with chapter 1, part 5.   History: En. 40-5906 by Sec. 6, Ch. 319, L. 1975; R.C.M. 1947, 40-5906; amd. Sec. 2, Ch. 452, L. 1981; amd. Sec. 6, Ch. 558, L. 1987.  
  33-30-302. Allowed contracts. (1) A corporation subject to the provisions of this chapter may enter into contracts for the rendering of health services on behalf of its members or beneficiaries with:   (a) hospitals maintained by a governmental body or agency;   (b) hospitals maintained by a nonprofit corporation organized for hospital purposes; or   (c) other corporations, organizations, associations, partnerships, or individuals furnishing health services.   (2) A health service corporation may enter into agreements or contracts with other organizations or corporations licensed to do business in this state or in any other state for:   (a) the transfer of members or beneficiaries;   (b) the reciprocal joint provisions of benefits to the members or beneficiaries of the corporation and of those other organizations or corporations; or   (c) other joint undertakings the corporation's board of directors approves.   History: En. 40-5907 by Sec. 7, Ch. 319, L. 1975; R.C.M. 1947, 40-5907.  
  33-30-303. Grievance procedure for members. Any individual member of a corporation, subject to the provisions of this chapter, who believes that the member is aggrieved by any act or omission of the corporation or its officers, directors, or employees may file a statement in writing of the grievance in the office of the commissioner, and the commissioner may investigate the grievance. An investigation by the commissioner may not act as a bar to any suit in a court of competent jurisdiction instituted by an aggrieved member or as a bar to any defense by the involved corporation.   History: En. 40-5913 by Sec. 13, Ch. 319, L. 1975; R.C.M. 1947, 40-5913; amd. Sec. 1243, Ch. 56, L. 2009.  
  33-30-304. Nonliability for injuries caused by contractees. A health service corporation is not liable for injuries resulting from neglect, misfeasance, malfeasance, or malpractice on the part of any person, organization, agency, or corporation rendering health services to the health service corporation's members and beneficiaries.   History: En. 40-5914 by Sec. 14, Ch. 319, L. 1975; R.C.M. 1947, 40-5914.  
  33-30-305. Prohibited trade practices. In order to regulate trade practices of health service corporations the following practices are prohibited:   (1) No person may make, issue, circulate, or cause to be made, issued, or circulated any estimate, circular, or statement misrepresenting:   (a) the terms of any health service corporation membership contract issued or to be issued; or   (b) the benefits or advantages promised thereby.   (2) No person may make any misleading representation or any misrepresentation as to the financial condition of any health service corporation.   (3) No person may make, publish, disseminate, circulate, or place before the public or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster or over any radio or television station or in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of a health service corporation which is untrue, deceptive, or misleading.   (4) No person may make or issue or cause to be made or issued any written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in any health service corporation membership contract for the purpose of inducing or attempting or tending to induce a member to cancel or convert any membership contract.   (5) No person may file with any public official or make, publish, disseminate, circulate, or deliver to any person or place before the public or cause directly or indirectly to be made, published, disseminated, circulated, delivered to any person, or placed before the public any false statement of financial condition of a health service corporation with intent to deceive.   (6) No person may make any false entry in any book, report, or statement of any health service corporation with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs or any public official to whom that health service corporation is required by law to report or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omit to make a true entry of any material fact pertaining to the business of that health service corporation in any book, report, or statement of the health service corporation.   (7) No person may make, publish, disseminate, or circulate, directly or indirectly, or aid, abet, or encourage the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false or maliciously critical of or derogatory to the financial condition of a health service corporation or of an organization proposing to become a health service corporation and which is calculated to injure any person engaged or proposing to engage in the business of operating a health service corporation.   (8) No person may enter into agreement to commit or by any concerted action commit any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the operation of health service corporations.   History: En. 40-5918 by Sec. 18, Ch. 319, L. 1975; R.C.M. 1947, 40-5918(intro.), (1) thru (7).  
  33-30-306. Discrimination between individuals -- restrictions -- ratesetting by commissioner prohibited. (1) No person may knowingly make or permit any unreasonable discrimination between individuals in any classification which may be established by a health service corporation and of essentially the same condition of health in the amount of dues or rates charged for any membership contract or in the benefits payable thereunder or in any of the terms and conditions of such contract or in any manner whatever.   (2) Nothing herein contained shall, however, restrict the right of a health service corporation within the discretion of its board of directors to limit or define the classes of persons who shall be eligible to become members, to limit and to define the benefits which it will furnish, and define such benefits as it undertakes to furnish into classes or kinds. A health service corporation may make available to its members health services, or reimbursement therefor, as the board of directors of that corporation may approve.   (3) Nothing contained in subsection (1) includes within the definition of discrimination any of the following practices:   (a) readjustment of the rate of payment for membership in a health service corporation under a group contract based on the loss or expense experience thereunder at the end of the first or any subsequent contract year thereunder which may be made retroactive only for that contract year;   (b) in the case of membership contracts issued on the preauthorized bank draft or similar plans, making allowance to members in an amount which fairly represents the saving in collection expense;   (c) reduction of the rate of payment for group contracts covering a large number of members, but not exceeding savings in administrative expenses reasonably attributable to these contracts as compared with contracts offering similar benefits to smaller numbers of members;   (d) issuing individual membership contracts on a "salary savings" or payroll deduction plan reasonably commensurate with the savings made by use of such plan.   (4) Nothing in this chapter gives the commissioner power to fix and determine a rate level by classification or otherwise.   History: En. 40-5918, 40-5919 by Secs. 18, 19, Ch. 319, L. 1975; R.C.M. 1947, 40-5918(8), 40-5919.  
  33-30-307. Repealed. Sec. 9, Ch. 384, L. 2003.   History: En. Sec. 2, Ch. 309, L. 1983; amd. Sec. 7, Ch. 558, L. 1987.  
  33-30-308 through 33-30-310 reserved.  
  33-30-311. Insurance producer. A person who, for compensation, solicits membership in a prepayment health service plan offered by a corporation subject to the provisions of this chapter is an insurance producer of that corporation and is subject to the provisions of 33-2-708 and Title 33, chapter 17.   History: En. 40-5908 by Sec. 8, Ch. 319, L. 1975; R.C.M. 1947, 40-5908; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 72, Ch. 379, L. 1995.  
  33-30-312. Repealed. Sec. 97, Ch. 379, L. 1995.   History: En. 40-5909 by Sec. 9, Ch. 319, L. 1975; R.C.M. 1947, 40-5909; amd. Sec. 8, Ch. 558, L. 1987; amd. Sec. 8, Ch. 509, L. 1989; amd. Sec. 1, Ch. 713, L. 1989.  
  33-30-313. Repealed. Sec. 97, Ch. 379, L. 1995.   History: En. 40-5910 by Sec. 10, Ch. 319, L. 1975; R.C.M. 1947, 40-5910; amd. Sec. 1, Ch. 713, L. 1989.  
  33-31-101. Short title. This chapter may be cited as the "Montana Health Maintenance Organization Act".   History: En. Sec. 1, Ch. 457, L. 1987.  
  33-31-102. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:  (1) "Accountable care organization" means a group of health care providers that are willing and capable of accepting accountability for the total cost and quality of care for a defined population.   (2) "Affiliation period" means a period that, under the terms of the health insurance coverage offered by a health maintenance organization, must expire before the health insurance coverage becomes effective.   (3) "Basic health care services" means:   (a) consultative, diagnostic, therapeutic, and referral services by a provider;   (b) inpatient hospital and provider care;   (c) outpatient medical services;   (d) medical treatment and referral services;   (e) accident and sickness services by a provider to each newborn infant of an enrollee pursuant to 33-31-301(3)(e);   (f) care and treatment of mental illness, alcoholism, and drug addiction;   (g) diagnostic laboratory and diagnostic and therapeutic radiologic services;   (h) preventive health services, including:   (i) immunizations;   (ii) well-child care from birth;   (iii) periodic health evaluations for adults;   (iv) voluntary family planning services;   (v) infertility services; and   (vi) children's eye and ear examinations conducted to determine the need for vision and hearing correction;   (i) minimum mammography examination, as defined in 33-22-132;   (j) outpatient self-management training and education for the treatment of diabetes along with certain diabetic equipment and supplies as provided in 33-22-129; and   (k) treatment and medical foods for inborn errors of metabolism. "Medical foods" and "treatment" have the meanings provided for in 33-22-131.   (4) "Commissioner" means the commissioner of insurance of the state of Montana.   (5) "Dependent" has the meaning provided in 33-22-140.   (6) "Enrollee" means a person:   (a) who enrolls in or contracts with a health maintenance organization;   (b) on whose behalf a contract is made with a health maintenance organization to receive health care services; or   (c) on whose behalf the health maintenance organization contracts to receive health care services.   (7) "Evidence of coverage" means a certificate, agreement, policy, or contract issued to an enrollee setting forth the coverage to which the enrollee is entitled.   (8) "Health care services" means:   (a) the services included in furnishing medical or dental care to a person;   (b) the services included in hospitalizing a person;   (c) the services incident to furnishing medical or dental care or hospitalization; or   (d) the services included in furnishing to a person other services for the purpose of preventing, alleviating, curing, or healing illness, injury, or physical disability.   (9) "Health care services agreement" means an agreement for health care services between a health maintenance organization and an enrollee.   (10) (a) "Health maintenance organization" means a person who provides or arranges for basic health care services to enrollees on a prepaid basis, either directly through provider employees or through contractual or other arrangements with a provider or a group of providers. This subsection (10) does not limit methods of provider payments made by health maintenance organizations.   (b) The term does not apply to:   (i) a PACE organization or an accountable care organization that has received a waiver pursuant to 33-31-201; or   (ii) a direct patient care agreement established pursuant to 50-4-107.   (11) "Insurance producer" means an individual or business entity appointed or authorized by a health maintenance organization to solicit applications for health care services agreements on its behalf.   (12) "PACE organization" means an organization, as defined in 42 CFR 460.6, that is authorized by the centers for medicare and medicaid services and the department of public health and human services to operate a program of all-inclusive care for the elderly.   (13) "Person" means:   (a) an individual;   (b) a group of individuals;   (c) an insurer, as defined in 33-1-201;   (d) a health service corporation, as defined in 33-30-101;   (e) a corporation, partnership, facility, association, or trust; or   (f) an institution of a governmental unit of any state licensed by that state to provide health care, including but not limited to a physician, hospital, hospital-related facility, or long-term care facility.   (14) "Plan" means a health maintenance organization operated by an insurer or health service corporation as an integral part of the corporation and not as a subsidiary.   (15) "Point-of-service option" means a delivery system that permits an enrollee of a health maintenance organization to receive health care services from a provider who is, under the terms of the enrollee's contract for health care services with the health maintenance organization, not on the provider panel of the health maintenance organization.   (16) "Provider" means a physician, hospital, hospital-related facility, long-term care facility, dentist, osteopath, chiropractor, optometrist, podiatrist, psychologist, licensed social worker, registered pharmacist, or advanced practice registered nurse, as specifically listed in 37-8-202, or registered nurse first assistant as defined by the board of nursing under Title 37, chapter 8, who treats any illness or injury within the scope and limitations of the provider's practice or any other person who is licensed or otherwise authorized in this state to furnish health care services.   (17) "Provider panel" means those providers with whom a health maintenance organization contracts to provide health care services to the health maintenance organization's enrollees.   (18) "Purchaser" means the individual, employer, or other entity, but not the individual certificate holder in the case of group insurance, that enters into a health care services agreement.   (19) "Uncovered expenditures" mean the costs of health care services that are covered by a health maintenance organization and for which an enrollee is liable if the health maintenance organization becomes insolvent.   History: En. Sec. 2, Ch. 457, L. 1987; amd. Sec. 3, Ch. 34, L. 1989; amd. Sec. 2, Ch. 80, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 1, Ch. 437, L. 1991; amd. Sec. 2, Ch. 663, L. 1991; amd. Sec. 1, Ch. 165, L. 1997; amd. Sec. 3, Ch. 413, L. 1997; amd. Sec. 29, Ch. 416, L. 1997; amd. Sec. 3, Ch. 434, L. 1999; amd. Sec. 3, Ch. 450, L. 2001; amd. Sec. 7, Ch. 356, L. 2007; amd. Sec. 5, Ch. 463, L. 2007; amd. Sec. 1, Ch. 195, L. 2009; amd. Sec. 33, Ch. 271, L. 2009; amd. Sec. 2, Ch. 173, L. 2011; amd. Sec. 1, Ch. 346, L. 2011; amd. Sec. 11, Ch. 262, L. 2021. 
  33-31-103. Rules. The commissioner may, after notice and hearing, make reasonable rules necessary to effectuate this chapter.   History: En. Sec. 20, Ch. 457, L. 1987; amd. Sec. 2, Ch. 437, L. 1991.  
  33-31-104. Repealed. Sec. 10, Ch. 437, L. 1991.   History: En. Sec. 27, Ch. 457, L. 1987.  
  33-31-105 through 33-31-110 reserved.  
  33-31-111. Statutory construction and relationship to other laws. (1) Except as otherwise provided in this chapter, the insurance or health service corporation laws do not apply to a health maintenance organization authorized to transact business under this chapter. This provision does not apply to an insurer or health service corporation licensed and regulated pursuant to the insurance or health service corporation laws of this state except with respect to its health maintenance organization activities authorized and regulated pursuant to this chapter.  (2) Solicitation of enrollees by a health maintenance organization granted a certificate of authority or its representatives is not a violation of any law relating to solicitation or advertising by health professionals.   (3) A health maintenance organization authorized under this chapter is not practicing medicine and is exempt from Title 37, chapter 3, relating to the practice of medicine.   (4) This chapter does not exempt a health maintenance organization from the applicable certificate of need requirements under Title 50, chapter 5, parts 1 and 3.   (5) This section does not exempt a health maintenance organization from the prohibition of pecuniary interest under 33-3-308 or the material transaction disclosure requirements under 33-3-701 through 33-3-704. A health maintenance organization must be considered an insurer for the purposes of 33-3-308 and 33-3-701 through 33-3-704.   (6) This section does not exempt a health maintenance organization from:   (a) prohibitions against interference with certain communications as provided under Title 33, chapter 1, part 8;   (b) the provisions of Title 33, chapter 22, parts 7 and 19;   (c) the requirements of 33-22-134 and 33-22-135;   (d) network adequacy and quality assurance requirements provided under chapter 36; or   (e) the requirements of Title 33, chapter 18, part 9.   (7) Other chapters and provisions of this title apply to health maintenance organizations as follows: Title 33, chapter 1, parts 6, 12, and 13; 33-2-1114; 33-2-1211 and 33-2-1212; Title 33, chapter 2, parts 13, 19, 23, and 24; 33-3-401; 33-3-422; 33-3-431; Title 33, chapter 3, part 6; Title 33, chapter 10; Title 33, chapter 12; 33-15-308; Title 33, chapter 17; Title 33, chapter 19; 33-22-107; 33-22-128; 33-22-129; 33-22-131; 33-22-136 through 33-22-139; 33-22-141 and 33-22-142; 33-22-152 and 33-22-153; 33-22-156 through 33-22-159; 33-22-180; 33-22-244; 33-22-246 and 33-22-247; 33-22-514 and 33-22-515; 33-22-521; 33-22-523 and 33-22-524; 33-22-526; and Title 33, chapter 32.   History: En. Sec. 24, Ch. 457, L. 1987; amd. Sec. 74, Ch. 379, L. 1995; amd. Sec. 10, Ch. 198, L. 1997; amd. Sec. 6, Ch. 410, L. 1997; amd. Sec. 4, Ch. 413, L. 1997; amd. Sec. 30, Ch. 416, L. 1997; amd. Sec. 1, Ch. 527, L. 1997; amd. Sec. 40, Ch. 531, L. 1997; amd. Sec. 3, Ch. 178, L. 1999; amd. Sec. 2, Ch. 334, L. 1999; amd. Sec. 5, Ch. 348, L. 1999; amd. Sec. 4, Ch. 434, L. 1999; amd. Sec. 56, Ch. 472, L. 1999; amd. Sec. 66, Ch. 227, L. 2001; amd. Sec. 4, Ch. 336, L. 2001; amd. Sec. 4, Ch. 450, L. 2001; amd. Sec. 7, Ch. 325, L. 2003; amd. Sec. 47, Ch. 380, L. 2003; amd. Sec. 7, Ch. 384, L. 2003; amd. Sec. 8, Ch. 356, L. 2007; amd. Sec. 23, Ch. 399, L. 2007; amd. Sec. 34, Ch. 271, L. 2009; amd. Sec. 4, Ch. 359, L. 2009; amd. Sec. 4, Ch. 97, L. 2013; amd. Sec. 3, Ch. 164, L. 2013; amd. Sec. 5, Ch. 334, L. 2013; amd. Sec. 9, Ch. 363, L. 2013; amd. Sec. 3, Ch. 256, L. 2015; amd. Sec. 33, Ch. 428, L. 2015; amd. Sec. 34, Ch. 151, L. 2017; amd. Sec. 9, Ch. 231, L. 2017; amd. Sec. 7, Ch. 245, L. 2017; amd. Sec. 9, Ch. 25, L. 2019; amd. Sec. 13, Ch. 60, L. 2019; amd. Sec. 4, Ch. 215, L. 2019; amd. Sec. 3, Ch. 209, L. 2021; amd. Sec. 18, Ch. 501, L. 2021. 
  33-31-112. Filings and reports as public documents. All applications, filings, and reports required under this chapter, except those that contain trade secrets or privileged or confidential commercial or financial information (other than an annual financial statement that the commissioner may require under 33-31-211), are public documents.   History: En. Sec. 25, Ch. 457, L. 1987.  
  33-31-113. Confidentiality of medical information. (1) Any data or information pertaining to the diagnosis, treatment, or health of an enrollee or applicant obtained from the enrollee, applicant, or a provider by a health maintenance organization must be held in confidence and may not be disclosed to any person except:   (a) to the extent that it may be necessary to carry out the purposes of this chapter;   (b) upon the express consent of the enrollee or applicant;   (c) pursuant to statute or court order for the production of evidence or the discovery thereof; or   (d) in the event of claim or litigation between the enrollee or applicant and the health maintenance organization wherein the data or information is pertinent.   (2) A health maintenance organization is entitled to claim the same statutory privileges against disclosure that the provider who furnished the information to the health maintenance organization is entitled to claim.   History: En. Sec. 26, Ch. 457, L. 1987.  
  33-31-114. Coverage for adopted children from time of placement -- preexisting conditions. (1) Each health maintenance contract regulated under this chapter must provide coverage for an adopted child of the enrollee to the same extent as for natural children of the enrollee.   (2) The coverage required by this section must be effective from the date of placement for the purpose of adoption and must continue unless the placement is disrupted prior to legal adoption and the child is removed from placement. Coverage at the time of placement must include the necessary care and treatment of medical conditions existing prior to the date of placement.   (3) As used in this section, "placement" has the meaning as defined in 33-22-130.   History: En. Sec. 3, Ch. 387, L. 1991; amd. Sec. 163, Ch. 480, L. 1997.  
  33-31-115. Applicability to managed health care entity. (1) The department of public health and human services may limit the amount, scope, and duration of services provided by a managed health care entity under contract for programs established under Title 53. These services may be less than services required by this title.   (2) The delivery of programs of managed health care services established under Title 53 by a managed health care entity under contract with the department of public health and human services is exempt from the provisions of 33-31-301 and 33-31-321.   History: En. Sec. 10, Ch. 502, L. 1995; amd. Sec. 2, Ch. 577, L. 1999; amd. Sec. 1, Ch. 466, L. 2001; amd. Sec. 4, Ch. 351, L. 2011.  
  33-31-201. Establishment of health maintenance organizations. (1) Notwithstanding any law of this state to the contrary, a person may apply to the commissioner for and obtain a certificate of authority to establish and operate a health maintenance organization in compliance with this chapter. A person may not establish or operate a health maintenance organization in this state except as authorized by a subsisting certificate of authority issued to it by the commissioner. A foreign person may qualify for a certificate of authority if it first registers with the secretary of state to transact business in this state as a foreign corporation under 35-14-1502.   (2) Each application of a health maintenance organization, whether separately licensed or not, for a certificate of authority must:   (a) be verified by an officer or authorized representative of the applicant;   (b) be in a form prescribed by the commissioner;   (c) contain:   (i) the applicant's name;   (ii) the location of the applicant's home office or principal office in the United States, if a foreign person;   (iii) the date of organization or incorporation;   (iv) the form of organization, including whether the providers affiliated with the health maintenance organization will be salaried employees or group or individual contractors;   (v) the state or country of domicile; and   (vi) any additional information that the commissioner may reasonably require; and   (d) set forth the following information or be accompanied by the following documents, as applicable:   (i) a copy of the applicant's organizational documents, such as its corporate charters or articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments to those documents, certified by the public officer with whom the originals were filed in the state or country of domicile;   (ii) a copy of the bylaws, rules, and regulations, or similar document, if any, regulating the conduct of the applicant's internal affairs, certified by its secretary or other officer having custody of the documents;   (iii) a list of the names, addresses, and official positions of the persons responsible for the conduct of the applicant's affairs, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;   (iv) a copy of any contract made or to be made between:   (A) any provider and the applicant; or   (B) any person listed in subsection (2)(d)(iii) and the applicant. The applicant may file a list of providers executing a standard contract and a copy of the contract instead of copies of each executed contract.   (v) the extent to which any of the following will be included in provider contracts and the form of any provisions that:   (A) limit a provider's ability to seek reimbursement for basic health care services or health care services from an enrollee;   (B) permit or require a provider to assume a financial risk in the health maintenance organization, including any provisions for assessing the provider, adjusting capitation or fee-for-service rates, or sharing in the earnings or losses; and   (C) govern amending or terminating an agreement with a provider;   (vi) a financial statement showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent certified financial statement satisfies this requirement unless the commissioner directs that additional or more recent financial information is required for the proper administration of this chapter.   (vii) a description of the proposed method of marketing, a financial plan that includes a projection of operating results anticipated until the organization has had net income for at least 1 year, and a statement as to the sources of working capital as well as any other source of funding;   (viii) a power of attorney executed by the applicant, on a form prescribed by the commissioner, appointing the commissioner, the commissioner's successors in office, and the commissioner's authorized deputies as the applicant's attorney to receive service of legal process issued against it in this state;   (ix) a statement reasonably describing the geographic service area or areas to be served, by county, including:   (A) a chart showing the number of primary and specialty care providers, with locations and service areas by county;   (B) the method of handling emergency care, with the location of each emergency care facility; and   (C) the method of handling out-of-area services;   (x) a description of the way in which the health maintenance organization provides services to enrollees in each geographic service area, including the extent to which a provider under contract with the health maintenance organization provides primary care to those enrollees;   (xi) a description of the complaint procedures to be used as required under 33-31-303;   (xii) a description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under 33-31-222;   (xiii) a summary of the way in which administrative services will be provided, including the size and qualifications of the administrative staff and the projected cost of administration in relation to premium income. If the health maintenance organization delegates management authority for a major corporate function to a person outside the organization, the health maintenance organization shall include a copy of the contract in its application for a certificate of authority. Contracts for delegated management authority must be filed with the commissioner in accordance with the filing provisions of 33-31-301(2). However, this subsection does not deprive the health maintenance organization of its right to confidentiality of any proprietary information, and the commissioner may not disclose that proprietary information to any other person. All contracts must include:   (A) the services to be provided;   (B) the standards of performance for the manager;   (C) the method of payment, including any provisions for the administrator to participate in the profits or losses of the plan;   (D) the duration of the contract; and   (E) any provisions for modifying, terminating, or renewing the contract.   (xiv) a summary of all financial guaranties by providers, sponsors, affiliates, or parents within a holding company system or any other guaranties that are intended to ensure the financial success of the plan, including hold harmless agreements by providers, insolvency insurance, reinsurance, or other guaranties;   (xv) a summary of benefits to be offered enrollees, including any limitations and exclusions and the renewability of all contracts to be written;   (xvi) evidence that it can meet the requirement of 33-31-216(10); and   (xvii) any other information that the commissioner may reasonably require to make the determinations required in 33-31-202.   (3) Each health maintenance organization shall file each substantial change, alteration, or amendment to the information submitted under subsection (2) with the commissioner at least 30 days prior to its effective date, including changes in articles of incorporation and bylaws, organization type, geographic service area, provider contracts, provider availability, plan administration, financial projections and guaranties, and any other change that might affect the financial solvency of the plan. The commissioner may, after notice and hearing, disapprove any proposed change, alteration, or amendment to the business plan. The commissioner may adopt reasonable rules exempting from the filing requirements of this subsection those items that the commissioner considers unnecessary.   (4) An applicant or a health maintenance organization holding a certificate of authority shall file with the commissioner all contracts of reinsurance and any modifications to the contracts. An agreement between a health maintenance organization and an insurer is subject to Title 33, chapter 2, part 12. A reinsurance agreement must remain in full force and effect for at least 90 days following written notice of cancellation by either party by certified mail to the commissioner.   (5) Each health maintenance organization shall maintain at its administrative office and make available to the commissioner upon request executed copies of all provider contracts.   (6) The commissioner may adopt reasonable rules exempting an insurer or health service corporation operating a health maintenance organization as a plan from the filing requirements of this section if information requested in the application has been submitted to the commissioner under other laws and rules administered by the commissioner.   (7) (a) The commissioner may waive the requirements of this section for a PACE organization that has entered into a PACE program agreement pursuant to 42 U.S.C. 1396u-4.   (b) A request for waiver must be submitted in a form prescribed by the commissioner. The waiver application must be filed and approved annually. The annual renewal process must be completed by June 30 of each year.   (c) The factors that the commissioner may take into account when granting a waiver include but are not limited to the financial condition of the PACE organization, any consumer complaints against the PACE organization, and the length of time the PACE organization has been in business.   (d) The PACE organization shall submit an audited financial statement for the organization as a whole and a financial statement for the PACE program specifically with the initial waiver application and annually on June 30. The commissioner may request additional information necessary to evaluate the waiver request.   (e) The waiver automatically expires if the certification of the PACE organization by the centers for medicare and medicaid services or the department of public health and human services expires or is terminated.   (f) The PACE organization shall notify the commissioner within 30 days if the centers for medicare and medicaid services takes adverse action or issues any warnings regarding the continuation of the PACE organization.   (8) (a) (i) The commissioner may waive the requirements of this section for an accountable care organization. Upon establishment of a medicare shared savings program pursuant to 42 U.S.C. 1395jjj, an accountable care organization shall demonstrate compliance with the program requirements in a manner determined by the commissioner.   (ii) The commissioner shall follow the medicare shared savings program structure in developing compliance criteria needed for obtaining a waiver.   (b) A request for waiver must be submitted in a form prescribed by the commissioner. The waiver application must be filed and approved every 3 years. The renewal process must be completed by June 30 of every third year.   (c) The factors that the commissioner may take into account when granting a waiver include but are not limited to the financial condition of the accountable care organization, any consumer complaints against the organization, and the length of time the organization has been in business.   (d) The accountable care organization shall submit an audited financial statement for the organization as a whole and a financial statement for the accountable care organization program specifically with the initial waiver application and annually by June 30. The commissioner may request additional information necessary to evaluate the waiver request.   (e) The waiver automatically expires if certification of the accountable care organization under the medicare shared savings program or the department of public health and human services expires or is terminated.   History: En. Sec. 3, Ch. 457, L. 1987; amd. Sec. 192, Ch. 368, L. 1991; amd. Sec. 3, Ch. 437, L. 1991; amd. Sec. 1249, Ch. 56, L. 2009; amd. Sec. 2, Ch. 195, L. 2009; amd. Sec. 2, Ch. 346, L. 2011; amd. Sec. 239, Ch. 271, L. 2019.  
  33-31-202. Issuance of certificate of authority. (1) The commissioner shall issue or deny a certificate of authority to any person filing an application pursuant to 33-31-201 within 180 days after receipt of the application. The commissioner shall grant a certificate of authority upon payment of the application fee prescribed in 33-31-212 if the commissioner is satisfied that each of the following conditions is met:   (a) The persons responsible for the conduct of the applicant's affairs are competent and trustworthy.   (b) The health maintenance organization will effectively provide or arrange for the provision of basic health care services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments. This requirement does not apply to the physical or mental health care services provided by a health maintenance organization to a person receiving medicaid services under the Montana medicaid program as established in Title 53, chapter 6.   (c) The health maintenance organization is financially responsible and can reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:   (i) the financial soundness of the arrangements for health care services and the schedule of charges used in connection with the services;   (ii) the adequacy of working capital;   (iii) any agreement with an insurer, a health service corporation, a government, or any other organization for ensuring the payment of the cost of health care services or the provision for automatic applicability of an alternative coverage in the event of discontinuance of the health maintenance organization;   (iv) any agreement with providers for the provision of health care services;   (v) any deposit of cash or securities submitted in accordance with 33-31-216; and   (vi) any additional information that the commissioner may reasonably require.   (d) The enrollees must be afforded an opportunity to participate in matters of policy and operation pursuant to 33-31-222.   (e) Nothing in the proposed method of operation, as shown by the information submitted pursuant to 33-31-201 or by independent investigation, violates any provision of this chapter or rules adopted by the commissioner.   (2) The commissioner may deny a certificate of authority only if the requirements of 33-31-404 are complied with.   (3) The commissioner shall examine each health maintenance organization applying for an initial certificate of authority to do business in this state. In lieu of making an examination under this part of any health maintenance organization domiciled in another state, the commissioner may accept an examination report on the organization prepared by the insurance department of the organization's state of domicile.   History: En. Sec. 4, Ch. 457, L. 1987; amd. Sec. 4, Ch. 437, L. 1991; amd. Sec. 2, Ch. 590, L. 1995; amd. Sec. 57, Ch. 472, L. 1999; amd. Sec. 3, Ch. 577, L. 1999; amd. Sec. 8, Ch. 325, L. 2003.  
  33-31-203. Powers of insurers and health service corporations. (1) An insurer authorized to transact insurance in this state or a health service corporation authorized to do business in this state may, either directly or through a subsidiary or affiliate, organize and operate a health maintenance organization under the provisions of this chapter. Notwithstanding any other law which may be inconsistent with this section, two or more insurers, health service corporations, or subsidiaries or affiliates thereof may jointly organize and operate a health maintenance organization. The business of insurance is considered to include the provision of health care services by a health maintenance organization owned or operated by an insurer or a subsidiary thereof.   (2) Notwithstanding any insurance or health service corporation laws, an insurer or a health service corporation may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through a health maintenance organization and to provide coverage if the health maintenance organization fails to meet its obligations.   (3) The enrollees of a health maintenance organization constitute a permissible group under this title. The insurer or health service corporation may make benefit payments to health maintenance organizations for health care services rendered by providers under the contracts described in subsection (2).   (4) Nothing in this section exempts a health maintenance organization that provides health care services from complying with the applicable certificate of need requirements under Title 50, chapter 5, parts 1 and 3.   History: En. Sec. 16, Ch. 457, L. 1987.  
  33-31-204. Acquisition, control, or merger of a health maintenance organization. (1) Except as provided in 33-2-1106 and subsection (2) of this section, a person may not tender for, request, or invite tenders of, or enter into an agreement to exchange securities for or acquire in the open market or otherwise, any voting security of a health maintenance organization or enter into any other agreement if, after the consummation of the agreement, that person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the health maintenance organization.   (2) A person may not enter into an agreement to merge or consolidate with or otherwise to acquire control of a health maintenance organization, unless, at the time any offer, request, or invitation is made or any agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the acquiring person has filed with the commissioner and has sent to the health maintenance organization information required by 33-2-1104 and the commissioner has approved the offer, request, invitation, agreement, or acquisition pursuant to 33-2-1105.   History: En. Sec. 28, Ch. 457, L. 1987; amd. Sec. 39, Ch. 370, L. 2015.  
  33-31-205 through 33-31-210 reserved.  
  33-31-211. Annual statements -- revocation for failure to file -- penalty for false swearing. (1) Unless it is operated by an insurer or a health service corporation as a plan, each authorized health maintenance organization shall annually on or before March 1 file with the commissioner a full and true statement of its financial condition, transactions, and affairs as of the preceding December 31. The statement must be in the general form and content required by the commissioner. The statement must be completed in accordance with the national association of insurance commissioners' annual statement instructions and the Accounting Practices and Procedures Manual of the national association of insurance commissioners. The statement must be verified by the oath of at least two principal officers of the health maintenance organization. The commissioner may waive any verification under oath.   (2) In addition to the annual statement and unless it is operated by an insurer or a health service corporation as a plan, each authorized health maintenance organization shall file quarterly financial statements electronically with the national association of insurance commissioners. The dates for the electronic submission of the quarterly financial statements are March 1 for the first quarter, May 15 for the second quarter, August 15 for the third quarter, and November 15 for the fourth quarter.   (3) At the time of filing the annual statement required by March 1, the health maintenance organization shall pay the commissioner the fee for filing the statement as prescribed in 33-31-212. The commissioner may refuse to accept the fee for continuance of the insurer's certificate of authority, as provided in 33-31-212, may impose a penalty of $100, or may suspend or revoke the certificate of authority of a health maintenance organization that fails to file an annual statement when due. Each day that the insurer fails to file its annual statement constitutes a separate violation. The total penalty may not exceed $1,000.   (4) The commissioner may, after notice and hearing, impose a fine not to exceed $5,000 for each violation upon a director, officer, partner, member, insurance producer, or employee of a health maintenance organization who knowingly subscribes to or concurs in making or publishing an annual statement or quarterly financial statement required by law that contains a material statement that is false.   (5) The commissioner may require reports considered reasonably necessary and appropriate to enable the commissioner to carry out the duties required of the commissioner under this chapter, including but not limited to a statement of operations, transactions, and affairs of a health maintenance organization operated by an insurer or a health service corporation as a plan.   History: En. Sec. 9, Ch. 457, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 5, Ch. 413, L. 1997; amd. Sec. 41, Ch. 531, L. 1997; amd. Sec. 58, Ch. 472, L. 1999; amd. Sec. 67, Ch. 227, L. 2001; amd. Sec. 35, Ch. 151, L. 2017.  
  33-31-212. Fees. (1) Each health maintenance organization shall pay to the commissioner the following fees:   (a) for filing an application for a certificate of authority or amendment to a certificate of authority, $300;   (b) for filing an amendment to the organization documents that requires approval, $25;   (c) for filing each annual statement, $25;   (d) for annual continuation of certificate of authority, $300.   (2) All fees, miscellaneous charges, fines, penalties, and those amounts received pursuant to 33-31-211(4) and 33-31-405 collected by the commissioner pursuant to this chapter and the rules adopted under this chapter must be deposited in the state special revenue fund to the credit of the state auditor's office.   History: En. Sec. 22, Ch. 457, L. 1987; amd. Sec. 8, Ch. 351, L. 1989; amd. Sec. 6, Ch. 628, L. 1989; amd. Sec. 5, Ch. 437, L. 1991; amd. Sec. 48, Ch. 380, L. 2003; amd. Sec. 36, Ch. 151, L. 2017.  
  33-31-213 and 33-31-214 reserved.  
  33-31-215. Investment regulations. Except for a health maintenance organization operated as a plan by a health service corporation, a domestic health maintenance organization may invest its funds only as prescribed in chapter 12.   History: En. Sec. 12, Ch. 457, L. 1987; amd. Sec. 49, Ch. 304, L. 1999.  
  33-31-216. Protection against insolvency. (1) Except as provided in subsections (4) through (7), each authorized health maintenance organization shall deposit with the commissioner cash, securities, or any combination of cash or securities acceptable to the commissioner in the amount set forth in this section.   (2) The amount of the deposit for a health maintenance organization during the first year of its operation is $200,000.   (3) At the beginning of each succeeding year, unless not applicable, the health maintenance organization shall deposit with the commissioner cash, securities, or any combination of cash or securities acceptable to the commissioner, in an amount equal to 4% of its estimated annual uncovered expenditures for that year.   (4) Unless not applicable, a health maintenance organization that is in operation on October 1, 1987, shall make a deposit equal to the greater of:   (a) 1% of the preceding 12 months' uncovered expenditures; or   (b) 4% of its estimated annual uncovered expenditures for each year.   (5) The commissioner may waive any of the deposit requirements set forth in subsections (1) through (4) whenever the commissioner is satisfied that:   (a) the health maintenance organization has sufficient net worth and an adequate history of generating net income to ensure its financial viability for the next year;   (b) the health maintenance organization's performance and obligations are guaranteed by an organization with sufficient net worth and an adequate history of generating net income; or   (c) the health maintenance organization's assets or its contracts with insurers, health service corporations, governments, or other organizations are reasonably sufficient to ensure the performance of its obligations.   (6) When a health maintenance organization achieves a net worth not including land, buildings, and equipment of at least $1 million or achieves a net worth including organization-related land, buildings, and equipment of at least $5 million, the annual deposit requirement under subsection (3) does not apply. The annual deposit requirement under subsection (3) does not apply to a health maintenance organization if the total amount of the accumulated deposit is greater than the capital requirement for the formation or admittance of a disability insurer in this state. If the health maintenance organization has a guaranteeing organization that has been in operation for at least 5 years and has a net worth not including land, buildings, and equipment of at least $1 million or that has been in operation for at least 10 years and has a net worth including organization-related land, buildings, and equipment of at least $5 million, the annual deposit requirement under subsection (3) does not apply. If the guaranteeing organization is sponsoring more than one health maintenance organization, however, the net worth requirement is increased by a multiple equal to the number of those health maintenance organizations. This requirement to maintain a deposit in excess of the deposit required of a disability insurer does not apply during any time that the guaranteeing organization maintains for each health maintenance organization it sponsors a net worth at least equal to the capital and surplus requirements for a disability insurer.   (7) All income from deposits belongs to the depositing health maintenance organization and must be paid to it as it becomes available. A health maintenance organization that has made a securities deposit may withdraw the deposit or any part of it after making a substitute deposit of cash, securities, or any combination of cash or securities of equal amount and value. A health maintenance organization may not substitute securities without prior approval by the commissioner.   (8) In any year in which an annual deposit is not required of a health maintenance organization, at the health maintenance organization's request, the commissioner shall reduce the previously accumulated deposit by $100,000 for each $250,000 of net worth in excess of the amount that allows the health maintenance organization to be exempt from the annual deposit requirement. If the amount of net worth no longer supports a reduction of its required deposit, the health maintenance organization shall immediately redeposit $100,000 for each $250,000 of reduction in net worth. However, the health maintenance organization's total deposit may not be required to exceed the maximum required under this section.   (9) (a) Subject to subsection (9)(b) and unless it is operated by an insurer or a health service corporation as a plan, each health maintenance organization must have a minimum capital of at least $200,000 in addition to any deposit requirements under this section. The capital account must be in excess of any accrued liabilities and be in the form of cash, securities, or any combination of cash or securities acceptable to the commissioner.   (b) A health maintenance organization licensed under this chapter after October 1, 1999, must have a minimum capital of at least $750,000. The amount required to be deposited with the commissioner under subsection (2) must be included in the calculation of the capital needed to meet the $750,000 minimum.   (10) Each health maintenance organization shall demonstrate that if it becomes insolvent:   (a) enrollees hospitalized on the date of insolvency will be covered until discharged; and   (b) enrollees will be entitled to similar alternate insurance coverage that does not contain any medical underwriting or preexisting limitation requirements.   History: En. Sec. 13, Ch. 457, L. 1987; amd. Sec. 6, Ch. 413, L. 1997; amd. Sec. 59, Ch. 472, L. 1999.  
  33-31-217 through 33-31-220 reserved.  
  33-31-221. Powers of health maintenance organizations. (1) The powers of a health maintenance organization include but are not limited to the following:   (a) the purchase, lease, construction, renovation, operation, or maintenance of a hospital, a medical facility, or both, its ancillary equipment, and property that may reasonably be required for its principal office or for purposes that may be necessary in the transaction of the business of the organization;   (b) the making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation under its control for the purpose of acquiring or constructing a medical facility or hospital or in furtherance of a program providing health care services to enrollees;   (c) the furnishing of health care services through a provider who is under contract with or employed by the health maintenance organization;   (d) the contracting with a person for the performance on its behalf of certain functions, such as marketing, enrollment, and administration;   (e) the contracting with an insurer authorized to transact insurance in this state, or with a health service corporation authorized to do business in this state, for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization; and   (f) the offering of other health care services in addition to basic health care services.   (2) A health maintenance organization shall file notice, with adequate supporting information, with the commissioner before exercising a power granted in subsection (1)(a), (1)(b), or (1)(d). The commissioner may, after notice and hearing, within 60 days disapprove the exercise of a power under subsection (1)(a), (1)(b), or (1)(d) only if, in the commissioner's opinion, it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. The commissioner may make reasonable rules exempting from the filing requirement of this subsection those activities having a de minimis effect. The commissioner may exempt certain contracts from the filing requirement whenever exercise of the authority granted in this section would have little or no effect on the health maintenance organization's financial condition and ability to meet obligations.   (3) This section does not exempt the activities of a health maintenance organization from any applicable certificate of need requirements under Title 50, chapter 5, parts 1 and 3.   History: En. Sec. 5, Ch. 457, L. 1987; amd. Sec. 1250, Ch. 56, L. 2009.  
  33-31-222. Governing body. (1) The governing body of a health maintenance organization may include providers or other individuals, or both.   (2) The governing body shall establish a mechanism to give the enrollees an opportunity to participate in matters of policy and operation through the establishment of advisory panels, by the use of advisory referenda on major policy decisions, or through the use of other mechanisms.   History: En. Sec. 6, Ch. 457, L. 1987.  
  33-31-223. Fiduciary responsibilities. (1) Any director, officer, employee, or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of the health maintenance organization is responsible for the funds in the manner of a fiduciary to the health maintenance organization.   (2) A health maintenance organization shall maintain in force a fidelity bond on employees and officers in an amount not less than $100,000 or such other sum as may be prescribed by the commissioner. Each bond must be written with at least a 1-year discovery period and, if written with less than a 3-year discovery period, must contain a provision that a cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, may not take effect prior to the expiration of 90 days after written notice of the cancellation or termination has been filed with the commissioner unless the commissioner approves an earlier cancellation or termination date.   History: En. Sec. 7, Ch. 457, L. 1987.  
  33-31-301. Evidence of coverage -- schedule of charges for health care services. (1) Each enrollee residing in this state is entitled to an evidence of coverage. The health maintenance organization shall issue the evidence of coverage, except that if the enrollee obtains coverage through an insurance policy issued by an insurer or a contract issued by a health service corporation, whether by option or otherwise, the insurer or the health service corporation shall issue the evidence of coverage.   (2) A health maintenance organization may not issue or deliver an enrollment form, an evidence of coverage, or an amendment to an approved enrollment form or evidence of coverage to a person in this state before a copy of the enrollment form, the evidence of coverage, or the amendment to the approved enrollment form or evidence of coverage is filed with and approved by the commissioner in accordance with 33-1-501.   (3) An evidence of coverage issued or delivered to a person resident in this state may not contain a provision or statement that is untrue, misleading, or deceptive as defined in 33-31-312(1). The evidence of coverage must contain:   (a) a clear and concise statement, if a contract, or a reasonably complete summary, if a certificate, of:   (i) the health care services and the insurance or other benefits, if any, to which the enrollee is entitled;   (ii) any limitations on the services, kinds of services, or benefits to be provided, including any deductible or copayment feature;   (iii) the location at which and the manner in which information is available as to how services may be obtained;   (iv) the total amount of payment for health care services and the indemnity or service benefits, if any, that the enrollee is obligated to pay with respect to individual contracts; and   (v) a clear and understandable description of the health maintenance organization's method for resolving enrollee complaints;   (b) definitions of geographical service area, emergency care, urgent care, out-of-area services, dependent, and primary provider if these terms or terms of similar meaning are used in the evidence of coverage and have an effect on the benefits covered by the plan. The definition of geographical service area need not be stated in the text of the evidence of coverage if the definition is adequately described in an attachment that is given to each enrollee along with the evidence of coverage.   (c) clear disclosure of each provision that limits benefits or access to service in the exclusions, limitations, and exceptions sections of the evidence of coverage. The exclusions, limitations, and exceptions that must be disclosed include but are not limited to:   (i) emergency and urgent care;   (ii) restrictions on the selection of primary or referral providers;   (iii) restrictions on changing providers during the contract period;   (iv) out-of-pocket costs, including copayments and deductibles;   (v) charges for missed appointments or other administrative sanctions;   (vi) restrictions on access to care if copayments or other charges are not paid; and   (vii) any restrictions on coverage for dependents who do not reside in the service area.   (d) clear disclosure of any benefits for home health care, skilled nursing care, kidney disease treatment, diabetes, maternity benefits for dependent children, alcoholism and other drug abuse, and nervous and mental disorders;   (e) a provision requiring immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant of an enrollee or the enrollee's dependents;   (f) a provision providing coverage as required in 33-22-133;   (g) a provision requiring medical treatment and referral services to appropriate ancillary services for mental illness and for the abuse of or addiction to alcohol or drugs in accordance with the limits and coverage provided in Title 33, chapter 22, part 7; however:   (i) after the primary care physician refers an enrollee for treatment of and appropriate ancillary services for mental illness, alcoholism, or drug addiction, the health maintenance organization may not limit the enrollee to a health maintenance organization provider for the treatment of and appropriate ancillary services for mental illness, alcoholism, or drug addiction;   (ii) if an enrollee chooses a provider other than the health maintenance organization provider for treatment and referral services, the enrollee's designated provider shall limit treatment and services to the scope of the referral in order to receive payment from the health maintenance organization;   (iii) the amount paid by the health maintenance organization to the enrollee's designated provider may not exceed the amount paid by the health maintenance organization to one of its providers for equivalent treatment or services;   (iv) the provisions of this subsection (3)(g) do not apply to services for mental illness provided under the Montana medicaid program as established in Title 53, chapter 6;   (h) a provision requiring coverage for well-child care for children from the moment of birth through at least 7 years of age, including:   (i) a history, a physical examination, developmental assessment and anticipatory guidance, as those terms are defined in 33-22-303, and laboratory tests, according to the schedule of visits adopted under the early and periodic screening, diagnosis, and treatment services program provided for in 53-6-101; and   (ii) routine immunizations according to the schedule recommended by the immunization practices advisory committee of the U.S. department of health and human services;   (i) a provision as follows:   "Conformity With State Statutes: Any provision of this evidence of coverage that on its effective date is in conflict with the statutes of the state in which the insured resides on that date is amended to conform to the minimum requirements of those statutes."   (j) a provision that the health maintenance organization shall issue, without evidence of insurability, to the enrollee, dependents, or family members continuing coverage on the enrollee, dependents, or family members:   (i) if the evidence of coverage or any portion of it on an enrollee, dependents, or family members covered under the evidence of coverage ceases because of termination of employment or termination of membership in the class or classes eligible for coverage under the policy or because the employer discontinues the business or the coverage;   (ii) if the enrollee had been enrolled in the health maintenance organization for a period of 3 months preceding the termination of group coverage; and   (iii) if the enrollee applied for continuing coverage within 31 days after the termination of group coverage. The conversion contract may not exclude, as a preexisting condition, any condition covered by the group contract from which the enrollee converts.   (k) a provision that clearly describes the amount of money an enrollee shall pay to the health maintenance organization to be covered for basic health care services.   (4) A health maintenance organization may amend an enrollment form or an evidence of coverage in a separate document if the separate document is filed with and approved by the commissioner in accordance with 33-1-501 and issued to the enrollee.   (5) (a) A health maintenance organization shall provide the same coverage for newborn infants, required by subsection (3)(e), as it provides for enrollees, except that for newborn infants, there may be no waiting or elimination periods. A health maintenance organization may not assess a deductible or reduce benefits applicable to the coverage for newborn infants unless the deductible or reduction in benefits is consistent with the deductible or reduction in benefits applicable to all covered persons.   (b) A health maintenance organization may not issue or amend an evidence of coverage in this state if it contains any disclaimer, waiver, or other limitation of coverage relative to the accident and sickness coverage or insurability of newborn infants of an enrollee or dependents from and after the moment of birth.   (c) If a health maintenance organization requires payment of a specific fee to provide coverage of a newborn infant beyond 31 days of the date of birth of the infant, the evidence of coverage may contain a provision that requires notification to the health maintenance organization, within 31 days after the date of birth, of the birth of an infant and payment of the required fee.   (6) The provisions of 33-1-501 govern the filing and approval of health maintenance organization forms.   (7) The commissioner may require a health maintenance organization to submit any relevant information considered necessary in determining whether to approve or disapprove a filing made pursuant to this section.   (8) Prior to issuance of evidence of coverage, written informational materials describing the contract's cancer screening coverages must be provided to a potential applicant. The informational materials are not subject to filing with and approval of the insurance commissioner.   History: En. Sec. 8, Ch. 457, L. 1987; amd. Sec. 3, Ch. 590, L. 1995; amd. Sec. 2, Ch. 183, L. 1997; amd. Sec. 60, Ch. 472, L. 1999; amd. Sec. 9, Ch. 325, L. 2003; amd. Sec. 2, Ch. 409, L. 2005; amd. Sec. 5, Ch. 390, L. 2007; amd. Sec. 6, Ch. 463, L. 2007.  
  33-31-302. Information to enrollees. Each authorized health maintenance organization shall provide to its enrollees 30 days' advance notice in writing of any material change in the operation of the health maintenance organization that will affect them directly.   History: En. Sec. 10, Ch. 457, L. 1987.  
  33-31-303. Complaint system. (1) (a) Each authorized health maintenance organization shall establish and maintain a complaint system to provide reasonable procedures to resolve written complaints initiated by enrollees. A health maintenance organization may not use a complaint system:   (i) before the commissioner approves it; and   (ii) unless the health maintenance organization describes it in each evidence of coverage issued or delivered to an enrollee in this state.   (b) Each time the health maintenance organization denies a claim or initiates disenrollment, cancellation, or nonrenewal, it shall notify the affected enrollee of the right to file a complaint and the procedure for filing a complaint.   (c) Each health maintenance organization shall acknowledge a complaint within 10 days of receiving it.   (d) Each health maintenance organization shall retain records of all complaints for 3 years and shall develop a summary for each year that must include:   (i) a description of the procedures of the complaint system;   (ii) the total number of complaints handled through the complaint system, a compilation of causes underlying the complaints filed, the date on which each complaint was filed, the date on which each complaint was resolved, the disposition of each complaint filed, the time it took to process each complaint, and a summary of each administrative change made because of a complaint; and   (iii) the number, amount, and disposition of malpractice claims made by enrollees of the health maintenance organization that were settled during the year by the health maintenance organization.   (e) The health maintenance organization shall annually on or before March 1 file with the commissioner the summary described in subsection (1)(d) for the preceding year.   (2) The commissioner shall hold in confidence the information provided by the health maintenance organization pursuant to subsection (1)(d)(iii).   (3) The commissioner may examine a complaint system.   History: En. Sec. 11, Ch. 457, L. 1987.  
  33-31-304. Dual choice. An employer in this state that offers its employees the option to enroll in a health maintenance organization and an employee benefit fund in this state that offers its members the option to enroll in a health maintenance organization may not be required to pay more for health benefits provided by the health maintenance organization than it would otherwise be required to provide by any prevailing collective bargaining agreement or other contract for the provision of health benefits to its employees, if the employer or benefits fund pays to the health maintenance organization chosen by each employee or member an amount equal to the lesser of:   (1) the amount paid on behalf of its other employees or members of health benefits; or   (2) the health maintenance organization's charge for coverage approved by the commissioner pursuant to 33-31-301.   History: En. Sec. 29, Ch. 457, L. 1987.  
  33-31-305. Dentist participation as provider. A contract for dental care services through a health maintenance organization that is offered, delivered, or renewed under this chapter must allow a dentist to request participation as a provider on the same terms and conditions as those by which other dentists participate. This opportunity for participation must be offered for each contract or plan. Each contract or plan must provide at least one annual period during which a dentist may exercise this right.   History: En. Sec. 2, Ch. 265, L. 1989.  
  33-31-306. Point-of-service option. (1) (a) A health maintenance organization that has at least 10,000 enrollees shall offer a point-of-service option benefit plan to each purchaser of a health care services agreement. The purchaser may accept or reject the addition of a point-of-service option to the health care services agreement.   (b) For the purposes of subsection (1)(a), an enrollee does not include an individual receiving medicaid services under the Montana medicaid program provided for in Title 53, chapter 6, or an individual participating in an approved medicare risk contract administered by a licensed health maintenance organization.   (2) Any difference in premium charged for the point-of-service option benefit plan compared to the premium for a standard health care services agreement may not exceed the expected cost to the insurer of benefits and expenses based on sound actuarial principles.   (3) This section may not be construed to permit a health maintenance organization to offer stand-alone indemnity insurance coverage.   History: En. Sec. 2, Ch. 165, L. 1997.  
  33-31-307. Affiliation periods. (1) A health maintenance organization that offers health insurance coverage in connection with a group health plan and that does not impose a preexisting condition exclusion allowed by 33-22-246 or 33-22-514 with respect to any particular coverage option may impose an affiliation period for that coverage option if:   (a) the affiliation period is applied uniformly without regard to any health status-related factors; and   (b) the affiliation period does not exceed 2 months, or 3 months in the case of a late enrollee, as defined in 33-22-140.   (2) A health maintenance organization is not required to provide health care services or benefits during the affiliation period, and a premium may not be charged to the participant or beneficiary for any coverage during the affiliation period. An affiliation period begins on the enrollment date and runs concurrently with any waiting period under the plan.   (3) A health maintenance organization may use a method other than an affiliation period to address adverse selection if the method is approved by the commissioner.   (4) The definitions in 33-22-140 apply to this section.   History: En. Sec. 43, Ch. 416, L. 1997.  
  33-31-308 through 33-31-310 reserved.  
  33-31-311. Insurance producer license required. An individual or business entity may not act as or represent to the public that the individual or business entity is an insurance producer for a health maintenance organization unless the individual or business entity is:   (1) licensed as a disability insurance producer by the commissioner pursuant to Title 33, chapter 17, parts 1, 2, 4, and 10 through 12, or licensed as an insurance producer as provided in 33-30-311; and   (2) appointed or authorized by the health maintenance organization or other health insurance issuer to sell, solicit, or negotiate health care service agreements on its behalf.   History: En. Sec. 15, Ch. 457, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 153, Ch. 42, L. 1997; amd. Sec. 68, Ch. 227, L. 2001; amd. Sec. 24, Ch. 399, L. 2007; amd. Sec. 35, Ch. 271, L. 2009.  
  33-31-312. Prohibited practices. (1) A health maintenance organization or representative of a health maintenance organization may not cause or knowingly permit the use of advertising that is untrue or misleading, solicitation that is untrue or misleading, or any form of evidence of coverage that is deceptive. For purposes of this chapter:   (a) a statement or item of information is considered to be misleading, whether or not it may be literally untrue if, in the total context in which the statement is made or the item of information is communicated, a reasonable person not possessing special knowledge regarding health care coverage may reasonably understand the statement or item of information as indicating a benefit or advantage or the absence of an exclusion, limitation, or disadvantage of possible significance to an enrollee of or person considering enrollment in a health maintenance organization if the benefit or advantage or absence of limitation, exclusion, or disadvantage does not in fact exist; and   (b) an evidence of coverage is considered to be deceptive if, when taken as a whole and with consideration given to typography, format, and language, it can cause a reasonable person not possessing special knowledge regarding health maintenance organizations to expect benefits, services, charges, or other advantages that the evidence of coverage does not provide or that the health maintenance organization issuing the evidence of coverage does not regularly make available to enrollees covered under the evidence of coverage.   (2) Title 33, chapter 18, applies to health maintenance organizations and evidences of coverage issued by a health maintenance organization, except to the extent that the commissioner determines that the nature of health maintenance organizations and evidences of coverage render the chapter clearly inappropriate.   (3) A health maintenance organization shall clearly disclose in the evidence of coverage the circumstances under which it may disenroll, cancel, or refuse to renew an enrollee. A health maintenance organization may disenroll, cancel, or refuse to renew an enrollee only if the enrollee:   (a) has failed to pay required premiums by the end of the grace period;   (b) has committed acts of physical or verbal abuse that pose a threat to providers or other enrollees of the health maintenance organization;   (c) has allowed a nonenrollee to use the health maintenance organization's certification card to obtain services or has knowingly provided fraudulent information in applying for coverage;   (d) has moved outside of the geographical service area of the health maintenance organization;   (e) has violated rules of the health maintenance organization stated in the evidence of coverage;   (f) has violated rules adopted by the commissioner for enrollment in a health maintenance organization; or   (g) is unable to establish or maintain a satisfactory physician-patient relationship with the physician responsible for the enrollee's care. Disenrollment of an enrollee for this reason must be permitted only if the health maintenance organization can demonstrate that it provided the enrollee with the opportunity to select an alternate primary care physician, made a reasonable effort to assist the enrollee in establishing a satisfactory physician-patient relationship, and informed the enrollee that the enrollee may file a grievance on this matter.   (4) A health maintenance organization may not disenroll an enrollee under subsection (3) for reasons related to the physical or mental condition of the enrollee or for any of the following reasons:   (a) failure of the enrollee to follow a prescribed course of treatment; or   (b) administrative actions, such as failure to keep an appointment.   (5) (a) A health maintenance organization that disenrolls a group certificate holder for any reason not listed in subsection (3) or provided in rules adopted by the commissioner shall make arrangements to provide similar alternate insurance coverage to enrollees. The insurance coverage must be continued until the disenrolled group certificate holder finds its own coverage or a period of 12 months elapses, whichever comes first. The premium on the individual coverage must be at the then-customary rate applicable to the individual coverage offered by the insurer, health service corporation, or health maintenance organization that provides the alternate insurance coverage.   (b) If a health maintenance organization disenrolls an enrollee covered on an individual basis for any reason not listed in subsection (3) or provided in rules adopted by the commissioner, coverage must be continued until the anniversary date of the policy or for 1 year, whichever is earlier. A health maintenance organization that disenrolls an individual enrollee for failure to pay a required premium or for fraudulent statements on the enrollment form need not provide alternate insurance coverage to that enrollee.   (6) A health maintenance organization may not refer to itself as an insurer unless licensed as an insurer or use a name deceptively similar to the name or description of an insurer authorized to transact insurance in this state.   (7) A person may not refer to itself as a health maintenance organization or HMO unless it holds a valid certificate of authority issued by the commissioner.   History: En. Sec. 14, Ch. 457, L. 1987; amd. Sec. 1251, Ch. 56, L. 2009.  
  33-31-313. Premium increase restriction -- exception. (1) A health maintenance organization may not increase a premium for an individual's or an individual's group health care services agreement more frequently than once during a 12-month period unless failure to increase the premium more frequently than once during the 12-month period would:   (a) place the health maintenance organization in violation of the laws of this state; or   (b) cause the financial impairment of the health maintenance organization to the extent that further transaction of insurance by the health maintenance organization would injure or be hazardous to its enrollees or to the public.   (2) Subsection (1) does not apply to a premium increase necessitated by a state or federal law, by a court decision, by a state rule, or by a federal regulation.   History: En. Sec. 7, Ch. 413, L. 1997.  
  33-31-314 through 33-31-320 reserved.  
  33-31-321. Disclosure standards -- health maintenance organizations. (1) In order to provide for full and fair disclosure in the sale of disability insurance, an enrollment form or evidence of coverage may not be delivered or issued for delivery in this state by a health maintenance organization unless an outline of coverage is delivered to the applicant at the time the application is made. The outline of coverage must be filed with the commissioner as required by 33-1-501.   (2) The outline of coverage must include:   (a) a general description of the principal benefits and coverages provided by the policy;   (b) a general description of the insureds financial responsibility under the policy, including, if applicable, the amount of the deductible, the amount or percentage of copayment, and the maximum annual out-of-pocket expenses to be paid by the insured;   (c) a statement of the maximum lifetime benefit available under the policy;   (d) a statement of the estimated periodic premium to be paid by the insured;   (e) a general description of the factors or case characteristics that the insurer may consider in establishing or changing the premiums and, if applicable, in determining the insurability of the applicant; and   (f) a general description of the trend of premium increases or decreases for comparable policies issued by the insurer during the preceding 5 years, if the trend data is available.   (3) The outline of coverage may include any other information that the insurer considers relevant to the applicant's selection of an appropriate health benefit plan.   (4) An insurer or producer shall provide to an individual, upon request, an outline of coverage for any health benefit product marketed to the general public. The outline of coverage provided under this subsection may exclude the statement of the estimated periodic premium to be paid by the insured.   History: En. Sec. 7, Ch. 527, L. 1995.  
  33-31-322. Repealed. Sec. 35, Ch. 63, L. 2015.   History: En. Sec. 10, Ch. 527, L. 1995; amd. Sec. 31, Ch. 416, L. 1997.  
  33-31-401. Examination. (1) The commissioner may examine the affairs of a health maintenance organization as often as is reasonably necessary to protect the interests of the people of this state. The commissioner shall make an examination at least once every 5 years. Similarly, the commissioner shall examine a health maintenance organization operated by an insurer or health service corporation as a plan at least once every 5 years. The provisions of 33-1-408 and 33-1-409 apply to examinations under this section.   (2) Each authorized health maintenance organization and provider shall submit its relevant books and records for the examinations and in every way facilitate the examinations. For the purpose of examination, the commissioner may administer oaths to and examine the officers and insurance producers of the health maintenance organization and the principals of the providers concerning their business.   (3) (a) Upon presentation of a detailed account of the charges and expenses of examinations by the commissioner, the health maintenance organization being examined shall pay to the examiner as necessarily incurred on account of the examination the actual travel expenses, a reasonable living-expense allowance, and a per diem, all at reasonable rates customary therefor and as established or adopted by the commissioner. The commissioner may present an account periodically during the course of the examination or at the termination of the examination as the commissioner considers proper. A person may not pay and an examiner may not accept any additional emolument on account of any examination.   (b) If a health maintenance organization fails to pay the charges and expenses as referred to in subsection (3)(a), the commissioner shall pay them out of the funds of the commissioner in the same manner as other disbursements of funds. The amount paid is a lien upon all of the person's assets and property in this state and may be recovered by suit by the attorney general on behalf of the state and restored to the appropriate fund.   (4) In lieu of an examination, the commissioner may accept the report of an examination made by the commissioner of another state.   History: En. Sec. 17, Ch. 457, L. 1987; amd. Sec. 7, Ch. 628, L. 1989; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 6, Ch. 437, L. 1991; amd. Sec. 61, Ch. 472, L. 1999; amd. Sec. 69, Ch. 227, L. 2001; amd. Sec. 37, Ch. 151, L. 2017.  
  33-31-402. Suspension or revocation of certificate of authority. (1) The commissioner may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if the commissioner finds that any of the following conditions exist:   (a) The health maintenance organization is operating in contravention of its basic organizational document or in a manner contrary to that described in any other information submitted under 33-31-201 and the operation adversely affects the health maintenance organization's ability to provide benefits and operate under the application approved by the commissioner, unless amendments to the submissions have been filed with and approved by the commissioner.   (b) The health maintenance organization issues evidences of coverage or uses a schedule of charges for health care services that do not comply with the requirements of 33-31-301.   (c) The health maintenance organization does not provide or arrange for basic health care services.   (d) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees.   (e) The health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under 33-31-222.   (f) The health maintenance organization has failed to implement the complaint system required by 33-31-303 to resolve valid complaints in a reasonable manner.   (g) The health maintenance organization or any person on its behalf has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner.   (h) The continued operation of the health maintenance organization would be hazardous to its enrollees.   (i) The health maintenance organization has otherwise failed to substantially comply with this chapter.   (2) The commissioner may suspend or revoke a certificate of authority only if the commissioner complies with the requirements of 33-31-404.   (3) When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization may not, during the period of suspension, enroll any additional enrollees except newborn infants or other newly acquired dependents of existing enrollees and may not engage in any advertising or solicitation.   (4) If the commissioner revokes the certificate of authority of a health maintenance organization, the health maintenance organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs and may not transact further business except as may be essential to the orderly conclusion of its affairs. It may not engage in further advertising or solicitation following the effective date of the order of revocation. The commissioner may by written order permit further operation of the health maintenance organization if the commissioner finds further operation to be in the best interest of enrollees to the extent that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.   History: En. Sec. 18, Ch. 457, L. 1987; amd. Sec. 7, Ch. 437, L. 1991; amd. Sec. 1252, Ch. 56, L. 2009.  
  33-31-403. Supervision, rehabilitation, or liquidation of health maintenance organization. (1) The supervision, rehabilitation, or liquidation of a health maintenance organization is considered to be the supervision, rehabilitation, or liquidation of an insurer and must be conducted under the supervision of the commissioner pursuant to chapter 2, part 13. The commissioner may apply for an order directing the commissioner to supervise, rehabilitate, or liquidate a health maintenance organization upon any one or more grounds set out in 33-2-1321, 33-2-1331, or 33-2-1341 or when in the commissioner's opinion the continued operation of the health maintenance organization would be hazardous either to the enrollees or to the people of this state. Enrollees have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer.   (2) A claim by a health care provider for an uncovered expenditure has the same priority as a claim by an enrollee if the provider of services agrees not to assert the claim against any enrollee of the health maintenance organization.   History: En. Sec. 19, Ch. 457, L. 1987; amd. Sec. 1253, Ch. 56, L. 2009.  
  33-31-404. Administrative procedures. (1) When the commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist or that grounds for the suspension or revocation of a certificate of authority exist, the commissioner shall give written notice to the health maintenance organization specifically stating the grounds for denial, suspension, or revocation and fixing a time of at least 30 days after the notice for a hearing on the matter.   (2) After the hearing or upon the failure of the health maintenance organization to appear at the hearing, the commissioner shall make written findings and act as the commissioner considers advisable. The commissioner shall mail the written findings to the health maintenance organization. The action of the commissioner is subject to review by the district court having jurisdiction. The court may, in disposing of the issue before it, modify, affirm, or reverse the order of the commissioner in whole or in part.   (3) When notice and hearing are required with regard to actions taken by the commissioner under this chapter, the requirements of 33-1-314 through 33-1-316 and Title 33, chapter 1, part 7, apply, except that the formal rules of pleading and evidence must be observed. To the extent that 33-1-314 through 33-1-316 and Title 33, chapter 1, part 7, do not address the notice and hearing requirements of this chapter, the provisions of Title 2, chapter 4, parts 6 and 7, apply.   History: En. Sec. 21, Ch. 457, L. 1987; amd. Sec. 8, Ch. 437, L. 1991; amd. Sec. 1254, Ch. 56, L. 2009.  
  33-31-405. Penalties and enforcement. (1) The commissioner may, in addition to suspension or revocation of a certificate of authority under 33-31-402, after notice and hearing, impose an administrative penalty in an amount not less than $500 or more than $10,000 if the commissioner gives reasonable notice in writing of the intent to levy the penalty and the health maintenance organization has a reasonable time within which to remedy the defect in its operations that gave rise to the penalty citation.   (2) If the commissioner has cause to believe that a violation of this chapter has occurred or is threatened, the commissioner may:   (a) give notice to the health maintenance organization and to the representatives or other persons who appear to be involved in the suspected violation;   (b) arrange a conference with the alleged violators or their authorized representatives to attempt to ascertain the facts relating to the suspected violation; and   (c) if it appears that a violation has occurred or is threatened, arrive at an adequate and effective means of correcting or preventing the violation.   (3) (a) The commissioner may issue an order directing a health maintenance organization or its representative to cease and desist from engaging in an act or practice in violation of this chapter.   (b) Within 15 days after service of the cease and desist order, the respondent may request a hearing to determine whether acts or practices in violation of this chapter have occurred. The hearing must be conducted pursuant to Title 2, chapter 4, part 6, and judicial review must be available as provided by Title 2, chapter 4, part 7.   (4) If a health maintenance organization violates a provision of this chapter and the commissioner elects not to issue a cease and desist order or if the respondent does not comply with a cease and desist order issued pursuant to subsection (3), the commissioner may institute a proceeding to obtain injunctive or other appropriate relief in the district court of Lewis and Clark County.   History: En. Sec. 23, Ch. 457, L. 1987; amd. Sec. 9, Ch. 437, L. 1991; amd. Sec. 1255, Ch. 56, L. 2009.  
  33-32-101. Purpose. The legislature finds and declares that it is the purpose of this chapter to:   (1) promote the delivery of quality health care in a cost-effective manner;   (2) foster greater coordination between health care providers, third-party payors, and others who conduct utilization review activities;   (3) ensure timely access to health care services;   (4) preserve the integrity of the health care provider and patient relationship;   (5) protect patients, employers, and health care providers by:   (a) ensuring that utilization review activities result in informed decisions on the appropriateness of medical care made by those best qualified to be involved in the utilization review process; and   (b) establishing the use of written clinical criteria for utilization review programs and reviews by appropriate health care providers to ensure a fair and transparent process for patients; and   (6) establish written standards and clinical criteria for the structure and operation of utilization review and benefit determination processes designed to facilitate ongoing assessment and management of health care services.   History: En. Sec. 1, Ch. 665, L. 1991; amd. Sec. 34, Ch. 428, L. 2015; amd. Sec. 1, Ch. 470, L. 2019.  
  33-32-102. Definitions. As used in this chapter, the following definitions apply:  (1) "Adverse determination", except as provided in 33-32-402, means:   (a) a determination by a health insurance issuer or its designated utilization review organization that, based on the provided information and after application of any utilization review technique, a requested benefit under the health insurance issuer's health plan is denied, reduced, or terminated or that payment is not made in whole or in part for the requested benefit because the requested benefit does not meet the health insurance issuer's requirement for medical necessity, appropriateness, health care setting, level of care, or level of effectiveness or is determined to be experimental or investigational;   (b) a denial, reduction, termination, or failure to provide or make payment in whole or in part for a requested benefit based on a determination by a health insurance issuer or its designated utilization review organization of a person's eligibility to participate in the health insurance issuer's health plan;   (c) any prospective review or retrospective review of a benefit determination that denies, reduces, or terminates or fails to provide or make payment in whole or in part for a benefit; or   (d) a rescission of coverage determination.   (2) "Ambulatory review" means a utilization review of health care services performed or provided in an outpatient setting.   (3) "Authorized representative" means:   (a) a person to whom a covered person has given express written consent to represent the covered person;   (b) a person authorized by law to provided substituted consent for a covered person; or   (c) a family member of the covered person, or the covered person's treating health care provider, only if the covered person is unable to provide consent.   (4) "Case management" means a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or otherwise complex health conditions.   (5) "Certification" means a determination by a health insurance issuer or its designated utilization review organization that an admission, availability of care, continued stay, or other health care service has been reviewed and, based on the information provided, satisfies the health insurance issuer's requirements for medical necessity, appropriateness, health care setting, level of care, and level of effectiveness.   (6) "Clinical peer" means a physician or other health care provider who:   (a) holds a nonrestricted license in a state of the United States; and   (b) is trained or works in the same or a similar specialty to the specialty that typically manages the medical condition, procedure, or treatment under review.   (7) "Clinical review criteria" means the written policies, written screening procedures, decision abstracts, determination rules, clinical and medical protocols, practice guidelines, or any other criteria or rationale used by a health insurance issuer or its designated utilization review organization to determine the medical necessity of health care services.   (8) "Concurrent review" means a utilization review conducted during a patient's stay or course of treatment in a facility, the office of a health care professional, or another inpatient or outpatient health care setting.   (9) "Cost sharing" means the share of costs that a covered member pays under the health insurance issuer's health plan, including maximum out-of-pocket, deductibles, coinsurance, copayments, or similar charges, but does not include premiums, balance billing amounts for out-of-network providers, or the cost of noncovered services.   (10) "Covered benefits" or "benefits" means those health care services to which a covered person is entitled under the terms of a health plan.   (11) "Covered person" means a policyholder, a certificate holder, a member, a subscriber, an enrollee, or another individual participating in a health plan.   (12) "Discharge planning" means the formal process for determining, prior to discharge from a facility, the coordination and management of the care that a patient receives after discharge from a facility.   (13) "Emergency medical condition" has the meaning provided in 33-36-103.   (14) "Emergency services" has the meaning provided in 33-36-103.   (15) "External review" describes the set of procedures provided for in Title 33, chapter 32, part 4.   (16) "Final adverse determination" means an adverse determination involving a covered benefit that has been upheld by a health insurance issuer or its designated utilization review organization at the completion of the health insurance issuer's internal grievance process as provided in Title 33, chapter 32, part 3.   (17) "Grievance" means a written complaint or an oral complaint if the complaint involves an urgent care request submitted by or on behalf of a covered person regarding:   (a) availability, delivery, or quality of health care services, including a complaint regarding an adverse determination made pursuant to utilization review;   (b) claims payment, handling, or reimbursement for health care services; or   (c) matters pertaining to the contractual relationship between a covered person and a health insurance issuer.   (18) "Health care provider" or "provider" means a person, corporation, facility, or institution licensed by the state to provide, or otherwise lawfully providing, health care services, including but not limited to:   (a) a physician, physician assistant, advanced practice registered nurse, health care facility as defined in 50-5-101, osteopath, dentist, nurse, optometrist, chiropractor, podiatrist, physical therapist, psychologist, licensed social worker, speech pathologist, audiologist, licensed addiction counselor, or licensed professional counselor; and   (b) an officer, employee, or agent of a person described in subsection (18)(a) acting in the course and scope of employment.   (19) "Health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease, including the provision of pharmaceutical products or services or durable medical equipment.   (20) "Health insurance issuer" has the meaning provided in 33-22-140.   (21) "Medical necessity" means health care services that a health care provider exercising prudent clinical judgment would provide to a patient for the purpose of preventing, evaluating, diagnosing, treating, curing, or relieving a health condition, illness, injury, or disease or its symptoms and that are:   (a) in accordance with generally accepted standards of practice;   (b) clinically appropriate in terms of type, frequency, extent, site, and duration and are considered effective for the patient's illness, injury, or disease; and   (c) not primarily for the convenience of the patient or health care provider and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of the patient's illness, injury, or disease.   (22) "Network" means the group of participating providers providing services to a managed care plan.   (23) "Participating provider" means a health care provider who, under a contract with a health insurance issuer or with its contractor or subcontractor, has agreed to provide health care services to covered persons with the expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly from the health insurance issuer.   (24) "Person" means an individual, a corporation, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, or any similar entity or combination of entities in this subsection.   (25) "Preservice claim" means a request for benefits or payment from a health insurance issuer for health care services that, under the terms of the health insurance issuer's contract of coverage, requires authorization from the health insurance issuer or from the health insurance issuer's designated utilization review organization prior to receiving the services.   (26) "Prospective review" means a utilization review conducted of a preservice claim prior to an admission or a course of treatment.   (27) (a) "Rescission" means a cancellation or the discontinuance of coverage under a health plan that has a retroactive effect.   (b) The term does not include a cancellation or discontinuance under a health plan if the cancellation or discontinuance of coverage:   (i) has only a prospective effect; or   (ii) is effective retroactively to the extent that the cancellation or discontinuance is attributable to a failure to timely pay required premiums or contributions toward the cost of coverage.   (28) (a) "Retrospective review" means a review of medical necessity conducted after services have been provided to a covered person.   (b) The term does not include the review of a claim that is limited to an evaluation of reimbursement levels, veracity of documentation, accuracy of coding, or adjudication for payment.   (29) "Second opinion" means an opportunity or requirement to obtain a clinical evaluation by a health care provider other than the one originally making a recommendation for a proposed health care service to assess the clinical necessity and appropriateness of the initial proposed health care service.   (30) "Stabilize" means, with respect to an emergency condition, to ensure that no material deterioration of the condition is, within a reasonable medical probability, likely to result from or occur during the transfer of the individual from a facility.   (31) (a) "Urgent care request" means a request for a health care service or course of treatment with respect to which the time periods for making a nonurgent care request determination could:   (i) seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or   (ii) subject the covered person, in the opinion of a health care provider with knowledge of the covered person's medical condition, to severe pain that cannot be adequately managed without the health care service or treatment that is the subject of the request.   (b) Except as provided in subsection (31)(c), in determining whether a request is to be treated as an urgent care request, an individual acting on behalf of the health insurance issuer shall apply the judgment of a prudent lay person who possesses an average knowledge of health and medicine.   (c) Any request that a health care provider with knowledge of the covered person's medical condition determines is an urgent care request within the meaning of subsection (31)(a) must be treated as an urgent care request.   (32) "Utilization review" means a set of formal techniques designed to monitor the use of or to evaluate the clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures, or settings. Techniques may include ambulatory review, prospective review, second opinions, certification, concurrent review, case management, discharge planning, or retrospective review.   (33) "Utilization review organization" means an entity that conducts utilization review for one or more of the following:   (a) an employer with employees who are covered under a health benefit plan or health insurance policy;   (b) a health insurance issuer providing review for its own health plans or for the health plans of another health insurance issuer;   (c) a preferred provider organization or health maintenance organization; and   (d) any other individual or entity that provides, offers to provide, or administers hospital, outpatient, medical, or other health benefits to a person treated by a health care provider under a policy, plan, or contract.   History: En. Sec. 2, Ch. 665, L. 1991; amd. Sec. 3, Ch. 23, L. 2001; amd. Sec. 35, Ch. 428, L. 2015; amd. Sec. 38, Ch. 151, L. 2017; amd. Sec. 2, Ch. 470, L. 2019; amd. Sec. 8, Ch. 471, L. 2021. 
  33-32-103. Utilization review plan. An entity covered under the provisions of this chapter may not conduct a utilization review of health care services provided or to be provided to a patient covered under a contract or plan for health care services issued in this state unless that entity, at all times, maintains and can provide at the commissioner's request a current utilization review plan that includes:   (1) a description of review criteria, standards, and procedures to be used in evaluating proposed or delivered health care services that, to the extent possible, must:   (a) be based on nationally recognized criteria, standards, and procedures;   (b) reflect community standards of care, except that a utilization review plan for health care services under the medicaid program provided for in Title 53 need not reflect community standards of care;   (c) ensure quality of care; and   (d) ensure access to needed health care services;   (2) policies and procedures to ensure that a representative of the entity conducting the utilization review is reasonably accessible to patients and health care providers at all times;   (3) policies and procedures to ensure compliance with all applicable state and federal laws to protect the confidentiality of individual medical records;   (4) a copy of the materials designed to inform applicable patients and health care providers of the requirements of the utilization review plan; and   (5) any other information that may be required by the commissioner that is necessary to implement this chapter.   History: En. Sec. 3, Ch. 665, L. 1991; amd. Sec. 5, Ch. 561, L. 1993; amd. Sec. 36, Ch. 428, L. 2015; amd. Sec. 39, Ch. 151, L. 2017.  
  33-32-104. Preemption by federal law. If any provision of this chapter is preempted by federal law or regulations as applied to any specific health care service, then the provision of this chapter that is preempted by federal law or regulations does not apply to that health care service but only to the extent of the preemption.   History: En. Sec. 8, Ch. 665, L. 1991; amd. Sec. 37, Ch. 428, L. 2015.  
  33-32-105. Application -- exemptions. (1) Except as provided in subsections (2) and (3), the provisions of this chapter apply to:   (a) a health insurance issuer that offers a health plan and provides or performs utilization review services;   (b) any designee of the health insurance issuer or utilization review organization that performs utilization review functions on the health insurance issuer's behalf; and   (c) a health insurance issuer or its designated utilization review organization that provides or performs prospective review or retrospective review benefit determinations.   (2) A general in-house utilization review for a health care provider, including an in-house utilization review that is conducted by or for a long-term care facility and that is required by regulations for medicare or medicaid, is exempt from the provisions of this chapter as long as the review does not directly result in the approval or denial of payment for health care services for a particular case.   (3) A peer review procedure conducted by a professional society or association of providers is exempt from the provisions of this chapter.   History: En. Sec. 9, Ch. 665, L. 1991; amd. Sec. 38, Ch. 428, L. 2015.  
  33-32-106. Disclosure of utilization review requirements -- drug benefit information. (1) A utilization review organization shall make its current utilization review plan prepared pursuant to 33-32-103, including clinical review criteria, standards, procedures, requirements, and restrictions, readily accessible on its website to covered persons, prospective covered persons, and health care providers. The utilization review plan must be described in detail and in easily understandable language.   (2) If a utilization review organization intends to implement a new or amended utilization review plan, including any new or amended clinical review criteria, standards, procedures, requirements, or restrictions, the entity may not implement the change until it has:   (a) notified health care providers in writing of the new or amended utilization review plan, including any new or amended clinical review criteria, standards, procedures, requirements, or restrictions, no less than 60 days before the new or amended plan is to be implemented; and   (b) updated its website to reflect the new or amended utilization review plan, including any new or amended clinical review criteria, standards, procedures, requirements, or restrictions, to make the information accessible to covered persons, prospective covered persons, and health care providers.   (3) A health insurance issuer or utilization review organization, as applicable, shall display on its public website current prescription drug benefit information, including formulary lists of each prescription drug covered under the health insurance issuer's plan.   History: En. Sec. 6, Ch. 470, L. 2019.  
  33-32-107. Length of prior authorization. A certification by a utilization review organization approving health care services is valid for at least 3 months from the date the health care provider receives the certification unless the covered person loses coverage under the applicable health plan or health insurance coverage.   History: En. Sec. 7, Ch. 470, L. 2019.  
  33-32-201. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 4, Ch. 665, L. 1991; amd. Sec. 1, Ch. 378, L. 1993.  
  33-32-202. Commissioner not to approve or disapprove plans. Nothing in this chapter may be construed as authorizing the commissioner to approve or disapprove a utilization review plan required in 33-32-103.   History: En. Sec. 5, Ch. 665, L. 1991.  
  33-32-203. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 6, Ch. 665, L. 1991.  
  33-32-204. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 7, Ch. 665, L. 1991.  
  33-32-205. Corporate oversight of utilization review program. A health insurance issuer is responsible for:   (1) monitoring all utilization review activities carried out by or on behalf of the health insurance issuer;   (2) ensuring that all requirements of this part and rules adopted pursuant to this part are met; and   (3) ensuring that appropriate personnel have operational responsibility for the conduct of the health insurance issuer's utilization review program.   History: En. Sec. 1, Ch. 428, L. 2015.  
  33-32-206. Responsibility for contracted services. Whenever a health insurance issuer contracts with a utilization review organization or other entity to perform the utilization review functions required by this part or rules adopted pursuant to this part, the commissioner shall hold the health insurance issuer responsible for monitoring the activities of the utilization review organization or the entity with which the health insurance issuer has contracted and for ensuring that the requirements of this part are met.   History: En. Sec. 2, Ch. 428, L. 2015.  
  33-32-207. Health insurance issuer duties for utilization review. (1) A health insurance issuer that requires a request for benefits under the covered person's health plan to be subjected to utilization review shall implement a utilization review program with written documentation describing all review activities and procedures, both delegated and nondelegated, for:   (a) the filing of benefit requests;   (b) the notification of utilization review and benefit determinations; and   (c) the review of adverse determinations in accordance with Title 33, chapter 32, parts 3 and 4.   (2) The written documentation must describe the following:   (a) procedures to evaluate the medical necessity, appropriateness, efficacy, or efficiency of health care services;   (b) data sources and clinical review criteria used in decisionmaking;   (c) mechanisms to ensure consistent application of clinical review criteria and compatible decisions;   (d) data collection processes and analytical methods used in assessing utilization of health care services;   (e) provisions for ensuring confidentiality of clinical and proprietary information;   (f) the organizational structure that periodically assesses utilization review activities and reports to the health insurance issuer's governing body. This organizational structure may include but is not limited to the utilization review committee or a quality assurance committee.   (g) the staff position functionally responsible for day-to-day program management.   (3) A health insurance issuer shall:   (a) file an annual summary report of its utilization review program activities with the commissioner in the format specified by the commissioner;   (b) maintain records for a minimum of 6 years of all benefit requests, claims, and notices associated with utilization review and benefit determinations made in accordance with 33-32-211 and 33-32-212; and   (c) make the records maintained under subsection (3)(b) available, on request, for examination by covered persons, the commissioner, and appropriate federal agencies.   History: En. Sec. 3, Ch. 428, L. 2015.  
  33-32-208. Operational requirements. (1) A utilization review program must use documented clinical review criteria that are based on sound clinical evidence and are evaluated periodically to ensure ongoing efficacy. A health insurance issuer may develop its own clinical review criteria or may purchase or license clinical review criteria from qualified vendors.   (2) A health insurance issuer shall, on request, make available its clinical review criteria to authorized government agencies, including the commissioner.   (3) Qualified health care professionals shall administer and oversee the utilization review program.   (4) A health insurance issuer shall issue utilization review and benefit determinations in a timely manner pursuant to the requirements of 33-32-211 and 33-32-212.   (5) (a) Whenever a health insurance issuer fails to adhere to the requirements of 33-32-211 or 33-32-212, as applicable, with respect to conducting a utilization review and making benefit determinations of a benefit request or claim, the covered person is considered to have exhausted the provisions of this part and may take action under subsection (5)(b).   (b) A covered person may file a request for external review in accordance with the procedures outlined in Title 33, chapter 32, part 4. In addition to filing a request, a covered person is entitled to pursue any available remedies under state or federal law if the health insurance issuer failed to provide a reasonable internal claims and appeals process designed to yield a decision on the merits of the claim.   (6) (a) Section 33-32-211 or 33-32-212 may not be considered exhausted based on a de minimis violation that does not cause and is not likely to cause prejudice or harm to the covered person, as long as the health insurance issuer demonstrates that the violation was for good cause or was due to matters beyond the control of the health insurance issuer and that the violation occurred in the context of an ongoing, good faith exchange of information between the health insurance issuer and the covered person or, if applicable, the covered person's authorized representative.   (b) The exception provided in subsection (6)(a) does not apply if the violation is part of a pattern or practice of violations by the health insurance issuer.   (7) A health insurance issuer shall maintain a process to ensure that utilization reviewers apply clinical review criteria consistently in conducting utilization review.   (8) A health insurance issuer shall routinely assess the effectiveness and efficiency of its utilization review program.   (9) A health insurance issuer's data systems must be sufficient to support utilization review program activities and to generate management reports to enable the health insurance issuer to monitor and manage health care services effectively.   (10) If a health insurance issuer delegates any utilization review activities to a utilization review organization, the health insurance issuer shall maintain adequate oversight, which includes:   (a) a written description of the utilization review organization's activities and responsibilities, including reporting requirements;   (b) evidence of formal approval of the utilization review organization's program by the health insurance issuer; and   (c) a process by which the health insurance issuer evaluates the performance of the utilization review organization.   (11) A health insurance issuer shall coordinate its utilization review program with other medical management activity conducted by the health insurance issuer, such as quality assurance, credentialing, health care provider contracting, data reporting, grievance procedures, processes for assessing member satisfaction, and risk management.   (12) A health insurance issuer shall provide covered persons and participating providers with access to the health insurance issuer's review staff through a toll-free number or collect-call telephone line.   (13) When conducting a utilization review, a health insurance issuer shall collect only the information necessary, including pertinent clinical information, to conduct the utilization review or make the benefit determination.   (14) (a) When conducting a utilization review, a health insurance issuer shall ensure that the review is conducted in a manner that ensures the independence and impartiality of the individuals involved in conducting the utilization review or making the benefit determination.   (b) In ensuring the independence and impartiality of individuals involved in the utilization review or benefit determination, a health insurance issuer may not make decisions regarding hiring, compensation, termination, promotion, or other similar matters based on the likelihood that the individual involved in the utilization review or benefit determination will support the denial of benefits.   History: En. Sec. 4, Ch. 428, L. 2015.  
  33-32-209 and 33-32-210 reserved.  
  33-32-211. Procedures for standard utilization review and benefit determinations -- notices. (1) A health insurance issuer shall establish written procedures and clinical review criteria for conducting standard utilization reviews and making benefit determinations on requests for benefits submitted to the health insurance issuer by covered persons or their authorized representatives. The written procedures must also include provisions for notifying covered persons or, if applicable, their authorized representatives of the health insurance issuer's determinations with respect to these requests within the timeframes specified in this section.   (2) (a) Subject to subsection (2)(c), for prospective review determinations, a health insurance issuer shall make the determination and notify the covered person or, if applicable, the covered person's authorized representative of the determination, whether the health insurance issuer certifies the provision of the benefit or not, within a reasonable period of time appropriate to the covered person's medical condition. The notification must be made not later than 7 business days after the date the health insurance issuer receives the request or not later than 7 business days after the health insurance issuer receives all information under subsection (2)(d) necessary to make a determination.   (b) If the determination is an adverse determination, the health insurance issuer shall provide notification of the adverse determination in writing in accordance with subsection (8).   (c) The time period for making a determination and notifying the covered person or, if applicable, the covered person's authorized representative of the determination pursuant to subsection (2)(a) may be extended one time by the health insurance issuer for up to 7 business days if the health insurance issuer:   (i) determines that an extension is necessary due to matters beyond the health insurance issuer's control; and   (ii) notifies the covered person or, if applicable, the covered person's authorized representative, prior to the expiration of the initial 7-business-day period, of the circumstances requiring the extension of time and of the date by which the health insurance issuer expects to make a determination.   (d) If the extension under subsection (2)(c) is necessary because of the failure of the covered person or, if applicable, the covered person's authorized representative to submit information necessary to reach a determination on the request, the notice of extension must:   (i) describe specifically the required information necessary to complete the request; and   (ii) give the covered person or, if applicable, the covered person's authorized representative at least 45 days after the date of receipt of the notice to provide the specified information.   (3) (a) If the health insurance issuer receives from a covered person or, if applicable, the covered person's authorized representative a prospective review request that fails to meet the health insurance issuer's filing procedures, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative of this failure and provide in the notice any information regarding the proper procedures to be followed for filing a request.   (b) The notice required under subsection (3)(a) must be provided as soon as possible but not later than 3 days after the date of the failure. The health insurance issuer may provide the notice orally or, if requested by the covered person or the covered person's authorized representative, in writing or electronically.   (c) To qualify for the provisions of this subsection (3) related to a failed filing procedure, the communication must:   (i) have been sent by a covered person or, if applicable, the covered person's authorized representative and received by a person or an organizational unit of the health insurance issuer responsible for handling benefit matters; and   (ii) refer to a specific covered person, a specific medical condition or symptom, and a specific health care service, treatment, or health care provider for which certification is being requested.   (4) For concurrent review determinations, if a health insurance issuer has certified an ongoing course of treatment to be provided over a period of time or a specified number of treatments:   (a) any reduction or termination by the health insurance issuer during the course of treatment before the end of the period or the specified number of treatments, other than by health plan amendment or termination of the health plan, constitutes an adverse determination; and   (b) the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative of the adverse determination in accordance with subsection (8) at a time sufficiently in advance of the reduction or termination to allow the covered person or, if applicable, the covered person's authorized representative to:   (i) file a grievance requesting a review of the adverse determination pursuant to Title 33, chapter 32, parts 3 and 4; and   (ii) obtain a determination with respect to the review of the adverse determination before the benefit is reduced or terminated.   (5) The health care service or treatment that is the subject of the adverse determination must be continued without liability to the covered person pending a determination under the internal review request made pursuant to Title 33, chapter 32, part 3.   (6) (a) For retrospective review determinations, a health insurance issuer shall make the determination no later than 30 days after the date of receiving the benefit request.   (b) If the determination is an adverse determination, the health insurance issuer shall provide notice of the adverse determination to the covered person or, if applicable, the covered person's authorized representative in accordance with subsection (8).   (c) The time period for making a determination and notifying the covered person or, if applicable, the covered person's authorized representative of the determination pursuant to subsection (6)(a) may be extended one time by the health insurance issuer for up to 15 days if the health insurance issuer:   (i) determines that an extension is necessary due to matters beyond the health insurance issuer's control; and   (ii) notifies the covered person or, if applicable, the covered person's authorized representative, prior to the expiration of the initial 30-day period, of the circumstances requiring the extension of time and of the date by which the health insurance issuer expects to make a determination.   (d) If the extension under subsection (6)(c) is necessary because of the failure of the covered person or, if applicable, the covered person's authorized representative to submit information necessary to reach a determination on the request, the notice of extension must:   (i) describe specifically the information required to complete the request; and   (ii) give the covered person or, if applicable, the covered person's authorized representative at least 45 days after the date of receipt of the notice to provide the specified information.   (7) (a) For purposes of this section, the period within which a determination must be made begins on the date the request is received by the health insurance issuer in accordance with the health insurance issuer's procedures, established pursuant to 33-32-207, for filing a request. The date the request is received by the health insurance issuer must be counted without regard to whether all of the information necessary to make the determination accompanies the filing of the request.   (b) If the period for making the determination under this section is extended due to the failure of the covered person or, if applicable, the covered person's authorized representative to submit the information necessary to make the determination, the period for making the determination is counted from the date on which the health insurance issuer sends the notification of the extension to the covered person or, if applicable, the covered person's authorized representative until the earlier of:   (i) the date on which the covered person or, if applicable, the covered person's authorized representative responds to the request for additional information; or   (ii) the date on which the specified information was to have been submitted.   (c) If the covered person or, if applicable, the covered person's authorized representative fails to submit the information before the end of the extension period, as specified in this section, the health insurance issuer may deny the certification of the requested benefit.   (8) A notification of an adverse determination under this section must, in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative, set forth:   (a) information sufficient to identify the benefit request or claim involved and, if applicable, the date of service, the health care provider, and the claim amount;   (b) a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning. On receiving a request for a diagnosis or treatment code, the health insurance issuer shall provide the information to the covered person or, if applicable, the covered person's authorized representative as soon as practicable. A health insurance issuer may not consider a request for the diagnosis code and treatment information, in itself, to be a request to file a grievance for review of an adverse determination pursuant to Title 33, chapter 32, part 3, or a request for external review as outlined in Title 33, chapter 32, part 4.   (c) the specific rationale behind the adverse determination, including the denial code and its corresponding meaning, as well as a description of the health insurance issuer's standard, if any, that was used in denying the benefit request or claim;   (d) a reference to the specific plan provision on which the determination is based;   (e) a description of any additional material or information necessary for the covered person or, if applicable, the covered person's authorized representative to complete the benefit request, including an explanation of why the material or information is necessary to complete the request;   (f) a description of the health insurance issuer's grievance procedures established pursuant to Title 33, chapter 32, part 3, including any time limits applicable to those procedures;   (g) a copy of any internal rule, guideline, protocol, or other similar criteria that the health insurance issuer may have relied on to make the adverse determination. Alternatively, the health insurance issuer may provide a statement that a specific rule, guideline, protocol, or other similar criteria was relied on to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criteria will be provided free of charge to the covered person on request.   (h) an explanation of the scientific or clinical judgment for making the adverse determination if the adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit. Alternatively, the health insurance issuer may provide a statement that an explanation will be provided to the covered person free of charge on request. The explanation under this subsection (8)(h) must apply the terms of the health plan to the covered person's medical circumstances.   (i) a statement explaining the availability of further assistance from the commissioner's office and the right of the covered person or, if applicable, the covered person's authorized representative to contact the commissioner's office at any time for assistance or, on completion of the health insurance issuer's grievance procedure and the external review process as provided under Title 33, chapter 32, parts 3 and 4, to file a civil suit in a court of competent jurisdiction. The statement must include contact information for the commissioner's office.   (9) (a) A health insurance issuer shall provide the notice required under this section in a culturally and linguistically appropriate manner as required in accordance with federal regulations, including 45 CFR 147.136(e), and rules adopted pursuant to Title 33, chapter 32, part 3.   (b) To satisfy the provisions of subsection (9)(a), the health insurance issuer shall, at a minimum:   (i) provide oral language services, such as a telephone assistance hotline, that include answering questions in any applicable non-English language and providing assistance with filing benefit requests, claims, and appeals in any applicable non-English language;   (ii) provide, upon request, a notice in any applicable non-English language; and   (iii) include in the English version of the notice a prominently displayed statement in any applicable non-English language clearly indicating how to access the language services provided by the health insurance issuer.   (c) For purposes of this subsection (9), with respect to any United States county to which a notice is sent, a non-English language is an applicable non-English language if 10% or more of the population residing in the county is literate only in the same non-English language, as determined in federal guidance.   (10) If the adverse determination is a recission, the health insurance issuer shall provide, in addition to any applicable disclosures required under this section, in a notice sent at least 30 days in advance of implementing the rescission decision:   (a) clear identification of the alleged fraudulent act, practice, or omission or the intentional misrepresentation of material fact;   (b) an explanation of why the act, practice, or omission was fraudulent or was an intentional misrepresentation of a material fact;   (c) the date when the advance notice period ends and the date to which the coverage is to be retroactively rescinded;   (d) notice that the covered person or, if applicable, the covered person's authorized representative may immediately file a grievance with the health insurance issuer requesting a review of the rescission; and   (e) a description of the health insurance issuer's grievance procedures, including any time limits applicable to these procedures.   (11) A health insurance issuer may provide the notices required under this section in writing or electronically.   History: En. Sec. 5, Ch. 428, L. 2015; amd. Sec. 3, Ch. 470, L. 2019.  
  33-32-212. Procedures for expedited utilization review and benefit determinations. (1) With respect to urgent care requests and concurrent review urgent care requests, a health insurance issuer shall establish written procedures and clinical review criteria for receiving benefit requests from covered persons or, if applicable, their authorized representatives, for conducting an expedited utilization review and making benefit determinations, and for notifying the covered persons or their authorized representatives of the expedited utilization review and benefit determinations.   (2) (a) The procedures established under subsection (1) must include a requirement for the health insurance issuer to provide that, in the case of a failure by a covered person or, if applicable, the covered person's authorized representative to follow the health insurance issuer's procedures for filing an urgent care request, the covered person or the covered person's authorized representative must be notified of the failure and the proper procedures to be followed for filing the request.   (b) The notice required under subsection (2)(a):   (i) must be provided to the covered person or, if applicable, the covered person's authorized representative not later than 24 hours after receipt of the request; and   (ii) may be made orally, unless the covered person or, if applicable, the covered person's authorized representative requests the notice in writing or electronically.   (c) To qualify for the provisions of this subsection (2) related to a failed filing procedure, the communication must:   (i) be sent by a covered person or, if applicable, the covered person's authorized representative and received by a person or organizational unit of the health insurance issuer responsible for handling benefit matters; and   (ii) contain a reference to a specific covered person, a specific medical condition or symptom, and a specific health care service, treatment, or health care provider for which approval is being requested.   (3) (a) For an urgent care request, unless the covered person or, if applicable, the covered person's authorized representative has failed to provide sufficient information for the health insurance issuer to determine whether or to what extent the benefits requested are covered benefits or payable under the health insurance issuer's health plan, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative as soon as possible, taking into account the medical condition of the covered person, but no later than 48 hours after the receipt of the request by the health insurance issuer.   (b) With respect to the request, the health insurance issuer shall state in the notification whether or not the determination is an adverse determination. If the health insurance issuer's determination is an adverse determination, the notice must comply with the provisions of subsection (7).   (4) (a) If the covered person or, if applicable, the covered person's authorized representative has failed to provide sufficient information for the health insurance issuer to make a determination, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative either orally or, if requested by the covered person or the covered person's authorized representative, in writing or electronically of this failure and identify what specific information is needed. This notification must be made as soon as possible but not later than 24 hours after receipt of the request.   (b) The health insurance issuer shall, taking into account the circumstances, provide the covered person or, if applicable, the covered person's authorized representative with a reasonable period of time to submit the necessary information. The reasonable period may not end less than 48 hours after the health insurance issuer notifies the covered person or, if applicable, the covered person's authorized representative of the failure to submit sufficient information as provided in subsection (4)(a).   (c) A health insurance issuer shall, in cases in which more information is required as provided in subsection (4)(a), notify the covered person or, if applicable, the covered person's authorized representative of its determination with respect to the urgent care request as soon as possible but not later than 24 hours after the earlier of:   (i) the health insurance issuer's receipt of the requested information; or   (ii) the end of the period provided for the covered person or, if applicable, the covered person's authorized representative to submit the requested information.   (d) If the covered person or, if applicable, the covered person's authorized representative fails to submit the information before the end of the period of the extension, as specified in subsection (4)(b), the health insurance issuer may deny the certification of the requested benefit.   (e) If the health insurance issuer's determination is an adverse determination, the health insurance issuer shall provide notice of the adverse determination in accordance with subsection (7).   (5) (a) For concurrent review urgent care requests involving a request by the covered person or, if applicable, the covered person's authorized representative to extend the course of treatment beyond the initial period of time or the number of treatments, if the request is made at least 24 hours prior to the expiration of the prescribed period of time or number of treatments, the health insurance issuer shall make a determination with respect to the request and notify the covered person or, if applicable, the covered person's authorized representative of the determination, whether it is an adverse determination or not, as soon as possible, taking into account the covered person's medical condition, but not later than 24 hours after the health insurance issuer's receipt of the request.   (b) If the health insurance issuer's determination is an adverse determination, the health insurance issuer shall provide notice of the adverse determination as provided in subsection (7).   (6) For the purposes of this section, the time period within which a determination must be made begins on the date and at the time the request is filed with the health insurance issuer in accordance with the health insurance issuer's procedures established pursuant to 33-32-207 for filing a request. The date and time the request is received by the health insurance issuer must be counted without regard to whether all of the information necessary to make the determination accompanies the filing of the request.   (7) A notification of an adverse determination under this section must, in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative, set forth:   (a) information sufficient to identify the benefit request or claim involved and, if applicable, the date of service, the health care provider, and the claim amount;   (b) a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning. On receiving a request for a diagnosis or treatment code, the health insurance issuer shall provide the information as soon as practicable. A health insurance issuer may not consider a request for the diagnosis code and treatment information, in itself, to be a request to file a grievance for review of an adverse determination pursuant to Title 33, chapter 32, part 3, or a request for external review as outlined in Title 33, chapter 32, part 4.   (c) the specific rationale behind the adverse determination, including the denial code and its corresponding meaning, as well as a description of the health insurance issuer's standard, if any, that was used in denying the benefit request or claim;   (d) a reference to the specific plan provisions on which the determination is based;   (e) a description of any additional material or information necessary for the covered person or, if applicable, the covered person's authorized representative to complete the request, including an explanation of why the material or information is necessary to complete the request;   (f) a description of the health insurance issuer's internal grievance procedures established pursuant to Title 33, chapter 32, part 3, including any time limits applicable to those procedures;   (g) a description of the health insurance issuer's expedited grievance procedures established pursuant to Title 33, chapter 32, part 3, including any time limits applicable to those procedures;   (h) a copy of any internal rule, guideline, protocol, or other similar criteria that the health insurance issuer may have relied on to make the adverse determination. Alternatively, the health insurance issuer may provide a statement that a specific rule, guideline, protocol, or other similar criteria was relied on to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criteria will be provided free of charge to the covered person on request.   (i) an explanation of the scientific or clinical judgment for making the adverse determination if the adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit. Alternatively, the health insurance issuer may provide a statement that an explanation will be provided to the covered person free of charge on request. The explanation under this subsection (7)(i) must apply the terms of the health plan to the covered person's medical circumstances.   (j) instructions for requesting any of the following that are applicable:   (i) a copy of the rule, guideline, protocol, or other similar criteria relied on in making the adverse determination in accordance with subsection (7)(h); or   (ii) the written statement of the scientific or clinical rationale for the adverse determination in accordance with subsection (7)(i); and   (k) a statement explaining the availability of further assistance from the commissioner's office and the right of the covered person or, if applicable, the covered person's authorized representative to contact the commissioner's office at any time for assistance or, on completion of the health insurance issuer's grievance procedure process as provided under Title 33, chapter 32, part 3, to file a civil suit in a court of competent jurisdiction. The statement must include contact information for the commissioner's office.   (8) A health insurance issuer shall provide the notice required under this section in the manner provided in 33-32-211(9).   (9) (a) A health insurance issuer may provide the notice required under this section orally, in writing, or electronically.   (b) If notice of the adverse determination is provided orally, the health insurance issuer shall provide written or electronic notice of the adverse determination within 3 days following the oral notification.   History: En. Sec. 6, Ch. 428, L. 2015; amd. Sec. 4, Ch. 470, L. 2019.  
  33-32-213 and 33-32-214 reserved.  
  33-32-215. Emergency services. (1) When conducting a utilization review or making a benefit determination for emergency services, a health insurance issuer that provides benefits for services in an emergency department of a hospital shall follow the provisions of this section.   (2) A health insurance issuer shall cover emergency services that screen and stabilize a covered person:   (a) without the need for prior authorization of the emergency services if a prudent lay person would have reasonably believed that an emergency medical condition existed even if the emergency services are provided on an out-of-network basis;   (b) without regard to whether the health care provider furnishing the services is a participating provider with respect to the emergency services;   (c) if the emergency services are provided out-of-network, without imposing any administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from network providers;   (d) if the emergency services are provided out-of-network, by complying with the cost-sharing requirements in subsection (4); and   (e) without regard to any other term or condition of coverage, other than:   (i) the exclusion of or coordination of benefits;   (ii) an affiliation or waiting period as permitted under 42 U.S.C. 300gg-19a; or   (iii) cost-sharing, as provided in subsection (4)(a) or (4)(b), as applicable.   (3) For in-network emergency services, coverage of emergency services is subject to applicable copayments, coinsurance, and deductibles.   (4) (a) Except as provided in subsection (4)(b), for out-of-network emergency services, any cost-sharing requirement imposed with respect to a covered person may not exceed the cost-sharing requirement for a covered person if the services were provided in-network.   (b) A covered person may be required to pay, in addition to the in-network cost-sharing expenses, the excess amount the out-of-network provider charges that exceeds the amount the health insurance issuer is required to pay under this subsection (4).   (c) A health insurance issuer complies with the requirements of this section by paying for emergency services provided by an out-of-network provider in an amount not less than the greatest of the following and taking into account exceptions in subsections (4)(d) and (4)(e):   (i) the amount negotiated with in-network providers for emergency services, excluding any in-network cost-sharing imposed with respect to the covered person;   (ii) the amount of the emergency service calculated using the same method the plan uses to determine payments for out-of-network services but using the in-network cost-sharing provisions instead of the out-of-network cost-sharing provisions; or   (iii) the amount that would be paid under medicare for the emergency services, excluding any in-network cost-sharing requirements.   (d) For capitated or other health plans that do not have a negotiated charge for each service for in-network providers, subsection (4)(c)(i) does not apply.   (e) If a health plan has more than one negotiated amount for in-network providers for a particular emergency service, the amount in subsection (4)(c)(i) is the median of those negotiated amounts.   (5) Only in-network cost-sharing amounts may be imposed on out-of-network emergency services.   (6) A health insurance issuer shall allow a covered person, the person's authorized representative, and the person's health care provider at least 24 hours following an emergency admission or the provision of emergency services to notify the health insurance issuer of the admission or provision of emergency services. If the admission or the emergency services occur on a holiday or weekend, a health insurance issuer shall allow notification no later than by the next business day following the admission or provision of emergency services.   (7) If prior authorization is required for a postevaluation or poststabilization services review, a health insurance issuer shall provide access to a designated representative 24 hours a day, 7 days a week, to facilitate the review.   (8) A health insurance issuer may not impose prior authorization or step therapy requirements for an oral therapy prescription used to treat opioid use disorder.   History: En. Sec. 7, Ch. 428, L. 2015; amd. Sec. 5, Ch. 470, L. 2019.  
  33-32-216. Confidentiality. A health insurance issuer and its designee shall comply with all applicable state and federal laws establishing confidentiality and reporting requirements with regard to its utilization review program, including the provisions of Title 33, chapter 19, and 45 CFR, parts 160 and 164.   History: En. Sec. 8, Ch. 428, L. 2015.  
  33-32-217. Disclosure. (1) In the certificate of coverage and member handbook provided to covered persons, a health insurance issuer shall include a clear and comprehensive description of its utilization review procedures, including the procedures for obtaining review of adverse determinations, and a statement of the rights and responsibilities of covered persons with respect to those procedures.   (2) In the outline of coverage provided to covered persons, a health insurance issuer shall include a statement indicating the section of the member handbook containing the information required in subsection (1).   (3) A health insurance issuer shall print on its membership cards a toll-free telephone number to call for utilization review and benefit determinations.   History: En. Sec. 9, Ch. 428, L. 2015.  
  33-32-301. Short title. The provisions of Title 33, chapter 32, parts 3 and 4, may be cited as the "Health Insurance Issuer Grievance Procedures and External Review Act".   History: En. Sec. 10, Ch. 428, L. 2015.  
  33-32-302. Applicability and scope. (1) Except as provided in subsection (2), the provisions of Title 33, chapter 32, parts 3 and 4, apply to all health insurance issuers.   (2) The provisions of Title 33, chapter 32, parts 3 and 4, do not apply to:   (a) a policy or certificate that provides coverage only for a specified disease or specified accident, accident-only coverage, credit insurance as described in 33-1-206, dental, disability income, or hospital indemnity insurance, long-term care insurance as defined in 33-22-1107, vision care insurance, or any other limited supplemental benefit;   (b) a medicare supplement policy as defined in 33-22-903;   (c) coverage under a plan through medicare or medicaid or any coverage issued under Title 10, chapter 55, of the United States Code and any coverage issued as supplemental to that coverage; or   (d) any coverage issued as supplemental to liability insurance, workers' compensation or similar insurance, automobile medical payment insurance, or any insurance under which benefits are payable with or without regard to fault, whether written on a group blanket basis or an individual basis.   History: En. Sec. 11, Ch. 428, L. 2015.  
  33-32-303. Purpose. The purpose of this part is to provide standards for the establishment and maintenance of procedures by health insurance issuers to ensure that covered persons have the opportunity for the appropriate resolution of grievances.   History: En. Sec. 12, Ch. 428, L. 2015.  
  33-32-304 and 33-32-305 reserved.  
  33-32-306. Grievance reporting and recordkeeping requirements -- definition. (1) (a) A health insurance issuer shall maintain within a register all written records that document grievances received during a calendar year, including the notices and claims associated with the grievances.   (b) For the purposes of this section, "register" means the written record of grievances received by a health insurance issuer that includes the notices and claims associated with the grievances as required by this section.   (2) Retention of the records in the register must be as provided in subsection (6), except that a health insurance issuer shall maintain for at least 6 years those records specified by the commissioner by rule.   (3) A health insurance issuer shall:   (a) maintain the records in a manner that is reasonably clear and accessible to the commissioner; and   (b) make the records available for examination, on request, by covered persons, the commissioner, and any appropriate federal oversight agency.   (4) A request for a review of a grievance involving an adverse determination must be processed in compliance with 33-32-308 and must be included in the register.   (5) For each grievance, the register must contain, at a minimum, the following information:   (a) a general description of the reason for the grievance;   (b) the date received;   (c) the date of each review or, if applicable, review meeting;   (d) a report on the resolution of the grievance, if applicable;   (e) the date of the resolution, if applicable; and   (f) the name of the covered person for whom the grievance was filed.   (6) Subject to the provisions of subsection (2), a health insurance issuer shall retain the register compiled in a calendar year for 3 years or until the commissioner has adopted a final report of an examination that contains a review of the register for that calendar year, whichever is longer.   (7) (a) At least annually, a health insurance issuer shall submit to the commissioner a report in the format specified by the commissioner.   (b) The report must include for each type of health plan offered by the health insurance issuer:   (i) the certificate of compliance required by 33-32-307(4)(b);   (ii) the number of covered persons;   (iii) the total number of grievances;   (iv) the number of grievances resolved, if applicable, and their resolution;   (v) the number of grievances referred to an alternative dispute resolution procedure or resulting in litigation; and   (vi) a synopsis of actions taken or being taken to correct problems that have been identified.   History: En. Sec. 13, Ch. 428, L. 2015; amd. Sec. 11, Ch. 62, L. 2019.  
  33-32-307. Grievance review procedures. (1) Except as specified in 33-32-309, a health insurance issuer shall use written procedures for receiving and resolving grievances from covered persons as provided in 33-32-308.   (2) (a) Whenever a health insurance issuer fails to adhere to the requirements of 33-32-308 or 33-32-309, as applicable, with respect to receiving and resolving grievances involving an adverse determination or waives the review of the grievance, the covered person is considered to have exhausted the provisions of this part and may take action under subsection (2)(b).   (b) (i) A covered person may file a request for external review in accordance with the procedures outlined in Title 33, chapter 32, part 4.   (ii) In addition to filing a request under subsection (2)(b)(i), a covered person is entitled to pursue any available remedies under state or federal law on the basis that the health insurance issuer failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim.   (3) (a) The provisions of 33-32-308 or 33-32-309 may not be considered exhausted based on a de minimis violation that does not cause and is not likely to cause prejudice or harm to the covered person as long as the health insurance issuer demonstrates that the violation was for good cause or due to matters beyond the control of the health insurance issuer and that the violation occurred in the context of an ongoing, good faith exchange of information between the health insurance issuer and the covered person or, if applicable, the covered person's authorized representative.   (b) The exception provided in subsection (3)(a) does not apply if the violation is part of a pattern or a practice of violations by the health insurance issuer.   (4) A health insurance issuer shall file with the commissioner:   (a) a copy of the procedures required under subsection (1), including all forms used to process requests made pursuant to 33-32-308. Any subsequent material modifications to the documents must also be filed.   (b) as part of the annual report required by 33-32-306(7), a certificate of compliance stating that the health insurance issuer has established and maintains for each of its health plans a set of grievance procedures that fully comply with the provisions of this part; and   (c) a description of the grievance procedures required under this section, which must be included in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided to covered persons. The grievance procedure documents must include a statement of a covered person's right to contact the commissioner's office for assistance at any time. The statement must include the telephone number and address of the commissioner's office.   (5) The commissioner may disapprove a filing received in accordance with subsection (4) if the filing fails to comply with this part or applicable federal regulations.   History: En. Sec. 14, Ch. 428, L. 2015.  
  33-32-308. Grievances involving adverse determination. (1) Within 180 days after the date of receipt of a notice of an adverse determination sent pursuant to Title 33, chapter 32, part 2, a covered person or, if applicable, the covered person's authorized representative may file a grievance with the health insurance issuer requesting a review of the adverse determination.   (2) The health insurance issuer shall provide the covered person or, if applicable, the covered person's authorized representative with the name, address, and telephone number of a person or organizational unit designated to coordinate the review on behalf of the health insurance issuer.   (3) (a) In providing for a review under this section, the health insurance issuer shall ensure that the review meets the requirements of this section and is conducted in a manner that ensures the independence and impartiality of the individuals involved in making the review decision.   (b) To ensure the independence and impartiality of the individuals involved in making the review decision, the health insurance issuer may not make hiring, compensation, termination, promotion, or other similar decisions related to any of those individuals based on the likelihood that the individual will support the denial of benefits.   (4) (a) In the case of an adverse determination involving utilization review, the health insurance issuer shall designate one or more appropriate physicians or health care professionals of the same licensure to review the adverse determination. A physician or health care professional of the same licensure may not have been involved in the initial adverse determination.   (b) In designating an appropriate physician or health care professional of the same licensure pursuant to subsection (4)(a), the health insurance issuer shall ensure that if more than one physician or health care professional of the same licensure is involved in the review, a majority of the individuals reviewing the adverse determination are health care professionals who have appropriate expertise.   (5) In conducting a review under subsection (4), each physician or health care professional of the same licensure shall take into consideration all comments, documents, records, and other information regarding the request for services submitted by the covered person or, if applicable, the covered person's authorized representative without regard to whether the information was submitted or considered in making the initial adverse determination.   (6) (a) A covered person does not have the right to attend or to have a representative in attendance at the review, but the covered person or, if applicable, the covered person's authorized representative is entitled to:   (i) submit written comments, documents, records, and other material relating to the request for benefits for the reviewer or reviewers to consider when conducting the review; and   (ii) receive from the health insurance issuer, on request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the covered person's request for benefits.   (b) For the purposes of subsections (6)(a) and (11)(f)(iii), the term "relevant" in relation to a document, record, or other information related to a covered person's request for benefits means the document, record, or other information:   (i) was relied on in making the benefit determination;   (ii) was submitted, considered, or generated in the course of making the adverse determination without regard to whether the document, record, or other information was relied on in making the benefit determination;   (iii) was used to demonstrate that in making the benefit determination, the health insurance issuer or its designated representatives consistently applied to the covered person the required administrative procedures and safeguards used for other similarly situated covered persons; or   (iv) constituted a statement of policy or guidance with respect to the health plan concerning the denied health care service or treatment for the covered person's diagnosis without regard to whether the advice or statement was relied on in making the benefit determination.   (7) The health insurance issuer shall disclose the provisions of subsection (6) to the covered person or, if applicable, the covered person's authorized representative, in writing:   (a) in the notice of adverse determination that is the subject of the grievance; or   (b) in a separate notice sent within 3 working days after the date of receipt of the grievance.   (8) For the purposes of calculating the time period within which a determination must be made and noticed under subsection (9), the time period begins on the date the request for a grievance review is filed with the health insurance issuer in accordance with the health insurance issuer's procedures for filing requests established pursuant to 33-32-307 without regard to whether all of the information necessary to make the determination accompanies the filing.   (9) (a) A health insurance issuer shall notify and issue a decision with respect to a grievance requesting a review of an adverse determination involving a prospective review or a retrospective review request. The notification must be in writing or sent electronically to the covered person or, if applicable, the covered person's authorized representative.   (b) The health insurance issuer shall issue a decision and send notification as provided in this section within a reasonable period of time that is appropriate considering the covered person's medical condition but no later than 30 days in the case of a prospective review or 60 days in the case of a retrospective review after the date on which the health insurance issuer received the grievance request for the review made pursuant to subsection (1).   (10) Prior to issuing a decision or final adverse determination in accordance with the timeframe provided in subsection (9) and sufficiently in advance of the required date for a decision or final adverse determination to allow the covered person or, if applicable, the covered person's authorized representative a reasonable opportunity to respond prior to the date of the decision or final adverse determination, the health insurance issuer shall provide free of charge to the covered person or, if applicable, the covered person's authorized representative:   (a) any new or additional relevant evidence relied on or generated by the health insurance issuer or at the health insurance issuer's direction in connection with the grievance; and   (b) in relation to the issuance and notice of a final adverse determination based on new or additional rationale, the new or additional rationale.   (11) The decision issued pursuant to subsection (9) must specify in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative the following:   (a) the titles and qualifying credentials of each physician or health care professional of the same licensure participating in the review process;   (b) information sufficient to identify the claim involved with respect to the grievance, including, as applicable, the date of service, the health care provider, and the claim amount;   (c) a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning. On receiving a request for a diagnosis or treatment code, the health insurance issuer shall provide the information as soon as practicable. A health insurance issuer may not consider a request for the diagnosis code and treatment information, in itself, to be a request to file a grievance for review of an adverse determination pursuant to this part or a request for external review as outlined in Title 33, chapter 32, part 4.   (d) a statement from the physicians or health care professionals of the same licensure participating in the review of their understanding of the covered person's grievance;   (e) the decision of the physicians or health care professionals of the same licensure conducting the review, provided in clear terms, and the contract basis or medical rationale on which the decision was based, provided in sufficient detail for the covered person or, if applicable, the covered person's authorized representative to respond further to the health insurance issuer's position;   (f) a reference to the evidence or documentation used as the basis for the decision. The information required under this subsection (11)(f) must also include for a review decision issued pursuant to subsection (9) that upholds an adverse determination:   (i) all specific reasons that uphold the final internal adverse determination, including the denial code and its corresponding meaning, as well as a description of the health insurance issuer's standard, if any, that was used in reaching the denial;   (ii) the reference to the specific plan provisions on which the adverse determination is based;   (iii) a statement that the covered person is entitled to receive, on request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the covered person's benefit request;   (iv) a copy of any specific rule, guideline, protocol, or other similar criteria that the health insurance issuer may have relied on to make the final adverse determination. Alternatively, the health insurance issuer may provide a statement that a specific rule, guideline, protocol, or other similar criteria was relied on to make the final adverse determination and that a copy of the rule, guideline, protocol, or other similar criteria will be provided free of charge to the covered person on request;   (v) an explanation of the scientific or clinical judgment used for making the adverse determination if the final adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit. The explanation must apply the terms of the health plan to the covered person's medical circumstances. Alternatively, the health insurance issuer may provide a statement that an explanation will be provided to the covered person free of charge on request.   (vi) instructions for requesting all of the following that are applicable:   (A) a copy of the rule, guideline, protocol, or other similar criteria relied on in making the final adverse determination in accordance with subsection (11)(f)(iv); or   (B) the written statement of the scientific or clinical rationale for the final adverse determination in accordance with subsection (11)(f)(v);   (vii) a statement, if applicable, indicating:   (A) a description of the procedures for obtaining an independent external review of the final adverse determination pursuant to Title 33, chapter 32, part 4; and   (B) the covered person's right to bring a civil action in a court of competent jurisdiction;   (viii) the following statement, if applicable:   "You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your state insurance commissioner."   (ix) notice of the covered person's right to contact the commissioner's office for further assistance on any claim, grievance, or appeal at any time, including the telephone number and address of the commissioner's office. The notice under this subsection (11)(f)(ix) must be provided in accordance with federal regulations and as provided in 33-32-211(9).   History: En. Sec. 15, Ch. 428, L. 2015.  
  33-32-309. Expedited review of grievance involving adverse determination. (1) A health insurance issuer shall establish written procedures for the expedited review of urgent care requests of grievances involving an adverse determination.   (2) A health insurance issuer shall provide an expedited review of a grievance involving an adverse determination with respect to a concurrent review of an urgent care request involving an admission, availability of care, continued stay, or health care service for a covered person who has received emergency services but has not been discharged from a facility. The procedures in subsection (1) must also specify the process for the concurrent review of urgent care requests under this subsection (2).   (3) The procedures under this section must provide that a covered person or, if applicable, the covered person's authorized representative may request an expedited review orally, in writing, or electronically.   (4) On receipt of a request for an expedited review, a health insurance issuer shall appoint one or more physicians or health care professionals of the same licensure to review the adverse determination. An appointed physician or health care professional of the same licensure may not have been involved in making the initial adverse determination.   (5) In an expedited review, all necessary information, including the health insurance issuer's decision, must be transmitted between the health insurance issuer and the covered person or, if applicable, the covered person's authorized representative in the most expeditious method available, whether by telephone, facsimile, or other method.   (6) (a) The timeframe for making a decision under an expedited review and notification, as provided in subsection (8), must be as expeditious as the covered person's medical condition requires but may take no more than 72 hours after the receipt of the request for the expedited review.   (b) If the expedited review is of a grievance involving an adverse determination with respect to a concurrent review urgent care request, the health insurance issuer shall continue the health care service or treatment without liability to the covered person until the covered person has been notified of the determination.   (7) For purposes of calculating the timeframe within which a decision is required to be made under subsection (6), the time period within which the decision must be made begins on the date the request is filed with the health insurance issuer in accordance with the health insurance issuer's procedures for filing requests established under 33-32-307 without regard to whether all of the information necessary to make the determination accompanies the filing.   (8) A notification of a decision under this section must be in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative and, if necessary, meet the requirements of subsection (9). The notification must include:   (a) the titles and qualifying credentials of each physician or health care professional of the same licensure participating in the expedited review process;   (b) information sufficient to identify the claim involved with respect to the grievance, including the date of service, the health care provider, and, if applicable, the claim amount;   (c) a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning. On receiving a request for a diagnosis or treatment code, the health insurance issuer shall provide the information as soon as practicable. A health insurance issuer may not consider a request for the diagnosis code and treatment information, in itself, to be a request to file a grievance for external review as outlined in Title 33, chapter 32, part 4.   (d) a statement from the physicians or health care professionals of the same licensure participating in the review of their understanding of the covered person's grievance;   (e) a description in clear terms of the decision of the physicians or health care professionals of the same licensure and the contract basis or medical rationale in sufficient detail for the covered person to respond further to the health insurance issuer's position;   (f) a reference to the evidence or documentation used as the basis for the decision. If the decision involves an adverse determination, the notice must provide:   (i) all specific reasons for the adverse determination, including the denial code and its corresponding meaning, as well as a description of the health insurance issuer's standard, if any, that was used in reaching the denial;   (ii) the reference to the specific plan provisions on which the determination is based;   (iii) if the adverse determination is based on incomplete documentation, a description of any additional material or information necessary for the covered person to complete the request, including an explanation of why the material or information is necessary to complete the request;   (iv) a copy of any internal rule, guideline, protocol, or other similar criteria if relied on by the health insurance issuer to make the adverse determination. Alternatively, the health insurance issuer may provide a statement that a specific rule, guideline, protocol, or other similar criteria was relied on to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criteria will be provided free of charge to the covered person on request.   (v) an explanation of the scientific or clinical judgment used for making the adverse determination if the adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit. The explanation must apply the terms of the health plan to the covered person's medical circumstances. Alternatively, the health insurance issuer may provide a statement that an explanation will be provided to the covered person free of charge on request.   (vi) instructions for requesting any of the following that are applicable:   (A) a copy of the rule, guideline, protocol, or other similar criteria relied on in making the adverse determination in accordance with subsection (8)(f)(iv); or   (B) the written statement of the scientific or clinical rationale for the adverse determination in accordance with subsection (8)(f)(v);   (vii) a statement describing the procedures for obtaining an independent external review of the adverse determination pursuant to Title 33, chapter 32, part 4;   (viii) the following statement, if applicable:   "You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your state insurance commissioner."   (ix) a statement indicating the covered person's right to bring a civil action in a court of competent jurisdiction; and   (x) a notice of the covered person's right to contact the commissioner's office for assistance at any time, including the telephone number and address of the commissioner's office.   (9) The notice under subsection (8)(f) must be provided in accordance with federal regulations and as provided in 33-32-211(9).   (10) (a) A health insurance issuer may provide the notice required under this section orally, in writing, or electronically.   (b) If notice of the adverse determination is provided orally, the health insurance issuer shall provide written or electronic notice of the adverse determination within 3 days after the oral notification.   History: En. Sec. 16, Ch. 428, L. 2015.  
  33-32-401. Purpose. The purpose of this part is to provide uniform standards for the establishment and maintenance of external review procedures to ensure that covered persons have the opportunity for an independent review of an adverse determination or a final adverse determination.   History: En. Sec. 17, Ch. 428, L. 2015.  
  33-32-402. Definitions for external review. For the purposes of this part, the following definitions apply:   (1) "Adverse determination" means a determination by a health insurance issuer or its designated utilization review organization that an admission, availability of care, continued stay, or other health care service that is a covered benefit has been reviewed and, based on the information provided, does not meet the health insurance issuer's requirements for medical necessity, appropriateness, health care setting, level of care, or level of effectiveness and as a result the requested service or payment for the service has been denied, reduced, or terminated.   (2) "Best evidence" means evidence based on:   (a) randomized clinical trials;   (b) a cohort study or case-control study if randomized clinical trials are not available;   (c) a case series if information as provided in subsection (2)(a) or (2)(b) is unavailable; or   (d) an expert opinion if information as provided in subsection (2)(a), (2)(b), or (2)(c) is unavailable.   (3) "Case-control study" means a retrospective evaluation of two groups of patients with different outcomes to determine which specific interventions the patients received.   (4) "Case series" means an evaluation of a series of patients with a particular outcome, without the use of a control group.   (5) "Cohort study" means a prospective evaluation of two groups of patients with only one group of patients receiving a specific intervention.   (6) "Disclose" means to release, transfer, or otherwise divulge protected health information to any person other than the individual who is the subject of the protected health information.   (7) "Evidence-based standard" means the conscientious, explicit, and judicious use of the current best evidence based on the overall systematic review of the research in making decisions about the care of individual patients.   (8) "Expert opinion" means a belief or an interpretation by specialists with experience in a specific area about the scientific evidence pertaining to a particular service, intervention, or therapy.   (9) "Health information" means information or data, whether oral or recorded in any form or medium, including personal facts or information about events or relationships that relate to:   (a) the past, present, or future physical, mental, or behavioral health or condition of a covered person or a member of the covered person's family;   (b) the provision of health care services to a covered person; or   (c) payment for the provision of health care services to a covered person.   (10) "Independent review organization" means an entity that conducts independent external reviews of adverse determinations and final adverse determinations.   (11) "Medical or scientific evidence" means evidence found in the following sources:   (a) peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff;   (b) peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia, and other medical literature that meet the criteria of the national institutes of health's library of medicine for indexing in Index Medicus and Excerpta Medica, published by the Reed Elsevier group;   (c) medical journals recognized by the secretary of health and human services under 42 U.S.C. 1395x(t)(2)(B) of the federal Social Security Act;   (d) the following standard reference compendia:   (i) the American Hospital Formulary Service Drug Information;   (ii) Drug Facts and Comparisons;   (iii) the American Dental Association Guide to Dental Therapeutics; and   (iv) the United States Pharmacopeia;   (e) findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including:   (i) the federal agency for healthcare research and quality;   (ii) the national institutes of health;   (iii) the national cancer institute;   (iv) the national academy of sciences;   (v) the centers for medicare and medicaid services;   (vi) the food and drug administration; and   (vii) any national board recognized by the national institutes of health for the purpose of evaluating the medical value of health care services; or   (f) any other medical or scientific evidence that is comparable to the sources listed in subsection (11)(d) or (11)(e).   (12) "NAIC" means the national association of insurance commissioners.   (13) "Protected health information" means health information:   (a) that identifies an individual who is the subject of the information; or   (b) with respect to which there is a reasonable basis to believe that the information could be used to identify an individual.   (14) "Randomized clinical trial" means a controlled, prospective study of patients who have been assigned at random to an experimental group or a control group at the beginning of the study with only the experimental group of patients receiving a specific intervention. The term includes a study of the groups for variables and anticipated outcomes over time.   History: En. Sec. 18, Ch. 428, L. 2015.  
  33-32-403. Notice of right to external review. (1) A health insurance issuer shall:   (a) notify the covered person or, if applicable, the covered person's authorized representative in writing of the covered person's right to request an external review pursuant to 33-32-410, 33-32-411, or 33-32-412; and   (b) include the appropriate statements and information described in subsection (4) at the same time that the health insurance issuer sends written notice of:   (i) an adverse determination upon completion of the health insurance issuer's utilization review process described in Title 33, chapter 32, part 2; and   (ii) a final adverse determination.   (2) The health insurance issuer shall include in the written notice required under subsection (1) the following, or substantially equivalent, language:   "We have denied your request for the provision of or payment for a health care service or course of treatment. You have the right to have our decision reviewed by health care professionals who have no association with us if our decision involved making a judgment as to the medical necessity, appropriateness, health care setting, level of care, or level of effectiveness of the health care service or treatment you requested. You may exercise this right by submitting a request for external review to us [insert address and telephone number of the unit of the health insurance issuer that administers the external review program]."   (3) (a) The commissioner may prescribe the form and content of the notice required under this section.   (b) The notice must also include the following information:   (i) information sufficient to identify the claim involved, including the date of service, the health care provider, and, if applicable, the claim amount; and   (ii) a statement describing the availability, upon request, of the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning. On receiving a request for a diagnosis or treatment code, the health insurance issuer shall provide the information as soon as practicable. A health insurance issuer may not consider a request for the diagnosis code and treatment information, in itself, to be a request for an external review as outlined in this part.   (4) The health insurance issuer shall include in the notice required under subsection (1) a statement that:   (a) for a notice related to an adverse determination:   (i) the covered person or, if applicable, the covered person's authorized representative may file a grievance under the health insurance issuer's internal grievance process provided for in 33-32-308;   (ii) if the health insurance issuer has not issued a written decision to the covered person or the covered person's authorized representative within the time period provided in 33-32-308 or 33-32-309, as applicable, after the date the covered person or the covered person's authorized representative files the grievance with the health insurance issuer and the covered person or the covered person's authorized representative has not requested or agreed to a delay, the covered person or the covered person's authorized representative may file a request for external review pursuant to 33-32-404. Under those conditions, the covered person or the covered person's authorized representative is considered to have exhausted the health insurance issuer's internal grievance process for the purposes of 33-32-307.   (iii) the covered person or the covered person's authorized representative may file a request for an expedited external review to be conducted pursuant to 33-32-411 or 33-32-412, as applicable, under the following circumstances:   (A) a review under 33-32-411 may be requested if the covered person has a medical condition with regard to which the timeframe for completion of an expedited grievance review of an adverse determination would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; and   (B) a review under 33-32-412 may be requested if the adverse determination involves a denial of coverage based on a determination that the recommended or requested health care service or treatment is experimental or investigational and the covered person's treating health care provider certifies in writing that the recommended or requested health care service or treatment that is the subject of the adverse determination would be significantly less effective if not promptly initiated. The health care provider's certification must be submitted at the same time that the covered person or the covered person's authorized representative files a request for an expedited review of a grievance involving an adverse determination. However, the independent review organization assigned to conduct the expedited external review is responsible for determining whether the covered person is required to complete the expedited review of the grievance before the expedited external review can begin.   (iv) informs the covered person or the covered person's authorized representative of the other exhaustion methods listed in 33-32-405;   (b) for a notice related to a final adverse determination, the covered person or the covered person's authorized representative may file a request for:   (i) an expedited external review under 33-32-411 if the covered person has a medical condition for which the timeframe for completion of a standard external review under 33-32-410 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function;   (ii) an expedited external review under 33-32-411 if the covered person has received emergency services and has not been discharged from a facility and the request concerns an admission, the availability of care, a continued stay, or a health care service for which the covered person received emergency services;   (iii) a standard external review under 33-32-412 if the denial of coverage was based on a determination that the recommended or requested health care service or treatment is experimental or investigational; or   (iv) an expedited external review under 33-32-412 if a covered person to which subsection (4)(b)(iii) applies attaches a written certification from the covered person's treating health care provider that the recommended or requested health care service or treatment that is the subject of the request would be significantly less effective if not promptly initiated.   (5) In addition to the information to be provided in subsections (1) and (2), the health insurance issuer shall:   (a) include a description of both the standard and the expedited external review procedures as required by the disclosure requirements under 33-32-423, highlighting the provisions in the external review procedures that give the covered person or, if applicable, the covered person's authorized representative the opportunity to submit additional information and including any forms used to process an external review; and   (b) state that the commissioner's office is available to assist covered persons with the external review process. This statement must include the commissioner's contact information.   (6) Among the forms provided under this section, the health insurance issuer shall include an authorization form or other document approved by the commissioner that complies with the requirements of 45 CFR 164.508 and 33-19-206, by which the covered person, for purposes of conducting an external review under this part, authorizes the health insurance issuer and the covered person's treating health care provider to disclose protected health information, including medical records, concerning the covered person for the purposes of the external review.   History: En. Sec. 19, Ch. 428, L. 2015; amd. Sec. 40, Ch. 151, L. 2017.  
  33-32-404. Request for external review. (1) Except for a request for an expedited external review provided for in 33-32-411, all requests for an external review must be made in writing to the health insurance issuer.   (2) A request for expedited external review may be made by telephone or in another expeditious manner.   (3) The commissioner may prescribe the form and content of external review requests submitted under this section.   (4) A covered person or, if applicable, the covered person's authorized representative may make a request for an external review of an adverse determination or a final adverse determination.   History: En. Sec. 20, Ch. 428, L. 2015.  
  33-32-405. Exhaustion of internal grievance process. (1) Except as provided in subsections (2), (4), (5), and (6), a request for an external review pursuant to 33-32-410, 33-32-411, or 33-32-412 may not be made until the covered person has exhausted the health insurance issuer's internal grievance process provided for in Title 33, chapter 32, part 3.   (2) For the purposes of this section, a covered person is considered to have exhausted the health insurance issuer's internal grievance process if the covered person or, if applicable, the covered person's authorized representative:   (a) has filed a grievance involving an adverse determination pursuant to 33-32-308; and   (b) has not received a written decision on the grievance from the health insurance issuer within the time period provided in 33-32-308 or 33-32-309, as applicable, from the date the covered person or the covered person's authorized representative filed the grievance with the health insurance issuer except to the extent the covered person or the covered person's authorized representative requested or agreed to a delay.   (3) Except as provided in subsection (2), a covered person or, if applicable, the covered person's authorized representative may not request an external review of an adverse determination involving a retrospective review determination made pursuant to Title 33, chapter 32, part 3, until the covered person has exhausted the health insurance issuer's internal grievance process.   (4) (a) At the same time a covered person or, if applicable, the covered person's authorized representative files a request for an expedited review of a grievance involving an adverse determination under 33-32-308, the covered person or the covered person's authorized representative may file a request for an expedited external review of the adverse determination:   (i) under 33-32-411 if the covered person has a medical condition for which the timeframe for completion of an expedited review of the grievance involving an adverse determination provided for in 33-32-308 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; or   (ii) under 33-32-412 if the adverse determination involves a denial of coverage based on a determination that:   (A) the recommended or requested health care service or treatment is experimental or investigational; and   (B) the covered person's treating health care provider certifies in writing that the recommended or requested health care service or treatment that is the subject of the adverse determination would be significantly less effective if not promptly initiated.   (b) On receipt of a request for an expedited external review under subsection (4)(a), the independent review organization conducting the external review as provided under 33-32-411 or 33-32-412 shall determine whether the covered person must be required to complete the expedited review process for grievances provided for in 33-32-309 before an expedited external review can be conducted.   (c) Upon a determination made pursuant to subsection (4)(b) that the covered person must first be required to complete the expedited grievance review process provided for in 33-32-309, the independent review organization shall immediately notify the covered person or, if applicable, the covered person's authorized representative of this determination. The notification also must state that the independent review organization will not proceed with the expedited external review under 33-32-411 until:   (i) the expedited grievance review process under 33-32-309 is completed; and   (ii) the covered person's grievance at the completion of the expedited grievance review process remains unresolved.   (5) A request for an external review of an adverse determination may be made before the covered person has exhausted the health insurance issuer's internal grievance procedures as provided in 33-32-307 whenever the health insurance issuer agrees to waive the exhaustion requirement.   (6) If the requirement to exhaust the health insurance issuer's internal grievance procedures is waived under subsection (5), the covered person or, if applicable, the covered person's authorized representative may file a request in writing for a review under 33-32-410 or 33-32-412, as applicable.   History: En. Sec. 21, Ch. 428, L. 2015.  
  33-32-406 through 33-32-409 reserved.  
  33-32-410. Standard external review. (1) Within 120 days after the date of receipt of a notice of an adverse determination or a final adverse determination pursuant to 33-32-403, a covered person or, if applicable, the covered person's authorized representative may file a request for an external review with the health insurance issuer.   (2) Within 5 business days after the date of receipt of the external review request, the health insurance issuer shall complete a preliminary review of the request to determine whether:   (a) the individual is or was a covered person in the health plan at the time the health care service or treatment was requested or, in the case of a retrospective review, was a covered person in the health plan at the time the health care service or treatment was provided;   (b) the health care service or treatment that is the subject of the adverse determination or the final adverse determination is a covered service under the covered person's health plan but is not covered because of a determination by the health insurance issuer that the health care service or treatment does not meet the health insurance issuer's requirements for medical necessity, appropriateness, health care setting, level of care, or level of effectiveness;   (c) the covered person has exhausted the health insurance issuer's internal grievance process as set forth in Title 33, chapter 32, part 3, or the covered person is exempt under 33-32-307(2); and   (d) the covered person or the covered person's authorized representative has provided all of the information and forms required to process an external review.   (3) (a) Within 1 business day after completion of the preliminary review, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative in writing as to whether:   (i) the request is complete; and   (ii) the request is eligible for external review.   (b) (i) If the request is not complete, the health insurance issuer shall inform the covered person or, if applicable, the covered person's authorized representative in writing and include in the notice the information or materials that are needed to make the request complete.   (ii) If the request is not eligible for external review, the health insurance issuer shall inform the covered person or, if applicable, the covered person's authorized representative in writing and include in the notice the reasons for the request's ineligibility.   (4) (a) The commissioner may specify the form for the health insurance issuer's notice of initial determination under subsection (3) and any supporting information to be included in the notice.   (b) The notice of initial determination provided under subsection (3) must include a statement informing the covered person or, if applicable, the covered person's authorized representative of the right to appeal to the commissioner a health insurance issuer's initial determination that the external review request is ineligible for review.   (5) (a) If the commissioner receives an appeal under subsection (4), the commissioner may require a referral for external review, notwithstanding a health insurance issuer's initial determination that the request is ineligible.   (b) A determination by the commissioner under subsection (5)(a) must be based on the terms of the covered person's health plan and all applicable provisions of Title 33, chapter 32, parts 2 through 4.   (6) (a) If the request is eligible for external review, the health insurance issuer shall within 1 business day assign an independent review organization on a random basis, or using another method of assignment that ensures the independence and impartiality of the assignment process, from the list of approved independent review organizations compiled and maintained by the commissioner pursuant to 33-32-416 to conduct the external review.   (b) In making the assignment, the health insurance issuer shall consider whether an independent review organization is qualified to conduct the particular external review based on the nature of the health care service or treatment that is the subject of the adverse determination or final adverse determination.   (c) The health insurance issuer shall also take into account other circumstances, including conflict of interest concerns pursuant to 33-32-417(4).   (7) The assigned independent review organization, in reaching its decision, is not bound by any decisions or conclusions reached during the health insurance issuer's utilization review process set forth in Title 33, chapter 32, part 2, or the health insurance issuer's internal grievance process set forth in Title 33, chapter 32, part 3.   (8) Within 1 business day of assigning an independent review organization pursuant to subsection (6), the health insurance issuer shall notify, in writing, the covered person or, if applicable, the covered person's authorized representative that the health insurance issuer initiated an external review.   (9) The health insurance issuer shall include in the notice provided to the covered person or, if applicable, the covered person's authorized representative a statement that the covered person or the covered person's authorized representative may submit in writing to the assigned independent review organization within 10 business days following the date of receipt of the notice provided pursuant to subsection (8) any additional information for the independent review organization to consider when conducting the external review. The independent review organization shall accept and consider information submitted within 10 business days after the date of receipt of the notice and may accept and consider additional information submitted after the 10 business days.   (10) Within 5 business days after assigning an independent review organization pursuant to subsection (6), the health insurance issuer or its designated utilization review organization shall provide to the assigned independent review organization the medical records, documents, and any information used in making the adverse determination or final adverse determination.   (11) Except as provided in subsection (12), failure by the health insurance issuer or its designated utilization review organization to provide the documents and information within the time specified in subsection (10) may not delay the conduct of the external review.   (12) (a) If the health insurance issuer or its designated utilization review organization fails to provide the documents and information within the time specified in subsection (10), the assigned independent review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination.   (b) Within 1 business day after making a decision under subsection (12)(a), the independent review organization shall notify the covered person or, if applicable, the covered person's authorized representative as well as the health insurance issuer.   (13) If the provisions of subsection (12) do not apply, the assigned independent review organization shall review all of the information and documents received pursuant to subsection (10) and any other information submitted in writing to the independent review organization by the covered person or, if applicable, the covered person's authorized representative pursuant to subsection (9).   (14) On receipt of any information submitted by the covered person or, if applicable, the covered person's authorized representative pursuant to subsection (9), the assigned independent review organization shall within 1 business day after receipt forward the information to the health insurance issuer.   (15) On receipt of the information, if any, forwarded as provided in subsection (14), the health insurance issuer may reconsider its adverse determination or final adverse determination that is the subject of the external review.   (16) Reconsideration by the health insurance issuer of its adverse determination or final adverse determination pursuant to subsection (15) may not delay or terminate the external review.   (17) The external review may be terminated only if the health insurance issuer decides, on completion of its reconsideration, to reverse its adverse determination or final adverse determination and provide coverage or payment for the health care service or treatment that is the subject of the adverse determination or final adverse determination.   (18) (a) Within 1 business day after making a decision to reverse its adverse determination or final adverse determination, as provided in subsection (17), the health insurance issuer shall notify the following in writing of its decision:   (i) the covered person or, if applicable, the covered person's authorized representative; and   (ii) the assigned independent review organization.   (b) The assigned independent review organization shall terminate the external review on receipt of the notice from the health insurance issuer sent pursuant to subsection (18)(a).   (19) In addition to the documents and information provided pursuant to subsection (10), the assigned independent review organization shall consider the following information and documents in making a decision, to the extent the information or documents are available:   (a) the covered person's medical records;   (b) the attending health care professional's recommendation;   (c) consulting reports from appropriate health care professionals and other documents submitted by the health insurance issuer, the covered person, the covered person's authorized representative, or the covered person's treating health care provider;   (d) the terms of coverage under the covered person's health plan with the health insurance issuer to ensure that the independent review organization's decision is not contrary to the terms of coverage under the covered person's health plan with the health insurance issuer;   (e) the most appropriate practice guidelines, which must include generally accepted practice guidelines, evidence-based standards, or any other practice guidelines developed by the federal government or national or professional medical societies, boards, and associations;   (f) any applicable clinical review criteria developed and used by the health insurance issuer or its designated utilization review organization; and   (g) the opinion of the independent review organization's clinical peer after considering the provisions of subsections (19)(a) through (19)(f) to the extent the information or documents are available.   (20) Within 45 days after the date of receipt of the request for an external review, the assigned independent review organization shall provide written notice of its decision to uphold or reverse the adverse determination or the final adverse determination to:   (a) the covered person or, if applicable, the covered person's authorized representative; and   (b) the health insurance issuer.   (21) The independent review organization shall include in the notice sent pursuant to subsection (20):   (a) a general description of the reason for the request for the external review;   (b) the date the independent review organization received the assignment from the health insurance issuer to conduct the external review;   (c) the time period over which the external review was conducted;   (d) the date of the independent review organization's decision;   (e) the principal reasons for the decision;   (f) the rationale for the decision; and   (g) references to the evidence or documentation, including the evidence-based standards, considered in reaching the decision.   (22) If a notice of a decision under subsection (20) reverses the adverse determination or final adverse determination, the health insurance issuer shall immediately approve the coverage that was the subject of the adverse determination or final adverse determination.   History: En. Sec. 22, Ch. 428, L. 2015; amd. Sec. 41, Ch. 151, L. 2017.  
  33-32-411. Expedited external review. (1) Except as provided in subsection (11), a covered person or, if applicable, the covered person's authorized representative may request an expedited external review with the health insurance issuer at the time the covered person receives:   (a) an adverse determination if:   (i) the adverse determination involves a medical condition of the covered person for which the timeframe for completion of an expedited internal review of a grievance involving an adverse determination under 33-32-309 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; and   (ii) the covered person or the covered person's authorized representative has filed a request for an expedited review of a grievance involving an adverse determination as provided in 33-32-309; or   (b) a final adverse determination if:   (i) the covered person has a medical condition for which the timeframe for completion of a standard external review pursuant to 33-32-410 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; or   (ii) the final adverse determination concerns an admission, availability of care, continued stay, or health care service for which the covered person received emergency services but has not been discharged from a facility.   (2) (a) On receipt of the request pursuant to subsection (1), the health insurance issuer shall immediately determine whether the request meets the review requirements under 33-32-410(2).   (b) The health insurance issuer shall immediately notify the covered person or, if applicable, the covered person's authorized representative of its eligibility determination.   (3) (a) The commissioner may specify the form for the health insurance issuer's notice of initial determination under subsection (2)(b) and any supporting information to be included in the notice.   (b) The notice of initial determination under subsection (2)(b) must include a statement informing the covered person or, if applicable, the covered person's authorized representative of the right to appeal to the commissioner a health insurance issuer's initial determination that the external review request is ineligible for review. The notice must also provide contact information for the commissioner's office.   (4) (a) The commissioner may determine that a request is eligible for external review under 33-32-410(5) and require a referral for external review, notwithstanding a health insurance issuer's initial determination that the request is ineligible.   (b) A determination by the commissioner under subsection (4)(a) must be based on the terms of the covered person's health plan and all applicable provisions of Title 33, chapter 32, parts 2 through 4.   (5) (a) If the request is eligible for external review, the health insurance issuer shall immediately assign an independent review organization on a random basis, or using another method of assignment that ensures the independence and impartiality of the assignment process, from the list of approved independent review organizations compiled and maintained by the commissioner pursuant to 33-32-416 to conduct the review.   (b) In making the assignment, the health insurance issuer shall consider whether an independent review organization is qualified to conduct the particular external review based on the nature of the health care service or treatment that is the subject of the adverse determination or final adverse determination.   (c) The health insurance issuer shall also take into account other circumstances, including conflict of interest concerns pursuant to 33-32-417(4).   (6) In reaching a decision as provided in subsection (9), the assigned independent review organization is not bound by any decisions or conclusions reached during the health insurance issuer's utilization review process, as provided in Title 33, chapter 32, part 2, or the health insurance issuer's internal grievance process provided in Title 33, chapter 32, part 3.   (7) Upon assigning an independent review organization, the health insurance issuer or its designated utilization review organization shall provide or transmit all necessary documents and information used in making the adverse determination or final adverse determination to the assigned independent review organization electronically or by telephone or facsimile or any other available expeditious method.   (8) In addition to the documents and information provided under subsection (7), the assigned independent review organization, to the extent the information or documents are available, shall consider the documents listed in 33-32-410(19) in reaching a decision.   (9) (a) As expeditiously as the covered person's medical condition or circumstances require but no more than 72 hours after receiving the request for an expedited external review that meets the review requirements set forth in 33-32-410(2), the assigned independent review organization shall:   (i) decide whether to uphold or reverse the adverse determination or final adverse determination; and   (ii) notify the covered person or, if applicable, the covered person's authorized representative as well as the health insurance issuer of the decision.   (b) If the notice required under subsection (9)(a) was not provided in writing, the assigned independent review organization shall within 48 hours after the date of providing the notice:   (i) provide written confirmation of the decision to the covered person or, if applicable, the covered person's authorized representative as well as to the health insurance issuer; and   (ii) include the information required in 33-32-410(21).   (10) On receipt of the notice regarding a decision reversing the adverse determination or final adverse determination, the health insurance issuer shall immediately approve the coverage that was the subject of the adverse determination or final adverse determination.   (11) An expedited external review may not be provided for retrospective adverse or retrospective final adverse determinations.   History: En. Sec. 23, Ch. 428, L. 2015.  
  33-32-412. External review of adverse determinations for experimental or investigational treatment -- expedited external review. (1) Within 120 days after the date when a covered person or, if applicable, the covered person's authorized representative receives notice pursuant to 33-32-403 of an adverse determination or final adverse determination that involves a denial of coverage because a health insurance issuer determined that the health care service or treatment recommended or requested is experimental or investigational, the covered person or the covered person's authorized representative may file a request for an external review with the health insurance issuer.   (2) (a) A covered person or, if applicable, the covered person's authorized representative may make an oral request for an expedited external review of the adverse determination or final adverse determination pursuant to subsection (1) if the covered person's treating health care provider certifies, in writing, that the recommended or requested health care service or treatment that is the subject of the request would be significantly less effective if not promptly initiated.   (b) (i) Upon receipt of a request for an expedited external review, the health insurance issuer shall immediately determine and notify the covered person or, if applicable, the covered person's authorized representative whether the request meets the review requirements of subsection (4).   (ii) The commissioner may specify the form for the health insurance issuer's notice of initial determination under subsection (2)(b)(i) and any supporting information to be included in the notice.   (iii) The notice of initial determination under subsection (2)(b)(i) must include a statement informing the covered person or, if applicable, the covered person's authorized representative of the right to appeal to the commissioner a health insurance issuer's initial determination that the external review request is ineligible for review. The notice must also provide contact information for the commissioner's office.   (c) (i) The commissioner may determine that a request is eligible for external review under 33-32-404 or subsection (4) of this section and may require a referral for external review, notwithstanding a health insurance issuer's initial determination that the request is ineligible.   (ii) A determination by the commissioner under subsection (2)(c)(i) must be based on the terms of the covered person's health plan and all applicable provisions of Title 33, chapter 32, parts 2 through 4.   (d) (i) If the request is eligible for expedited external review, the health insurance issuer shall immediately assign an independent review organization on a random basis, or using another method of assignment that ensures the independence and impartiality of the assignment process, from the list of approved independent review organizations compiled and maintained by the commissioner pursuant to 33-32-416 to conduct the external review.   (ii) In making the assignment, the health insurance issuer shall consider whether an independent review organization is qualified to conduct the particular external review based on the nature of the health care service or treatment that is the subject of the adverse determination or final adverse determination.   (iii) The health insurance issuer shall also take into account other circumstances, including conflict of interest concerns pursuant to 33-32-417(4).   (e) Upon assigning an independent review organization, the health insurance issuer or its designated utilization review organization shall provide or transmit to the assigned independent review organization electronically, by telephone, by facsimile, or by any other available expeditious method all necessary documents and information used in making the adverse determination or final adverse determination.   (3) Upon receipt of a request for standard external review, the health insurance issuer shall, within 5 business days, determine whether the request meets the eligibility requirements of subsection (4).   (4) In accordance with the timeframes in subsections (2)(b) and (3), the health insurance issuer shall conduct and complete a preliminary review of the request to determine whether:   (a) the individual is or was a covered person in the health plan at the time the health care service or treatment was recommended or requested or, in the case of a retrospective review, was a covered person in the health plan at the time the health care service or treatment was provided;   (b) the recommended or requested health care service or treatment that is the subject of the adverse determination or final adverse determination:   (i) is a covered benefit under the covered person's health plan except for the health insurance issuer's determination that the service or treatment is experimental or investigational for a particular medical condition; and   (ii) is not explicitly listed as an excluded benefit under the covered person's health plan;   (c) the covered person's treating health care provider has certified that one of the following situations is applicable:   (i) standard health care services or treatments have not been effective in improving the condition of the covered person;   (ii) standard health care services or treatments are not medically appropriate for the covered person; or   (iii) there is no available standard health care service or treatment covered by the health insurance issuer that is more beneficial than the recommended or requested health care service or treatment described in subsection (4)(d);   (d) (i) the covered person's treating health care provider has recommended a health care service or treatment that the health care provider certifies, in writing, is likely to be more beneficial to the covered person, in the health care provider's opinion, than any available standard health care services or treatments; or   (ii) a physician who is licensed, board-certified, or eligible to take the examination to become board-certified and is qualified to practice in the area of medicine appropriate to treat the covered person's condition has certified in writing that scientifically valid studies using accepted protocols demonstrate that the health care service or treatment requested by the covered person who is subject to the adverse determination or final adverse determination is likely to be more beneficial to the covered person than any available standard health care services or treatments; and   (e) the covered person has exhausted the health insurance issuer's internal grievance process provided in Title 33, chapter 32, part 3, or the covered person is exempt under 33-32-307(2).   (5) (a) Within 1 business day after completion of the preliminary review, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative in writing as to whether:   (i) the request is complete; and   (ii) the request is eligible for external review.   (b) (i) If the request is not complete, the health insurance issuer shall inform the covered person or, if applicable, the covered person's authorized representative in writing and include in the notice the information or materials that are needed to make the request complete.   (ii) If the request is not eligible for external review, the health insurance issuer shall inform the covered person or, if applicable, the covered person's authorized representative in writing and include in the notice the reasons for the request's ineligibility.   (6) (a) The commissioner may specify the form for the health insurance issuer's notice of initial determination under subsection (5) and any supporting information to be included in the notice.   (b) The notice of initial determination provided under subsection (5) must include a statement informing the covered person or, if applicable, the covered person's authorized representative of the right to appeal to the commissioner a health insurance issuer's initial determination that the external review request is ineligible for review. The notice must also provide contact information for the commissioner's office.   (7) If a request for external review is determined eligible for external review, the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative.   (8) (a) If the request is eligible for external review, the health insurance issuer shall within 1 business day assign an independent review organization on a random basis, or using another method of assignment that ensures the independence and impartiality of the assignment process, from the list of approved independent review organizations compiled and maintained by the commissioner pursuant to 33-32-416 to conduct the external review.   (b) In making the assignment, the health insurance issuer shall consider whether an independent review organization is qualified to conduct the particular external review based on the nature of the health care service or treatment that is the subject of the adverse determination or final adverse determination.   (c) The health insurance issuer shall also take into account other circumstances, including conflict of interest concerns pursuant to 33-32-417(4).   (9) Within 1 business day of assigning an independent review organization pursuant to subsection (2)(d) or (8), the health insurance issuer shall notify in writing the covered person or, if applicable, the covered person's authorized representative that the health insurance issuer initiated an external review.   (10) The health insurance issuer shall include in the notice provided to the covered person or, if applicable, the covered person's authorized representative a statement that the covered person or, if applicable, the covered person's authorized representative may submit in writing to the assigned independent review organization within 10 business days following the date of receipt of the notice provided pursuant to subsection (9) any additional information for the independent review organization to consider when conducting the external review. The independent review organization shall accept and consider information submitted within 10 business days after the date of receipt of the notice and may accept and consider additional information submitted after the 10 business days.   (11) Within 1 business day after the receipt of the notice of assignment to conduct the external review pursuant to subsection (9), the assigned independent review organization shall select a clinical peer, or multiple peers if medically appropriate under the circumstances, to conduct the external review.   (12) (a) In selecting clinical peers to conduct the external review, the assigned independent review organization shall select physicians or other health care providers who meet the minimum qualifications described in 33-32-417 and who, through clinical experience in the past 3 years, are experts in the treatment of the covered person's condition and knowledgeable about the recommended or requested health care service or treatment.   (b) The choice of the physicians or other health care providers to conduct the external review may not be made by the covered person, the covered person's authorized representative, if applicable, or the health insurance issuer.   (13) (a) In accordance with subsection (20), each clinical peer shall provide a written opinion to the assigned independent review organization on whether the recommended or requested health care service or treatment should be covered.   (b) In reaching an opinion, clinical peers are not bound by any decisions or conclusions reached during the health insurance issuer's utilization review process provided for in Title 33, chapter 32, part 2, or in the health insurance issuer's internal grievance process provided for in Title 33, chapter 32, part 3.   (14) (a) Within 5 business days after assigning an independent review organization pursuant to subsection (9), the health insurance issuer or its designated utilization review organization shall provide to the assigned independent review organization any documents and information considered in making the adverse determination or the final adverse determination.   (b) Except as provided in subsection (15), failure by the health insurance issuer or its designated utilization review organization to provide the documents and information within the time specified in subsection (14)(a) may not delay the conduct of the external review.   (15) (a) If the health insurance issuer or its designated utilization review organization fails to provide the documents and information within the time specified in subsection (14)(a), the assigned independent review organization may terminate the external review and decide to reverse the adverse determination or final adverse determination.   (b) Immediately upon making the determination under subsection (15)(a), the independent review organization shall notify the covered person or, if applicable, the covered person's authorized representative, the health insurance issuer, and the commissioner.   (16) On receipt of any information submitted by the covered person or, if applicable, the covered person's authorized representative pursuant to subsection (10), the assigned independent review organization shall, within 1 business day after the receipt of the information, forward the information to the health insurance issuer.   (17) (a) On receipt of the information required to be forwarded pursuant to subsection (16), the health insurance issuer may reconsider its adverse determination or final adverse determination that is the subject of the external review.   (b) Reconsideration by the health insurance issuer of its adverse determination or final adverse determination pursuant to subsection (17)(a) may not delay or terminate the external review.   (18) (a) The external review may be terminated only if the health insurance issuer decides, on completion of its reconsideration, to reverse its adverse determination or final adverse determination and provide coverage or payment for the recommended or requested health care service or treatment that is the subject of the adverse determination or final adverse determination.   (b) Immediately upon making the decision to reverse its adverse determination or final adverse determination, as provided in subsection (18)(a), the health insurance issuer shall notify the covered person or, if applicable, the covered person's authorized representative, the assigned independent review organization, and the commissioner in writing of its decision.   (c) The assigned independent review organization shall terminate the external review on receipt of the notice from the health insurance issuer pursuant to subsection (18)(b).   (19) Each clinical peer selected pursuant to subsection (12) shall review all of the information and documents received pursuant to subsection (14) and any other information submitted in writing by the covered person or, if applicable, the covered person's authorized representative pursuant to subsection (10).   (20) (a) Except as provided in subsection (20)(c), within 20 days after being selected in accordance with subsection (12) to conduct the external review, each clinical peer shall provide an opinion to the assigned independent review organization pursuant to subsection (21) on whether the recommended or requested health care service or treatment should be covered.   (b) Except for an opinion provided pursuant to subsection (20)(c), each clinical peer's opinion must be in writing and must include the following information:   (i) a description of the covered person's medical condition;   (ii) a description of the indicators relevant to determining whether there is sufficient evidence to demonstrate that the recommended or requested health care service or treatment is more likely than not to be more beneficial to the covered person than any available standard health care services or treatments and that the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments;   (iii) a description and analysis of any medical or scientific evidence considered in reaching the opinion;   (iv) a description and analysis of any evidence-based standard; and   (v) information on whether the clinical peer's rationale for the opinion is based on subsection (21)(a) or (21)(b).   (c) (i) For an expedited external review, each clinical peer shall provide an opinion orally or in writing to the assigned independent review organization as expeditiously as the covered person's medical condition or circumstances require but no later than 5 calendar days after the clinical peer was selected in accordance with subsection (12).   (ii) If the opinion provided pursuant to subsection (20)(c)(i) was not in writing, the clinical peer shall provide to the assigned independent review organization written confirmation of the opinion within 48 hours after the date the opinion was delivered and include the information required under subsection (20)(b).   (21) In addition to the documents and information provided under this section, each clinical peer selected pursuant to subsection (12) shall consider the following information in reaching an opinion as required in subsection (20) to the extent that the information is available and the clinical peer considers the information to be appropriate:   (a) the covered person's pertinent medical records;   (b) the attending health care provider's recommendation;   (c) consulting reports from appropriate health care professionals and other documents submitted by the health insurance issuer, the covered person, the covered person's authorized representative, or the covered person's treating health care provider;   (d) the terms of coverage under the covered person's health plan with the health insurance issuer. The terms of coverage must be analyzed to ensure that, except for the health insurance issuer's determination that the recommended or requested health care service or treatment that is the subject of the opinion is experimental or investigational, the clinical peer's opinion is not contrary to the terms of coverage under the covered person's health benefit plan with the health insurance issuer; and   (e) whether:   (i) the recommended or requested health care service or treatment has been approved by the food and drug administration, if applicable, for the condition;   (ii) the recommended or requested health care service or treatment is typically covered by other insurers or payers, such as medicare; or   (iii) medical or scientific evidence or evidence-based standards demonstrate that the expected benefits of the recommended or requested health care service or treatment is more likely than not to be more beneficial to the covered person than any available standard health care service or treatment and that the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments.   (22) (a) Except as provided in subsection (22)(b), within 20 days after the date of receiving the opinion of each clinical peer pursuant to subsection (20), the assigned independent review organization shall make a decision and provide written notice of the decision to the covered person or, if applicable, the covered person's authorized representative as well as the health insurance issuer.   (b) (i) For an expedited external review, within 48 hours after the date of receiving the opinion of each clinical peer pursuant to subsection (20), the assigned independent review organization, in accordance with subsection (22)(c), shall make a decision and provide notice of the decision orally or in writing to the recipients listed in subsection (22)(a).   (ii) If the notice provided under subsection (22)(b)(i) was not in writing, within 48 hours after the date of providing that notice the assigned independent review organization shall provide written confirmation of the decision to the recipients listed in subsection (22)(a) and include the information set forth in subsection (22)(d).   (c) (i) If a majority of the clinical peers respond that the recommended or requested health care service or treatment should be covered, the independent review organization shall make a decision to reverse the health insurance issuer's adverse determination or final adverse determination.   (ii) If a majority of the clinical peers respond that the recommended or requested health care service or treatment should not be covered, the independent review organization shall make a decision to uphold the health insurance issuer's adverse determination or final adverse determination.   (iii) If the clinical peers are evenly split as to whether the recommended or requested health care service or treatment should be covered, the independent review organization shall obtain the opinion of an additional clinical peer to help the independent review organization make a decision based on the opinions of a majority of the clinical peers pursuant to subsections (22)(c)(i) or (22)(c)(ii).   (iv) The additional clinical peer selected under subsection (22)(c)(iii) shall use the same information to reach an opinion as used by the clinical peers who have already submitted their opinions pursuant to subsection (20).   (v) The selection of the additional clinical peer under subsection (22)(c)(iii) may not extend the time within which the assigned independent review organization is required to make a decision based on the opinions of the clinical peers.   (d) The independent review organization shall include in the notice provided pursuant to subsection (22)(b):   (i) a general description of the reason for the request for external review;   (ii) the written opinion of each clinical peer, including the opinion of each clinical peer as to whether the recommended or requested health care service or treatment should be covered and the rationale for the reviewer's recommendation;   (iii) the date on which the independent review organization was assigned by the commissioner to conduct the external review;   (iv) the time period during which the external review was conducted;   (v) the date of the independent review organization's decision; and   (vi) the principal rationale for its decision.   (e) On receipt of a notice of a decision pursuant to subsection (22)(c)(i) reversing the adverse determination or final adverse determination, the health insurance issuer shall immediately approve coverage of the recommended or requested health care service or treatment that was the subject of the adverse determination or final adverse determination.   History: En. Sec. 24, Ch. 428, L. 2015; amd. Sec. 42, Ch. 151, L. 2017.  
  33-32-413 and 33-32-414 reserved.  
  33-32-415. Binding nature of external review decisions. (1) An external review decision is binding on:   (a) the health insurance issuer; and   (b) the covered person except to the extent that the covered person has other remedies available under applicable federal or state law.   (2) A covered person or, if applicable, the covered person's authorized representative may not file a subsequent request for external review involving the same adverse determination or final adverse determination for which the covered person has already received an external review decision pursuant to this part.   History: En. Sec. 25, Ch. 428, L. 2015.  
  33-32-416. Approval of independent review organizations -- renewal. (1) The commissioner shall approve independent review organizations that are eligible to conduct external reviews under this part.   (2) To be eligible for approval by the commissioner to conduct external reviews under this part, an independent review organization:   (a) must be accredited by a nationally recognized private accrediting entity as provided in subsection (5) and meet the minimum qualifications provided in 33-32-417; and   (b) shall submit an application fee as provided in 33-32-419 and an application for approval in accordance with subsection (4) or, for those currently approved and seeking renewal, a renewal fee and renewal application.   (3) The commissioner shall develop an application form for initially approving and for reapproving independent review organizations to conduct external reviews.   (4) (a) Any independent review organization seeking to be approved to conduct external reviews under this part shall submit the application form and include with the form all documentation, fees, and information necessary for the commissioner to determine whether the independent review organization satisfies the minimum qualifications established under 33-32-417 and subsection (5) of this section.   (b) An independent review organization that is currently approved and seeking renewal shall submit a renewal application, fees, and other information necessary for the commissioner to determine whether the independent review organization continues to satisfy the minimum qualifications established under 33-32-417 and subsection (5) of this section.   (5) An independent review organization is eligible for approval under this section only if it is accredited by a nationally recognized private accrediting entity approved by the commissioner as having independent review organization accreditation standards that are equivalent to or exceed the minimum qualifications for independent review organizations established under 33-32-417.   (6) The commissioner's approval of an independent review organization is effective for 2 years unless the commissioner determines before the expiration date that the independent review organization:   (a) is not satisfying the minimum qualifications established under 33-32-417; or   (b) has not fulfilled the reporting requirements under 33-32-421.   (7) If the commissioner determines that an independent review organization has lost its accreditation or no longer satisfies the minimum requirements established under 33-32-417, the commissioner shall terminate the approval of the independent review organization and remove the independent review organization from the list of independent review organizations maintained by the commissioner pursuant to subsection (9).   (8) If the commissioner determines that an independent review organization has not fulfilled the reporting requirements contained in 33-32-421, the commissioner may terminate the approval of the independent review organization and remove the independent review organization from the list of independent review organizations maintained by the commissioner pursuant to subsection (9).   (9) The commissioner shall maintain and periodically update a list of approved independent review organizations.   (10) A person may not operate as an independent review organization in Montana unless approved by the commissioner.   History: En. Sec. 26, Ch. 428, L. 2015; amd. Sec. 2, Ch. 31, L. 2019.  
  33-32-417. Minimum qualifications for independent review organizations. (1) To be approved to conduct external reviews as provided in 33-32-416, an independent review organization shall establish and maintain written policies and procedures that govern all aspects of both the standard external review process and the expedited external review process set forth in 33-32-410 through 33-32-412. The written policies and procedures must include, at a minimum:   (a) a quality assurance mechanism that ensures:   (i) that external reviews are conducted within the specified timeframes and that required notices are provided in a timely manner;   (ii) that the independent review organization is unbiased;   (iii) both the selection of qualified and impartial clinical peers to conduct external reviews on behalf of the independent review organization and the suitable matching of reviewers to specific cases;   (iv) that the independent review organization employs or contracts with an adequate number of clinical peers to meet the objective of qualified, impartial reviews;   (v) the confidentiality of medical and treatment records as well as clinical review criteria; and   (vi) that any person employed by or under contract with the independent review organization adheres to the requirements of this part;   (b) a toll-free telephone service to receive information related to external reviews on a 24-hour-a-day, 7-day-a-week basis. The telephone service must be capable of accepting, recording, or providing appropriate instruction to incoming telephone callers during other-than-normal business hours.   (c) an agreement to maintain and provide to the commissioner the information required under 33-32-421.   (2) All clinical peers assigned by an independent review organization to conduct external reviews must:   (a) be appropriate health care providers; and   (b) meet the following minimum qualifications:   (i) be an expert in the treatment of the covered person's medical condition that is the subject of the external review;   (ii) be knowledgeable about the recommended health care service or treatment through recent or current actual clinical experience treating patients with the same or similar medical conditions of the covered person;   (iii) hold a nonrestricted professional license in a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in one or more areas appropriate to the subject of the external review; and   (iv) have no history of disciplinary actions or sanctions, including participation restrictions or a loss of staff privileges either taken or pending by any hospital, government agency, governmental unit, or regulatory body if the disciplinary actions or sanctions raise a substantial question as to the clinical peer's physical, mental, or professional competence or moral character.   (3) In addition to the requirements in subsection (1), an independent review organization may not own or control, be a subsidiary of, or in any way be owned or controlled by or exercise control over a health plan, a health insurance issuer, a national, state, or local trade association of health plans, or a national, state, or local trade association of health care providers.   (4) (a) In addition to the requirements in subsections (1) through (3), to be approved under 33-32-416 to conduct an external review of a specified case, neither the independent review organization selected to conduct the external review nor any clinical peer assigned by the independent review organization to conduct the external review may have a material professional, familial, or financial conflict of interest with any of the following:   (i) the health insurance issuer that is the subject of the external review;   (ii) the covered person whose treatment is the subject of the external review or, if applicable, the covered person's authorized representative;   (iii) any officer, director, or management employee of the health insurance issuer that is the subject of the external review;   (iv) the health care provider, the health care provider's medical group, or the independent practice association recommending the health care service or treatment that is the subject of the external review;   (v) the facility at which the recommended health care service or treatment would be provided; or   (vi) the developer or manufacturer of the principal drug, device, procedure, or other therapy being recommended for the covered person whose treatment is the subject of the external review.   (b) In determining whether an independent review organization or a clinical peer assigned by the independent review organization to conduct the external review has a material professional, familial, or financial conflict of interest, the commissioner shall take into consideration:   (i) situations in which the independent review organization to be assigned to conduct an external review of a specified case or a clinical peer to be assigned by the independent review organization to conduct an external review of a specified case may have an apparent professional, familial, or financial relationship or connection with a person described in subsection (4)(a) if the characteristics of that relationship or connection do not pose a material professional, familial, or financial conflict of interest that otherwise would result in the disapproval of the independent review organization or of the clinical peer from conducting the external review; and   (ii) whether other medical expertise is available within a reasonable timeframe.   (5) (a) An independent review organization that is accredited by a nationally recognized private accrediting entity that has independent review accreditation standards determined by the commissioner to be equivalent to or exceed the minimum qualifications of this section is presumed to be in compliance with this section and eligible for approval under 33-32-416. However, the commissioner shall also consider the conflict of interest provisions of subsection (4).   (b) The commissioner shall initially and periodically review the independent review organization accreditation standards of a nationally recognized private accrediting entity to determine whether the entity's standards are and continue to be equivalent to or exceed the minimum qualifications established under this section. The commissioner may accept a review conducted by the NAIC for the determination under this subsection (5)(b).   (c) On request, a nationally recognized private accrediting entity shall make its current independent review organization accreditation standards available to the commissioner or the NAIC to enable the commissioner to determine if the entity's standards are equivalent to or exceed the minimum qualifications established under this section. The commissioner may exclude any private accrediting entity that is not reviewed by the NAIC.   History: En. Sec. 27, Ch. 428, L. 2015; amd. Sec. 43, Ch. 151, L. 2017.  
  33-32-418. Liability limits for independent review organization. (1) Except as provided in subsection (2), an independent review organization or clinical peer working on behalf of an independent review organization or an employee, agent, or contractor of an independent review organization is not liable to any person for any opinions rendered or acts or omissions performed within the scope of the organization's or person's duties under the law during or upon completion of an external review conducted pursuant to this part.   (2) The liability exemption under subsection (1) does not apply if the opinion was rendered or if the act or omission was performed in bad faith or involved gross negligence.   History: En. Sec. 28, Ch. 428, L. 2015.  
  33-32-419. Fees. (1) An application for approval of an independent review organization under 33-32-416 must be accompanied by a fee of $250.   (2) An application for renewal as an approved independent review organization must be accompanied by a fee of $150.   History: En. Sec. 1, Ch. 31, L. 2019.  
  33-32-420 reserved.  
  33-32-421. External review reporting requirements. (1) An independent review organization assigned pursuant to 33-32-410, 33-32-411, or 33-32-412 to conduct an external review shall maintain written records in the aggregate by state and by health insurance issuer on all requests for external reviews for which the independent review organization conducted an external review during the calendar year.   (2) Each independent review organization required to maintain written records as provided in subsection (1) shall submit to the commissioner, at least annually by March 1, a report in the format specified by the commissioner.   (3) The report must include, aggregated by state and by health insurance issuer:   (a) the total number of requests for external review;   (b) the number of requests for external review resolved and, of those resolved, the number resolved upholding the adverse determination or final adverse determination and the number resolved reversing the adverse determination or final adverse determination;   (c) the average length of time for resolution;   (d) a summary of the types of coverages or cases for which an external review was sought, provided in the format required by the commissioner;   (e) the number of external reviews that were terminated pursuant to 33-32-410(17) or 33-32-412(15) as the result of a reconsideration by the health insurance issuer of its adverse determination or final adverse determination after the receipt of additional information from the covered person or, if applicable, the covered person's authorized representative; and   (f) any other information the commissioner may request or require.   (4) The independent review organization shall retain the written records required pursuant to subsection (1) for at least 6 years.   (5) Each health insurance issuer shall maintain in the aggregate for each type of health plan offered by the health insurance issuer written records on all requests for external review for which the health insurance issuer received notice pursuant to Title 33, chapter 32, parts 2 through 4.   (6) Each health insurance issuer required to maintain written records on all requests for external review pursuant to subsection (5) shall submit to the commissioner, at least annually by March 1, a report in the format specified by the commissioner.   (7) The report must include in the aggregate by state and by type of health plan:   (a) the total number of requests for external review;   (b) the number of requests determined eligible for a full external review based on the total number of requests for external review reported under subsection (7)(a);   (c) the number of requests for external review resolved and, of those resolved, the number resolved upholding the adverse determination or final adverse determination and the number resolved reversing the adverse determination or final adverse determination;   (d) the average length of time for resolution;   (e) a summary of the types of coverage or cases for which an external review was sought, as provided in the format required by the department;   (f) the number of external reviews that were terminated as the result of a reconsideration by the health carrier of its adverse determination or final adverse determination after the receipt of additional information from the covered person or, if applicable, the covered person's authorized representative; and   (g) any other information the commissioner may request or require.   (8) The health insurance issuer shall retain the written records required pursuant to subsection (5) for at least 6 years.   History: En. Sec. 29, Ch. 428, L. 2015; amd. Sec. 3, Ch. 31, L. 2019.  
  33-32-422. Funding of external review. The health insurance issuer against which a request for a standard external review or an expedited external review is filed shall pay the costs of the independent review organization for conducting the external review.   History: En. Sec. 30, Ch. 428, L. 2015.  
  33-32-423. Disclosure requirements. (1) Each health insurance issuer shall include a description of the external review procedures in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided to covered persons.   (2) The disclosure required under subsection (1) must:   (a) be in a format prescribed by the commissioner; and   (b) include a statement that informs the covered person of the right of the covered person or, if applicable, the covered person's authorized representative to file a request for an external review of an adverse determination or final adverse determination with the health insurance issuer. The statement may explain that external review is available when the adverse determination or final adverse determination involves an issue of medical necessity, appropriateness, health care setting, level of care, or level of effectiveness. The statement must include the telephone number and address of the commissioner.   (3) In addition to the requirements under subsection (2), the statement must inform the covered person that, when filing a request for an external review, the covered person or, if applicable, the covered person's authorized representative is required to authorize the release of any medical records of the covered person that may be required to be reviewed for the purpose of reaching a decision on the external review.   History: En. Sec. 31, Ch. 428, L. 2015; amd. Sec. 44, Ch. 151, L. 2017.  
  33-33-101. Purpose. The legislature recognizes that property and casualty insurers providing coverage for medical expenses or liability coverage for bodily injury may need, with respect to some claims, to seek medical reviews from qualified utilization review organizations so that an insurer may use the reviews to determine its contractual obligations. This chapter establishes standards for organizations providing utilization reviews and for property and casualty insurers seeking reviews.   History: En. Sec. 1, Ch. 335, L. 2001.  
  33-33-102. Scope -- rulemaking. (1) This chapter applies to property and casualty insurers seeking utilization review opinions and to utilization review organizations that provide opinions with respect to property and casualty insurance contracts issued in this state.   (2) The commissioner may adopt rules to implement the provisions of this chapter, including but not limited to registration procedures and medical privacy requirements.   History: En. Sec. 2, Ch. 335, L. 2001.  
  33-33-103. Definitions. As used in this chapter, the following definitions apply:   (1) "Utilization review" has the meaning provided in 33-32-102.   (2) "Utilization review organization" means an entity that provides utilization review services.   History: En. Sec. 3, Ch. 335, L. 2001; amd. Sec. 39, Ch. 428, L. 2015.  
  33-33-201. Standards for utilization review organizations. (1) A utilization review organization that conducts utilization reviews in this state for property and casualty insurers shall register with the commissioner prior to performing utilization reviews. The commissioner shall place a utilization review organization on the register when the utilization review organization provides information that establishes that the utilization review organization meets the standards set forth in this section. The commissioner shall remove from the register a utilization review organization that fails to meet the standards set forth in this section.   (2) Utilization review organizations may use only licensed or certified health care professionals to conduct utilization reviews.   (3) Utilization reviews must be conducted by health care professionals who are licensed or certified in the same specialty as the provider whose treatment is being received by the insured or by a health care professional who is qualified to render the treatment being reviewed.   (4) Utilization review organizations shall comply with all applicable state or federal medical privacy laws.   (5) Utilization review evaluations must use generally accepted standards for treatment of the illness, injury, or condition that is being reviewed.   (6) Utilization review opinions must be signed by the health care professional performing the review.   (7) A utilization review organization may not base its fees or charges on any recommendation for a reduction in payment under an insurance contract or on a percentage of claim savings.   History: En. Sec. 4, Ch. 335, L. 2001.  
  33-33-202. Standards for property and casualty insurers. (1) Property or casualty insurers seeking utilization reviews with respect to insurance contracts issued in this state may use only utilization review organizations that are registered under 33-33-201.   (2) A property or casualty insurer that denies, in whole or in part, a policyholder's claim after consideration of a utilization review shall provide the policyholder an opportunity to request reconsideration by the insurer and the opportunity to submit additional information relating to the claim.   History: En. Sec. 5, Ch. 335, L. 2001.  
  33-35-101. Short title. This chapter may be cited as the "Self-Funded Multiple Employer Welfare Arrangement Regulation Act".   History: En. Sec. 1, Ch. 420, L. 1995.  
  33-35-102. Purpose. The purposes of this chapter are to:   (1) provide for the authorization and registration of self-funded multiple employer welfare arrangements;   (2) regulate self-funded multiple employer welfare arrangements in order to ensure the financial integrity of the arrangements;   (3) provide reporting requirements for self-funded multiple employer welfare arrangements; and   (4) provide for sanctions against self-funded multiple employer welfare arrangements organized and maintained in Montana that do not comply with this chapter.   History: En. Sec. 2, Ch. 420, L. 1995.  
  33-35-103. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:   (1) "Allowable benefit" means a benefit relating to medical, surgical, or hospital care in the event of sickness, accident, disability, or any combination of sickness, accident, or disability.   (2) (a) "Bona fide association" means an association of employers that has been in existence for a period of not less than 5 years prior to sponsoring a self-funded multiple employer welfare arrangement, during which time the association has engaged in substantial activities relating to the common interests of member employers, and that continues to engage in substantial activities in addition to sponsoring an arrangement.   (b) Notwithstanding subsection (2)(a), an association that was formed and began sponsoring an arrangement prior to October 1, 1995, is not subject to the requirement that the association be in existence for 5 years prior to sponsoring an arrangement.   (3) "Claims liability" means the total of all incurred and unpaid claims for allowable benefits under a self-funded multiple employer welfare arrangement that are not reimbursed or reimbursable by excess of loss insurance, subrogation, or other sources.   (4) (a) "Multiple employer welfare arrangement" means a multiple employer welfare arrangement as defined by 29 U.S.C. 1002.   (b) The term does not include an arrangement, plan, program, or interlocal agreement of or between political subdivisions of this state, including school districts, as provided in 33-1-102.   (5) "Reserves" means the excess of the assets of a self-funded multiple employer welfare arrangement minus the liabilities of the arrangement. The liabilities of a self-funded multiple employer welfare arrangement include the claims liability of the arrangement.   (6) "Self-funded multiple employer welfare arrangement" or "arrangement" means a multiple employer welfare arrangement that does not provide for payment of benefits under the arrangement solely through a policy or policies of insurance issued by one or more insurance companies with a certificate of authority under this title.   History: En. Sec. 3, Ch. 420, L. 1995; amd. Sec. 25, Ch. 399, L. 2007.  
  33-35-201. Certificate of authority. (1) Except as provided in subsection (3), a person may not establish or maintain a self-funded multiple employer welfare arrangement in Montana unless the arrangement first obtains a certificate of authority from the commissioner.   (2) A self-funded multiple employer welfare arrangement is considered to be established or maintained in Montana if one or more of the employer members participating in the arrangement is either domiciled in or maintains its principal place of business in Montana.   (3) A self-funded multiple employer welfare arrangement established and maintained in Montana prior to January 1, 1995, has until April 1, 1996, to file an application for a certificate of authority. An arrangement that files an application for a certificate of authority by that date is considered to have been issued a certificate of authority unless the commissioner finally denies the arrangement's application for a certificate of authority.   History: En. Sec. 4, Ch. 420, L. 1995.  
  33-35-202. Eligibility for certificate of authority. The commissioner may not issue a certificate of authority to a self-funded multiple employer welfare arrangement unless the arrangement establishes to the reasonable satisfaction of the commissioner that the following requirements have been satisfied by the arrangement:   (1) the employers participating in the self-funded multiple employer welfare arrangement are either engaged in the same trade, profession, or industry or the employers participating in the arrangement are members of a bona fide association;   (2) the employers participating in the arrangement exercise control over the arrangement, as follows:   (a) Subject to subsection (2)(b), control exists if the employers participating in the arrangement have the right to elect at least 75% of the individuals designated in the arrangement's organizational documents as having control over the operations of the arrangement and the individuals designated in the arrangement's organizational documents in fact exercise control over the operation of the arrangement.   (b) The use of a third-party administrator to process claims and to assist in the administration of the arrangement is not evidence of the lack of exercise of control over the operation of the arrangement.   (3) the arrangement provides only allowable benefits. However, an arrangement may provide life insurance coverage to its participants if the coverage is provided pursuant to contracts of insurance that comply with Title 33, chapter 20, parts 10 through 12.   (4) the arrangement provides allowable benefits to not less than 2 employers and not less than 75 employees;   (5) the arrangement may not solicit participation in the arrangement from the general public. However, the arrangement may employ or independently contract with a licensed insurance producer who may be paid a commission or other remuneration to enroll employers in the arrangement, and employees of the arrangement, employees of the association sponsoring the arrangement, or employees of affiliates of the association, other than licensed insurance producers, may enroll employers in the arrangement if the employees do not receive a commission or other remuneration in addition to their customary compensation for enrolling employers.   (6) the arrangement is not organized or maintained solely as a conduit for the collection of premiums and the forwarding of premiums to an insurance company. However, it is permissible for a self-funded multiple employer welfare arrangement to act as a conduit for the collection and forwarding of premiums for life insurance coverage pursuant to subsection (3).   History: En. Sec. 5, Ch. 420, L. 1995.  
  33-35-203. Requirements applicable only to arrangements organized after October 1, 1995. (1) In addition to the requirements of 33-35-202, self-funded multiple employer welfare arrangements formed after October 1, 1995, are subject to the following requirements:   (a) arrangements shall maintain a calendar year for operations and reporting purposes unless the commissioner consents to a fiscal year;   (b) arrangements shall satisfy one of the following requirements:   (i) (A) the arrangement shall deposit $200,000 with the commissioner pursuant to Title 33, chapter 2, part 6, to be used for the payment of claims in the event that the arrangement becomes insolvent; and   (B) the arrangement shall submit to the commissioner a written plan of operation that, in the reasonable discretion of the commissioner, ensures the financial integrity of the arrangement; or   (ii) the arrangement demonstrates to the reasonable satisfaction of the commissioner the ability of the arrangement to remain financially solvent, for which purpose the commissioner may consider:   (A) the pro forma financial statements of the self-funded multiple employer welfare arrangement;   (B) the types and levels of excess of loss insurance coverage, including the attachment points of the coverage and whether the points are reflected as annual or monthly levels;   (C) whether a deposit is required for each employee covered under the arrangement equal to at least one month's cost of providing benefits under the arrangement;   (D) the experience of the individuals who will be involved in the management of the arrangement, including employees, independent contractors, and consultants; and   (E) other factors as reasonably determined by the commissioner to be relevant to a determination of whether the arrangement is able to operate in a financially solvent manner.   (2) Financial information relating to the employers is subject to the confidentiality provisions of 33-1-409(6).   (3) The commissioner may require that the articles, bylaws, agreements, trusts, or other documents or instruments describing the rights and obligations of the employers, employees, and beneficiaries of the arrangement provide that employers participating in the arrangement are subject to pro rata assessment for all liabilities of the arrangement.   (4) Arrangements shall maintain excess of loss insurance coverage covering 100% of claims in excess of the designated attachment point. The commissioner may waive the requirement of excess of loss insurance coverage.   (5) An arrangement shall submit its base contribution rates for participation under the arrangement for its initial year of operations for review and approval by the commissioner.   (6) The commissioner may require continued compliance with respect to the conditions set forth in this section as a condition of granting a certificate of authority to an arrangement. The commissioner may waive continued compliance with respect to the conditions in this section at any time after the commissioner has granted a certificate of authority to an arrangement.   History: En. Sec. 6, Ch. 420, L. 1995.  
  33-35-204 reserved.  
  33-35-205. Application for certificate of authority. A self-funded multiple employer welfare arrangement shall apply for a certificate of authority on a form prescribed by the commissioner and shall submit the application, together with the following documents, to the commissioner:   (1) a copy of all articles, bylaws, agreements, trusts, or other documents or instruments describing the rights and obligations of the employers, employees, and beneficiaries of the arrangement;   (2) a copy of the summary plan description or summary plan descriptions of the arrangement filed or required to be filed with the United States department of labor, together with any amendments to the description;   (3) evidence of coverage of or letters of intent to participate executed by at least 2 employers providing allowable benefits to at least 75 employees;   (4) a copy of the arrangement's most recent year's financial statements or, if the arrangement has been in existence for less than 1 year, pro forma financial statements that must include, at a minimum, a balance sheet, an income statement, a statement of changes in financial position, and an actuarial opinion that the unpaid claim liability of the arrangement satisfies the standards of 33-2-514. The commissioner may, in the commissioner's discretion, waive the requirement of an actuarial opinion and require a report by an actuarial firm.   (5) proof that the arrangement maintains or will maintain fidelity bonds required by the United States department of labor pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq.;   (6) a copy of any excess of loss insurance coverage policies maintained or proposed to be maintained by the arrangement;   (7) biographical reports on forms prescribed by the national association of insurance commissioners evidencing the general trustworthiness and competence of each individual who is serving or who will serve as an employee or fiduciary of the arrangement; and   (8) a statement executed by a representative of the arrangement certifying, to the best knowledge and belief of the representative, that:   (a) the arrangement is in compliance with requirements of 33-35-202;   (b) the arrangement is in compliance with the requirements of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001, et seq., or a statement of any requirements with which the arrangement is not in compliance and a statement of proposed corrective actions; and   (c) the arrangement is in compliance with requirements of 33-35-209 and 33-35-210.   History: En. Sec. 7, Ch. 420, L. 1995.  
  33-35-206 through 33-35-208 reserved.  
  33-35-209. Minimum reserve requirements. Self-funded multiple employer welfare arrangements shall establish by the end of the first year of operations of the arrangement and shall maintain as of the end of each year of operations reserves equal to at least 30% of the unpaid claims liability of the arrangement. The commissioner may adopt rules regarding the supervision, rehabilitation, and liquidation of self-funded multiple employer welfare arrangements that fail to maintain the level of reserves required by this section.   History: En. Sec. 8, Ch. 420, L. 1995.  
  33-35-210. Minimum funding levels. A self-funded multiple employer welfare arrangement shall establish and maintain contribution rates for participation under the arrangement that satisfy either of the following requirements:   (1) contribution rates must equal or exceed the sum of projected claims liability for the year, plus all projected costs of operation of the arrangement for the year, plus an amount equal to any deficiency in the reserves of the arrangement for the prior year, minus an amount equal to the reserves of the arrangement in excess of the minimum required level of reserves; or   (2) contribution rates must equal or exceed a funding level established by a report prepared by an actuarial firm.   History: En. Sec. 9, Ch. 420, L. 1995.  
  33-35-211. Issuance of certificate of authority. (1) The commissioner shall grant or deny an application for a certificate of authority within 180 days of the date that a completed application, together with the items designated in 33-35-205, is submitted to the commissioner.   (2) The commissioner shall grant the application of an arrangement that satisfies the applicable requirements of 33-35-202, 33-35-203, 33-35-205, 33-35-209, and 33-35-210.   (3) The commissioner shall deny the application of an arrangement that does not satisfy the applicable requirements of 33-35-202, 33-35-203, 33-35-205, 33-35-209, and 33-35-210. Denial of an application for a certificate of authority is considered a contested case under the Montana Administrative Procedure Act.   (4) A certificate of authority granted to an arrangement is effective unless revoked by the commissioner under 33-35-302.   History: En. Sec. 10, Ch. 420, L. 1995.  
  33-35-301. Reporting. (1) A self-funded multiple employer welfare arrangement shall comply with the reporting requirements of this section.   (2) Within 3 months following the close of the arrangement's year of operations, the arrangement shall file with the commissioner, on forms prescribed by the commissioner:   (a) a statement of financial condition;   (b) a statement of change in financial conditions accompanied by an actuarial opinion that the unpaid claim liability of the arrangement satisfies the standards of 33-2-514. The commissioner may, in the commissioner's discretion, waive the requirement of an actuarial opinion and require a report prepared by an actuarial firm and, upon a showing of good cause, may extend by 30 days the filing date for the report.   (c) a statement of its contribution rates for the ensuing year;   (d) a statement of operations for the previous year;   (e) if the total payments to the arrangement for participation during the prior year of operations exceeded the sum of $2 million, an audit satisfying the requirements of the commissioner's rules governing annual audited reports, except that an arrangement audit may be prepared using generally accepted accounting principles. The audit must be certified by an independent certified public accountant. The filing date for the audit must be extended by the commissioner upon a showing of good cause.   (f) additional information as the commissioner reasonably determines to be necessary to determine the financial integrity of the management.   (3) An arrangement shall file with the commissioner a copy of the arrangement's internal revenue service form 5500 together with all attachments to the form, at the time required for filing the form.   History: En. Sec. 11, Ch. 420, L. 1995; amd. Sec. 32, Ch. 63, L. 2015.  
  33-35-302. Failure to comply. (1) Pursuant to 33-1-317 and 33-1-318, the commissioner may impose sanctions against a self-funded multiple employer welfare arrangement that fails to comply with the provisions of this chapter. The maximum fine may not exceed $5,000 for each violation.   (2) The commissioner may issue a notice of intent to revoke the certificate of authority of a self-funded multiple employer welfare arrangement that fails to comply with the provisions of 33-35-209, 33-35-210, or 33-35-301. If, within 60 days of receiving notice under this subsection, the arrangement fails to file with the commissioner a plan to bring the arrangement into compliance with 33-35-209, 33-35-210, or 33-35-301, the commissioner may revoke the arrangement's certificate of authority. A revocation of a certificate of authority is a contested case under the Montana Administrative Procedure Act.   (3) The commissioner shall adopt rules to provide sanctions for an arrangement that fails to maintain the level of reserves required by 33-35-209. The rules must be consistent with the provisions of Title 33, chapter 2, part 13.   History: En. Sec. 12, Ch. 420, L. 1995.  
  33-35-303. Violation by arrangement failing to obtain or maintain certificate of authority. A self-funded multiple employer welfare arrangement organized or maintained in Montana without a certificate of authority is in violation of 33-2-101.   History: En. Sec. 13, Ch. 420, L. 1995.  
  33-35-304 and 33-35-305 reserved.  
  33-35-306. Application of insurance code to arrangements. (1) In addition to this chapter, self-funded multiple employer welfare arrangements are subject to the following provisions:  (a) 33-1-111;   (b) Title 33, chapter 1, part 4, but the examination of a self-funded multiple employer welfare arrangement is limited to those matters to which the arrangement is subject to regulation under this chapter;   (c) Title 33, chapter 1, part 7;   (d) Title 33, chapter 2, parts 23 and 24;   (e) 33-3-308;   (f) Title 33, chapter 7;   (g) Title 33, chapter 18, except 33-18-242;   (h) Title 33, chapter 19;   (i) 33-22-107, 33-22-128, 33-22-131, 33-22-134, 33-22-135, 33-22-138, 33-22-139, 33-22-141, 33-22-142, 33-22-152, and 33-22-153;   (j) 33-22-512, 33-22-515, 33-22-525, and 33-22-526;   (k) Title 33, chapter 22, part 7; and   (l) 33-22-707.   (2) Except as provided in this chapter, other provisions of Title 33 do not apply to a self-funded multiple employer welfare arrangement that has been issued a certificate of authority that has not been revoked.   History: En. Sec. 14, Ch. 420, L. 1995; amd. Sec. 7, Ch. 410, L. 1997; amd. Sec. 32, Ch. 416, L. 1997; amd. Sec. 5, Ch. 434, L. 1999; amd. Sec. 49, Ch. 380, L. 2003; amd. Sec. 8, Ch. 384, L. 2003; amd. Sec. 2, Ch. 249, L. 2007; amd. Sec. 9, Ch. 356, L. 2007; amd. Sec. 6, Ch. 390, L. 2007; amd. Sec. 26, Ch. 399, L. 2007; amd. Sec. 5, Ch. 359, L. 2009; amd. Sec. 5, Ch. 97, L. 2013; amd. Sec. 4, Ch. 164, L. 2013; amd. Sec. 10, Ch. 363, L. 2013; amd. Sec. 4, Ch. 256, L. 2015; amd. Sec. 10, Ch. 231, L. 2017; amd. Sec. 8, Ch. 245, L. 2017; amd. Sec. 4, Ch. 209, L. 2021; amd. Sec. 4, Ch. 277, L. 2021; amd. Sec. 3, Ch. 323, L. 2021; amd. Sec. 19, Ch. 501, L. 2021. 
  33-35-307. Disclosure. Each policy issued by a self-funded multiple employer welfare arrangement must contain, in 10-point type on the front page and the declaration page, the following notice:   "NOTICE   This policy is issued by a self-funded multiple employer welfare arrangement. A self-funded multiple employer welfare arrangement may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for a self-funded multiple employer welfare arrangement."   History: En. Sec. 15, Ch. 420, L. 1995.  
  33-36-101. Short title. This chapter may be cited as the "Managed Care Plan Network Adequacy and Quality Assurance Act".   History: En. Sec. 8, Ch. 413, L. 1997.  
  33-36-102. Purpose. The purpose and intent of this chapter are to:   (1) establish standards for the creation and maintenance of networks by health carriers offering managed care plans and to ensure the adequacy, accessibility, and quality of health care services offered under a managed care plan by establishing requirements for written agreements between health carriers offering managed care plans and participating providers regarding the standards, terms, and provisions under which the participating provider will provide services to covered persons;   (2) provide for the implementation of state network adequacy and quality assurance standards in administrative rules, provide for monitoring compliance with those standards, and provide a mechanism for detecting and reporting violations of those standards to the commissioner;   (3) establish minimum criteria for the quality assessment activities of a health carrier issuing a closed plan or a combination plan and to require that minimum state quality assessment criteria be adopted by rule;   (4) enable health carriers to evaluate, maintain, and improve the quality of health care services provided to covered persons; and   (5) provide a streamlined and simplified process by which managed care network adequacy and quality assurance programs may be monitored for compliance through coordinated efforts of the commissioner and the department. It is not the purpose or intent of this chapter to apply quality assurance standards applicable to medicaid or medicare to managed care plans regulated pursuant to this chapter or to create or require the creation of quality assurance programs that are as comprehensive as quality assurance programs applicable to medicaid or medicare.   History: En. Sec. 9, Ch. 413, L. 1997.  
  33-36-103. Definitions. As used in this chapter, the following definitions apply:   (1) "Closed plan" means a managed care plan that requires covered persons to use only participating providers under the terms of the managed care plan.   (2) "Combination plan" means an open plan with a closed component.   (3) "Covered benefits" means those health care services to which a covered person is entitled under the terms of a health benefit plan.   (4) "Covered person" means a policyholder, subscriber, or enrollee or other individual participating in a health benefit plan.   (5) "Department" means the department of public health and human services established in 2-15-2201.   (6) "Emergency medical condition" means a condition manifesting itself by symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected to result in any of the following:   (a) the covered person's health would be in serious jeopardy;   (b) the covered person's bodily functions would be seriously impaired; or   (c) a bodily organ or part would be seriously damaged.   (7) "Emergency services" means health care items and services furnished or required to evaluate and treat an emergency medical condition.   (8) "Facility" means an institution providing health care services or a health care setting, including but not limited to a hospital, medical assistance facility, or critical access hospital, as defined in 50-5-101, or other licensed inpatient center, an outpatient center for surgical services, a treatment center, a skilled nursing center, a residential treatment center, a diagnostic laboratory, a diagnostic imaging center, or a rehabilitation or other therapeutic health setting.   (9) "Health benefit plan" means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.   (10) "Health care professional" means a physician or other health care practitioner licensed, accredited, or certified pursuant to the laws of this state to perform specified health care services consistent with state law.   (11) "Health care provider" or "provider" means a health care professional or a facility.   (12) "Health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease.   (13) "Health carrier" means an entity subject to the insurance laws and rules of this state that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a disability insurer, health maintenance organization, or health service corporation or another entity providing a health benefit plan.   (14) "Intermediary" means a person authorized to negotiate, execute, and be a party to a contract between a health carrier and a provider or between a health carrier and a network.   (15) "Managed care plan" means a health benefit plan that either requires or creates incentives, including financial incentives, for a covered person to use health care providers managed, owned, under contract with, or employed by a health carrier, but not preferred provider organizations or other provider networks operated in a fee-for-service indemnity environment.   (16) "Medically necessary" means services, medicines, or supplies that are necessary and appropriate for the diagnosis or treatment of a covered person's illness, injury, or medical condition according to accepted standards of medical practice and that are not provided only as a convenience.   (17) "Network" means the group of participating providers that provides health care services to a managed care plan.   (18) "Open plan" means a managed care plan other than a closed plan that provides incentives, including financial incentives, for covered persons to use participating providers under the terms of the managed care plan.   (19) "Participating provider" means a provider who, under a contract with a health carrier or with the health carrier's contractor, subcontractor, or intermediary, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly from the health carrier.   (20) "Primary care professional" means a participating health care professional designated by the health carrier to supervise, coordinate, or provide initial care or continuing care to a covered person and who may be required by the health carrier to initiate a referral for specialty care and to maintain supervision of health care services rendered to the covered person.   (21) "Quality assessment" means the measurement and evaluation of the quality and outcomes of medical care provided to individuals, groups, or populations.   (22) "Quality assurance" means quality assessment and quality improvement.   (23) "Quality improvement" means an effort to improve the processes and outcomes related to the provision of health care services within a health plan.   History: En. Sec. 10, Ch. 413, L. 1997; amd. Sec. 2, Ch. 192, L. 2001; amd. Sec. 6, Ch. 502, L. 2007.  
  33-36-104. Applicability and scope. This chapter applies to all health carriers that offer managed care plans. This chapter does not exempt a health carrier from the applicable requirements of federal law when providing a managed care plan to medicare recipients or from the applicable requirements of federal law or Title 53, chapter 6, when providing a managed care plan to medicaid recipients.   History: En. Sec. 11, Ch. 413, L. 1997.  
  33-36-105. Department -- general powers and duties -- rulemaking. (1) The department shall:   (a) adopt rules pursuant to the Montana Administrative Procedure Act establishing minimum state standards for network adequacy and quality assurance and procedures for ensuring compliance with those standards; and   (b) recommend action to the commissioner against a health carrier whose managed care plan does not comply with standards for network adequacy and quality assurance adopted by the department.   (2) Quality assurance standards adopted by the department must consist of some but not all of the health plan employer data and information standards. The department shall select and adopt only standards appropriate for quality assurance in Montana.   (3) The state may contract, through a competitive bidding process, for the development of network adequacy and quality assurance standards.   History: En. Sec. 12, Ch. 413, L. 1997.  
  33-36-201. Network adequacy -- standards -- access plan required. (1) A health carrier offering a managed care plan in this state shall maintain a network that is sufficient in numbers and types of providers to ensure that all services to covered persons are accessible without unreasonable delay. Sufficiency in number and type of provider is determined in accordance with the requirements of this section. Covered persons must have access to emergency care 24 hours a day, 7 days a week. A health carrier providing a managed care plan shall use reasonable criteria to determine sufficiency. The criteria may include but are not limited to:   (a) a ratio of specialty care providers to covered persons;   (b) a ratio of primary care providers to covered persons;   (c) geographic accessibility;   (d) waiting times for appointments with participating providers;   (e) hours of operation; or   (f) the volume of technological and specialty services available to serve the needs of covered persons requiring technologically advanced or specialty care.   (2) Whenever a health carrier has an insufficient number or type of participating providers to provide a covered benefit, the health carrier shall ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the covered benefit were obtained from participating providers or shall make other arrangements acceptable to the department.   (3) The health carrier shall establish and maintain adequate provider networks to ensure reasonable proximity of participating providers to the businesses or personal residences of covered persons. In determining whether a health carrier has complied with this requirement, consideration must be given to the relative availability of health care providers in the service area under consideration.   (4) A health carrier offering a managed care plan in this state on October 1, 1999, shall file with the department on October 1, 1999, an access plan complying with subsection (6) and the rules of the department. A health carrier offering a managed care plan in this state for the first time after October 1, 1999, shall file with the department an access plan meeting the requirements of subsection (6) and the rules of the department before offering the managed care plan. A plan must be filed with the department in a manner and form complying with the rules of the department. A health carrier shall file any subsequent material changes in its access plan with the department within 30 days of implementation of the change.   (5) A health carrier may request the department to designate parts of its access plan as proprietary or competitive information, and when designated, that part may not be made public. For the purposes of this section, information is proprietary or competitive if revealing the information would cause the health carrier's competitors to obtain valuable business information. A health carrier shall make the access plans, absent proprietary information, available on its business premises and shall provide a copy of the plan upon request.   (6) An access plan for each managed care plan offered in this state must describe or contain at least the following:   (a) a listing of the names and specialties of the health carrier's participating providers;   (b) the health carrier's procedures for making referrals within and outside its network;   (c) the health carrier's process for monitoring and ensuring on an ongoing basis the sufficiency of the network to meet the health care needs of populations that enroll in the managed care plan;   (d) the health carrier's efforts to address the needs of covered persons with limited English proficiency and illiteracy, with diverse cultural and ethnic backgrounds, and with physical and mental disabilities;   (e) the health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services;   (f) the health carrier's method of informing covered persons of the plan's services and features, including but not limited to the plan's grievance procedures, its process for choosing and changing providers, and its procedures for providing and approving emergency and specialty care;   (g) the health carrier's system for ensuring the coordination and continuity of care for covered persons referred to specialty physicians and for covered persons using ancillary services, including social services and other community resources, and for ensuring appropriate discharge planning;   (h) the health carrier's process for enabling covered persons to change primary care professionals;   (i) the health carrier's proposed plan for providing continuity of care in the event of contract termination between the health carrier and a participating provider or in the event of the health carrier's insolvency or other inability to continue operations. The description must explain how covered persons will be notified of the contract termination or the health carrier's insolvency or other cessation of operations and be transferred to other providers in a timely manner.   (j) any other information required by the department to determine compliance with this part and the rules implementing this part.   (7) The department shall ensure timely and expedited review and approval of the access plan and other requirements in this section.   History: En. Sec. 13, Ch. 413, L. 1997; amd. Sec. 10, Ch. 325, L. 2003.  
  33-36-202. Provider responsibility for care -- contracts -- prohibited collection practices. (1) A contract between a health carrier and a participating provider must set forth a hold harmless provision specifying protection for covered persons. This requirement is met by including in a contract a provision substantially the same as the following:   "The provider agrees that the provider may not for any reason, including but not limited to nonpayment by the health carrier or intermediary, insolvency of the health carrier or intermediary, or breach of this agreement, bill, charge, collect a deposit, seek compensation, remuneration, or reimbursement, or have any recourse from or against a covered person or a person other than the health carrier or intermediary acting on behalf of the covered person for services provided pursuant to this agreement. This agreement does not prohibit the provider from collecting coinsurance, copayments, or deductibles, as specifically provided in the evidence of coverage, or fees for uncovered services delivered on a fee-for-service basis to a covered person. This agreement does not prohibit a provider, except a health care professional who is employed full-time on the staff of a health carrier and who has agreed to provide services exclusively to that health carrier's covered persons and no others, and a covered person from agreeing to continue services solely at the expense of the covered person if the provider has clearly informed the covered person that the health carrier may not cover or continue to cover a specific service or services. Except as provided in this agreement, this agreement does not prohibit the provider from pursuing any legal remedy available for obtaining payment for services from the health carrier."   (2) A contract between a health carrier and a participating provider must state that if a health carrier or intermediary becomes insolvent or otherwise ceases operations, covered benefits to covered persons will continue through the end of the period for which a premium has been paid to the health carrier on behalf of the covered person, but not to exceed 30 days, or until the covered person's discharge from an acute care inpatient facility, whichever occurs last. Covered benefits to a covered person confined in an acute care inpatient facility on the date of insolvency or other cessation of operations must be continued by a provider until the confinement in an inpatient facility is no longer medically necessary.   (3) The contract provisions that satisfy the requirements of subsections (1) and (2) must be construed in favor of the covered person, survive the termination of the contract regardless of the reason for termination, including the insolvency of the health carrier, and supersede an oral or written contrary agreement between a participating provider and a covered person or the representative of a covered person if the contrary agreement is inconsistent with the hold harmless and continuation of covered benefits provisions required by subsections (1) and (2).   (4) A participating provider may not collect or attempt to collect from a covered person money owed to the provider by the health carrier.   History: En. Sec. 14, Ch. 413, L. 1997.  
  33-36-203. Selection of providers -- professional credentials standards. (1) A health carrier shall adopt standards for selecting participating providers who are primary care professionals and for each health care professional specialty within the health carrier's network. The health carrier shall use the standards to select health care professionals, the health carrier's intermediaries, and any provider network with which the health carrier contracts. A health carrier may not adopt selection criteria that allow the health carrier to:   (a) avoid high-risk populations by excluding a provider because the provider is located in a geographic area that contains populations or providers presenting a risk of higher than average claims, losses, or use of health care services; or   (b) exclude a provider because the provider treats or specializes in treating populations presenting a risk of higher than average claims, losses, or use of health care services.   (2) Subsection (1) does not prohibit a health carrier from declining to select a provider who fails to meet the other legitimate selection criteria of the health carrier adopted in compliance with this part and the rules implementing this part.   (3) This part does not require a health carrier, its intermediary, or a provider network with which the health carrier or its intermediary contract to employ specific providers or types of providers who may meet their selection criteria or to contract with or retain more providers or types of providers than are necessary to maintain an adequate network.   (4) A health carrier may use criteria established in accordance with the provisions of this section to select health care professionals allowed to participate in the health carrier's managed care plan. A health carrier shall make its selection standards for participating providers available for review by the department and by each health care professional who is subject to the selection standards.   History: En. Sec. 15, Ch. 413, L. 1997.  
  33-36-204. Health carriers -- general responsibilities. (1) A health carrier offering a managed care plan shall notify, in writing, prospective participating providers of the participating providers' responsibilities concerning the health carrier's administrative policies and programs, including but not limited to payment terms, utilization reviews, the quality assurance program, credentialing, grievance procedures, data reporting requirements, confidentiality requirements, and applicable federal or state requirements.   (2) A health carrier may not offer an inducement under a managed care plan to a participating provider to provide less than medically necessary services to a covered person.   (3) A health carrier may not prohibit a participating provider from discussing a treatment option with a covered person or from advocating on behalf of a covered person within the utilization review or grievance processes established by the health carrier or a person contracting with the health carrier.   (4) A health carrier shall require a participating provider to make health records available to appropriate state and federal authorities, in accordance with the applicable state and federal laws related to the confidentiality of medical or health records, when the authorities are involved in assessing the quality of care or investigating a grievance or complaint of a covered person.   (5) A health carrier and participating provider shall provide at least 60 days' written notice to each other before terminating the contract between them without cause. The health carrier shall make a good faith effort to provide written notice of a termination, within 15 working days of receipt or issuance of a notice of termination from or to a participating provider, to all covered persons who are patients seen on a regular basis by the participating provider whose contract is terminating, irrespective of whether the termination is for cause or without cause. If a contract termination involves a primary care professional, all covered persons who are patients of that primary care professional must be notified.   (6) A health carrier shall ensure that a participating provider furnishes covered benefits to all covered persons without regard to the covered person's enrollment in the plan as a private purchaser or as a participant in a publicly financed program of health care services. This requirement does not apply to circumstances in which the participating provider should not render services because of the participating provider's lack of training, experience, or skill or because of a restriction on the participating provider's license.   (7) A health carrier shall notify the participating providers of their obligation, if any, to collect applicable coinsurance, copayments, or deductibles from covered persons pursuant to the evidence of coverage or of the participating providers' obligations, if any, to notify covered persons of the covered persons' personal financial obligations for noncovered benefits.   (8) A health carrier may not penalize a participating provider because the participating provider, in good faith, reports to state or federal authorities an act or practice by the health carrier that may adversely affect patient health or welfare.   (9) A health carrier shall establish a mechanism by which a participating provider may determine in a timely manner whether or not a person is covered by the health carrier.   (10) A health carrier shall establish procedures for resolution of administrative, payment, or other disputes between the health carrier and participating providers.   (11) A contract between a health carrier and a participating provider may not contain definitions or other provisions that conflict with the definitions or provisions contained in the managed care plan or this chapter.   (12) A contract between a health carrier and a participating provider shall set forth all of the responsibilities and obligations of the provider either in the contract or documents referenced in the contract. A health carrier shall make its best effort to furnish copies of any reference documents, if requested by a participating provider, prior to execution of the contract.   History: En. Sec. 16, Ch. 413, L. 1997.  
  33-36-205. Emergency services. (1) A health carrier offering a managed care plan shall provide or pay for emergency services screening and emergency services and may not require prior authorization for either of those services. If an emergency services screening determines that emergency services or emergency services of a particular type are unnecessary for a covered person, emergency services or emergency services of the type determined unnecessary by the screening need not be covered by the health carrier unless otherwise covered under the health benefit plan. However, if screening determines that emergency services or emergency services of a particular type are necessary, those services must be covered by the health carrier. A health carrier shall cover emergency services if the health carrier, acting through a participating provider or other authorized representative, has authorized the provision of emergency services.   (2) A health carrier shall provide or pay for emergency services obtained from a nonnetwork provider within the service area of a managed care plan and may not require prior authorization of those services if use of a participating provider would result in a delay that would worsen the medical condition of the covered person or if a provision of federal, state, or local law requires the use of a specific provider.   (3) If a participating provider or other authorized representative of a health carrier authorizes emergency services, the health carrier may not subsequently retract its authorization after the emergency services have been provided or reduce payment for an item or health care services furnished in reliance on approval unless the approval was based on a material misrepresentation about the covered person's medical condition made by the provider of emergency services.   (4) Coverage of emergency services is subject to applicable coinsurance, copayments, and deductibles.   (5) For postevaluation or poststabilization services required immediately after receipt of emergency services, a health carrier shall provide access to an authorized representative 24 hours a day, 7 days a week, to facilitate review.   History: En. Sec. 17, Ch. 413, L. 1997; amd. Sec. 11, Ch. 325, L. 2003.  
  33-36-206 through 33-36-208 reserved.  
  33-36-209. Use of intermediaries -- responsibilities of health carriers, intermediaries, and providers. (1) A health carrier is responsible for complying with applicable provisions of this chapter, and contracting with an intermediary for all or some of the services for which a health carrier is responsible does not relieve the health carrier of responsibility for compliance.   (2) A health carrier may determine whether a subcontracted provider participates in the provider's own network or a contracted network for the purpose of providing covered benefits to the health carrier's covered persons.   (3) A health carrier shall maintain copies of all intermediary health care subcontracts at the health carrier's principal place of business in this state or ensure that the health carrier has access to all intermediary subcontracts, including the right to make copies of the contracts, upon 20 days' prior written notice from the health carrier.   (4) If required in a contract or otherwise by a health carrier, an intermediary shall transmit utilization documentation and claims-paid documentation to the health carrier. The health carrier shall monitor the timeliness and appropriateness of payments made to providers and health care services received by covered persons. This duty may not be delegated to an intermediary by a health carrier.   (5) If required in a contract or otherwise by a health carrier, an intermediary shall maintain the books, records, financial information, and documentation of services provided to covered persons at its principal place of business in the state and preserve them for 5 years in a manner that facilitates regulatory review.   (6) An intermediary shall allow the commissioner and the department access to the intermediary's books, records, claim information, billing information, and other documentation of services provided to covered persons that are required by any of those entities to determine compliance with this part and the rules implementing this part.   (7) A health carrier may, in the event of the intermediary's insolvency, require the assignment to the health carrier of the provisions of a participating provider's contract addressing the participating provider's obligation to furnish covered benefits.   History: En. Sec. 18, Ch. 413, L. 1997.  
  33-36-210. Contract filing requirements -- material changes -- state access to contracts. (1) On October 1, 1999, a health carrier offering a managed care plan shall file with the department sample contract forms proposed for use with its participating providers and intermediaries.   (2) A health carrier shall file with the department a material change to a contract. The change must be filed with the department at least 60 days before use of the proposed change. A change in a participating provider payment rate, coinsurance, copayment, or deductible or other plan benefit is not considered a material change for the purpose of this subsection.   (3) A health carrier shall maintain participating provider and intermediary contracts at its principal place of business in this state, or the health carrier must have access to all contracts and provide copies to the department upon 20 days' prior written notice from the department.   History: En. Sec. 19, Ch. 413, L. 1997.  
  33-36-211. General contracting requirements. (1) The execution of a contract for health care services with an intermediary by a health carrier does not relieve the health carrier of its duty to provide health care services to a person with whom the health carrier has contracted and does not relieve the health carrier of its responsibility for compliance with this chapter or the rules implementing this chapter.   (2) All contracts by a health carrier for the provision of health care services by a managed care plan must be in writing and are subject to review by the department and the commissioner.   History: En. Sec. 20, Ch. 413, L. 1997.  
  33-36-212. Contract compliance dates. (1) A contract between a health carrier and a participating provider or intermediary in effect on October 1, 1999, must comply with this part and the rules implementing this part by October 1, 1999. The department may extend the October 1 date for an additional period of up to 6 months if the health carrier demonstrates good cause for an extension.   (2) A contract between a health carrier and a participating provider or intermediary issued or put into effect on or after October 1, 1999, must comply with this part and the rules implementing this part on the day that it is issued or put into effect.   (3) A contract between a health carrier and a participating provider or intermediary not described in subsection (1) or (2) must comply with this part and the rules implementing this part by October 1, 1999.   History: En. Sec. 21, Ch. 413, L. 1997.  
  33-36-213. Department rules. The department may adopt rules to implement this part.   History: En. Sec. 22, Ch. 413, L. 1997.  
  33-36-301. Quality assurance -- national accreditation. (1) A health carrier whose managed care plan has been accredited by a nationally recognized accrediting organization shall annually provide a copy of the accreditation and the accrediting standards used by the accrediting organization to the department.   (2) If the department finds that the standards of a nationally recognized accrediting organization meet or exceed state standards and that the health carrier has been accredited by the nationally recognized accrediting organization, the department shall approve the quality assurance standards of the health carrier.   (3) The department shall maintain a list of accrediting organizations whose standards have been determined by the department to meet or exceed state quality assurance standards.   (4) Section 33-36-302 does not apply to a health carrier's managed care plan if the health carrier maintains current accreditation by a nationally recognized accrediting organization whose standards meet or exceed state quality assurance standards adopted pursuant to this part.   (5) This section does not prevent the department from monitoring a health carrier's compliance with this part.   History: En. Sec. 23, Ch. 413, L. 1997.  
  33-36-302. Standards for health carrier quality assessment programs. A health carrier that issues a closed plan or a combination plan shall adopt and use infrastructure and disclosure systems sufficient to accurately measure the quality of health care services provided to covered persons on a regular basis and appropriate to the types of plans offered by the health carrier. To comply with this requirement, a health carrier shall:   (1) establish and use a system designed to assess the quality of health care provided to covered persons and appropriate to the types of plans offered by the health carrier. The system must include systematic collection, analysis, and reporting of relevant data.   (2) communicate in a timely fashion its findings concerning the quality of health care to regulatory agencies, providers, and consumers as provided in 33-36-304;   (3) report to the appropriate professional or occupational licensing board provided in Title 37 any persistent pattern of problematic care provided by a participating provider that is sufficient to cause the health carrier to terminate or suspend a contractual arrangement with the participating provider; and   (4) file a written description of the quality assessment program and any subsequent material changes with the department in a format that must be prescribed by rules of the department. The description must include a signed certification by a corporate officer of the health carrier that the health carrier's quality assessment program meets the requirements of this part.   History: En. Sec. 24, Ch. 413, L. 1997.  
  33-36-303. Standards for health carrier quality improvement programs. A health carrier that issues a closed plan or a combination plan shall, in addition to complying with 33-36-302, adopt and use systems and methods necessary to improve the quality of health care provided in the health carrier's managed care plan as indicated by the health carrier's quality assessment program and as required by this section. To comply with this requirement, a health carrier subject to this section shall:   (1) establish an internal system capable of identifying opportunities to improve care;   (2) use the findings generated by the system required by subsection (1) to work on a continuing basis with participating providers and other staff within the closed plan or closed component to improve the health care delivered to covered persons;   (3) adopt and use a program for measuring, assessing and improving the outcomes of health care as identified in the health carrier's quality improvement program plan. This quality improvement program plan must be filed with the department by October 1, 2000, and must be consistent with this part. A health carrier shall file any subsequent material changes to its quality improvement program plan within 30 days of implementation of the change. The quality improvement program plan must:   (a) implement improvement strategies in response to quality assessment findings that indicate improvement is needed; and   (b) evaluate, not less than annually, the effectiveness of the strategies implemented pursuant to subsection (3)(a).   History: En. Sec. 25, Ch. 413, L. 1997.  
  33-36-304. Reporting and disclosure requirements. (1) A health carrier offering a closed plan or a combination plan shall document and communicate information, as required in this section, about its quality assurance program. The health carrier shall:   (a) include a summary of its quality assurance program in marketing materials;   (b) include a description of its quality assurance program and a statement of patient rights and responsibilities with respect to that program in the certificate of coverage or handbook provided to newly enrolled covered persons; and   (c) make available annually to providers and covered persons a report containing findings from its quality assurance program and information about its progress in meeting internal goals and external standards, when available.   (2) A health carrier shall certify to the department annually that its quality assurance program and the materials provided to providers and consumers in accordance with subsection (1) meet the requirements of this part.   (3) A health carrier shall make available, upon request and payment of a reasonable fee, the materials certified pursuant to subsection (2), except for the materials subject to the confidentiality requirements of 33-36-305 and materials that are proprietary to the managed care plan. A health carrier shall retain all certified materials for at least 3 years from the date that the material was certified or until the material has been examined as part of a market conduct examination, whichever is later.   History: En. Sec. 26, Ch. 413, L. 1997.  
  33-36-305. Confidentiality of health care and quality assurance records -- disclosure. (1) Except as provided in subsection (2), the following information held by a health carrier offering a closed plan or a combination plan is confidential and may not be disclosed by the carrier to a person:   (a) information pertaining to the diagnosis, treatment, or health of a covered person, regardless of whether the information is in the form of paper, is preserved on microfilm, or is stored in computer-retrievable form;   (b) information considered by a quality assurance program and the records of its actions, including testimony of a member of a quality committee, of an officer, director, or other member of a health carrier or its staff engaged in assisting the quality committee or engaged in the health carrier's quality assessment, quality improvement, or quality assurance activities, or of any person assisting or furnishing information to the quality committee.   (2) The information specified in subsection (1) may be disclosed:   (a) as allowed by Title 33, chapter 19;   (b) as required in proceedings before the commissioner, a professional or occupational licensing board provided in Title 37, or the department pursuant to Title 50, chapter 5, part 2;   (c) in an appeal, if an appeal is permitted, from a quality committee's findings or recommendations; or   (d) as otherwise required by law or court order, including a judicial or administrative subpoena.   (3) Information specified in subsection (1) identifying:   (a) the provider may also be disclosed upon a written, dated, and signed approval of the provider if the information does not identify the covered person;   (b) the covered person may also be disclosed upon a written, dated, and signed approval of the covered person or of the parent or guardian of a covered person if the covered person is a minor and if the information does not identify the provider;   (c) neither the provider nor the covered person may also be disclosed upon request for use for statistical purposes only.   History: En. Sec. 27, Ch. 413, L. 1997.  
  33-36-401. Enforcement. (1) If the department determines that a health carrier has not complied with this chapter or the rules implementing this chapter, the department may recommend corrective action to the health carrier.   (2) At the recommendation of the department the commissioner may take an enforcement action provided in subsection (3) if:   (a) a health carrier fails to implement corrective action recommended by the department;   (b) corrective action taken by a health carrier does not result in bringing a health carrier into compliance with this chapter and the rules implementing this chapter within a reasonable period of time;   (c) the department demonstrates to the commissioner that a health carrier does not comply with this chapter or the rules implementing this chapter; or   (d) the commissioner determines that a health carrier has violated or is violating this chapter or the rules implementing this chapter.   (3) The commissioner may take any of the following enforcement actions to require a health carrier to comply with this chapter or the rules implementing this chapter:   (a) suspend or revoke the health carrier's certificate of authority or deny the health carrier's application for a certificate of authority; or   (b) use any of the commissioner's other enforcement powers provided in Title 33, chapter 1, part 3.   History: En. Sec. 28, Ch. 413, L. 1997.  
  33-36-402. Jurisdiction over contract actions. The district courts have jurisdiction over actions for the enforcement of contracts authorized or regulated by this chapter.   History: En. Sec. 29, Ch. 413, L. 1997.  
  33-37-101. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 1, Ch. 482, L. 1999.  
  33-37-102. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 2, Ch. 482, L. 1999.  
  33-37-103. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 3, Ch. 482, L. 1999.  
  33-37-104. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 4, Ch. 482, L. 1999.  
  33-37-105. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 5, Ch. 482, L. 1999.  
  33-37-106. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 8, Ch. 482, L. 1999.  
  33-37-107 through 33-37-109 reserved.  
  33-37-110. Repealed. Sec. 40, Ch. 428, L. 2015.   History: En. Sec. 1, Ch. 107, L. 2001.  
  33-38-101. Short title -- purpose. (1) This part may be cited as the "Montana Medical Care Discount Card and Pharmacy Discount Card Act".   (2) The purposes of this part are to regulate the promotion, offer, sale, and use of medical care discount cards and pharmacy discount cards and to facilitate the detection of and reduce the occurrence of medical care discount card and pharmacy discount card fraud.   History: En. Sec. 4, Ch. 456, L. 2005.  
  33-38-102. Definitions. As used in this part, unless the context indicates otherwise, the following definitions apply:  (1) (a) "Administrator" has the meaning provided for in 33-17-102(3).   (b) The term includes a pharmacy benefit manager as defined in 33-2-2402.   (2) "Enroller" means a person who:   (a) solicits the purchase or renewal of a medical care discount card through that person;   (b) transmits, for consideration, from a supplier to another person or from another person to a supplier a contract or application for a medical care discount card or the renewal of a medical care discount card; or   (c) acts or aids in another manner in the delivery or negotiation of a medical care discount card or the renewal or continuance of a medical care discount card.   (3) "Health care provider" means:   (a) an individual licensed by the department of labor and industry to practice or who holds a temporary permit to practice a branch of the healing arts;   (b) a professional corporation organized pursuant to Title 35, chapter 4, by one or more individuals described in subsection (3)(a);   (c) a Montana limited liability company organized pursuant to Title 35, chapter 8, for the purpose of rendering professional services by individuals described in subsection (3)(a);   (d) a partnership of individuals described in subsection (3)(a);   (e) a Montana nonprofit corporation organized pursuant to Title 35, chapter 2, for the purpose of rendering professional health care services by one or more individuals described in subsection (3)(a); or   (f) a health care facility as defined in 50-5-101.   (4) "Health insurance issuer" means a health insurance issuer, as defined in 33-22-140, that is authorized to do business in this state and its affiliates, as defined in 33-2-1101.   (5) (a) "Medical care discount card" means a paper or plastic device or other mechanism, arrangement, account, or other device that does not constitute insurance, as defined in 33-1-201, that purports to grant, for consideration, a discount or access to a discount in a medical care-related purchase from a health care provider.   (b) The term does not include a pharmacy discount card unless a pharmacy discount benefit is combined with another type of medical care discount.   (6) "Medical care discount card supplier" means a person engaged in selling or furnishing, either as principal or agent, for consideration, one or more medical care discount cards to another person or persons.   (7) "Network of health care providers" means two or more health care providers who are contractually obligated to provide services in accordance with the terms and conditions applicable to a medical care discount card.   (8) "Pharmacy discount card" means a paper or plastic device or other mechanism, arrangement, account, or other device that does not constitute insurance, as defined in 33-1-201, that purports to grant, for consideration, a discount or access to a discount on one or more prescription drugs, and that is not combined with another type of medical care discount.   (9) "Pharmacy discount card supplier" means a person engaged in selling or furnishing, either as a principal or agent, for consideration, one or more pharmacy discount cards to another person or persons.   (10) "Preferred provider organization company" means a company that contracts with health care providers for lower fees than those customarily charged by the health care provider for services and contracts with health insurance issuers, administrators, or self-insured employers to provide access to those lower fees to a particular group of insureds, subscribers, participants, beneficiaries, members, or claimants.   (11) "Prescription drug provider" means a pharmacy or other business that is contractually bound to provide a discount on one or more prescription drugs in conjunction with the use of a pharmacy discount card.   (12) "Service area" means the area within a 60-mile radius of the home or place of business of a medical care discount card user or pharmacy discount card user.   History: En. Sec. 5, Ch. 456, L. 2005; amd. Sec. 20, Ch. 501, L. 2021. 
  33-38-103. Unlawful acts by medical care discount card suppliers or enrollers. (1) A medical care discount card supplier or an enroller that markets, promotes, advertises, or distributes a medical care discount card in Montana:   (a) may not make misleading, deceptive, or fraudulent representations regarding:   (i) the discount or range of discounts offered by a medical care discount card;   (ii) the access to any range of discounts offered by a medical care discount card; or   (iii) another medical care service provided in connection with a medical care discount card;   (b) may not use terms or phrases commonly associated with insurance products that could lead a prospective purchaser or user of a medical care discount card to believe that the card being offered is composed of one or more insurance products or is a substitute for insurance, despite disclaimers to the contrary by the medical care discount card supplier or enroller;   (c) shall provide to a prospective purchaser or user, before purchase, access to a list of health care providers, including the name, city, state, and provider type and, optionally, the address and telephone number of each health care provider in the prospective purchaser's or user's service area; and   (d) shall make continuously available to each medical care discount card user, through a toll-free telephone number, the internet, and in writing upon request, the name, address, telephone number, and provider type of all health care providers in the user's service area who are bound by contract to provide services in accordance with the terms and conditions applicable to the card.   (2) A medical care discount card supplier that markets, promotes, advertises, or distributes a medical care discount card in Montana shall:   (a) state, on all advertisements for medical care discount cards, in bold and prominent type of at least 14 points in size, and on all cards themselves in clear and conspicuous type, that the card is not insurance;   (b) designate and provide the commissioner with the name, address, and telephone number of a medical care discount card compliance officer responsible for ensuring compliance with the provisions of this part applicable to medical care discount cards and medical care discount card suppliers and enrollers; and   (c) ensure that if the medical care discount card supplier claims that a specific health care provider offers a discount in conjunction with the medical care discount card, that specific health care provider is contractually bound to provide that discount to the purchaser or user.   History: En. Sec. 6, Ch. 456, L. 2005.  
  33-38-104. Right to return or cancel medical care discount card or pharmacy discount card -- notice -- prohibited acts. (1) A medical care discount card or pharmacy discount card issued for delivery in this state is returnable or cancelable, within 30 days of the date of delivery of the card or a longer period if provided in the purchase agreement, by the purchaser or user for any reason, and the user must receive a full refund of all fees, except nominal fees associated with enrollment costs, that were part of the cost of the card.   (2) A medical care discount card supplier or pharmacy discount card supplier may not charge or collect a fee, including a cancellation fee, after a purchaser or user has returned a card to the supplier or given the supplier notice of the person's intention to return or cancel the card.   (3) A medical care discount card supplier or pharmacy discount card supplier shall ensure that each purchaser or user receives with the card a notice stating the terms under which the medical care discount card or pharmacy discount card may be returned or canceled as provided in subsections (1) and (2). A medical care discount card or pharmacy discount card returned or canceled in accordance with this section is void from the date of purchase.   History: En. Sec. 7, Ch. 456, L. 2005.  
  33-38-105. Sale of medical care discount card by unregistered supplier prohibited -- requirements for registration -- list of authorized enrollers required -- exceptions. (1) A medical care discount card supplier may not market, promote, sell, or distribute a medical care discount card in this state unless the supplier holds a certificate of registration as a supplier issued by the commissioner.   (2) An application to the commissioner for a certificate of registration must be accompanied by a nonrefundable application fee of $100. The commissioner shall issue the certificate unless the commissioner determines that the medical care discount card supplier or an officer or manager is not financially responsible, does not have adequate expertise or experience to operate a medical care discount card business, or is not of good character or that the supplier or its affiliates or a business formerly owned or managed by the supplier or an officer or manager of the supplier has had a previous application for a certificate of registration denied, revoked, suspended, or terminated for cause or is under investigation for or has been found in violation of a statute or regulation in any jurisdiction within the previous 5 years.   (3) A medical care discount card supplier shall renew its certificate of registration annually by December 31. The certificate is renewed upon payment by the supplier of a nonrefundable renewal fee of $100 and expires on the anniversary of its issuance if the renewal fee is not paid before that date. Once issued or renewed, the certificate continues in effect for 1 year unless suspended, revoked, or terminated. The commissioner shall deposit the fees required by this section with the state treasurer, to be credited to the general fund.   (4) A certificate of registration may be suspended or revoked if, after notice and hearing, the commissioner finds that the medical care discount card supplier has violated a provision of this part, that the supplier is not financially responsible or competent, or that the supplier or an affiliate or business formerly owned or managed by the supplier has had a certificate of registration denied or suspended for cause or has been found in violation of a statute or regulation in another jurisdiction.   (5) A medical care discount card supplier that violates the provisions of subsection (1) is subject to a civil penalty of not less than $5,000 or more than $25,000 for each violation. Each day of violation is considered to be a separate violation.   (6) A medical care discount card supplier that is a health insurance issuer is not required to obtain a certificate of registration in accordance with this section, except that affiliates, as defined in 33-2-1101, that are selling medical care discount cards in Montana shall obtain a certificate of registration.   (7) An administrator that is authorized to do business in this state and that provides medical care discount cards to Montana residents who are members of self-funded group health plans administered by that administrator is not required to obtain a certificate of registration pursuant to this section.   (8) A person commencing business as a medical care discount card supplier shall file a certificate of registration and its list of authorized enrollers with the commissioner at least 30 days before commencing business as a supplier. After the initial filing of a list of its enrollers with the commissioner, a supplier shall file an updated list annually by December 31.   (9) This section does not excuse a medical care discount card supplier that is also an insurer from full compliance with the Montana Insurance Code.   History: En. Sec. 8, Ch. 456, L. 2005; amd. Sec. 27, Ch. 399, L. 2007.  
  33-38-106. Medical care discount card supplier financial responsibility requirements -- claims against bonds or accounts -- exemptions. (1) A person intending to act as a medical care discount card supplier may not market, promote, advertise, or distribute a medical care discount card in this state until the person has purchased a bond or established a surety account and filed with the commissioner a copy of a bond or a statement identifying a surety account depository as provided in this section.   (2) A person intending to act as a medical care discount card supplier shall:   (a) purchase and maintain a surety bond in the amount of $50,000 issued by a surety company authorized to do business in this state; or   (b) establish and maintain a surety account in the amount of $50,000 at a federally insured bank, savings and loan association, or federal savings bank located in this state.   (3) A person intending to act as a medical care discount card supplier shall provide the depository, trustee, and account number of the surety account to the commissioner and shall annually provide to the commissioner proof of renewal of the bond or maintenance of the surety account. The person shall pay a nonrefundable filing fee of $250 with the initial filing and with each subsequent filing.   (4) A medical care discount card supplier shall maintain the surety account or bond until 2 years after the date that the supplier ceases operations in the state. Money from a surety account may not be released to the supplier without the written consent of the commissioner.   (5) A surety on a medical care discount card company bond may not cancel a bond required by this section without giving at least 21 days' written notice of cancellation to the medical care discount card supplier and the commissioner. If the commissioner receives notice of a surety's intention to cancel a supplier's bond, the commissioner shall notify the affected supplier that, unless the supplier files another $50,000 surety bond with the commissioner or establishes a $50,000 surety account on or before the date the bond is to be canceled, the supplier may no longer do business as a supplier in this state.   (6) A bond surety shall write a bond required by this section and a person intending to act as a medical care discount card supplier shall establish an account in favor of a person, and the commissioner for the benefit of a person, injured by a violation of this part. The bond surety shall also write the bond to cover any fines levied against the supplier, a supplier's enroller, or both, for a violation of this part occurring during the time the supplier's bond is in effect.   (7) A person with a claim against a medical care discount card supplier's bond or surety account for a violation of a provision of this part may maintain an action against the supplier and against either the bond surety or the trustee of the surety account, as appropriate. The aggregate liability of the surety or trustee to a person injured by a violation of this part may not exceed the amount of the surety bond or account.   (8) A person acting as a medical care discount card supplier on October 1, 2005, shall file with the commissioner a copy of a surety bond or statement identifying a surety account depository on that date. A person commencing business as a supplier after October 1, 2005, shall file a copy of a bond or statement with the commissioner at least 30 days before commencing business as a supplier.   (9) A health insurance issuer that is also a medical care discount card supplier is exempt from the requirements of this section.   (10) An administrator that is authorized to do business in this state and that provides medical care discount cards to Montana residents who are members of self-funded group health plans administered by that administrator is exempt from the requirements of this section.   History: En. Sec. 9, Ch. 456, L. 2005.  
  33-38-107. Waiver of registration and bonding requirements. The commissioner may waive the requirements of 33-38-105 and 33-38-106 for any preferred provider organization company. The factors taken into account in granting a waiver include but are not limited to whether the company:   (1) has contracts in place with health care providers residing in this state;   (2) has contracts in place with users and purchasers of health care services residing in this state who use the medical care discount card in conjunction with a self-funded or fully insured health plan;   (3) is primarily in the preferred provider organization business or primarily in the medical care discount card supplier business; and   (4) was in business in this state prior to October 1, 2005.   History: En. Sec. 10, Ch. 456, L. 2005.  
  33-38-108. Pharmacy discount card supplier requirements. (1) A pharmacy discount card supplier that sells, markets, promotes, or distributes, for a consideration, a pharmacy discount card in Montana:   (a) shall clearly and conspicuously disclose on all advertising, marketing materials, and enrollment materials that discounts offered through the use of a pharmacy discount card are not insurance and are not intended as a substitute for insurance;   (b) shall clearly and conspicuously disclose on all pharmacy discount cards that discounts offered through the use of the pharmacy discount card are not insurance;   (c) shall disclose, when a pharmacy discount card is sold in combination with a group limited supplemental insurance policy, that discounts offered through the use of the pharmacy discount card are not insurance;   (d) may not, in the advertising or offering of the pharmacy discount card, use terms or phrases commonly associated only with insurance products that could lead a prospective purchaser or user of the card to believe that the pharmacy discount card is composed of insurance products or is a substitute for insurance, despite disclaimers to the contrary by the pharmacy discount card supplier;   (e) shall ensure that each prescription drug provider claimed by the pharmacy discount card supplier to offer a discount in conjunction with the pharmacy discount card is contractually bound to provide that discount to the purchaser or user;   (f) may not make misleading, deceptive, or fraudulent representations regarding a discount or range of discounts available through the use of a pharmacy discount card;   (g) shall provide to each prospective purchaser or user prior to purchase reasonable access to a list of the benefits and services provided through the use of a pharmacy discount card;   (h) shall provide a prospective purchaser or user prior to purchase access to a list of any prescription drug providers in the prospective purchaser's or user's service area;   (i) shall disclose in all enrollment materials that a pharmacy discount card purchaser or user has 30 days to cancel a pharmacy discount card as provided in 33-38-104;   (j) shall make available to each pharmacy discount card user continuously after purchase of a pharmacy discount card, through a toll-free telephone number, the internet, and in writing upon request, the name, address, and telephone number of each prescription drug provider in the user's service area, including mail order prescription drug providers, that are bound by contract to offer prescription drugs in accordance with the terms and conditions of the pharmacy discount card; and   (k) shall designate and provide the commissioner with the name, address, and telephone number of a pharmacy discount card compliance officer responsible for ensuring compliance with the provisions of this part applicable to pharmacy discount cards and pharmacy discount card suppliers.   (2) A person violating the provisions of subsection (1) is subject to the fine provided for in 33-1-317.   History: En. Sec. 11, Ch. 456, L. 2005.  
  33-39-101. Compact adopted. The Interstate Insurance Product Regulation Compact is enacted into law and entered into with all jurisdictions legally joining in the compact, in the form substantially as set forth below.   Article I. Purposes   Pursuant to terms and conditions of this compact, the state of Montana seeks to join with other states and establish the Interstate Insurance Product Regulation Compact. Through means of joint and cooperative action among the compacting states, the purposes of this compact are:   (1) to promote and protect the interest of consumers of individual and group annuity, life insurance, disability income, and long-term care insurance products;   (2) to develop uniform standards for insurance products covered under the compact;   (3) to establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisement related to the products, submitted by insurers authorized to do business in one or more compacting states;   (4) to give appropriate regulatory approval to those product filings and advertisement satisfying the applicable uniform standard;   (5) to improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact;   (6) to create the interstate insurance product regulation commission; and   (7) to perform these and other related functions as may be consistent with the state regulation of the business of insurance.   Article II. Definitions   For purposes of this compact, the following definitions apply:   (1) "Advertisement" means any material designed to create public interest in a product or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy, as more specifically defined in the rules and operating procedures of the commission.   (2) "Bylaws" mean those bylaws established by the commission for its governance or for directing or controlling the commission's actions or conduct.   (3) "Compacting state" means a state that has enacted this compact legislation and that has not withdrawn pursuant to Article XIV, subsection (1), or been terminated pursuant to Article XIV, subsection (2).   (4) "Commission" means the interstate insurance product regulation commission established by this compact.   (5) "Commissioner" means the chief insurance regulatory official of a state, including but not limited to a commissioner, superintendent, director, or administrator.   (6) "Domiciliary state" means the state in which an insurer is incorporated or organized or, in the case of an alien insurer, its state of entry.   (7) "Insurer" means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this compact.   (8) "Member" means the person chosen by a compacting state as its representative to the commission or the designee named by the representative to the commission.   (9) "Noncompacting state" means a state that is not at the time a compacting state.   (10) "Operating procedures" mean procedures promulgated by the commission implementing a rule, a uniform standard, or a provision of this compact.   (11) "Product" means the form of a policy or contract, including any application, endorsement, or related form that is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income, or long-term care insurance product that an insurer is authorized to issue.   (12) "Rule" means a statement of general or particular applicability and future effect promulgated by the commission, including a uniform standard developed pursuant to Article VII, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the commission, which has the force of law in the compacting states.   (13) "State" means any state, district, or territory of the United States of America.   (14) "Third-party filer" means an entity that submits a product filing to the commission on behalf of an insurer.   (15) "Uniform standard" means a standard adopted by the commission for a product line pursuant to Article VII and includes all of the product requirements in aggregate, provided that each uniform standard must be construed, whether express or implied, to prohibit the use of any inconsistent, misleading, or ambiguous provisions in a product and the form of the product made available to the public may not be unfair, inequitable, or against public policy as determined by the commission.   Article III. Establishment of the Commission and Venue   (1) The compacting states create and establish a joint public agency known as the interstate insurance product regulation commission. Pursuant to Article IV, the commission has the power to develop uniform standards for product lines, receive and provide prompt review of products filed with the commission, and give approval to those product filings satisfying applicable uniform standards. However, it is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. Nothing in the compact prohibits any insurer from filing its product in any state in which the insurer is licensed to conduct the business of insurance, and any such filing is subject to the laws of the state where filed.   (2) The commission is a body corporate and politic and an instrumentality of the compacting states.   (3) The commission is solely responsible for its liabilities except as otherwise specifically provided in this compact.   (4) Venue is proper and judicial proceedings by or against the commission must be brought solely and exclusively in a court of competent jurisdiction where the principal office of the commission is located.   Article IV. Powers of the Commission   The commission has the following powers:   (1) to promulgate rules, pursuant to Article VII, which have the force of law and are binding in the compacting states to the extent and in the manner provided in this compact;   (2) to exercise its rulemaking authority and establish reasonable uniform standards for products covered under the compact and advertisement related to the products, which have the force of law and are binding in the compacting states, but only for those products filed with the commission, provided that a compacting state has the right to opt out of the uniform standard pursuant to Article VII, to the extent and in the manner provided in this compact, and provided further that any uniform standard established by the commission for long-term care insurance products may provide the same or greater protections for consumers as, but may not provide less than, those protections set forth in the national association of insurance commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The commission shall consider whether any subsequent amendments to the national association of insurance commissioners' Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the national association of insurance commissioners require amending of the uniform standards established by the commission for long-term care insurance products.   (3) to receive and review in an expeditious manner products filed with the commission and rate filings for disability income and long-term care insurance products and to give approval of those products and rate filings that satisfy the applicable uniform standard, where the approval has the force of law and is binding on the compacting states to the extent and in the manner provided in the compact;   (4) to receive and review in an expeditious manner advertisement relating to long-term care insurance products for which uniform standards have been adopted by the commission and to give approval to all advertisement that satisfies the applicable uniform standard. For any product covered under this compact, other than long-term care insurance products, the commission has the authority to require an insurer to submit all or any part of its advertisement with respect to that product for review or approval prior to use if the commission determines that the nature of the product is such that an advertisement of the product could have the capacity or tendency to mislead the public. The actions of the commission as provided in this section have the force of law and are binding in the compacting states to the extent and in the manner provided in the compact.   (5) to exercise its rulemaking authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission;   (6) to promulgate operating procedures pursuant to Article VII that are binding in the compacting states to the extent and in the manner provided in this compact;   (7) to bring and prosecute legal proceedings or actions in its name as the commission, provided that the standing of any state insurance department to sue or be sued under applicable law may not be affected;   (8) to issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;   (9) to establish and maintain offices;   (10) to purchase and maintain insurance and bonds;   (11) to borrow, accept, or contract for services of personnel, including but not limited to employees of a compacting state;   (12) to hire employees, professionals, or specialists and elect or appoint officers, to fix their compensation, define their duties, give them appropriate authority to carry out the purposes of the compact, and determine their qualifications, and to establish the commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation, and qualifications of personnel;   (13) to accept any and all appropriate donations and grants of money, equipment, supplies, materials, and services and to receive, utilize, and dispose of the same, provided that at all times the commission shall strive to avoid any appearance of impropriety;   (14) to lease, purchase, or accept appropriate gifts or donations of or otherwise own, hold, improve, or use any property, real, personal, or mixed, provided that at all times the commission shall strive to avoid any appearance of impropriety;   (15) to sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose of any property whether real, personal, or mixed;   (16) to remit filing fees to compacting states as may be set forth in the bylaws, rules, or operating procedures;   (17) to enforce compliance by compacting states with rules, uniform standards, operating procedures, and bylaws;   (18) to provide for dispute resolution among compacting states;   (19) to advise compacting states on issues relating to insurers domiciled or doing business in noncompacting jurisdictions, consistent with the purposes of this compact;   (20) to provide advice and training to those personnel in state insurance departments responsible for product review and to be a resource for state insurance departments;   (21) to establish a budget and make expenditures;   (22) to borrow money;   (23) to appoint committees, including advisory committees comprising members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and other interested persons as may be designated in the bylaws;   (24) to provide and receive information from and to cooperate with law enforcement agencies;   (25) to adopt and use a corporate seal; and   (26) to perform other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance.   Article V. Organization of the Commission   (1) Membership, voting, and bylaws.   (a) Each compacting state has and is limited to one member. Each member must be qualified to serve in that capacity pursuant to applicable law of the compacting state. Any member may be removed or suspended from office as provided by the law of the state from which the member is appointed. Any vacancy occurring in the commission must be filled in accordance with the laws of the compacting state in which the vacancy exists. Nothing in the compact may be construed to affect the manner in which a compacting state determines the election or appointment and qualification of its own commissioner.   (b) Each member is entitled to one vote and must have an opportunity to participate in the governance of the commission in accordance with the bylaws. Notwithstanding any provision in the compact to the contrary, an action of the commission with respect to the promulgation of a uniform standard may not be effective unless two-thirds of the members vote in favor of the standard.   (c) The commission shall, by a majority vote of the members, prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes and exercise the powers of the compact, including but not limited to:   (i) establishing the fiscal year of the commission;   (ii) providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee;   (iii) providing reasonable standards and procedures:   (A) for the establishment and meetings of other committees; and   (B) governing any general or specific delegation of any authority or function of the commission;   (iv) providing reasonable procedures for calling and conducting meetings of the commission that consist of a majority of commission members, ensuring reasonable advance notice of each meeting, and providing for the right of citizens to attend each meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The commission may meet in camera only after a majority of the entire membership votes to close a meeting in whole or in part. As soon as practicable, the commission shall make public:   (A) a copy of the vote to close the meeting revealing the vote of each member with no proxy votes allowed; and   (B) votes taken during the meeting.   (v) establishing the titles, duties, and authority and reasonable procedures for the election of the officers of the commission;   (vi) providing reasonable standards and procedures for the establishment of the personnel policies and programs of the commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws must exclusively govern the personnel policies and programs of the commission.   (vii) promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and   (viii) providing a mechanism for winding up the operations of the commission and the equitable disposition of any surplus funds that may exist after the termination of the compact after the payment or reserving of all of its debts and obligations.   (d) The commission shall publish its bylaws in a convenient form and file a copy of the bylaws and a copy of any amendment to the bylaws with the appropriate agency or officer in each of the compacting states.   (2) Management committee, officers, and personnel.   (a) A management committee comprising no more than 14 members must be established as follows:   (i) one member from each of the six compacting states with the largest premium volume for individual and group annuities, life, disability income, and long-term care insurance products as determined from the records of the national association of insurance commissioners for the prior year;   (ii) four members from those compacting states with at least 2% of the market based on the premium volume described in subsection (2)(a)(i), other than the six compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws; and   (iii) four members from those compacting states with less than 2% of the market, based on the premium volume described in subsection (2)(a)(i), with one selected from each of the four zone regions of the national association of insurance commissioners as provided in the bylaws.   (b) The management committee has the authority and duties set forth in the bylaws, including but not limited to:   (i) managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission;   (ii) establishing and overseeing an organizational structure within and appropriate procedures for the commission to provide for the creation of uniform standards and other rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a compacting state to opt out of a uniform standard, provided that a uniform standard may not be submitted to the compacting states for adoption unless approved by two-thirds of the members of the management committee;   (iii) overseeing the offices of the commission; and   (iv) planning, implementing, and coordinating communications and activities with other state, federal, and local government organizations in order to advance the goals of the commission.   (c) The commission shall annually elect officers from the management committee, with each having the authority and duties specified in the bylaws.   (d) The management committee may, subject to the approval of the commission, appoint or retain an executive director for a period, upon the terms and conditions, and for the compensation that the commission considers appropriate. The executive director shall serve as secretary to the commission but may not be a member of the commission. The executive director shall hire and supervise other staff authorized by the commission.   (3) Legislative and advisory committees.   (a) A legislative committee comprising state legislators or their designees must be established to monitor the operations of and make recommendations to the commission, including the management committee, provided that the manner of selection and term of any legislative committee member must be as set forth in the bylaws. Prior to the adoption by the commission of any uniform standard, revision to the bylaws, annual budget, or other significant matter provided in the bylaws, the management committee shall consult with and report to the legislative committee.   (b) The commission shall establish two advisory committees, one comprising consumer representatives independent of the insurance industry and the other comprising insurance industry representatives.   (c) The commission may establish additional advisory committees as its bylaws may provide to carry out its functions.   (4) Corporate records of the commission. The commission shall maintain its corporate books and records in accordance with the bylaws.   (5) Qualified immunity, defense, and indemnification.   (a) The members, officers, executive director, employees, and representatives of the commission are immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error, or omission that occurred or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities, provided that nothing in this subsection (5)(a) may be construed to protect any person from suit or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of that person.   (b) The commission shall defend any member, officer, executive director, employee, or representative of the commission in any civil action seeking to impose liability arising out of any actual or alleged act, error, or omission that occurred within the scope of commission employment, duties, or responsibilities or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities, provided that nothing in the compact may be construed to prohibit that person from retaining personal counsel and provided further that the actual or alleged act, error, or omission did not result from that person's intentional or willful and wanton misconduct.   (c) The commission shall indemnify and hold harmless any member, officer, executive director, employee, or representative of the commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error, or omission that occurred within the scope of commission employment, duties, or responsibilities or that the person had a reasonable basis for believing occurred within the scope of commission employment, duties, or responsibilities, provided that the actual or alleged act, error, or omission did not result from the intentional or willful and wanton misconduct of that person.   Article VI. Meetings and Acts of the Commission   (1) The commission shall meet and take actions that are consistent with the provisions of this compact and the bylaws.   (2) Each member of the commission has the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the commission. A member shall vote in person or by other means that are provided in the bylaws. The bylaws may provide for members' participation in meetings by telephone or other means of communication.   (3) The commission shall meet at least once during each calendar year. Additional meetings must be held as set forth in the bylaws.   Article VII. Rules and Operating Procedures -- Rulemaking Functions of the Commission and Opting Out of Uniform Standards   (1) Rulemaking authority. The commission shall promulgate reasonable rules, including uniform standards, and operating procedures to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, if the commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this compact or the powers granted by this compact, then the action by the commission is invalid and has no force.   (2) Rulemaking procedure. Rules and operating procedures must be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedures Act of 1981, as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee or committees in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. In adopting a uniform standard, the commission shall consider fully all submitted materials and issue a concise explanation of its decision.   (3) Effective date and opt out of a uniform standard. A uniform standard becomes effective 90 days after its promulgation by the commission or at a later date determined by the commission, provided, however, that a compacting state may opt out of a uniform standard as provided in this article. "Opt out" means any action by a compacting state to decline to adopt or participate in a promulgated uniform standard. All other rules and operating procedures and amendments of the rules and operating procedures become effective as of the date specified in each rule, operating procedure, or amendment.   (4) Opt-out procedure.   (a) A compacting state may opt out of a uniform standard, either by legislation or regulation promulgated by the insurance department under the compacting state's administrative procedure act. If a compacting state elects to opt out of a uniform standard by regulation, the compacting state shall:   (i) give written notice to the commission no later than 10 business days after the uniform standard is promulgated or at the time the state becomes a compacting state; and   (ii) find that the uniform standard does not provide reasonable protections to the citizens of the state, given the conditions in the state. The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state that warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the citizens of the state. The commissioner shall consider and balance the following factors and find that the conditions in the state and needs of the citizens of the state outweigh:   (A) the intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this compact; and   (B) the presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product.   (b) Notwithstanding subsection (4)(a), a compacting state may, at the time of its enactment of this compact, prospectively opt out of all uniform standards involving long-term care insurance products by expressly providing for the opt out in the enacted compact, and the opt out may not be treated as a material variance in the offer or acceptance of any state to participate in this compact. The opt out is effective at the time of enactment of this compact by the compacting state and applies to all existing uniform standards involving long-term care insurance products and those subsequently promulgated.   (5) Effect of opt out.   (a) If a compacting state elects to opt out of a uniform standard, the uniform standard remains applicable in the compacting state electing to opt out until the opt-out legislation is enacted into law or the regulation opting out becomes effective.   (b) Once the opt out of a uniform standard by a compacting state becomes effective as provided under the laws of that state, the uniform standard has no further force in that state unless the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out has the same prospective effect as provided under Article XIV for withdrawals.   (6) Stay of uniform standard. If a compacting state has formally initiated the process of opting out of a uniform standard by regulation and while the regulatory opt out is pending, the compacting state may petition the commission, at least 15 days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If the commission grants or extends a stay, the stay or extension may postpone the effective date by up to 90 days unless affirmatively extended by the commission, provided that a stay may not be permitted to remain in effect for more than 1 year unless the compacting state can show extraordinary circumstances that warrant a continuance of the stay, including but not limited to the existence of a legal challenge that prevents the compacting state from opting out. The commission may terminate a stay upon notice that the rulemaking process has been terminated.   (7) Not later than 30 days after a rule or operating procedure is promulgated, any person may file a petition for judicial review of the rule or operating procedure, provided that the filing of a petition may not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and may not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the commission's authority.   Article VIII. Commission Records and Enforcement   (1) The commission shall promulgate rules establishing conditions and procedures for public inspection and copying of its information and official records, except information and records involving the privacy of individuals and insurers' trade secrets. The commission may promulgate additional rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure and may enter into agreements with those agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.   (2) Except with regard to privileged records, data, and information, the laws of any compacting state pertaining to confidentiality or nondisclosure may not relieve any compacting state commissioner of the duty to disclose any relevant records, data, or information to the commission, provided that disclosure to the commission may not be considered to waive or otherwise affect any confidentiality requirement and provided further that, except as otherwise expressly provided in this compact, the commission may not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data, and information in its possession. Confidential information of the commission must remain confidential after the information is provided to any commissioner.   (3) The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any noncomplying compacting state in writing of its noncompliance with commission bylaws, rules, or operating procedures. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state is considered to be in default as set forth in Article XIV.   (4) The commissioner of any state in which an insurer is authorized to do business or is conducting the business of insurance shall continue to exercise authority to oversee the market regulation of the activities of the insurer in accordance with the provisions of the state's law. The commissioner's enforcement of compliance with the compact is governed by the following provisions:   (a) With respect to the commissioner's market regulation of a product or advertisement that is approved or certified to the commission, the content of the product or advertisement may not constitute a violation of the provisions, standards, or requirements of the compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission.   (b) Before a commissioner may bring an action for violation of any provision, standard, or requirement of the compact relating to the content of an advertisement not approved or certified to the commission, the commission or an authorized commission officer or employee shall authorize the action. However, authorization pursuant to this subsection (4)(b) does not require notice to the insurer, opportunity for hearing, or disclosure of requests for authorization or records of the commission's action on the requests.   Article IX. Dispute Resolution   The commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and that may arise between two or more compacting states or between compacting states and noncompacting states, and the commission shall promulgate an operating procedure providing for resolution of the disputes.   Article X. Product Filing and Approval   (1) Insurers and third-party filers seeking to have a product approved by the commission shall file the product with and pay applicable filing fees to the commission. Nothing in this compact may be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state in which the insurer is licensed to conduct the business of insurance, and the filing is subject to the laws of the states where filed.   (2) The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. Notwithstanding any provision in this compact to the contrary, the commission shall promulgate rules to establish conditions and procedures under which the commission shall provide public access to product filing information. In establishing the rules, the commission shall consider the interests of the public in having access to the information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a product filing or supporting information.   (3) Any product approved by the commission may be sold or otherwise issued in those compacting states in which the insurer is legally authorized to do business.   Article XI. Review of Commission Decisions Regarding Filings   (1) Not later than 30 days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall promulgate rules to establish procedures for appointing a review panel and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law is subject to judicial review in accordance with Article III, subsection (4).   (2) The commission has authority to monitor, review, and reconsider products and advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant uniform standard. When appropriate, the commission may withdraw or modify its approval after proper notice and hearing subject to the appeal process in subsection (1).   Article XII. Finance   (1) The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the national association of insurance commissioners, compacting states, and other sources. Contributions and other forms of funding from other sources must be of such a nature that the independence of the commission concerning the performance of its duties may not be compromised.   (2) The commission shall collect a filing fee from each insurer and third-party filer filing a product with the commission to cover the cost of the operations and activities of the commission and its staff in a total amount sufficient to cover the commission's annual budget.   (3) The commission's budget for a fiscal year may not be approved until the budget has been subject to notice and comment as set forth in Article VII.   (4) The commission is exempt from all taxation in and by the compacting states.   (5) The commission may not pledge the credit of any compacting state except by and with the appropriate legal authority of that compacting state.   (6) The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission are subject to the accounting procedures established under the commission bylaws. The financial accounts and reports, including the system of internal controls and procedures of the commission, must be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every 3 years, the review of the independent auditor must include a management and performance audit of the commission. The commission shall make an annual report to the governor and legislature of the compacting states, which must include a report of the independent audit. The commission's internal accounts are not confidential, and the materials may be shared with the commissioner of any compacting state upon request. However, any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, must remain confidential.   (7) No compacting state has any claim to or ownership of any property held by or vested in the commission or to any commission funds held pursuant to the provisions of this compact.   Article XIII. Compacting States, Effective Date, and Amendment   (1) Any state is eligible to become a compacting state.   (2) The compact becomes effective and binding upon legislative enactment of the compact into law by two compacting states; however, the commission becomes effective for purposes of adopting uniform standards for, reviewing, and giving approval or disapproval of products filed with the commission that satisfy applicable uniform standards only after 26 states are compacting states or, alternatively, by states representing greater than 40% of the premium volume for life insurance, annuity, disability income, and long-term care insurance products, based on records of the national association of insurance commissioners for the prior year. Thereafter, the compact becomes effective and binding as to any other compacting state upon enactment of the compact into law by the state.   (3) Amendments to the compact may be proposed by the commission for enactment by the compacting states. An amendment does not become effective and binding upon the commission and the compacting states until all compacting states enact the amendment into law.   Article XIV. Withdrawal, Default, and Termination   (1) Withdrawal.   (a) Once effective, the compact continues in force and remains binding upon each compacting state, provided that a compacting state may withdraw from the compact ("withdrawing state") by enacting a statute specifically repealing the statute that enacted the compact into law.   (b) The effective date of withdrawal is the effective date of the repealing statute. The withdrawal may not apply to any product filings approved or self-certified, or any advertisement of those products, on the date the repealing statute becomes effective except by mutual agreement of the commission and the withdrawing state unless the withdrawing state rescinds the approval as provided in subsection (1)(e).   (c) The commissioner of the withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state.   (d) The commission shall notify the other compacting states of the introduction of the legislation within 10 days after its receipt of notice.   (e) The withdrawing state is responsible for all obligations, duties, and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The commission's approval of products and advertisement prior to the effective date of withdrawal continues to be effective and must be given full force in the withdrawing state unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisement previously approved under state law.   (f) Reinstatement following withdrawal of any compacting state occurs upon the effective date of the withdrawing state reenacting the compact.   (2) Default.   (a) If the commission determines that any compacting state has at any time defaulted ("defaulting state") in the performance of any of its obligations or responsibilities under this compact, the bylaws, or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges, and benefits conferred by this compact on the defaulting state must be suspended from the effective date of default as fixed by the commission. The grounds for default include but are not limited to failure of a compacting state to perform its obligations or responsibilities and any other grounds designated in the commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state must be terminated from the compact and all rights, privileges, and benefits conferred by this compact must be terminated from the effective date of termination.   (b) Product approvals by the commission, product self-certifications, or any advertisement in connection with the product that is in force on the effective date of termination remains in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to subsection (1) of this article.   (c) Reinstatement following termination of any compacting state requires a reenactment of the compact.   (3) Dissolution of compact.   (a) The compact dissolves effective upon the date of the withdrawal or default of the compacting state that reduces membership in the compact to one compacting state.   (b) Upon the dissolution of this compact, the compact becomes null and void and is of no further force and the business and affairs of the commission must be wound up and any surplus funds must be distributed in accordance with the bylaws.   Article XV. Severability and Construction   (1) The provisions of this compact are severable, and if any phrase, clause, sentence, or provision is considered unenforceable, the remaining provisions of the compact are enforceable.   (2) The provisions of this compact must be liberally construed to effectuate its purposes.   Article XVI. Binding Effect of Compact and Other Laws   (1) Other laws.   (a) Nothing in this compact prevents the enforcement of any other law of a compacting state, except as provided in subsection (1)(b).   (b) For any product approved or certified to the commission, the rules, uniform standards, and any other requirements of the commission constitute the exclusive provisions applicable to the content, approval, and certification of those products. For advertisement that is subject to the commission's authority, any rule, uniform standard, or other requirement of the commission that governs the content of the advertisement constitutes the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission may abrogate or restrict:   (i) the access of any person to state courts;   (ii) remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product;   (iii) state law relating to the construction of insurance contracts; or   (iv) the authority of the attorney general of the state, including but not limited to maintaining any actions or proceedings, as authorized by law.   (c) All insurance products filed with individual states are subject to the laws of those states.   (2) Binding effect of this compact.   (a) All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states.   (b) All agreements between the commission and the compacting states are binding in accordance with their terms.   (c) Upon the request of a party to a conflict over the meaning or interpretation of commission actions and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.   (d) In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the commission are ineffective as to that compacting state and those obligations, duties, powers, or jurisdiction remain in the compacting state and must be exercised by the agency of the compacting state to which those obligations, duties, powers, or jurisdictions are delegated by law in effect at the time this compact becomes effective.   Article XVII. State of Montana Opt Out   In accordance with the provisions of Article VII, subsection (4)(b), the state of Montana opts out of all existing and prospective uniform standards involving long-term care insurance products and all existing uniform standards involving individual disability income insurance products in order to preserve the state's statutory and constitutional requirements governing these insurance products.   History: En. Sec. 1, Ch. 360, L. 2013.  
  33-39-102. Montana compact commissioner -- alternate. The commissioner of insurance provided for in 2-15-1903 or the commissioner's designated alternate shall represent this state on the interstate insurance product regulation commission.   History: En. Sec. 2, Ch. 360, L. 2013.  
  33-39-103. Opt-out duties, guidelines, remedies. (1) As a participant in the Interstate Insurance Product Regulation Compact, the commissioner may opt out of any uniform standard that provides a materially lower level of protection for or materially diminishes the rights of Montana policyholders or policy applicants under Montana law.   (2) Using the time periods provided in Title 2, chapter 4, for adopting administrative procedures and prior to notifying the interstate insurance product regulation commission of a decision to opt out, the commissioner shall provide public notice and hold a public hearing to allow for comments on the decision to opt out.   (3) After taking public comment, the commissioner shall notify the interstate insurance product regulation commission, the governor, and the legislative council of the decision to opt out.   (4) A decision of the commissioner to opt out of a uniform standard may be appealed as provided in 33-1-711.   History: En. Sec. 3, Ch. 360, L. 2013.  
  33-4-101. Scope of chapter -- provisions applicable. (1) The chapter applies to:   (a) all domestic mutual hail, fire, and other casualty insurers of farm property and stock and rural buildings formed and immediately prior to January 1, 1961, lawfully transacting insurance under sections 40-1501 through 40-1517 of the Revised Codes of Montana, 1947;   (b) all domestic mutual rural insurers formed and immediately prior to January 1, 1961, lawfully transacting insurance under sections 40-1601 through 40-1625 of the Revised Codes of Montana, 1947;   (c) all insurers formed under this chapter.   (2) The insurance laws of this state do not apply to or govern, either directly or indirectly, domestic farm mutual insurers except as provided in this chapter.   (3) The following chapters and sections of this title apply to farm mutual insurers to the extent applicable and not inconsistent with the express provisions of this chapter and the reasonable implications of the express provisions of this chapter: chapter 1, parts 1 through 4, 7, 12, and 13; 33-2-112; 33-2-501; 33-2-502; 33-2-708; 33-2-1212; chapter 2, parts 13 and 16; 33-2-1501; 33-2-1517(2); 33-3-218; 33-3-308; 33-3-309; 33-3-401; 33-3-402; 33-3-431; 33-3-436; chapter 3, part 6; and chapters 18 and 19.   History: En. Secs. 468, 520, Ch. 286, L. 1959; R.C.M. 1947, 40-4801, 40-4853; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 12, Ch. 451, L. 1993; amd. Sec. 1, Ch. 158, L. 1997; amd. Sec. 19, Ch. 472, L. 1999; amd. Sec. 32, Ch. 227, L. 2001; amd. Sec. 15, Ch. 380, L. 2003; amd. Sec. 7, Ch. 469, L. 2005; amd. Sec. 11, Ch. 63, L. 2015.  
  33-4-102. Definitions. (1) A "county mutual insurer" is a farm mutual insurer authorized to insure property and liability risks located in the county in which its principal office is located and in the counties in this state with boundaries contiguous with the principal office county.   (2) A "farm mutual insurer" is an insurer that meets the qualifications of 33-4-101(1).   (3) A "state mutual insurer" is a farm mutual insurer authorized to insure property and liability risks throughout the state.   (4) "Surplus" is the extent to which the value of an insurer's assets exceeds its liabilities.   History: En. Secs. 469, 481, Ch. 286, L. 1959; R.C.M. 1947, 40-4802, 40-4814; amd. Sec. 2, Ch. 158, L. 1997.  
  33-4-103. Corporate powers in general. (1) An insurance corporation formed under this chapter or existing on January 1, 1961, and of a type which might be formed under this chapter shall have the same capacity to act possessed by individuals but with authority to perform only such lawful acts as are necessary or proper to accomplish its purposes.   (2) Without affecting the authority contained in subsection (1) above, every such corporation shall have the following corporate powers:   (a) to have succession by its corporate name for the period stated in its articles;   (b) to sue and be sued in its corporate name;   (c) to adopt, use, and alter a corporate seal;   (d) to acquire, hold, sell, use, dispose of, pledge, or mortgage any such property as its purpose may require, subject to any limitation prescribed by law or the articles of incorporation;   (e) to transact insurance;   (f) to conduct its affairs through its directors, officers, employees, insurance producers, and representatives thereunto duly authorized;   (g) to make bylaws not inconsistent with law for the exercise of its corporate powers, the management, regulation, and government of its affairs and property, including but not limited to calling and holding of meetings of its directors or members, and to modify or amend such bylaws;   (h) to exercise, subject to law and the express provisions of the articles of incorporation, all such incidental and subsidiary powers as may be necessary or convenient to the attainment of the objectives set forth in such articles;   (i) to dissolve and wind up or be dissolved and wound up in the manner provided by law.   (3) An insurance corporation formed under this chapter may also form a subsidiary entity for the purpose of acting as an insurance producer, transacting insurance underwritten by other insurers. The subsidiary entity shall comply with the licensing requirements of chapter 17, as well as all other laws that apply to insurance producers. Funds used by an insurance corporation formed under this chapter for a subsidiary entity insurance producer are considered investments but are exempt from the requirements of 33-4-403.   History: En. Sec. 479, Ch. 286, L. 1959; R.C.M. 1947, 40-4812; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 15, Ch. 151, L. 2017.  
  33-4-201. Eligible incorporators. (1) One hundred or more individuals residing in this state, each of whom is 18 years of age or more, who collectively own farm property as referred to in 33-4-501(1)(a) valued at not less than $500,000 which they desire to insure, and each of whom owns farm lands or ranch lands situated in this state valued at not less than $5,000, may incorporate a state mutual insurer.   (2) Twenty-five or more individuals residing in this state, each of whom is 18 years or more of age, each of whom owns farm land or ranch land valued at $5,000 or more in the county wherein is to be located the principal office of the proposed insurer or in any county in this state contiguous with such county, and who collectively own in such counties farm property referred to in 33-4-501(1)(a) valued at not less than $125,000 which they desire to insure, may incorporate a county mutual insurer.   History: En. Sec. 474, Ch. 286, L. 1959; amd. Sec. 8, Ch. 423, L. 1971; R.C.M. 1947, 40-4807.  
  33-4-202. Declaration of intention to incorporate -- articles of incorporation. (1) The individuals proposing to form a farm mutual insurer as referred to in 33-4-201 shall file with the commissioner:   (a) a declaration of their intention to form the corporation signed by at least 100 persons if a proposed state mutual insurer or by at least 25 persons if a proposed county mutual insurer; and   (b) proposed articles of incorporation executed by three or more incorporators. The signatures of the incorporators must be notarized.   (2) The articles of incorporation must state:   (a) the name of the corporation. If a state mutual insurer, the words "farm mutual" must be a part of the name; if a county mutual insurer, the name must contain the words "farm mutual" or "rural mutual" together with the name of the county in which its principal place of business is to be located. The name may not be so similar to one already used by a corporation in this state as to be misleading.   (b) if a county mutual insurer, the name of the county or counties in which the corporation is to transact insurance and the address where its principal business office will be located;   (c) if a state mutual insurer, the location of its principal business office, which must be located in this state;   (d) the objects and purposes for which the corporation is formed;   (e) whether the insurer intends to transact business on the cash premium plan or the assessment plan;   (f) the duration of the corporation's existence, which may be perpetual;   (g) the number of its directors, which may not be less than 5 or more than 11, and the names and addresses of the members of the initial board of directors appointed to manage the affairs of the corporation until the first annual meeting of the members at which time successors must be elected and qualified;   (h) other provisions, not inconsistent with law, considered appropriate by the incorporators;   (i) the names, residences, and addresses of the persons signing the declaration under subsection (1)(a) and the value of their property to be insured in the county or counties where the operations of the corporation are to be transacted.   History: En. Sec. 475, Ch. 286, L. 1959; R.C.M. 1947, 40-4808; amd. Sec. 35, Ch. 379, L. 1995; amd. Sec. 14, Ch. 531, L. 1997; amd. Sec. 16, Ch. 380, L. 2003; amd. Sec. 6, Ch. 117, L. 2019.  
  33-4-203. Approval of articles -- commencement of corporate existence. (1) If the commissioner finds the proposed articles of incorporation to be in accordance with the provisions of this chapter and not in conflict with the constitution and laws of the United States or of this state, the articles must be approved. The commissioner shall forward the approved articles and the applicable fees to the secretary of state.   (2) If the commissioner considers the name of the proposed corporation to be so similar to one already appropriated by another company or corporation as to be likely to mislead the public, the commissioner shall reject the name applied for and shall notify the incorporators of the rejection.   (3) The corporation has legal existence upon the issuance of the certificate of incorporation by the secretary of state, but it may not transact business as an insurer until it has obtained a certificate of authority as provided in 33-4-505.   History: En. Sec. 476, Ch. 286, L. 1959; R.C.M. 1947, 40-4809; amd. Sec. 13, Ch. 451, L. 1993; amd. Sec. 36, Ch. 379, L. 1995; amd. Sec. 15, Ch. 531, L. 1997; amd. Sec. 20, Ch. 472, L. 1999; amd. Sec. 7, Ch. 117, L. 2019.  
  33-4-204. Amendment of articles -- change of status. (1) A farm mutual insurer may, by a vote of two-thirds of its members present at any annual meeting or at any special meeting called for that purpose, amend its articles of incorporation to extend its corporate duration or any other particular within the scope of this chapter by causing amended articles to be filed in the same form and manner as required for original articles of incorporation.   (2) (a) A county mutual insurer may change its status to that of a state mutual insurer by amending its articles of incorporation pursuant to the requirements of this section.   (b) A county mutual insurer that changes its status to that of a state mutual insurer shall conform with all requirements for a state mutual insurer under this chapter.   (3) (a) A state mutual insurer may change its status to that of a county mutual insurer by amending its articles of incorporation pursuant to this section.   (b) A state mutual insurer that changes its status to that of a county mutual insurer shall conform with all requirements for a county mutual insurer under this chapter.   (4) The commissioner shall review the amended articles for compliance with this title. The amended articles of incorporation may be signed only by the president and secretary of the corporation. Notice of the proposed amendment must be contained in the notice of the annual or special meeting.   History: En. Sec. 477, Ch. 286, L. 1959; R.C.M. 1947, 40-4810; amd. Sec. 16, Ch. 531, L. 1997; amd. Sec. 1, Ch. 228, L. 2001; amd. Sec. 16, Ch. 151, L. 2017; amd. Sec. 8, Ch. 117, L. 2019.  
  33-4-205. Certified copies of articles as evidence. A copy of the articles of incorporation of a farm mutual insurer and any amendments thereof filed pursuant to law and certified by the commissioner shall be received in all courts and other places as prima facie evidence of the facts therein stated and of the due incorporation of the insurer.   History: En. Sec. 478, Ch. 286, L. 1959; R.C.M. 1947, 40-4811.  
  33-4-206. Initial qualifications. When applying for an original certificate of authority as an insurer newly organized in this state or for an amended certificate of authority in the case of a county mutual insurer that is changing its status to that of a state mutual insurer pursuant to 33-4-204, the insurer must have surplus as required by 33-4-401 and be otherwise qualified under this chapter, and:   (1) if a county mutual insurer, it must have received acceptable bona fide written applications from 25 separate persons for substantial insurance of the kinds of insurance proposed to be transacted, aggregating at least $100,000. The applicants must have given to the insurer the obligations referred to in 33-4-508 or paid the premium required for the insurance, subject to the insurer qualifying to transact the kinds of insurance for which it has applied.   (2) if a state mutual insurer or a county mutual insurer that has changed its status to that of a state mutual insurer pursuant to 33-4-204, it must have received acceptable bona fide written applications from 100 separate persons, each for substantial insurance, aggregating at least $500,000 of the kinds of insurance proposed to be transacted. The applicants must have given to the insurer the obligations referred to in 33-4-508 or paid the premium required for the insurance, subject to the insurer qualifying to transact the kinds of insurance for which it has applied.   (3) if to insure growing crops against loss or damage by hail, it must have received applications for hail insurance from not less than 100 persons residing in Montana and owning in the aggregate not less than 5,000 acres of grain. Each applicant must have given to the insurer the obligations referred to in 33-4-508 or paid the premium required for the insurance, subject to the insurer qualifying to transact hail insurance.   History: En. Sec. 480, Ch. 286, L. 1959; R.C.M. 1947, 40-4813; amd. Sec. 2, Ch. 228, L. 2001.  
  33-4-301. Bylaws -- adoption -- power to amend. Upon commencement of the legal existence of an insurer, its initial board of directors shall adopt such original bylaws, not inconsistent with the state constitution or this chapter, as may be deemed necessary for the management of its affairs. The bylaws shall be subject to the approval of the insurer's members at their next succeeding meeting. The members shall otherwise have the power to make, modify, and revoke bylaws.   History: En. Sec. 484, Ch. 286, L. 1959; R.C.M. 1947, 40-4817.  
  33-4-302. Bylaws -- contents. (1) The bylaws of a farm mutual insurer must provide:   (a) for the liability of each member for payment of the expenses and losses of the insurer and for what obligations must be given for the expenses and losses when a person applies for insurance;   (b) for the time when obligations of members for losses and expenses become due;   (c) for the limitation of liability of members for the payment of expenses and losses of the insurer;   (d) for the terms of office of the directors. At least part of the directors must be elected at each annual meeting of members. The term of any director may not be longer than 3 years.   (e) the month of the annual meeting of the members, at which vacancies existing or occurring on the board of directors are to be filled by election by the members. Each member must be permitted to cast at least one vote, either in person or, if authorized in the bylaws, by proxy, for each director to be elected and may cumulate the member's votes for one or more directors, not exceeding the number to be elected.   (f) how directors are to be elected in case an election does not occur at the annual meeting or in event of resignation, disability, or death of a director;   (g) the manner and time of giving notice of annual and special meetings of members.   (2) The bylaws may provide:   (a) the character of property to be insured and under what restrictions and limitations;   (b) restrictions and limitations as to membership and the powers, duties, and obligations of the members other than as to obligations covered under subsection (1)(a);   (c) the manner of making and collecting assessments;   (d) the manner of the suspension and expulsion of members;   (e) the form of application and the form of policy;   (f) the manner of making proof, adjustment, and payment of losses;   (g) for who is authorized to adjust losses for the insurer;   (h) for arbitration, as provided in 33-4-411, in the event that the insurer's adjuster and any claimant cannot agree as to the amount of any insured damage or loss;   (i) the duties and compensation of the officers and the bonds to be required of them;   (j) the books and records to be kept by the insurer, the reports required of the officers, and the manner of examining and auditing their accounts;   (k) what must be contained on the corporate seal and when the seal is required to be used;   (l) other matters as may be considered necessary or convenient for the management of the affairs of the insurer.   History: En. Sec. 485, Ch. 286, L. 1959; R.C.M. 1947, 40-4818; amd. Sec. 1149, Ch. 56, L. 2009; amd. Sec. 9, Ch. 169, L. 2013.  
  33-4-303. Bylaws binding upon members. The bylaws of a farm mutual insurer are binding upon all of its members and as from time to time amended are a part of the contracts of insurance between the insurer and its members.   History: En. Sec. 486, Ch. 286, L. 1959; R.C.M. 1947, 40-4819.  
  33-4-304. Annual meetings of members -- where held. Annual meetings of the members of a farm mutual insurer may be held at its principal business office or at any other place located in any county in this state in which the insurer is authorized to transact insurance.   History: En. Sec. 488, Ch. 286, L. 1959; R.C.M. 1947, 40-4821.  
  33-4-305. Annual meeting -- presentation of annual statement. The annual statement of the insurer as required to be filed with the commissioner under 33-4-313 shall be presented at the annual meeting of the members of the insurer next following the end of the calendar year to which such statement relates.   History: En. Sec. 489, Ch. 286, L. 1959; R.C.M. 1947, 40-4822.  
  33-4-306. Adjourned annual meetings -- notice. Notice of any adjourned annual meeting of members shall be given to the members of an insurer in the same manner as provided in the insurer's bylaws for the regular annual meeting of members.   History: En. Sec. 490, Ch. 286, L. 1959; R.C.M. 1947, 40-4823.  
  33-4-307. Members' voting rights. Each member of an insurer is entitled to one vote upon each matter coming to a vote at meetings of members of the insurer. A member may vote by written proxy if and as may be provided in the insurer's bylaws. No such proxy shall be made irrevocable or for longer than 1 year.   History: En. Sec. 491, Ch. 186, L. 1959; R.C.M. 1947, 40-4824.  
  33-4-308. Board of directors -- quorum. (1) The general management of the affairs of a farm mutual insurer is vested in its board of directors.   (2) A majority of the directors shall constitute a quorum to do business at any lawful meeting of the board.   History: En. Sec. 494, Ch. 286, L. 1959; R.C.M. 1947, 40-4827.  
  33-4-309. Directors -- election and term. (1) Directors of a farm mutual insurer must be elected by its members by ballot or acclamation for terms not to exceed 3 years and hold office until their respective successors are elected and have qualified.   (2) An individual may not serve as a director unless the individual is a member of the insurer.   History: En. Sec. 495, Ch. 286, L. 1959; R.C.M. 1947, 40-4828; amd. Sec. 11, Ch. 227, L. 2011.  
  33-4-310. Officers. The board of directors of an insurer shall elect from their number a president and vice-president. The board shall also elect a secretary and treasurer or a secretary-treasurer, who may or may not be members of the insurer. Officers shall hold their offices for 1 year and until their successors are elected and qualified, unless earlier removed by the board of directors.   History: En. Sec. 496, Ch. 286, L. 1959; R.C.M. 1947, 40-4829.  
  33-4-311. Bonding of officers, managers, and employees. (1) When acting in a fiduciary capacity, officers, managers, and employees shall each give bonds to the insurer for the faithful performance of their duties. The bond must be issued by an authorized corporate surety.   (2) The commissioner may adopt rules to determine the amount of the bonds required under this section.   History: En. Sec. 497, Ch. 286, L. 1959; R.C.M. 1947, 40-4830; amd. Sec. 21, Ch. 472, L. 1999.  
  33-4-312. Officers, agents, and employees not licensed -- exception for liability insurance. (1) Except as provided in subsection (2), an agent of an insurer is not required to obtain a license or authority from any public official to transact business for the insurer. The insurer or its officers, agents, or employees are not required to pay any fee for a license for the transaction of the business of the insurer, except as provided in this chapter.   (2) A farm mutual insurer that offers liability insurance is required to have an insurance producer licensed by the state of Montana to transact liability insurance. A person may not sell, solicit, negotiate, or take applications for, procure, or place for others liability insurance for a farm mutual insurer unless that person is licensed under Title 33, chapter 17.   History: En. Sec. 498, Ch. 286, L. 1959; R.C.M. 1947, 40-4831; amd. Sec. 1, Ch. 28, L. 1987; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 3, Ch. 399, L. 2007.  
  33-4-313. Annual statement. The president and secretary of each insurer, on or before March 1 each year, shall prepare, affirm under oath, and file with the commissioner, on forms prescribed and furnished by the commissioner, an annual statement for the preceding calendar year showing the condition of the insurer as of December 31 of the preceding year and exhibiting the following facts:   (1) the names of the president and secretary;   (2) the date of the annual meeting;   (3) the amount of insurance in force;   (4) the number of members;   (5) the number of assessments made during the year;   (6) the amount paid in losses during the year;   (7) the number of members withdrawn, suspended, and expelled during the year;   (8) the number of new members admitted during the year;   (9) the expenses during the year;   (10) the amount of money on hand;   (11) the amount and character of the insurer's assets;   (12) the amount of the insurer's liabilities, including any reserves required to be established under this chapter; and   (13) other information concerning the insurer's affairs that the commissioner may reasonably require.   History: En. Sec. 499, Ch. 286, L. 1959; R.C.M. 1947, 40-4832; amd. Sec. 1, Ch. 337, L. 1987; amd. Sec. 17, Ch. 531, L. 1997; amd. Sec. 22, Ch. 472, L. 1999.  
  33-4-314. Annual statement -- exclusive report -- penalty for failure to file. (1) A report, statement, or return of any nature may not be required of any farm mutual insurer other than those required by 33-4-313.   (2) The commissioner may:   (a) suspend or revoke the certificate of authority of any insurer failing to file its annual statement as required; or   (b) impose a fine of up to $100 a day for each day that an insurer is late in filing its annual statement, with the aggregate penalty not to exceed $1,000.   History: En. Sec. 500, Ch. 286, L. 1959; R.C.M. 1947, 40-4833; amd. Sec. 18, Ch. 531, L. 1997.  
  33-4-315. Examination by commissioner -- expense. (1) The commissioner has power, at any time, to investigate and examine the affairs and books of any insurer.   (2) The insurer shall pay the costs of investigation and examination by the commissioner in the same manner as prescribed in 33-1-413.   History: En. Sec. 501, Ch. 286, L. 1959; R.C.M. 1947, 40-4834; amd. Sec. 1, Ch. 177, L. 1987.  
  33-4-316. Records -- inspections. (1) A farm mutual insurer, through its president and secretary, shall keep or cause to be kept accurate records and accounts of its transactions. The books, files, and records of the insurer must be located at its principal place of business or, in the case of a county mutual insurer, at a place within the county of its principal place of business as may be designated by the insurer's board of directors and shown in the minutes of the board.   (2) The books, files, and records of the insurer must be available for inspection by the insurer's directors and officers and by the commissioner or the commissioner's duly constituted examiner at all reasonable times.   History: En. Sec. 508, Ch. 286, L. 1959; R.C.M. 1947, 40-4841; amd. Sec. 1150, Ch. 56, L. 2009.  
  33-4-317 through 33-4-319 reserved.  
  33-4-320. Managing general agent waiver -- exceptions. (1) The commissioner may waive the requirements for a managing general agent under Title 33, chapter 2, part 16, for a person managing the property and liability business of a resident domestic farm mutual insurer.   (2) The commissioner may revoke the waiver if the commissioner determines through examination that licensure of the person as a managing general agent is necessary.   (3) A person serving as a managing general agent for crop hail insurance may not receive a waiver under this section.   History: En. Sec. 1, Ch. 208, L. 2013.  
  33-4-401. Surplus funds required. A domestic farm mutual insurer is authorized to transact insurance if it is otherwise in compliance with the applicable provisions of this chapter and if it maintains surplus funds as follows:   (1) if a state mutual insurer or a county mutual insurer that has changed its status to that of a state mutual insurer pursuant to the provisions of 33-4-204, surplus of not less than $200,000; or   (2) if a county mutual insurer, surplus of not less than $50,000.   History: En. Sec. 482, Ch. 286, L. 1959; R.C.M. 1947, 40-4815; amd. Sec. 3, Ch. 228, L. 2001.  
  33-4-402. Members' liability -- limitation. All liability of the members of a farm mutual insurer must be as limited in the insurer's bylaws. For insurers transacting business on the cash premium plan, the limitation must comply with 33-4-504(4). A member may not be required to pay more than the full amount of the member's obligation given to the insurer or of the member's liability as provided for in the bylaws.   History: En. Sec. 492, Ch. 286, L. 1959; R.C.M. 1947, 40-4825; amd. Sec. 1151, Ch. 56, L. 2009.  
  33-4-403. Investments. (1) When directed by a majority vote of its members present at a meeting of members, the directors of a farm mutual insurer may invest the insurer's funds or any part of the funds in any of the following:   (a) bonds or other securities issued by the United States government or by any agency of the United States;   (b) bonds or other obligations the payment of the interest and principal of which is assumed or guaranteed by the United States government or any agency of the United States;   (c) general obligation bonds or warrants of any state, county, or city, when approved by the commissioner;   (d) loans secured by a first mortgage on real estate situated in the state of Montana but subject to the provisions of subsection (3);   (e) common stock of a domestic insurer formed as an affiliate company to two or more farm mutual insurers for the purpose of offering companion insurance products that farm mutual insurers are prohibited from selling. The investment may not exceed one-third of the assets of the farm mutual insurer.   (f) corporate bonds that are rated A3 or better by Moody's investor service, inc., or A- or better by Standard and Poor's corporation and that are issued with the full credit of the parent corporation. An investment in corporate bonds may not exceed 20% of the total assets of the mutual insurer, and no more than 5% of the total assets of the mutual insurer may be invested with one corporation.   (g) money market funds as defined by rules adopted by the commissioner. An investment in money market funds may not exceed 20% of the total assets of the mutual insurer, and no more than 5% of the total assets of the mutual insurer may be invested in a single money market fund.   (2) At the time of making an investment the document evidencing the investment must be stamped with the name of the insurer with the following notation printed or written on the document: "Negotiable only upon the order of the Board of Directors of .... (naming the insurer)."   (3) A real estate loan may not be for more than 60% of the appraised value of the real estate securing the loan, and the appraisal must have been made within 30 days prior to the date of the loan. The loan may not be for a term longer than 10 years. This subsection does not prevent the renewal or extension of loans already made and does not apply to real estate loans that are insured under the provisions of any act of the congress of the United States or to the making, extension, or renewal of any loans that are made under subchapter II of the act of congress known as the "Servicemen's Readjustment Act of 1944", or any amendment thereof or supplement thereto, as to any part of the loans. This subsection does not prevent an insurer from taking another and immediately subsequent mortgage or deed of trust when it already holds a first mortgage or deed of trust on the same real estate or from accepting a second lien on real estate to secure the payment of a debt previously contracted in good faith. This subsection does not prevent subsequent liens of any kind from being taken to secure the payment of a debt previously contracted in good faith when in the judgment of the insurer's board of directors the subsequent liens are necessary to further secure the payment of any debts and save the insurer from loss.   History: En. Sec. 502, Ch. 286, L. 1959; R.C.M. 1947, 40-4835; amd. Sec. 6, Ch. 274, L. 1981; amd. Sec. 145, Ch. 575, L. 1981; amd. Exec. Ord. No. 16-81; amd. Sec. 1, Ch. 77, L. 1983; amd. Sec. 1, Ch. 334, L. 1993.  
  33-4-404. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 503, Ch. 286, L. 1959; R.C.M. 1947, 40-4836.  
  33-4-405. Repealed. Sec. 73, Ch. 227, L. 2001.   History: En. Sec. 504, Ch. 286, L. 1959; R.C.M. 1947, 40-4837.  
  33-4-406. Reserves -- cash premium plan. Each insurer transacting business on the cash premium plan shall maintain the following reserves:   (1) a loss reserve, in amount reasonably adequate to pay in full all losses already incurred but currently unpaid. The amount subsequently paid on such losses shall be credited against this reserve.   (2) a reserve for unearned premiums, which reserve shall be computed at 50% of net premiums (gross premiums less premiums returned) charged and collected for unexpired policy periods that commenced during the calendar year covered by the financial statement plus 100% of such net premiums charged and collected in advance for policy periods that are to commence after such calendar year. In the alternative, the insurer may at its option compute its entire reserve for unearned premiums as the aggregate amount of the pro rata unearned premiums for each policy in force as at the end of the calendar year to be covered by the financial statement.   History: En. Sec. 505, Ch. 286, L. 1959; R.C.M. 1947, 40-4838.  
  33-4-407. Profits or dividends. An insurer may not accumulate any profits or pay any dividends. This provision does not prohibit an insurer from accumulating and maintaining surplus funds as required to be maintained by the insurer under this chapter or from accumulating and maintaining other voluntary reserves for purposes and in amounts that may be reasonable. Limitations on any accumulations and the purposes of the accumulations may be provided for in the insurer's bylaws.   History: En. Sec. 506, Ch. 286, L. 1959; R.C.M. 1947, 40-4839; amd. Sec. 33, Ch. 227, L. 2001.  
  33-4-408. Deficiency of surplus. (1) If the surplus funds of a farm mutual insurer at any time fall below the amount required to be maintained under this chapter, the insurer shall cure such deficiency within 6 months thereafter, notwithstanding that new losses or expenses may be incurred within such 6-month period.   (2) If the deficiency is not so cured, the commissioner may, upon the insurer's written application therefor, allow an additional reasonable period, not to exceed 6 months, for the curing of the deficiency.   (3) If the deficiency is not so cured within the first 6-month period, if additional time is not so applied for, or within such additional period as the commissioner may so allow, the commissioner shall forthwith suspend or revoke the insurer's certificate of authority.   History: En. Sec. 507, Ch. 286, L. 1959; R.C.M. 1947, 40-4840.  
  33-4-409. Repealed. Sec. 44, Ch. 531, L. 1997.   History: En. Sec. 509, Ch. 286, L. 1959; R.C.M. 1947, 40-4842; amd. Sec. 2, Ch. 177, L. 1987; amd. Sec. 1, Ch. 327, L. 1987.  
  33-4-410. Losses -- notice -- adjustment. (1) Every member of a domestic farm mutual insurer who has sustained any insured loss or damage shall immediately notify the insurer's secretary thereof and of the amount of damage or loss claimed.   (2) Upon receipt of the notice of loss referred to in subsection (1) above, the secretary shall notify the person or persons authorized by the bylaws of such insurer to ascertain the amount of the loss or damage and adjust the same.   History: En. Sec. 514, Ch. 286, L. 1959; R.C.M. 1947, 40-4847.  
  33-4-411. Arbitration -- committee -- compensation. (1) If any insurer's adjuster and a claimant fail to agree as to the amount of the insured loss or damage sustained by the claimant and if provided for in the insurer's bylaws, the matter must be submitted to three persons as a committee of reference. One member must be selected by the claimant, one by the insurer, and the third by the other two members, all of whom must be sworn to a faithful and impartial investigation and award.   (2) The committee of reference has authority to examine witnesses and determine all matters in dispute. The decision or award of the committee must be made in writing to the secretary of the insurer. If it relates to any claimed loss or damage to a crop, the decision or award may not be made until after maturity of the crop. The decision or award of the committee is final and binding upon all parties unless an interested party appeals to the court within 30 days after the decision or award.   (3) The compensation of each member of any committee must be at the rate of $10 per day for each day of service in the discharge of duties. The compensation must be paid by the claimant unless the award of the committee exceeds the sum offered by the insurer in settlement of the claim, in which case the compensation must be paid by the insurer.   History: En. Sec. 515, Ch. 286, L. 1959; R.C.M. 1947, 40-4848; amd. Sec. 1152, Ch. 56, L. 2009.  
  33-4-412. Obligations or assessments due -- losses payable. (1) Obligations or assessments of members for losses and expenses become due and payable at such time as may be provided in the bylaws of the insurer, and the insurer shall use due diligence to collect each obligation or assessment.   (2) Any valid claim for an insured loss against an insurer transacting business on the assessment plan shall not be payable by the insurer until 30 days after such obligations of the members are due and payable.   History: En. Sec. 516, Ch. 286, L. 1959; R.C.M. 1947, 40-4849.  
  33-4-413. Suit to collect obligations -- liability of directors or officers. (1) An insurer may institute a suit against any member of such insurer if the member fails to pay when due any obligation or liability of the member given such insurer under the provisions of this chapter.   (2) The directors or officers of an insurer are liable in their individual capacity to the person sustaining an insured loss if they willfully refuse or neglect to perform the duties imposed upon them by the provisions of this section.   History: En. Sec. 517, Ch. 286, L. 1959; R.C.M. 1947, 40-4850.  
  33-4-414. Proportionate payment of losses. If the aggregate whole amount of the members' obligations to an insurer transacting business on the assessment plan are insufficient to pay all valid claims for losses under the insurer's contracts of insurance after necessary expenses in any one year, then such claimants insured by the insurer shall receive their proportionate share of the funds realized from such obligations in full satisfaction of such losses.   History: En. Sec. 518, Ch. 286, L. 1959; R.C.M. 1947, 40-4851.  
  33-4-415. Suit to collect for loss. If the insurer fails to pay any insured loss when due, an action may be maintained against it to collect for such loss, but subject to 33-4-414 as to assessment plan insurers.   History: En. Sec. 519, Ch. 286, L. 1959; R.C.M. 1947, 40-4852.  
  33-4-501. Insuring powers in general. (1) In respect to property insurance as defined in 33-1-210, a farm mutual insurer shall insure against loss or damage by fire or other casualty only:   (a) rural dwellings and buildings, including the usual contents, farm livestock, machinery, vehicles, growing crops, and other forms of farm property owned by a member of the insurer or by the member's spouse;   (b) residential dwellings, appurtenant structures, and personal property owned by a member of the insurer or by the member's spouse;   (c) dwellings and related buildings designed for occupancy by not over four families, together with the usual contents;   (d) rural schoolhouses and buildings used in connection with the schoolhouse, rural community houses, rural churches, or other rural public buildings.   (2) A farm mutual insurer may insure against the liability risks provided in 33-1-206(1)(b):   (a) only to the extent of the limit of risks provided in 33-4-502(3); and   (b) if contingent liability exists, provided that every policy contains a statement that each member of the farm mutual insurer is subject to a contingent liability under 33-3-411.   History: En. Sec. 470, Ch. 286, L. 1959; R.C.M. 1947, 40-4803; amd. Sec. 2, Ch. 28, L. 1987; amd. Sec. 2, Ch. 334, L. 1993; amd. Sec. 1, Ch. 281, L. 1995; amd. Sec. 4, Ch. 228, L. 2001.  
  33-4-502. Limit of risk -- retention of liability. (1) Except as provided in subsection (3), the maximum amount of insurance that an insurer may retain on a single risk, after deduction of applicable reinsurance, may not exceed the greater of 10% of the admitted assets of the insurer or $50,000.   (2) For the purposes of this section, a "single risk" as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophic perils includes all properties insured by the same insurer that are reasonably susceptible to loss or damage from the same fire or the same occurrence of another hazard insured against.   (3) A farm mutual insurer:   (a) that insures any portion of a liability risk shall maintain a surplus of at least $50,000;   (b) that retains any portion of a liability risk shall obtain reinsurance on that liability insurance with an insurer that meets the criteria established in 33-4-503. A farm mutual insurer's retention on a single liability risk may not exceed the greater of 3% of admitted assets or $50,000.   (c) may not retain liability risk or risk resulting from insuring growing crops against loss or damage from hail or other hazards greater than the proportional share of each limit of liability in the following schedule:     Surplus as of the   Proportional Share of Each     Preceding December 31:   Limit of Liability Retained:     $1,000,000 or greater   15%     $800,000 to $999,999   12%     $600,000 to $799,999   9%     $400,000 to $599,999   6%     $200,000 to $399,999   3%     Under $200,000   0%     History: En. Sec. 471, Ch. 286, L. 1959; amd. Sec. 1, Ch. 259, L. 1967; amd. Sec. 1, Ch. 94, L. 1975; R.C.M. 1947, 40-4804; amd. Sec. 1, Ch. 319, L. 1979; amd. Sec. 1, Ch. 132, L. 1981; amd. Sec. 3, Ch. 28, L. 1987; amd. Sec. 3, Ch. 158, L. 1997; amd. Sec. 6, Ch. 271, L. 2009; amd. Sec. 3, Ch. 208, L. 2013.  
  33-4-503. Reinsurance. A farm mutual insurer may cede reinsurance to any other farm mutual insurer or insurers and to other authorized property insurers and reinsurers meeting the requirements of 33-2-1216 and may accept reinsurance from other farm mutual insurers.   History: En. Sec. 472, Ch. 286, L. 1959; R.C.M. 1947, 40-4805; amd. Sec. 8, Ch. 469, L. 2005; amd. Sec. 7, Ch. 271, L. 2009.  
  33-4-504. Cash premium or assessment plans. (1) An insurer may transact business either on a cash premium plan or on an assessment plan, depending upon which plan is provided for in its articles of incorporation or bylaws.   (2) If transacting business on the cash premium plan, the insurer shall collect from each member a premium in cash in an amount that the insurer considers adequate to cover losses and expenses incurred during the term of the insurance.   (3) If transacting business on the assessment plan, the insurer shall principally depend for the payment of losses and expenses upon assessments from time to time levied upon members either before or after any losses or expenses have been incurred. This provision may not be construed as preventing any insurer from collecting from each member an initial amount that the insurer considers proper prior to or at the time of the effectuation of the member's insurance, and this provision may not be considered to prohibit the acquisition, accumulation, and maintenance of surplus or unallocated funds.   (4) An insurer transacting business on the cash premium plan may provide in its bylaws and policies for special assessment of its members if the cash premium charged is found by the insurer to be inadequate to pay in full losses and expenses currently incurred. The bylaws must provide a specific limitation on the amount that can be assessed in any one policy year, and the amount may not be less than one or more than six times the premium charged on each member's policy at the annual rate for a term of 1 year.   History: En. Sec. 473, Ch. 286, L. 1959; R.C.M. 1947, 40-4806; amd. Sec. 8, Ch. 271, L. 2009.  
  33-4-505. Certificate of authority required -- issuance -- continuation -- fee. (1) A farm mutual insurer may not insure any risk in this state unless it then holds a subsisting certificate of authority issued to it by the commissioner.   (2) Upon application, the commissioner shall issue a certificate of authority to every insurer qualified under this chapter.   (3) Every certificate of authority continues in force as long as the farm mutual insurer is entitled under this chapter and until suspended, revoked, or otherwise terminated; subject, however, to continuance of the certificate by the farm mutual insurer each year by payment before May 15 of the continuation fee of $10 if a county mutual insurer or $25 if a state mutual insurer, to be deposited by the commissioner with the state treasurer to the credit of the state general fund.   (4) If the farm mutual insurer does not continue its certificate of authority in accordance with subsection (3), its certificate of authority expires at midnight on May 31 next following its failure to continue it in force. The commissioner shall promptly notify a farm mutual insurer that has not continued its certificate of authority of the impending expiration of its certificate of authority.   (5) A certificate of authority is subject to suspension or revocation by the commissioner for violation of or noncompliance with any provision of this chapter or referred to in this chapter.   (6) The commissioner may reinstate a certificate of authority that a farm mutual insurer has inadvertently permitted to expire, after the farm mutual insurer has fully cured all failures that resulted in the expiration and upon payment by the farm mutual insurer of the current continuation fee as provided in subsection (3). If a certificate is not reinstated, the commissioner may grant a farm mutual insurer another certificate of authority only after the farm mutual insurer files an application for a certificate of authority and meets all other requirements for an original certificate of authority in this state.   (7) The commissioner may amend a certificate of authority at any time to accord with changes in the farm mutual insurer's charter of insuring powers.   History: En. Sec. 483, Ch. 286, L. 1959; R.C.M. 1947, 40-4816; amd. Sec. 2, Ch. 327, L. 1987; amd. Sec. 7, Ch. 316, L. 1999.  
  33-4-506. Members -- minimum membership. (1) A person may not become a member of a farm mutual insurer except by insuring property owned by the person insurable under this chapter.   (2) The membership of an insurer consists of the persons lawfully insuring in the insurer.   (3) The total membership of the insurer must at all times be not less than the number of persons required by 33-4-201 to incorporate an insurer.   History: En. Sec. 487, Ch. 286, L. 1959; R.C.M. 1947, 40-4820; amd. Sec. 1153, Ch. 56, L. 2009.  
  33-4-507. Withdrawal of member -- cancellation by insurer. (1) A member of an insurer may withdraw by surrendering the member's policy to the insurer for cancellation and paying all obligations then owed by the member to the insurer.   (2) The insurer may cancel the policy of any member for any cause considered adequate by the insurer and upon not less than 10 days' written notice in advance of cancellation delivered to the member or mailed to the member's last address of record on file with the insurer.   History: En. Sec. 493, Ch. 286, L. 1959; R.C.M. 1947, 40-4826; amd. Sec. 1154, Ch. 56, L. 2009.  
  33-4-508. Application for insurance. A person desiring insurance shall make written application to the insurer. If the insurer is transacting business on the assessment plan, the applicant shall at the time of application give the applicant's obligation to the insurer for the payment of losses and expenses as provided in the insurer's bylaws and make advance payment in cash as the insurer may require.   History: En. Sec. 510, Ch. 286, L. 1959; R.C.M. 1947, 40-4843; amd. Sec. 1155, Ch. 56, L. 2009.  
  33-4-509. Application and policy forms filed with commissioner. All forms of application for insurance and of policies proposed to be used by an insurer must be filed with the commissioner at least 30 days in advance of any use. The commissioner shall disapprove any form found by the commissioner to be unlawful, illegible, or misleading. An insurer may not use any form after it has received the commissioner's notice of disapproval setting forth the reasons for disapproval.   History: En. Sec. 511, Ch. 286, L. 1959; R.C.M. 1947, 40-4844; amd. Sec. 1156, Ch. 56, L. 2009.  
  33-4-510. Rates -- filing -- discrimination. (1) A farm mutual insurer is not required to file any of its insurance rates with the commissioner. No such rate shall be unfairly discriminatory as between subjects of insurance covered for like perils under like policies and having substantially the same insuring, exposure, and underwriting characteristics.   (2) Notwithstanding any provision of subsection (1) or chapter 18, part 2, of this title, a farm mutual insurer transacting insurance under this chapter may refuse to renew a casualty or liability policy upon nonpayment of dues to the farm mutual insurer if payment of dues is a condition for obtaining or continuing such insurance.   History: En. Sec. 512, Ch. 286, L. 1959; R.C.M. 1947, 40-4845; amd. Sec. 1, Ch. 319, L. 1981.  
  33-4-511. Insurance of schools, community houses, and churches. (1) A contract of insurance effected upon the property of any school district, rural community house, rural church, or rural public building pursuant to 33-4-501 does not constitute the school district or the owners of the community house, church, or public building a member of the insurer.   (2) A contract of insurance effected upon any rural school building, rural community house, rural church, or other rural public building referred to in 33-4-501(1)(d) is not invalid because the directors or any director or officer of the insurer at the time of effecting the insurance coverage was a trustee, director, insurance producer, custodian, or manager or in any way in control, supervision, or management of any or all of the property insured.   History: En. Sec. 513, Ch. 286, L. 1959; R.C.M. 1947, 40-4846; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 144, Ch. 42, L. 1997.  
  33-4-512 through 33-4-520 reserved.  
  33-4-521. Farm mutual insurers -- merger. (1) A domestic farm mutual insurer may not merge or consolidate with a stock insurer.   (2) A domestic farm mutual insurer may merge or consolidate with another farm mutual insurer or another domestic mutual insurer if:   (a) the insurers transact similar lines of business;   (b) the insurers agree on a plan for merger or consolidation which must be submitted to all members of each insurer by ballot and approved by two-thirds of the members voting for each respective insurer; and   (c) after submitting the plan for review and opportunity for a hearing, the commissioner provides written approval or denial of the merger or consolidation within a reasonable time.   (3) After opportunity for a hearing in subsection (2), the commissioner may not approve the merger or consolidation if evidence shows that it:   (a) is inequitable to the policyholders of any domestic mutual insurer involved;   (b) would substantially reduce the security of and service to be rendered to policyholders of the domestic mutual insurer; or   (c) is contrary to law.   (4) Sections 33-3-217(5) and 33-3-218 also apply to mergers and consolidations of mutual insurers with farm mutual insurers.   (5) Upon merger or consolidation of a domestic farm mutual insurer with another domestic mutual insurer under this chapter, the corporate charter of the merged or consolidated domestic farm mutual insurer must automatically be extinguished and nullified.   History: En. Sec. 1, Ch. 184, L. 2015.  
  33-4-522. Bulk reinsurance -- farm mutual insurers. (1) A domestic farm mutual insurer may reinsure all or substantially all its business in force, or all or substantially all of a major class of its business, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section. An agreement may not become effective unless filed with the commissioner and approved by the commissioner in writing.   (2) The commissioner shall approve an agreement within a reasonable time after filing if the commissioner finds it to be fair and equitable to each domestic insurer involved and that the reinsurance if effectuated would not substantially reduce the protection or service to its policyholders. If the commissioner does not approve the agreement, the commissioner shall notify each insurer involved in writing specifying the reasons for disapproval.   (3) The plan and agreement for reinsurance must be approved by a quorum of the board of directors of each farm mutual insurer involved in the agreement.   History: En. Sec. 2, Ch. 184, L. 2015.  
  33-40-101. Terminated. Sec. 14, Ch. 363, L. 2013.   History: En. Sec. 1, Ch. 363, L. 2013.  
  33-40-102. Terminated. Sec. 14, Ch. 363, L. 2013.   History: En. Sec. 2, Ch. 363, L. 2013.  
  33-40-103. Terminated. Sec. 14, Ch. 363, L. 2013.   History: En. Sec. 3, Ch. 363, L. 2013.  
  33-40-104. Terminated. Sec. 14, Ch. 363, L. 2013.   History: En. Sec. 4, Ch. 363, L. 2013.  
  33-40-105. Terminated. Sec. 14, Ch. 363, L. 2013.   History: En. Sec. 5, Ch. 363, L. 2013.  
  33-5-101. Scope of chapter -- existing insurers. (1) All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals.   (2) Existing authorized reciprocal insurers shall after January 1, 1961, comply with the provisions of this chapter and shall make such amendments to their subscribers' agreement, power of attorney, policies, and other documents and accounts and perform such other acts as may be required for such compliance.   History: En. Sec. 540, Ch. 286, L. 1959; R.C.M. 1947, 40-5003.  
  33-5-102. Definitions. (1) "Reciprocal insurance" is that resulting from an interexchange among persons, known as "subscribers", of reciprocal agreements of indemnity, the interexchange being effectuated through an attorney-in-fact common to all such persons.   (2) A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney-in-fact to provide reciprocal insurance among themselves.   History: En. Secs. 538, 539, Ch. 286, L. 1959; R.C.M. 1947, 40-5001, 40-5002.  
  33-5-103. Name -- suits. A reciprocal insurer shall:   (1) have and use a business name. The name shall include the word "reciprocal", "interinsurer", "interinsurance", "exchange", "underwriters", or "underwriting".   (2) sue and be sued in its own name.   History: En. Sec. 542, Ch. 286, L. 1959; R.C.M. 1947, 40-5005.  
  33-5-104. Attorney -- not doing business. (1) "Attorney", as used in this chapter, refers to the attorney-in-fact of a reciprocal insurer. The attorney may be an individual, firm, or corporation.   (2) The attorney of a foreign or alien reciprocal insurer, which insurer is duly authorized to transact insurance in this state, shall not, by virtue of discharge of its duties as such attorney with respect to the insurer's transactions in this state, be thereby deemed to be doing business in this state within the meaning of any laws of this state applying to foreign firms or corporations.   History: En. Sec. 543, Ch. 286, L. 1959; R.C.M. 1947, 40-5006.  
  33-5-201. Organization of reciprocal insurer. (1) (a) Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and apply to the commissioner for a certificate of authority to transact insurance.   (b) Eight or more employers with a total of more than 500 employees may organize a domestic reciprocal insurer and apply to the commissioner for a certificate of authority to transact insurance for the purpose of providing workers' compensation coverage for their employees.   (2) The proposed attorney shall file with the commissioner when applying for a certificate of authority a declaration setting forth:   (a) the name of the insurer;   (b) the location of the insurer's principal office, which must be the same as that of the attorney and must be maintained within this state;   (c) the kinds of insurance proposed to be transacted, which in the case of a reciprocal insurer organized pursuant to subsection (1)(b) may only be workers' compensation coverage for employees;   (d) the names and addresses of the original subscribers;   (e) the designation and appointment of the proposed attorney and a copy of the power of attorney;   (f) the names and addresses of the officers and directors of the attorney, if a corporation, or its members, if a firm;   (g) the powers of the subscribers' advisory committee and the names and terms of office of the members of the committee;   (h) that all money paid to the reciprocal insurer must, after deducting any sum payable to the attorney, be held in the name of the insurer and for the purposes specified in the subscribers' agreement;   (i) a copy of the subscribers' agreement;   (j) a statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted and that the insurer has received from each subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than 6 months at an adequate rate filed with and approved by the commissioner;   (k) a statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by 33-5-401 is on hand; and   (l) a copy of each policy, endorsement, and application form proposed for issue or use.   (3) The declaration must be acknowledged by the attorney in the manner required for the acknowledgment of deeds.   History: En. Sec. 545, Ch. 286, L. 1959; R.C.M. 1947, 40-5008; amd. Sec. 15, Ch. 198, L. 1979; amd. Sec. 1, Ch. 500, L. 2003.  
  33-5-202. Merger or conversion. (1) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of its subscribers who vote on a merger pursuant to due notice and the approval of the commissioner of the terms, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.   (2) A stock or mutual insurer is subject to the same capital or surplus requirements and has the same rights as a similar domestic insurer transacting the same kinds of insurance.   (3) The commissioner may not approve any plan for merger or conversion that is inequitable to subscribers or that, if for conversion to a stock insurer, does not give each subscriber a preferential right to acquire stock of the proposed insurer proportionate to the subscriber's interest in the reciprocal insurer as determined in accordance with 33-5-411 and a reasonable length of time within which to exercise the right.   History: En. Sec. 564, Ch. 286, L. 1959; R.C.M. 1947, 40-5027; amd. Sec. 1157, Ch. 56, L. 2009.  
  33-5-301. Power of attorney. (1) The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers.   (2) The power of attorney must set forth:   (a) the powers of the attorney;   (b) that the attorney is empowered to accept service of process on behalf of the insurer in actions against the insurer upon contracts exchanged;   (c) the general services to be performed by the attorney;   (d) the maximum amount to be deducted from advance premiums or deposits to be paid to the attorney and the general items of expense in addition to losses to be paid by the insurer; and   (e) except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount, which amount shall be not less than 1 or more than 10 times the premium or premium deposit stated in the policy.   (3) The power of attorney may:   (a) provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder;   (b) impose such restrictions upon the exercise of the power as are agreed upon by the subscribers;   (c) provide for the exercise of any right reserved to the subscribers directly or through their advisory committee; and   (d) contain other lawful provisions deemed advisable.   (4) The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable, and no such power or agreement shall be used or be effective as to a domestic reciprocal insurer until approved by the commissioner.   History: En. Sec. 547, Ch. 286, L. 1959; R.C.M. 1947, 40-5010.  
  33-5-302. Modifications. Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No such modification shall be effective retroactively or as to any insurance contract issued prior thereto.   History: En. Sec. 548, Ch. 286, L. 1959; R.C.M. 1947, 40-5011.  
  33-5-303. Attorney's bond. (1) Concurrently with the filing of the declaration provided for in 33-5-201, the attorney of a domestic reciprocal insurer shall file with the commissioner a bond in favor of this state for the benefit of all persons damaged as a result of breach by the attorney of the conditions of the attorney's bond as set forth in subsection (2). The bond must be executed by the attorney and by an authorized corporate surety and must be subject to the commissioner's approval.   (2) The bond must be in the penal sum of $25,000, aggregate in form, conditioned that the attorney will faithfully account for all money and other property of the insurer coming into the attorney's possession and that the attorney will not withdraw or appropriate to the attorney's own use from the funds of the insurer any money or property to which the attorney is not entitled under the power of attorney.   (3) The bond must provide that it is not subject to cancellation unless 30 days' advance notice in writing of cancellation is given to both the attorney and the commissioner.   History: En. Sec. 549, Ch. 286, L. 1959; R.C.M. 1947, 40-5012; amd. Sec. 1158, Ch. 56, L. 2009.  
  33-5-304. Action on bond. Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of such bond.   History: En. Sec. 550, Ch. 286, L. 1959; R.C.M. 1947, 40-5013.  
  33-5-305. Subscribers' advisory committee -- duties. (1) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.   (2) Not less than two-thirds of such committee shall be subscribers other than the attorney or any person employed by, representing, or having a financial interest in the attorney.   (3) The committee shall:   (a) supervise the finances of the insurer;   (b) supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;   (c) procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and   (d) have such additional powers and functions as may be conferred by the subscribers' agreement.   History: En. Sec. 555, Ch. 286, L. 1959; R.C.M. 1947, 40-5018.  
  33-5-401. Surplus funds required. (1) A domestic reciprocal insurer subject to this part, if it has otherwise complied with the applicable provisions of this code, may be authorized to transact insurance if it has and maintains surplus funds as follows:   (a) to transact property insurance, surplus funds of not less than $500,000;   (b) to transact casualty insurance:   (i) including authority for workers' compensation insurance, surplus funds of not less than $750,000; or   (ii) excluding authority for workers' compensation insurance, surplus funds of not less than $500,000.   (2) In addition to surplus funds required to be maintained under subsection (1), the insurer must have, when first authorized, expendable surplus in the same amount as required of a like foreign reciprocal insurer under 33-2-110.   (3) A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this code for the additional kinds of insurance and maintains surplus funds in an amount equal to the minimum capital stock required of a stock insurer for authority to transact a like combination of kinds of insurance.   History: En. Sec. 544, Ch. 286, L. 1959; R.C.M. 1947, 40-5007; amd. Sec. 1, Ch. 307, L. 1979; amd. Sec. 37, Ch. 379, L. 1995; amd. Sec. 34, Ch. 227, L. 2001.  
  33-5-402. Contributions to insurer. The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms funds that it may require from time to time in its operations. Sums advanced may not be treated as a liability of the insurer. Except upon liquidation of the insurer, during any calendar year, the total of withdrawals and repayments of the advanced sums may not exceed the lesser of the insurer's realized earned surplus or 10% of the sums advanced as of the previous December 31. A withdrawal or repayment may not be made without the advance approval of the commissioner. This section does not apply to bank loans or to loans for which security is given.   History: En. Sec. 552, Ch. 286, L. 1959; R.C.M. 1947, 40-5015; amd. Sec. 19, Ch. 531, L. 1997; amd. Sec. 23, Ch. 472, L. 1999.  
  33-5-403. Financial condition -- method of determining. In determining the financial condition of a reciprocal insurer the commissioner shall apply the following rules:   (1) The commissioner shall charge as liabilities the same reserves that are required of incorporated insurers issuing nonassessable policies on a reserve basis.   (2) The surplus deposits of subscribers must be allowed as assets, except that any premium deposits delinquent for 90 days must first be charged against the surplus deposit.   (3) The surplus deposits of subscribers may not be charged as a liability.   (4) All premium deposits that are delinquent for less than 90 days must be allowed as assets.   (5) An assessment levied upon subscribers and not collected may not be allowed as an asset.   (6) The contingent liability of subscribers may not be allowed as an asset.   (7) The computation of reserves must be based upon premium deposits other than membership fees and without any deduction for expenses and the compensation of the attorney.   History: En. Sec. 553, Ch. 286, L. 1959; R.C.M. 1947, 40-5016; amd. Sec. 1159, Ch. 56, L. 2009.  
  33-5-404. Subscribers' liability. (1) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer must be an individual, several, and proportionate liability, and not joint liability.   (2) Except as to a nonassessable policy, each subscriber must have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while the subscriber's policy was in force. The contingent liability may be at the rate of not less than 1 or more than 10 times the premium or premium deposit stated in the policy, and the maximum aggregate contingent liability must be computed in the manner set forth in 33-5-406.   (3) Each assessable policy issued by the insurer must contain a statement of the contingent liability.   History: En. Sec. 556, Ch. 286, L. 1959; R.C.M. 1947, 40-5019; amd. Sec. 1160, Ch. 56, L. 2009.  
  33-5-405. Subscribers' liability on judgment. (1) An action may not lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days.   (2) Any judgment described in subsection (1) is binding upon each subscriber only in the proportion that the subscriber's interests may appear and in an amount not exceeding the subscriber's contingent liability, if any.   History: En. Sec. 557, Ch. 286, L. 1959; R.C.M. 1947, 40-5020; amd. Sec. 1161, Ch. 56, L. 2009.  
  33-5-406. Assessments. (1) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable for the assessment under the terms of their policies by the attorney upon approval in advance by the subscribers' advisory committee and the commissioner or by the commissioner in liquidation of the insurer.   (2) Each subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event the subscriber's aggregate contingent liability as stated in accordance with 33-5-404, must be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during the period upon all policies subject to the assessment.   (3) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy must be used as a base, deducting only charges not recurring upon the renewal or extension of the policy.   (4) A subscriber may not have an offset against any assessment for which the subscriber is liable on account of any claim for unearned premium or losses payable.   History: En. Sec. 558, Ch. 286, L. 1959; R.C.M. 1947, 40-5021; amd. Sec. 1162, Ch. 56, L. 2009.  
  33-5-407. Time limit for assessments. Every subscriber of a domestic reciprocal insurer having contingent liability must be liable for and shall pay the subscriber's share of any assessment, as computed and limited in accordance with this chapter, if:   (1) while the subscriber's policy is in force or within 1 year after its termination, the subscriber is notified by either the attorney or the commissioner of the intention to levy an assessment; or   (2) an order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while the subscriber's policy is in force or within 1 year after its termination.   History: En. Sec. 559, Ch. 286, L. 1959; R.C.M. 1947, 40-5022; amd. Sec. 1163, Ch. 56, L. 2009.  
  33-5-408. Aggregate liability. No one policy or subscriber as to such policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on such policy during that year.   History: En. Sec. 560, Ch. 286, L. 1959; R.C.M. 1947, 40-5023.  
  33-5-409. Nonassessable policies. (1) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock required of a domestic stock insurer authorized to transact similar kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the commissioner shall issue a certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for as long as all the surplus remains unimpaired.   (2) Upon impairment of the surplus, the commissioner shall revoke the certificate. The revocation may not make a policy subject to contingent liability if the policy is then in force and for the remainder of the period for which the premium has been paid. However, after the revocation, a policy may not be issued or renewed without providing for contingent assessment liability of the subscriber.   (3) The commissioner may not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued unless it qualifies to and does extinguish the liability of all its subscribers and in all policies for all kinds of insurance transacted by it. However, if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of those of its subscribers that may acquire the policies in that state and need not extinguish the contingent liability applicable to policies previously in force in that state.   History: En. Sec. 561, Ch. 286, L. 1959; R.C.M. 1947, 40-5024; amd. Sec. 1164, Ch. 56, L. 2009.  
  33-5-410. Distribution of savings. A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks or policies or between subscribers, but this shall not prevent retrospective rating, distribution on a retrospective plan, or distribution varying as to classes of subscribers based on the experience of such subscribers.   History: En. Sec. 562, Ch. 286, L. 1959; R.C.M. 1947, 40-5025.  
  33-5-411. Subscribers' share in assets. Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in 33-5-402, and the return of any unused premium, savings, or credits then standing on subscribers' accounts shall be distributed to its subscribers who were such within the 12 months prior to the last termination of its certificate of authority, according to such reasonable formula as the commissioner may approve.   History: En. Sec. 563, Ch. 286, L. 1959; R.C.M. 1947, 40-5026.  
  33-5-412. Impaired reciprocals. (1) If the assets of a reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency, but subject to the limitation set forth in the power of attorney or policy.   (2) If the attorney fails to make up the deficiency or to make the assessment within 30 days after the commissioner orders the attorney to do so or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer is considered insolvent and must be proceeded against as authorized by this code.   (3) If liquidation of an insurer is ordered, an assessment must be levied upon the subscriber for an amount, subject to limits as provided by this chapter, that the commissioner determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons but including the reasonable cost of the liquidation.   History: En. Sec. 565, Ch. 286, L. 1959; R.C.M. 1947, 40-5028; amd. Sec. 1165, Ch. 56, L. 2009.  
  33-5-413. Annual statement. (1) The annual statement of a reciprocal insurer shall be made and filed by its attorney.   (2) The statement shall be supplemented by such information as may be required by the commissioner relative to the affairs and transactions of the attorney insofar as they relate to the reciprocal insurer.   History: En. Sec. 551, Ch. 286, L. 1959; R.C.M. 1947, 40-5014.  
  33-5-501. Insuring powers of reciprocals. (1) A reciprocal insurer may, upon qualifying therefor as provided for by this code, transact any kind or kinds of insurance defined by this code, other than life or title insurances.   (2) Such an insurer may purchase reinsurance and may grant reinsurance as to any kind of insurance it is authorized to transact.   History: En. Sec. 541, Ch. 286, L. 1959; R.C.M. 1947, 40-5004.  
  33-5-502. Certificate of authority. (1) The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer.   (2) The commissioner may refuse, suspend, or revoke the certificate of authority, in addition to other grounds therefor, for failure of the attorney to comply with any provision of this code.   History: En. Sec. 546, Ch. 286, L. 1959; R.C.M. 1947, 40-5009.  
  33-5-503. Eligible subscribers -- liability of representative. (1) Individuals, partnerships, and corporations of this state may make application, enter into agreement for, hold policies or contracts in or with, and be a subscriber of any domestic, foreign, or alien reciprocal insurer. Any corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurer. The right to exchange such contracts is hereby declared to be incidental to the purposes for which such corporations are organized and to be as fully granted as the rights and powers expressly conferred upon such corporations.   (2) Government or governmental agencies, state or political subdivisions thereof, boards, associations, estates, trustees, or fiduciaries are authorized to exchange nonassessable reciprocal interinsurance contracts with each other and with individuals, partnerships, and corporations to the same extent that individuals, partnerships, and corporations are herein authorized to exchange reciprocal interinsurance contracts.   (3) Any officer, representative, trustee, receiver, or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon such contract by reason of acting in such representative capacity.   History: En. Sec. 554, Ch. 286, L. 1959; R.C.M. 1947, 40-5017.  
  33-6-101. Repealed. Sec. 6, Ch. 26, L. 2019.   History: (1), (2)En. Sec. 521, Ch. 286, L. 1959; Sec. 40-4901, R.C.M. 1947; (3)En. Sec. 537, Ch. 286, L. 1959; amd. Sec. 1, Ch. 297, L. 1971; Sec. 40-4917, R.C.M. 1947; R.C.M. 1947, 40-4901, 40-4917; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 45, Ch. 304, L. 1999; amd. Sec. 9, Ch. 60, L. 2019.  
  33-6-102. Definition. (1) An entity is considered a "benevolent association" for the purposes of this chapter if the entity:   (a) is a corporation, association, or society, or by whatever name called, that issues any certificate, policy, or membership agreement or makes any promise or agreement with its members under which, upon the death of a member, any money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the corporation, association, or society to the deceased's legal representatives or to the beneficiary designated by the deceased and the money, benefit, charity, aid, or relief is derived from voluntary donations or from admission fees, dues, or assessments or any of those items collected or to be collected from the members of the entity or members of a class of the entity or interest or gains on the items or accumulations of the items; and   (b) uses the money or other benefit, charity, aid, or relief for the uses and purposes specified in this chapter, the uses of the corporation, association, or society, or the expenses of management and prosecution of its business.   (2) The definition of benevolent association in subsection (1) is not applicable to:   (a) burial or death benefits, annuities, endowments, or any other benefit payments of any legal reserve life or disability insurer or of any labor union, railroad brotherhood, or lodge having as a primary business the improvement of working conditions;   (b) any auxiliaries to any labor union, railroad brotherhood, or lodge referred to in subsection (2)(a); or   (c) the benevolent plans within fraternal orders if limited to members and if the plan is not the principal object for the formation or continuance of the fraternal order.   History: (1)En. Sec. 522, Ch. 286, L. 1959; amd. Sec. 20, Ch. 535, L. 1975; Sec. 40-4902, R.C.M. 1947; (2) thru (4)En. Secs. 523, 524, 525, Ch. 286, L. 1959; Secs. 40-4903, 40-4904, 40-4905, R.C.M. 1947; R.C.M. 1947, 40-4902, 40-4903, 40-4904, 40-4905; amd. Sec. 1166, Ch. 56, L. 2009; amd. Sec. 1, Ch. 26, L. 2019.  
  33-6-103. New benevolent associations prohibited -- foreign associations. (1) A benevolent association may not transact or be authorized to transact any business in this state if the benevolent association did not have authority to transact business in this state immediately prior to January 1, 1961.   (2) A new benevolent association may not be organized or formed in this state on or after January 1, 1961.   (3) A benevolent association formed or existing under the laws of any other state or jurisdiction may not be authorized to transact business in this state.   History: En. Sec. 526, Ch. 286, L. 1959; R.C.M. 1947, 40-4906; amd. Sec. 2, Ch. 26, L. 2019.  
  33-6-104. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 527, Ch. 286, L. 1959; R.C.M. 1947, 40-4907.  
  33-6-201. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 528, Ch. 286, L. 1959; R.C.M. 1947, 40-4908.  
  33-6-301. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 531, Ch. 286, L. 1959; R.C.M. 1947, 40-4911.  
  33-6-302. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 533, Ch. 286, L. 1959; amd. Sec. 1, Ch. 224, L. 1975; R.C.M. 1947, 40-4913.  
  33-6-303. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 535, Ch. 286, L. 1959; R.C.M. 1947, 40-4915.  
  33-6-304. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 536, Ch. 286, L. 1959; R.C.M. 1947, 40-4916; amd. Sec. 2, Ch. 337, L. 1987.  
  33-6-401. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. 40-4918 by Sec. 2, Ch. 297, L. 1971; R.C.M. 1947, 40-4918(part); amd. Sec. 3, Ch. 327, L. 1987; amd. Sec. 1167, Ch. 56, L. 2009.  
  33-6-402. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 529, Ch. 286, L. 1959; R.C.M. 1947, 40-4909; amd. Sec. 146, Ch. 575, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-6-403. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 530, Ch. 286, L. 1959; R.C.M. 1947, 40-4910; amd. Sec. 1, Ch. 713, L. 1989.  
  33-6-404. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 532, Ch. 286, L. 1959; R.C.M. 1947, 40-4912.  
  33-6-405. Repealed. Sec. 6, Ch. 26, L. 2019.   History: En. Sec. 534, Ch. 286, L. 1959; R.C.M. 1947, 40-4914.  
  33-7-101. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Secs. 617, 672, Ch. 286, L. 1959; R.C.M. 1947, 40-5304, 40-5359; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 2, Ch. 139, L. 1987; amd. Sec. 15, Ch. 713, L. 1989.  
  33-7-102. Repealed. Sec. 41, Ch. 586, L. 1991.   History: (1), (2)En. Sec. 614, Ch. 286, L. 1959; Sec. 40-5301, R.C.M. 1947; (3)En. Sec. 615, Ch. 286, L. 1959; Sec. 40-5302, R.C.M. 1947; (4)En. Sec. 616, Ch. 286, L. 1959; Sec. 40-5303, R.C.M. 1947; R.C.M. 1947, 40-5301, 40-5302, 40-5303.  
  33-7-103. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 645, Ch. 286, L. 1959; R.C.M. 1947, 40-5332.  
  33-7-104. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 618, Ch. 286, L. 1959; amd. Sec. 21, Ch. 535, L. 1975; R.C.M. 1947, 40-5305.  
  33-7-105. Fraternal benefit societies. Any incorporated or unincorporated society, order, or supreme lodge, without capital stock, including a society exempted under the provisions of 33-7-126(1)(b), that is conducted solely for the benefit of its members and their beneficiaries and not for profit, that is operated on a lodge system with ritualistic forms of work, that has a representative form of government, and that provides benefits in accordance with this chapter, is a fraternal benefit society.   History: En. Sec. 1, Ch. 586, L. 1991.  
  33-7-106. Lodge system. (1) A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws, rules, and ritual. Subordinate lodges must be required by the laws of the society to hold regular meetings at least once a month in furtherance of the purposes of the society.   (2) A society may organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges may not be required of children, and children may not have a voice or vote in the management of a society.   History: En. Sec. 2, Ch. 586, L. 1991.  
  33-7-107. Representative form of government. (1) A society has a representative form of government if it has a supreme governing body organized as provided in subsection (2) or (3).   (2) (a) The supreme governing body may be an assembly composed of delegates who meet the criteria of subsection (5) and who are elected either by the members directly or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail.   (b) The delegates elected must be a majority of delegates and may not have less than a majority of the votes and not less than the number of votes required to amend the society's laws. The assembly must be elected and shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the society between meetings of the assembly.   (c) Vacancies on the board of directors may be filled in the manner prescribed by the society's laws.   (3) (a) (i) The supreme governing body may be:   (A) a board composed of persons who meet the criteria of subsection (5) and who are elected by the members, either directly or by their representatives in intermediate assemblies; and   (B) any other persons prescribed in the society's laws.   (ii) A society may provide for election of the board by mail.   (b) The term of a board member may not exceed 4 years. Vacancies on the board may be filled in the manner prescribed in the society's laws.   (c) The persons elected to the board must be a majority of the board and may not be less than the number of votes required to amend the society's laws. A person filling an unexpired term of an elected board member is considered to be an elected board member.   (d) The board shall meet at least quarterly to conduct the business of the society.   (4) The officers of the society must be elected either by the assembly or by the board of directors, either of which constitutes the supreme governing body.   (5) Only benefit members are eligible for election to the assembly, the board of directors, or an intermediate assembly.   (6) Each voting member shall have one vote. A vote may not be cast by proxy.   History: En. Sec. 3, Ch. 586, L. 1991.  
  33-7-108. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:   (1) "Benefit contract" means the agreement for provision of authorized benefits described in 33-7-520.   (2) "Benefit member" means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract.   (3) "Certificate" means the document issued as written evidence of the benefit contract.   (4) "Laws" means the society's articles of incorporation, charter, constitution, and bylaws.   (5) "Lodge" means subordinate member units of the society, known as camps, courts, councils, or branches or by any other designation.   (6) "Premiums" means premiums, rates, dues, or other required contributions that are payable under the certificate.   (7) "Rules" means all rules, regulations, or resolutions that are adopted by the supreme governing body or board of directors and that are intended to have general application to the members of the society.   (8) "Society" means a fraternal benefit society described in 33-7-105. The term includes an order or supreme lodge.   History: En. Sec. 4, Ch. 586, L. 1991.  
  33-7-109. Purposes and powers. (1) A society shall operate for the benefit of members and their beneficiaries by:   (a) providing benefits as provided in 33-7-520; and   (b) providing for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes, which may be extended to others. The purposes may be carried out directly by the society or indirectly through subsidiary corporations or affiliated organizations.   (2) A society may adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It may amend laws and rules and exercise powers necessary and incidental to the objectives and purposes of the society.   History: En. Sec. 5, Ch. 586, L. 1991.  
  33-7-110. Qualification for membership. (1) A society shall specify in its laws or rules:   (a) eligibility standards for each class of membership. However, if benefits are provided on the lives of children, the minimum age for adult membership must be set at not less than 15 years of age and not more than 21 years of age.   (b) the process for admission to each membership class; and   (c) the rights and privileges of each membership class. However, only benefit members may vote on the management of the insurance affairs of the society.   (2) A society may admit social members who have no voice or vote in the management of the insurance affairs of the society.   (3) Membership rights in the society are personal to the member and are not assignable.   History: En. Sec. 6, Ch. 586, L. 1991.  
  33-7-111. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 653, Ch. 286, L. 1959; R.C.M. 1947, 40-5340; amd. Sec. 1, Ch. 713, L. 1989.  
  33-7-112. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 654, Ch. 286, L. 1959; R.C.M. 1947, 40-5341.  
  33-7-113. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 655, Ch. 286, L. 1959; R.C.M. 1947, 40-5342.  
  33-7-114. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 665, Ch. 286, L. 1959; R.C.M. 1947, 40-5352.  
  33-7-115. Repealed. Sec. 41, Ch. 586, L. 1991.   History: Ap. p. Sec. 669, Ch. 286, L. 1959; Sec. 40-5356, R.C.M. 1947; Ap. p. Sec. 670, Ch. 286, L. 1959; Sec. 40-5357, R.C.M. 1947; R.C.M. 1947, 40-5356, 40-5357.  
  33-7-116. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 671, Ch. 286, L. 1959; R.C.M. 1947, 40-5358.  
  33-7-117. Scope -- provisions applicable. (1) Except as provided in subsection (2), societies are governed by this chapter and are exempt from all other provisions of the insurance laws of this state, not only in governmental relations with the state but for every other purpose. The provisions of a law enacted after January 1, 1992, do not apply to fraternal benefit societies unless expressly made applicable by the provisions of the law.   (2) In addition to the provisions of this chapter, the provisions of chapter 1, parts 1 through 4 and 7; 33-2-104; 33-2-107; 33-2-112; chapter 2, parts 13 and 19; 33-3-308; 33-3-701 through 33-3-704; 33-15-502; and chapters 17, 18, 20, and 22 apply to fraternal benefit societies to the extent applicable and to the extent not in conflict with the provisions of this chapter and the reasonable implications of this chapter.   History: En. Sec. 23, Ch. 586, L. 1991; amd. Sec. 38, Ch. 379, L. 1995; amd. Sec. 12, Ch. 63, L. 2015.  
  33-7-118. Reports -- fee. Reports must be filed in accordance with the provisions of this section.   (1) On or before March 1 of each year, unless for cause shown the time has been extended by the commissioner of insurance, a society that transacts business in this state shall file with the commissioner of insurance a statement of its financial condition, transactions, and affairs for the preceding calendar year and pay a filing fee of $25. The statement must be in the general form and context approved by the national association of insurance commissioners for fraternal benefit societies and as supplemented by additional information required by the commissioner.   (2) As part of the annual statement, each society shall, on or before March 1, file with the commissioner a valuation of its certificates in force on the preceding December 31. The commissioner may, for cause shown, extend for not more than 2 calendar months the time for filing the valuation. The valuation must be done in accordance with the standards specified in 33-7-411. The valuation and underlying data must be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society.   (3) A society that fails to file the annual statement in the form and within the time provided by this section shall forfeit $100 for each day during which the failure continues, and, upon notice by the commissioner to that effect, its authority to do business in this state ceases while the default continues.   History: En. Sec. 26, Ch. 586, L. 1991.  
  33-7-119. Examination of societies. (1) The commissioner of insurance or any person appointed by the commissioner may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public, as provided in the laws regulating insurers, are applicable to the examination of societies.   (2) The expense of each examination and of each valuation, including compensation and actual expenses of examiners, must be paid by the society examined or whose certificates are valued, upon statements furnished by the commissioner.   History: En. Sec. 28, Ch. 586, L. 1991; amd. Sec. 1168, Ch. 56, L. 2009.  
  33-7-120. Injunction -- liquidation -- receivership of domestic society. (1) The commissioner of insurance shall notify a domestic society of a deficiency or deficiencies and state in writing the reasons for the dissatisfaction, whenever the commissioner, upon investigation, finds that the society:   (a) has exceeded its powers;   (b) has failed to comply with any provision of this chapter;   (c) is not fulfilling its contracts in good faith;   (d) has a membership of less than 400 after an existence of 1 year or more; or   (e) is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business.   (2) Whenever a deficiency or deficiencies are found, the commissioner shall issue to the society a written notice that requires the deficiency or deficiencies to be corrected. The society shall within 30 days comply with the commissioner's request for correction. If the society fails to comply, the commissioner shall notify the society of the noncompliance and require the society to show cause by a stated date why it should not be enjoined from transacting business until the violation complained of is corrected or why an action in quo warranto should not be commenced against the society.   (3) If the society does not present sufficient reasons why it should not be enjoined from transacting business or why the quo warranto action should not be commenced, the commissioner may present the facts relating to the commissioner's determination to the attorney general who shall, if the attorney general finds that the circumstances warrant, commence an action to enjoin the society from transacting business or an action in quo warranto.   (4) The court shall notify the officers of the society of a hearing. If after a hearing it appears that the society should be enjoined or liquidated or that a receiver should be appointed, the court shall enter the necessary order. A society enjoined from transacting business may not do business until:   (a) the commissioner finds that the violation complained of has been corrected;   (b) the costs of the action have been paid by the society if the court finds that the society was in default as charged;   (c) the court has dissolved its injunction; and   (d) the commissioner has reinstated the certificate of authority.   (5) If the court orders the society liquidated, it is enjoined from transacting any further business. The receiver of the society shall proceed at once to take possession of the books, papers, money, and other assets of the society and, under the direction of the court, proceed to close the affairs of the society and distribute its funds to those entitled to the funds.   (6) An action under this section may not be recognized in any court of this state unless brought by the attorney general upon request of the commissioner. The court shall appoint the commissioner as the receiver for a domestic society.   (7) The provisions of this section relating to hearing by the commissioner, action by the attorney general at the request of the commissioner, hearing by the court, injunction, and receivership apply to a society that voluntarily decides to discontinue business.   History: En. Sec. 30, Ch. 586, L. 1991; amd. Sec. 1169, Ch. 56, L. 2009.  
  33-7-121. Suspension, revocation, or refusal of license of foreign or alien society. (1) The commissioner of insurance shall notify a foreign or alien society of a deficiency or deficiencies and state in writing the reasons for the commissioner's dissatisfaction whenever the commissioner, upon investigation, finds that the society transacting or applying to transact business in this state:   (a) has exceeded its powers;   (b) has failed to comply with any of the provisions of this chapter;   (c) is not fulfilling its contracts in good faith; or   (d) is conducting its business fraudulently or in a manner hazardous to its members, creditors, or the public.   (2) Whenever a deficiency or deficiencies are found, the commissioner shall issue to the society a written notice that requires the deficiency or deficiencies to be corrected. The society shall within 30 days comply with the commissioner's request for correction. If the society fails to comply, the commissioner shall notify the society of the noncompliance and require the society to show cause by a stated date why its authority to do business in this state should not be suspended, revoked, or refused.   (3) If the society does not present sufficient reason why its authority to do business in this state should not be suspended, revoked, or refused, the commissioner may:   (a) suspend or refuse the authority of the society to do business in this state until satisfactory evidence is furnished to the commissioner that the suspension or refusal should be withdrawn; or   (b) revoke the authority of the society to do business in this state.   (4) This section may not be construed as preventing any society from continuing in good faith all contracts made in this state during the time the society was legally authorized to transact business in this state.   History: En. Sec. 31, Ch. 586, L. 1991; amd. Sec. 1170, Ch. 56, L. 2009.  
  33-7-122. Injunction. An application or petition for injunction against any domestic, foreign, or alien society or lodge of a society may not be recognized in any court of this state unless made by the attorney general upon request of the commissioner of insurance.   History: En. Sec. 32, Ch. 586, L. 1991.  
  33-7-123. Commissioner as agent -- service of process -- procedure -- fee. (1) A society authorized to do business in this state shall appoint in writing the commissioner of insurance as its agent upon whom all lawful process in any action or proceeding against it must be served. The society shall agree in writing that any lawful process against it that is served on the commissioner is of the same legal force and validity as if it had been served upon the society. The appointment continues in force as long as any liability remains outstanding in this state. Copies of the appointment, certified by the commissioner, may be admitted in evidence.   (2) Service may be made only upon the commissioner or, if absent, upon the person in charge of the commissioner's office. Service must be made in duplicate and constitutes service upon the society. When legal process against a society is served upon the commissioner, the commissioner shall forward one of the duplicate copies by certified mail to the secretary or corresponding officer of the society. The service may not require a society to file its answer, pleading, or defense in less than 30 days from the date of mailing the copy of the service to the society.   (3) Legal process may not be served upon a society except in the manner provided in this section.   (4) At the time of serving any process upon the commissioner, the plaintiff or complainant in the action shall pay to the commissioner a fee of $2.   History: En. Sec. 35, Ch. 586, L. 1991.  
  33-7-124. Review. All decisions and findings of the commissioner of insurance made under the provisions of this chapter are subject to review by the court in accordance with the provisions of 33-1-711.   History: En. Sec. 36, Ch. 586, L. 1991.  
  33-7-125. Penalties. (1) A person who makes a false or fraudulent statement in or relating to an application for membership or for the purpose of obtaining money from a benefit in any society is guilty of a misdemeanor.   (2) A person who solicits membership for, or in any manner assists in procuring membership in, any society not authorized to transact business in this state is subject to an administrative fine, imposed by the commissioner of insurance, of not less than $25 or more than $500 for each violation.   (3) A person convicted of a willful violation of, or neglect or refusal to comply with, any provision of this chapter for which a penalty is not otherwise prescribed shall be punished by a fine of not more than $1,000 for each violation and not more than $10,000 for all related violations.   History: En. Sec. 37, Ch. 586, L. 1991.  
  33-7-126. Exemption of certain societies. (1) Nothing in this chapter may be construed to affect or apply to:   (a) grand or subordinate lodges of societies, orders, or associations doing business in this state on July 1, 1992, that provide benefits exclusively through local or subordinate lodges;   (b) (i) orders, societies, or associations that admit to membership only persons engaged in one or more crafts or hazardous occupations or in the same or similar lines of business and that insure only their own members and their families; and   (ii) the ladies' societies or ladies' auxiliaries to such orders, societies, or associations;   (c) domestic societies that limit their membership to employees of a particular city or town, designated firm, business house, or corporation and that provide for a death benefit of not more than $400 or disability benefits of not more than $350 to any person in any 1 year, or both; or   (d) domestic societies or associations of a purely religious, charitable, or benevolent description, which provide for a death benefit of not more than $400 or for disability benefits of not more than $350 to a person in any 1 year, or both.   (2) A society or association described in subsection (1)(c) or (1)(d) that provides for death or disability benefits for which benefit certificates are issued and a society or association included in subsection (1)(d) that has more than 1,000 members are not exempt from the provisions of this chapter.   (3) A society that is exempt under this section from the requirements of this chapter, except a society described in subsection (1)(b), may not give or allow or promise to give or allow to any person any compensation for procuring new members.   (4) A society that provides for benefits in case of death or disability resulting solely from accident and that does not obligate itself to pay natural death or sick benefits has all of the privileges and is subject to all the applicable provisions and regulations of this chapter except the provisions of this chapter that relate to medical examination, valuations of benefit certificates, and incontestability.   (5) The commissioner may require from a society or association, by examination or otherwise, any information that will enable the commissioner to determine whether the society or association is exempt from the provisions of this chapter.   (6) A society that is exempt under the provisions of this section is also exempt from all other provisions of the insurance laws of this state.   History: En. Sec. 38, Ch. 586, L. 1991.  
  33-7-201. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 622, Ch. 286, L. 1959; R.C.M. 1947, 40-5309.  
  33-7-202. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 623, Ch. 286, L. 1959; R.C.M. 1947, 40-5310.  
  33-7-203. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 624, Ch. 286, L. 1959; R.C.M. 1947, 40-5311.  
  33-7-204. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 625, Ch. 286, L. 1959; R.C.M. 1947, 40-5312.  
  33-7-205. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 626, Ch. 286, L. 1959; R.C.M. 1947, 40-5313.  
  33-7-206. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 629, Ch. 286, L. 1959; R.C.M. 1947, 40-5316(part).  
  33-7-207. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 628, Ch. 286, L. 1959; R.C.M. 1947, 40-5315.  
  33-7-208. Organization. A domestic society organized on or after January 1, 1992, must be formed as follows:   (1) Ten or more citizens of the United States, a majority of whom are residents of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge before a notary public an application for articles of incorporation that states:   (a) the proposed corporate name of the society, which may not so closely resemble the name of any society or insurance company as to be misleading or confusing;   (b) the purposes for which it is being formed and the mode in which its corporate powers are to be exercised. The purposes may not include more liberal powers than are granted by this chapter.   (c) the names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all officers are elected by the supreme governing body. The election must be held not later than 1 year from the date of issuance of the permanent certificate of authority.   (2) The application for articles of incorporation, certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications for certificates, and circulars to be issued by the society, and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within 1 year must be filed with the commissioner, who may require further information considered necessary. The bond, with sureties approved by the commissioner, must be in an amount, not less than $300,000 or more than $1,500,000, required by the commissioner. All documents filed must be in English. If the purposes of the society conform to the requirements of this chapter and all provisions of law have been complied with, the commissioner shall certify, retain, and file the articles of incorporation and furnish to the incorporators a preliminary certificate of authority authorizing the society to solicit members.   (3) A preliminary certificate of authority granted under the provisions of this section is not valid after 1 year from its date of issuance or after an extended period, not exceeding 1 year, as may be authorized by the commissioner upon good cause shown, unless the 500 applicants required under subsection (4) have been secured and the organization has been completed. The charter and all other proceedings under the charter are void 1 year from the date of issuance of the preliminary certificate of authority or at the expiration of the extended period unless the society has completed its organization and received a certificate of authority to do business.   (4) Upon receipt of a preliminary certificate of authority from the commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount collected. A society may not incur a liability other than for the return of an advance premium, issue any certificate, or pay, allow, offer, or promise to pay or allow any benefit to a person until:   (a) actual applications for benefits have been secured, aggregating at least $500,000, on not less than 500 applicants and any necessary evidence of insurability has been furnished to and approved by the society;   (b) at least 10 subordinate lodges have been established into which the 500 applicants have been admitted;   (c) there has been submitted to the commissioner, under oath of the president, secretary, or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted, and premiums for benefits; and   (d) it has been shown to the commissioner, by sworn statement of the treasurer or the corresponding officer of the society, that at least 500 applicants have each paid in cash at least one regular monthly premium. The aggregate premiums must amount to at least $150,000. The advance premiums must be held in trust during the period of organization. If the society has not qualified for a certificate of authority within 1 year, unless extended as provided in subsection (3), the premiums must be returned to the applicants.   (5) The commissioner may require and examine additional information that the commissioner considers advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the commissioner shall issue a certificate of authority to the society, authorizing it to transact business pursuant to the provisions of this chapter. The certificate of authority is prima facie evidence of the existence of the society at the date of the certificate. The commissioner shall record the certificate of authority.   (6) A society authorized to transact business in this state on January 1, 1992, is not required to reincorporate.   (7) An unincorporated or voluntary association may not transact business in this state as a society. Every voluntary association incorporated as provided in section 629(2), Chapter 286, Laws of 1959, may incur the obligations and enjoy the benefits of a society as if it were originally incorporated, and the corporation is considered a continuation of the original voluntary association. The officers must be elected and serve as provided in its articles of incorporation. Incorporation of a voluntary association does not affect existing suits, claims, or contracts.   History: En. Sec. 10, Ch. 586, L. 1991; amd. Sec. 1171, Ch. 56, L. 2009.  
  33-7-209. Amendments to laws. (1) A domestic society may amend its laws in accordance with the provisions of its laws by action of its supreme governing body at any regular or special meeting or, if its laws provide, by referendum. The referendum may be held in accordance with the provisions of its laws by a vote of the voting members of the society, by a vote of delegates or representatives of voting members, or by a vote of local lodges. A society may provide for voting by mail. An amendment submitted by referendum may not be adopted unless, within 6 months from the date of submission, a majority of the members voting have signified their consent to the amendment.   (2) An amendment to the laws of a domestic society does not take effect unless approved by the commissioner of insurance, who shall approve the amendment if the commissioner finds that it has been adopted and is not inconsistent with any requirement of the laws of this state or with the character, objectives, and purposes of the society. Unless the commissioner disapproves an amendment within 60 days after its filing, the amendment is considered approved. The approval or disapproval of the commissioner must be in writing and mailed to the secretary or corresponding officer of the society at its principal office. If the commissioner disapproves an amendment, the reasons for the disapproval must be stated in the written notice.   (3) Within 90 days of approval by the commissioner, all amendments or a synopsis of the amendments must be furnished to all members of the society, either by mail or by publication in full in the official publication of the society.   (4) A foreign or alien society authorized to do business in this state shall file with the commissioner a certified copy of all amendments of or additions to its laws within 90 days after their enactment.   (5) Printed copies of the laws, as amended, that are certified by the secretary or a corresponding officer of the society are prima facie evidence of their legal adoption.   History: En. Sec. 11, Ch. 586, L. 1991; amd. Sec. 1172, Ch. 56, L. 2009.  
  33-7-210. Institutions. (1) A society may create, maintain, and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by 33-7-109(1)(b). The institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held, or leased by the society for these purposes must be reported in every annual statement but may not be allowed as an admitted asset of the society.   (2) A society may not own or operate funeral homes or undertaking establishments.   History: En. Sec. 12, Ch. 586, L. 1991.  
  33-7-211. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 666, Ch. 286, L. 1959; R.C.M. 1947, 40-5353.  
  33-7-212. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 667, Ch. 286, L. 1959; R.C.M. 1947, 40-5354.  
  33-7-213. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 668, Ch. 286, L. 1959; R.C.M. 1947, 40-5355.  
  33-7-214. Reinsurance. (1) A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, having the power to make the reinsurance and authorized to do business in this state or, if not authorized to do business in this state, an insurer that is approved by the commissioner of insurance. A society may not reinsure substantially all of its insurance in force without the written permission of the commissioner. A society may take credit for the reserves on the ceded risks to the extent reinsured. A credit may not be allowed as an admitted asset or as a deduction from liability to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective on or after July 1, 1992, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.   (2) Notwithstanding the limitation in subsection (1), a society may reinsure the risks of another society in a consolidation or merger approved by the commissioner under 33-7-215.   History: En. Sec. 13, Ch. 586, L. 1991.  
  33-7-215. Consolidations and mergers. (1) A domestic society may consolidate or merge with any other society by complying with the provisions of this section. The consolidated or merged society shall file with the commissioner of insurance:   (a) a certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;   (b) a sworn statement by the president and secretary or corresponding officers of each society showing the financial condition of each society on a date fixed by the commissioner, but not earlier than December 31 preceding the date of the contract;   (c) a certificate of the officers of each society, verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, held at a regular or special meeting of each body or, if the society's laws permit, by mail; and   (d) evidence that at least 60 days prior to the action of the supreme governing body of each society, the text of the contract was furnished to all members of each society, either by mail or by publication in full in the official publication of each society.   (2) If the commissioner finds that the contract containing the terms and conditions of the proposed consolidation or merger is in conformity with this section, that the financial statements are correct, and that the consolidation or merger is just and equitable to the members of each society, the commissioner shall approve the contract and issue a certificate approving the contract.   (3) Upon approval, the contract is in full force and effect unless a society that is a party to the contract is incorporated under the laws of any other state, district, territory, province, or country. In that event, the consolidation or merger is not effective until it is approved as provided by the laws of that state, district, territory, province, or country and a certificate of approval has been filed with the commissioner of insurance of this state.   (4) When the consolidation or merger becomes effective, all the rights, franchises, and interests of the consolidated or merged societies in and to every type of property, real, personal, or mixed, and things in action pertaining to the property are vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by deeds. The title to any real property or interest in real property vested under the laws of this state in any of the societies consolidated or merged may not revert or be impaired by reason of the consolidation or merger, but the title vests in the society resulting from or remaining after the consolidation or merger.   (5) The affidavit of any officer of the society or of anyone authorized by the society to mail a notice or document, stating that the notice or document has been addressed and mailed, is prima facie evidence that the notice or document has been furnished to the addressees.   History: En. Sec. 14, Ch. 586, L. 1991.  
  33-7-216. Conversion of society into mutual life insurance company. A domestic society may be converted and licensed as a mutual life insurance company by compliance with all the applicable requirements of Title 33 if the plan of conversion has been approved by the commissioner of insurance. The board of directors shall prepare a written plan of conversion that sets forth in full the terms and conditions of conversion. An affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting is necessary for the approval of the plan. A conversion may not take effect unless approved by the commissioner, who may approve the conversion if the commissioner finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.   History: En. Sec. 15, Ch. 586, L. 1991; amd. Sec. 1173, Ch. 56, L. 2009.  
  33-7-217. Annual certificate -- fees. (1) A society may not insure a risk in this state unless it holds a certificate of authority issued to it by the commissioner of insurance.   (2) A society's certificate of authority continues in force as long as the society is entitled to it under this chapter and until suspended, revoked, or otherwise terminated. However, continuance of the certificate by the society is conditioned upon payment before May 15 of each year of a continuation fee of $10. The fee must be deposited by the commissioner of insurance with the state treasurer to the credit of the state general fund.   (3) If a society does not continue its certificate of authority in accordance with subsection (2), its certificate of authority expires at midnight on the May 31 following its failure to continue it in force. In that case, the commissioner shall promptly notify the society of the impending expiration of its certificate of authority.   (4) The commissioner may reinstate a certificate of authority that a society has inadvertently permitted to expire, after the society has fully cured all failures that resulted in the expiration and upon payment by the society of a $25 fee for reinstatement in addition to the continuation fee provided for in subsection (2). If a certificate is not reinstated, the commissioner may grant a society another certificate of authority only after the society files an application for a certificate of authority and meets all other requirements for an original certificate of authority in this state.   (5) The commissioner may amend a certificate of authority at any time to conform to changes in a society's charter of insuring powers.   (6) A certified copy or duplicate of a certificate of authority is prima facie evidence that the society is a fraternal benefit society within the meaning of this chapter.   History: En. Sec. 27, Ch. 586, L. 1991.  
  33-7-301. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 627, Ch. 286, L. 1959; R.C.M. 1947, 40-5314.  
  33-7-302. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 630, Ch. 286, L. 1959; R.C.M. 1947, 40-5317.  
  33-7-303. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 631, Ch. 286, L. 1959; R.C.M. 1947, 40-5318.  
  33-7-304. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 632, Ch. 286, L. 1959; R.C.M. 1947, 40-5319.  
  33-7-305. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 633, Ch. 286, L. 1959; R.C.M. 1947, 40-5320.  
  33-7-306. Location of office -- meetings -- communication to members -- grievance procedures. (1) The principal office of a domestic society must be located in this state. The meetings of its supreme governing body may be held in any state, district, province, or territory where the society has at least five subordinate lodges or in a location determined by the supreme governing body. All business transacted at meetings is valid. The minutes of the proceedings of the supreme governing body and of the board of directors must be in English.   (2) (a) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. Required reports, notices, and statements must be printed conspicuously in the publication. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is considered to be mailed to all members at the same address unless a member requests a separate copy.   (b) Not later than June 1 of each year, a synopsis of the society's annual statement, providing an explanation of the facts concerning the condition of the society, must be printed and mailed to each benefit member of the society, or the synopsis may be published in the society's official publication.   (3) A society may provide in its laws or rules for grievance or complaint procedures for members.   History: En. Sec. 7, Ch. 586, L. 1991.  
  33-7-307. No personal liability. (1) The officers and members of the supreme governing body or any subordinate body of a society are not personally liable for any benefits provided by a society.   (2) A person may be indemnified and reimbursed by a society for expenses reasonably incurred by and liabilities imposed upon the person in connection with or arising out of an action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat of a proceeding in which the person may be involved by reason of the fact that the person is or was a director, officer, employee, or agent of the society or of a firm, corporation, or organization that the person served in any capacity at the request of the society.   (3) (a) A person may not be indemnified or reimbursed in relation to any matter in an action, suit, or proceeding:   (i) in which the person is finally found to be guilty of breach of a duty as a director, officer, employee, or agent of the society; or   (ii) that is the subject of a compromise settlement.   (b) A person may be indemnified or reimbursed if the person acted in good faith for a purpose that the person reasonably believed to be in, or not opposed to, the best interests of the society and, in a criminal action or proceeding, in addition, did not have reasonable cause to believe that the conduct was unlawful.   (4) The determination of whether the person's conduct met the standard required in order to justify indemnification or reimbursement in relation to any matter described in subsection (3) may be made only by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit, or proceeding or by a court of competent jurisdiction. The termination of an action, suit, or proceeding by a judgment, order, settlement, or conviction or upon a plea of no contest, does not create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification or reimbursement. The right of indemnification or reimbursement is not exclusive of other rights to which the person may be entitled as a matter of law, and the right inures to the benefit of the person's heirs, executors, and administrators.   (5) A director, officer, employee, member, or volunteer of a society who serves without compensation may not be held liable for and a cause of action may not be brought for damages resulting from the exercise of judgment or discretion in connection with the person's duties or responsibilities for the society unless the act or omission involved willful or wanton misconduct.   (6) A society may purchase and maintain liability insurance for acts incurred in the course and scope of the position for a person who is or was a director, officer, employee, or agent of the society or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization.   History: En. Sec. 8, Ch. 586, L. 1991; amd. Sec. 1174, Ch. 56, L. 2009.  
  33-7-308. Waiver. The laws of the society may provide that a subordinate body or any of its subordinate officers or members may not waive any of the provisions of the laws of the society. The provision is binding on the society and every member and beneficiary of a member.   History: En. Sec. 9, Ch. 586, L. 1991.  
  33-7-401. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 635, Ch. 286, L. 1959; R.C.M. 1947, 40-5322.  
  33-7-402. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 648, Ch. 286, L. 1959; R.C.M. 1947, 40-5335.  
  33-7-403. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 649, Ch. 286, L. 1959; R.C.M. 1947, 40-5336.  
  33-7-404. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 650, Ch. 286, L. 1959; R.C.M. 1947, 40-5337.  
  33-7-405. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 651, Ch. 286, L. 1959; R.C.M. 1947, 40-5338; amd. Sec. 13, Ch. 303, L. 1981.  
  33-7-406. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 652, Ch. 286, L. 1959; R.C.M. 1947, 40-5339.  
  33-7-407. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 656, Ch. 286, L. 1959; R.C.M. 1947, 40-5343.  
  33-7-408. Investments. A society may invest its funds only in investments authorized by the laws of this state for the investment of assets of life insurers. A foreign or alien society that is permitted or seeking to do business in this state and that invests its funds in accordance with the laws of the state, district, territory, province, or country where it is incorporated meets the requirements of this section for the investment of funds.   History: En. Sec. 21, Ch. 586, L. 1991.  
  33-7-409. Funds. (1) All assets must be held, invested, and disbursed for the use and benefit of the society, and a member or beneficiary may not have or acquire individual rights in assets or become entitled to any apportionment on the surrender of any part of the assets except as provided in the benefit contract.   (2) A society may create, maintain, invest, disburse, and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society.   (3) Pursuant to a resolution of its supreme governing body, a society may establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing similar accounts and issuing similar contracts. To the extent the society considers it necessary in order to comply with any applicable federal or state laws or any rules issued under those laws, the society may adopt special procedures for administering a separate account and may, for persons having beneficial interests in a separate account, provide special voting and other rights, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account. A society may issue contracts on a variable basis to which the provisions of 33-7-523(2) and (4) do not apply.   History: En. Sec. 22, Ch. 586, L. 1991.  
  33-7-410. Taxation. A society organized or licensed under this chapter is a charitable and benevolent institution, and all of its funds are exempt from all state, county, district, municipal, and school taxes other than taxes on real estate and office equipment.   History: En. Sec. 24, Ch. 586, L. 1991.  
  33-7-411. Valuation. (1) Standards of valuation for certificates issued prior to July 1, 1993, must be those provided by the laws applicable immediately prior to July 1, 1992.   (2) (a) The minimum standards of valuation for certificates issued on or after July 1, 1993, must be based on the following tables:   (i) for certificates of life insurance--the commissioner of insurance's 1941 standard ordinary mortality table, the commissioner's 1941 standard industrial mortality table, the commissioner's 1958 standard ordinary mortality table, the commissioner's 1980 standard ordinary mortality table, or any more recent table made applicable to life insurers;   (ii) for annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits and for noncancelable accident and health benefits--the tables authorized for use by life insurers in this state.   (b) All of the certificates must be valued under valuation methods and standards, including interest assumptions, that are in accordance with the laws of this state applicable to life insurers that issue policies containing similar benefits.   (3) The commissioner may accept other standards for valuation if the commissioner finds that the reserves produced by the valuation will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed in this section. The commissioner may vary the standards of mortality applicable to all benefit contracts on substandard lives or other extrahazardous lives by a society authorized to do business in this state.   (4) A society, with the consent of the commissioner of insurance of the state of domicile of the society and under conditions, if any, that the commissioner may impose, may establish and maintain reserves on its certificates in excess of required reserves, but the contractual rights of a benefit member may not be affected by the excess reserves.   History: En. Sec. 25, Ch. 586, L. 1991; amd. Sec. 1175, Ch. 56, L. 2009.  
  33-7-501. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 619, Ch. 286, L. 1959; R.C.M. 1947, 40-5306(part); amd. Sec. 4, Ch. 327, L. 1987.  
  33-7-502. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 620, Ch. 286, L. 1959; R.C.M. 1947, 40-5307.  
  33-7-503. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 621, Ch. 286, L. 1959; R.C.M. 1947, 40-5308.  
  33-7-504. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 634, Ch. 286, L. 1959; amd. Sec. 9, Ch. 423, L. 1971; R.C.M. 1947, 40-5321(part).  
  33-7-505. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 634, Ch. 286, L. 1959; amd. Sec. 9, Ch. 423, L. 1971; R.C.M. 1947, 40-5321(part).  
  33-7-506. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 636, Ch. 286, L. 1959; R.C.M. 1947, 40-5323.  
  33-7-507. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 637, Ch. 286, L. 1959; amd. Sec. 16, Ch. 94, L. 1973; R.C.M. 1947, 40-5324(1).  
  33-7-508. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 637, Ch. 286, L. 1959; amd. Sec. 16, Ch. 94, L. 1973; R.C.M. 1947, 40-5324(2).  
  33-7-509. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 638, Ch. 286, L. 1959; R.C.M. 1947, 40-5325; amd. Sec. 14, Ch. 303, L. 1981.  
  33-7-510. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 639, Ch. 286, L. 1959; R.C.M. 1947, 40-5326.  
  33-7-511. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 640, Ch. 286, L. 1959; R.C.M. 1947, 40-5327.  
  33-7-512. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 641, Ch. 286, L. 1959; R.C.M. 1947, 40-5328.  
  33-7-513. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 642, Ch. 286, L. 1959; R.C.M. 1947, 40-5329.  
  33-7-514. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 643, Ch. 286, L. 1959; R.C.M. 1947, 40-5330; amd. Sec. 16, Ch. 198, L. 1979.  
  33-7-515. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 644, Ch. 286, L. 1959; R.C.M. 1947, 40-5331.  
  33-7-516. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 646, Ch. 286, L. 1959; R.C.M. 1947, 40-5333.  
  33-7-517. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 647, Ch. 286, L. 1959; R.C.M. 1947, 40-5334.  
  33-7-518. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 663, Ch. 286, L. 1959; R.C.M. 1947, 40-5350.  
  33-7-519. Repealed. Sec. 41, Ch. 586, L. 1991.   History: En. Sec. 664, Ch. 286, L. 1959; R.C.M. 1947, 40-5351; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 35, Ch. 798, L. 1991.  
  33-7-520. Benefits. (1) A society may provide the following contractual benefits in any form:   (a) death benefits;   (b) endowment benefits;   (c) annuity benefits;   (d) temporary or permanent disability benefits;   (e) hospital, medical, or nursing benefits;   (f) monument or tombstone benefits to the memory of deceased members; and   (g) other benefits authorized for life insurers that are not inconsistent with this chapter.   (2) A society shall specify in its rules those persons who may be issued or covered by the contractual benefits in subsection (1), consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.   History: En. Sec. 16, Ch. 586, L. 1991.  
  33-7-521. Beneficiaries. (1) The owner of a benefit contract may change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that a revocable beneficiary may not have or obtain a vested interest in the proceeds of a certificate until the certificate becomes due and payable under the provisions of the benefit contract.   (2) A society may make provision for the payment of funeral benefits of up to $500 under a certificate due to a person equitably entitled to payment for the burial of a member.   (3) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds are payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in subsection (2), is payable to the estate of the deceased. If the owner of the certificate is a person other than the insured, the proceeds are payable to the owner.   History: En. Sec. 17, Ch. 586, L. 1991.  
  33-7-522. Benefits not attachable. Money or other benefits, charity, relief, or aid to be paid, provided, or rendered by a society is not liable to attachment, garnishment, or other process and may not be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member, a beneficiary, or any other person who may have a right to the benefit, either before or after payment by the society.   History: En. Sec. 18, Ch. 586, L. 1991.  
  33-7-523. Benefit contract. (1) A society authorized to do business in this state shall issue to the owner of a benefit contract a certificate specifying the amount of benefits provided. The certificate must state that the certificate, together with any attached riders or endorsements, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each, constitutes the benefit contract, as of the date of issuance, between the society and the owner. A copy of the application for insurance and declaration of insurability, if any, must be endorsed upon or attached to the certificate. All statements on the application must be representations and not warranties. Any waiver of this provision is void.   (2) Any changes, additions, or amendments to the laws of the society made or enacted after the issuance of the certificate bind the owner and the beneficiaries and control the benefit contract in all respects as if the changes, additions, or amendments were in force at the time of the application for insurance. However, a change, addition, or amendment does not destroy or diminish benefits that the society contracted to give the owner as of the date of issuance.   (3) A person upon whose life a benefit contract is issued before attaining the age of majority is bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.   (4) A society shall provide in its laws that if its reserves for one or more classes of certificates become impaired, its board of directors or corresponding body may require that the owner of a certificate pay to the society the amount of the owner's equitable proportion of the deficiency as ascertained by its board and that if the payment is not made either:   (a) it is an indebtedness against the certificate and draws interest not to exceed the rate specified for certificate loans under the certificates; or   (b) in lieu of or in combination with the provisions of subsection (4)(a), the owner of the certificate may accept a proportionate reduction in benefits under the certificate.   (5) The society may specify the manner of election and which alternative under subsection (4) is to be presumed if no election is made.   (6) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, must be received in evidence concerning the terms and conditions of the documents.   (7) A certificate may not be delivered or issued for delivery in this state unless a copy of the form has been filed with the commissioner of insurance in the manner provided for policies issued by life and disability insurers in this state. Certificates issued prior to July 1, 1993, must conform to the requirements provided by the laws applicable immediately prior to July 1, 1992. A life, disability, or annuity certificate issued on or after July 1, 1993, must meet the standard contract provision requirements not inconsistent with this chapter for policies issued by life and disability insurers in this state, except that a society may provide in its certificates for a grace period of 1 month for payment of premiums. The certificate must contain a provision stating the amount of premiums payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate that, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for the expulsion or suspension of a member, the certificate must contain a provision that a member expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, has the privilege of maintaining the certificate in force by continuing payment of the required premium.   (8) Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer, and it may provide in all other respects for the regulation, government, and control of the certificates and all rights, obligations, and liabilities incident to and connected with the transfer. Ownership rights prior to the transfer must be specified in the certificate.   (9) A society may specify the terms and conditions on which benefit contracts may be assigned.   History: En. Sec. 19, Ch. 586, L. 1991.  
  33-7-524. Nonforfeiture benefits, cash surrender values, certificate loans, and other options. (1) For certificates issued prior to July 1, 1993, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted must comply with the provisions of law applicable immediately prior to July 1, 1992.   (2) For certificates issued on or after July 1, 1993, for which reserves are computed on the commissioner of insurance's 1941 standard ordinary mortality table, the commissioner's 1941 standard industrial mortality table, the commissioner's 1958 standard ordinary mortality table, the commissioner's 1980 standard mortality table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted may not be less than the corresponding amount ascertained in accordance with the laws of this state applicable to life insurers issuing policies containing similar benefits based upon the tables.   History: En. Sec. 20, Ch. 586, L. 1991.  
  33-7-525. Insurance producer defined -- fraternal benefit society insurance contracts. (1) The term "insurance producer", as used in this chapter, means any authorized or acknowledged insurance producer of a society who acts as an insurance producer in the solicitation, negotiation, or sale of a life insurance, accident and health insurance, or annuity contract.   (2) The term does not include any regular salaried officer or employee of a licensed society who devotes substantially all of the officer's or employee's services to activities other than the solicitation of fraternal insurance contracts from the public and who receives for the solicitation of the contracts no commission or other compensation directly dependent upon the amount of business obtained.   History: En. Sec. 657, Ch. 286, L. 1959; R.C.M. 1947, 40-5344(2); amd. Sec. 15, Ch. 303, L. 1981; amd. Sec. 1, Ch. 713, L. 1989; amd. Sec. 8, Ch. 427, L. 2003.  
  33-7-526. Repealed. Sec. 69, Ch. 472, L. 1999.   History: En. Secs. 657, 658, Ch. 286, L. 1959; R.C.M. 1947, 40-5344(1), 40-5345; amd. Sec. 16, Ch. 303, L. 1981; amd. Sec. 1, Ch. 713, L. 1989.  
  33-7-527. Repealed. Sec. 29, Ch. 303, L. 1981.   History: En. Sec. 659, Ch. 286, L. 1959; R.C.M. 1947, 40-5346.  
  33-7-528. Repealed. Sec. 29, Ch. 303, L. 1981.   History: En. Sec. 660, Ch. 286, L. 1959; R.C.M. 1947, 40-5347.  
  33-7-529. Repealed. Sec. 29, Ch. 303, L. 1981.   History: En. Sec. 662, Ch. 286, L. 1959; R.C.M. 1947, 40-5349.  
  33-7-530. Repealed. Sec. 29, Ch. 303, L. 1981.   History: En. Sec. 661, Ch. 286, L. 1959; R.C.M. 1947, 40-5348.  
  33-7-531. Foreign or alien society -- admission. (1) A foreign or alien society may not transact business in this state without a license issued by the commissioner of insurance. A foreign or alien society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies. A society may be licensed to transact business in this state upon filing with the commissioner:   (a) a certified copy of its articles of incorporation;   (b) a copy of its bylaws, certified by its secretary or corresponding officer;   (c) a written appointment of the commissioner to be the society's agent, as prescribed in 33-7-123;   (d) a statement of its business, under oath of its president and secretary or corresponding officers, in a form prescribed by the commissioner, verified by an examination made by the supervising insurance official of its home state or other state, district, territory, province, or country satisfactory to the commissioner of this state;   (e) certification from the proper official of its home state, district, territory, province, or country that the society is legally incorporated and licensed to transact business in that jurisdiction;   (f) copies of its certificate forms; and   (g) other information the commissioner considers necessary.   (2) A foreign or alien society applying for authority to transact business in this state must have the qualifications required of domestic societies organized under this chapter.   History: En. Sec. 29, Ch. 586, L. 1991.  
  33-7-532. Insurance producer licensing -- fraternal benefit society. (1) A society's insurance producer is considered to be an insurance producer and is subject to the same licensing requirements as insurance producers under Title 33, chapter 17.   (2) A society doing business in this state may not pay to a person who is not a licensed insurance producer of the society any commission or other compensation for any services in obtaining in this state any new contract of life, accident, or health insurance or any new annuity contract.   History: En. Sec. 33, Ch. 586, L. 1991; amd. Sec. 9, Ch. 427, L. 2003.  
  33-7-533. Unfair methods of competition and unfair or deceptive acts and practices. A society authorized to do business in this state and its insurance producers are subject to the provisions of chapter 18 that relate to unfair or deceptive trade practices. However, nothing in chapter 18 may be construed as applying to or affecting the right of a society to determine its eligibility requirements for membership or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.   History: En. Sec. 34, Ch. 586, L. 1991.  
  33-8-101. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6001 by Sec. 1, Ch. 246, L. 1977; R.C.M. 1947, 40-6001.  
  33-8-102. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6002 by Sec. 2, Ch. 246, L. 1977; R.C.M. 1947, 40-6002.  
  33-8-103. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6003 by Sec. 3, Ch. 246, L. 1977; R.C.M. 1947, 40-6003(1) thru (4).  
  33-8-104. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6003 by Sec. 3, Ch. 246, L. 1977; R.C.M. 1947, 40-6003(5).  
  33-8-105. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6003 by Sec. 3, Ch. 246, L. 1977; R.C.M. 1947, 40-6003(6).  
  33-8-106. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6004 by Sec. 4, Ch. 246, L. 1977; R.C.M. 1947, 40-6004(1).  
  33-8-107. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6004 by Sec. 4, Ch. 246, L. 1977; R.C.M. 1947, 40-6004(2)(a) thru (2)(e).  
  33-8-108. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6004 by Sec. 4, Ch. 246, L. 1977; R.C.M. 1947, 40-6004(2)(f).  
  33-8-109. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6005 by Sec. 5, Ch. 246, L. 1977; R.C.M. 1947, 40-6005.  
  33-8-110. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6006 by Sec. 6, Ch. 246, L. 1977; R.C.M. 1947, 40-6006.  
  33-8-111. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6007 by Sec. 7, Ch. 246, L. 1977; R.C.M. 1947, 40-6007.  
  33-8-112. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6008 by Sec. 8, Ch. 246, L. 1977; R.C.M. 1947, 40-6008.  
  33-8-113. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6009 by Sec. 9, Ch. 246, L. 1977; R.C.M. 1947, 40-6009.  
  33-8-114. Terminated. Sec. 1, Ch. 134, L. 1979.   History: En. 40-6010 by Sec. 10, Ch. 246, L. 1977; R.C.M. 1947, 40-6010.  
  33-8-115. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 1, Ch. 301, L. 1985.  
  33-8-116. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 2, Ch. 301, L. 1985.  
  33-8-117. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 3, Ch. 301, L. 1985.  
  33-8-118. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 4, Ch. 301, L. 1985.  
  33-8-119. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 5, Ch. 301, L. 1985.  
  33-8-120. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 6, Ch. 301, L. 1985.  
  33-8-121. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 7, Ch. 301, L. 1985.  
  33-8-122. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 8, Ch. 301, L. 1985.  
  33-8-123. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 9, Ch. 301, L. 1985.  
  33-8-124. Terminated. Sec. 1, Ch. 404, L. 1987.   History: En. Sec. 10, Ch. 301, L. 1985.  
  33-8-201. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 1, Ch. 11, Sp. L. March 1986.  
  33-8-202. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 2, Ch. 11, Sp. L. March 1986.  
  33-8-203. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 3, Ch. 11, Sp. L. March 1986.  
  33-8-204. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 15, Ch. 11, Sp. L. March 1986.  
  33-8-205. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 16, Ch. 11, Sp. L. March 1986.  
  33-8-206 through 33-8-210 reserved.  
  33-8-211. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 4, Ch. 11, Sp. L. March 1986.  
  33-8-212. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 5, Ch. 11, Sp. L. March 1986.  
  33-8-213. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 6, Ch. 11, Sp. L. March 1986; amd. Sec. 16, Ch. 713, L. 1989.  
  33-8-214. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 7, Ch. 11, Sp. L. March 1986.  
  33-8-215 through 33-8-220 reserved.  
  33-8-221. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 8, Ch. 11, Sp. L. March 1986.  
  33-8-222. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 9, Ch. 11, Sp. L. March 1986.  
  33-8-223 and 33-8-224 reserved.  
  33-8-225. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 10, Ch. 11, Sp. L. March 1986.  
  33-8-226. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 11, Ch. 11, Sp. L. March 1986.  
  33-8-227. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 12, Ch. 11, Sp. L. March 1986.  
  33-8-228. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 13, Ch. 11, Sp. L. March 1986.  
  33-8-229 and 33-8-230 reserved.  
  33-8-231. Terminated. Sec. 22, Ch. 11, Sp. L. March 1986.   History: En. Sec. 14, Ch. 11, Sp. L. March 1986.  
  33-9-101. Definitions. As used in this part, the following definitions apply:   (1) "Health care provider" means any person, corporation, facility, or institution of a governmental unit of any state licensed by that state to provide health care, including but not limited to physician, osteopath, registered nurse, licensed practical nurse, dentist, optometrist, podiatrist, hospital, hospital-related facility, or long-term care facility.   (2) "Other professional" means an attorney, certified public accountant, public accountant, architect, veterinarian, pharmacist, and professional engineer licensed or otherwise legally authorized by a state to render professional services.   History: En. 40-4759 by Sec. 1, Ch. 119, L. 1977; R.C.M. 1947, 40-4759(intro.), (2), (3).  
  33-9-102. Professionals as members, stockholders, or subscribers of mutual, stock, or reciprocal insurers. A health care provider or other professional may be a member of a mutual insurer, a stockholder of a stock insurer, or a subscriber of a reciprocal insurer, whether the mutual, stock, or reciprocal insurer is domestic, foreign, or alien, for the purpose of protecting the provider or professional by insurance against loss, damage, or expense incident to a claim arising out of a breach of contract, pecuniary or personal injury to or death of any person, or other loss as the result of negligence in rendering professional services by any health care provider or other professional.   History: En. 40-4760 by Sec. 2, Ch. 119, L. 1977; R.C.M. 1947, 40-4760; amd. Sec. 1176, Ch. 56, L. 2009.  
  33-9-103. Incorporation and regulation. A domestic mutual, stock, or reciprocal insurer, organized for the purpose of transacting insurance business as set forth in 33-9-102, shall organize under the provisions of Title 33 and be regulated as therein provided. The provisions of this part govern whenever in conflict with other laws or parts of laws of any state.   History: En. 40-4761 by Sec. 3, Ch. 119, L. 1977; R.C.M. 1947, 40-4761.  
  33-9-104. Initial qualifications. No original certificate of authority for a mutual, stock, or reciprocal insurer may be issued by the commissioner until applications representing 250 members of the profession under consideration have been received by the commissioner or in the case of health care providers that are hospitals, hospital-related facilities, or long-term care facilities, applications representing 50% of the beds in the state or states affected, and until the commissioner has determined that such insurer or insurers have bona fide applications representing the number of applicants required.   History: En. 40-4762 by Sec. 4, Ch. 119, L. 1977; R.C.M. 1947, 40-4762.  
  33-9-105. Foreign or alien insurers -- certification. Any mutual, stock, or reciprocal insurer organized under the laws of another state substantially similar to this part for the purpose of transacting the kind of business described in this part may, upon an application and without prior operating experience or examination, be admitted to solicit applications. If the necessary number of applications is obtained, the insurer may do business in this state if the commissioner finds such admission is in the public interest. Thereafter the insurer shall make all reports and be subject to taxation, examination, and supervision by the commissioner to the same extent and in the same manner as are other foreign or alien insurers.   History: En. 40-4763 by Sec. 5, Ch. 119, L. 1977; R.C.M. 1947, 40-4763.