(1) Compulsory non-binding arbitration is
contrary to the public interest and is not a permissible arbitration
provision.
(2) Optional binding
arbitration at the exclusive election of an insured party is a permissible
arbitration provision, in which case the disclosure provisions in Subsection
(5) may not apply.
(3) Compulsory
and optional binding arbitration at the election of either the insured or the
insurer are permissible arbitration provisions.
(4)
(a) A
policy form containing an optional binding arbitration provision for the
exclusive election of an insurer will be disapproved under Subsection
31A-21-201(3),
and these provisions in any previously approved form are declared not
enforceable.
(b) A policy form
described in Subsection (4)(a) will be construed and applied as if in
compliance with the Insurance Code, as permitted under Section
31A-21-107.
(5) Except as excluded in Subsection (2),
each application or binder pertaining to an insurance policy that contains a
permissible arbitration provision must include or have attached a prominent
statement substantially as follows:
ANY MATTER IN DISPUTE BETWEEN YOU AND THE COMPANY MAY BE
SUBJECT TO ARBITRATION AS AN ALTERNATIVE TO COURT ACTION PURSUANT TO THE RULES
OF (THE AMERICAN ARBITRATION ASSOCIATION OR OTHER RECOGNIZED ARBITRATOR), A
COPY OF WHICH IS AVAILABLE ON REQUEST FROM THE COMPANY. ANY DECISION REACHED BY
ARBITRATION SHALL BE BINDING UPON BOTH YOU AND THE COMPANY. THE ARBITRATION
AWARD MAY INCLUDE ATTORNEY'S FEES IF ALLOWED BY STATE LAW AND MAY BE ENTERED AS
A JUDGMENT IN ANY COURT OF PROPER JURISDICTION.
This statement must be disclosed prior to the execution of
the insurance contract between the insurer and the policy holder and, in the
case of group insurance, shall be contained in the certificate of insurance or
other disclosure of benefits.
(6) No compulsory binding arbitration
provision or optional binding arbitration provision may be construed to
preclude any dispute resolution by any small claims court having
jurisdiction.
(7) Any arbitration
provision contained in an insurance policy shall comply with Title 78B, Chapter
11, Utah Uniform Arbitration Act.
(8) No agreement for arbitration may obligate
an insured to pay more than 50% of the advance payments required to begin the
arbitration process.
(9) No
arbitration provision may require that arbitration be held at a place further
from the residence of the insured than the nearest location of a State Court of
General Jurisdiction.
