(1) This part provides coverage for a policy or contract specified in Subsections (6) and (7) to a person who is: (a) except for a nonresident certificate holder under a group policy or contract, a beneficiary, assignee, or payee of a person covered by Subsection (1)(b), including a health care provider rendering services covered under an accident and health insurance policy or certificate, regardless of where that person resides; or (b) an owner of or a certificate holder or enrollee under a policy or contract, other than an unallocated annuity contract or structured settlement annuity, if the owner, enrollee, or certificate holder is: (i) a resident of Utah; or (ii) not a resident of Utah, but only if: (A) the member insurer that issued the policy or contract is domiciled in this state; (B) the state in which the person resides has an association similar to the association created by this part; and (C) the person is not eligible for coverage by an association in any other state because the insurer was not licensed in the other states at the time specified in the other states' guaranty association's laws. (2) For an unallocated annuity contract specified in Subsections (6) and (7): (a) Subsection (1) does not apply; and (b) except as provided in Subsections (4) and (5), this part provides coverage for the unallocated annuity contract specified in Subsection (2) to a person who is: (i) the owner of the unallocated annuity contract if 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) an owner of an unallocated annuity contract issued to or in connection with a government lottery if the owner is a resident. (3) For a structured settlement annuity specified in Subsections (6) and (7): (a) Subsection (1) does not apply; and (b) except as provided in Subsections (4) and (5), this part provides coverage for the structured settlement annuity specified in Subsections (6) and (7) to a person who is a payee under a structured settlement annuity, or beneficiary of a payee if the payee is deceased, if the payee: (i) is a resident, regardless of where the contract owner resides; (ii) is not a resident, but only if one or more of the contract owners of the structured settlement annuity is a resident, and the payee, beneficiary, or contract owner is not eligible for coverage by the association of the state in which the payee or contract owner resides; or (iii) is not a resident, but only if: (A) no contract owner of the structured settlement annuity is a resident; (B) the insurer that issued the structured settlement annuity is domiciled in this state; (C) the state in which the contract owner resides has an association similar to the association created by this part; and (D) the payee, beneficiary, or the contract owner is not eligible for coverage by the association of the state in which the payee or contract owner resides. (4) This part may not provide coverage for a policy or contract specified in Subsections (6) and (7) to a person who: (a) is a payee or beneficiary of a contract owner resident of this state, if the payee or beneficiary is afforded any coverage by the association of another state; (b) is covered under Subsection (2), if any coverage is provided to the person by the association of another state; or (c) acquires rights to receive payments through a structured settlement factoring transaction, regardless of whether the transaction occurred before or after 26 U.S.C. Sec. 5891(c)(3)(A) became effective. (5) (a) This part provides coverage for a policy or contract specified in Subsections (6) and (7) to a person who is a resident of this state and, in special circumstances, to a nonresident. (b) To avoid duplicate coverage, if a person who would otherwise receive coverage under this part is provided coverage under the laws of any other state, the person may not be provided coverage under this part. (c) In determining the application of this Subsection (5) when a person could be covered by the association of more than one state, whether as an owner, payee, enrollee, beneficiary, or assignee, this part shall be construed in conjunction with other state laws to result in coverage by only one association. (6) (a) Except as limited by this part, this part provides coverage to a person specified in Subsections (1) through (5) for: (i) a direct nongroup life insurance, direct accident and health insurance, or direct annuity policy or contract; (ii) a supplemental contract to a policy or contract described in Subsection (6)(a)(i); (iii) a certificate under a direct group policy or contract; and (iv) an unallocated annuity contract issued by a member insurer. (b) For purposes of Subsection (6)(a), an annuity contract and a certificate under a group annuity contract includes: (i) a guaranteed investment contract; (ii) a deposit administration contract; (iii) an unallocated funding agreement; (iv) an allocated funding agreement; (v) a structured settlement annuity; (vi) an annuity issued to or in connection with a government lottery; and (vii) an immediate or deferred annuity contract. (7) This part does not provide coverage for: (a) a portion of a policy or contract: (i) not guaranteed by the member insurer; or (ii) under which the risk is borne by the policy or contract owner; (b) a policy or contract of reinsurance, unless: (i) an assumption certificate is issued before the coverage date; (ii) the assumption certificate required by Subsection (7)(b)(i) is in effect pursuant to the reinsurance policy or contract; and (iii) the reinsurance contract is approved by the appropriate regulatory authorities; (c) except as provided in Subsection (11)(e), a portion of a policy or contract to the extent that the rate of interest on which the policy or contract 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 exceeds: (i) a rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged: (A) over the period of four years before the coverage date with respect to the policy or contract; or (B) for the corresponding lesser period if the policy or contract was issued less than four years before the association became obligated; or (ii) a rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available as determined on or after the earlier of: (A) the day on which the member insurer becomes an impaired insurer; or (B) the day on which the member insurer becomes an insolvent insurer; (d) a portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, accident and health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association, or other person under: (i) a multiple employer welfare arrangement, as that term is defined in 29 U.S.C. Sec. 1002; (ii) a minimum premium group insurance plan; (iii) a stop-loss group insurance plan; or (iv) an administrative services only contract; (e) a portion of a policy or contract to the extent that it provides: (i) a dividend; (ii) an experience rating credit; (iii) voting rights; or (iv) payment of a fee or allowance to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract; (f) an unallocated annuity contract issued to or in connection with a benefit plan protected under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal Pension Benefit Guaranty Corporation has yet become liable to make any payment with respect to the benefit plan; (g) a portion of an unallocated annuity contract that is not issued to or in connection with: (i) a specific benefit plan of: (A) employees; (B) a union; or (C) an association of natural persons; or (ii) a government lottery; (h) a portion of a policy or contract to the extent that the assessment required by Section
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