(1) As used in this section: (a) "Reserving discretionary authority" means a policy provision that: (i) has the effect of conferring discretion on an insurer, or other claim administrator, to: (A) determine eligibility for benefits; or (B) interpret the terms or provisions of the policy, contract, certificate, or agreement; and (ii) could lead to a deferential standard of review by a reviewing court. (b) "Reserving discretionary authority" does not include a policy provision that: (i) informs an insured that, as part of the insurer's routine operations, the insurer applies the terms of the contract for: (A) making a decision, including making a determination regarding eligibility, or receipt of benefits or claims; or (B) explaining the insurer's policies and procedures; and (ii) does not give rise to a deferential standard of review by a reviewing court. (2) An insurance policy subject to this chapter may not contain a provision: (a) requiring the insurance policy to be construed according to the laws of another jurisdiction except as necessary to meet the requirements of compulsory insurance laws of other jurisdictions; (b) depriving Utah courts of jurisdiction over an action against the insurer, except as provided in permissible arbitration provisions; (c) limiting the right of action against the insurer to less than three years from the date the cause of action accrues; or (d) for life insurance or accident and health insurance, reserving discretionary authority. (3) For purposes of Subsection (2)(c), the cause of action accrues on a fidelity bond on the date the insurer first denies all or part of a claim made under the fidelity bond.
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