# Utah Code § 31A-17-203: Encumbering of assets

> Utah · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_203

## Section

- **Citation:** Utah Code § 31A-17-203
- **Heading:** Encumbering of assets
- **Jurisdiction:** Utah
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Utah Code / Title 31A / Chapter 31A-17 / § 31A-17-203

## Text

(1) No domestic insurer may pledge, hypothecate, or otherwise encumber its assets to secure the debt, guaranty, or obligation of any other person. This prohibition does not apply to obligations of the insurer under surety bonds or insurance contracts issued in the regular course of business. (2) No domestic insurer may pledge, hypothecate, or otherwise encumber its assets in an amount in excess of the amount of its capital and surplus, without the prior written consent of the commissioner. (3) The commissioner may grant a domestic insurer an exception to Subsection (2) for a reinsurance agreement which may cause assets of the domestic insurer to be held, deposited, pledged, hypothecated, or otherwise encumbered in an amount in excess of capital and surplus to secure, offset, protect, or meet reserves or liabilities of the insurer that are established, incurred, or required under the provisions of the reinsurance agreement. The domestic insurer shall first file with the commissioner a written request for this exception, accompanied by a copy of the proposed reinsurance agreement and specifically stating its purpose and the reasons the exception should be granted. (4) Any person that accepts a pledge, hypothecation, or encumbrance of any asset of an insurer not in accordance with the terms and limitations of this section is considered to have accepted that asset subject to a superior, preferential, and perfected lien in favor of owners, beneficiaries, assignees, certificate holders, or third party claimants or beneficiaries of any insurance benefit or right arising out of and within the coverage of any insurance policy issued by the insurer. The commissioner may bring or participate in an action in any court of competent jurisdiction to protect the interests of insureds or claimants under this section.

## Nearby sections

- [Utah Code § 31A-17-101 § 31A-17-101. Scope.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_101.md)
- [Utah Code § 31A-17-102 § 31A-17-102. Standards for accounting rules.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_102.md)
- [Utah Code § 31A-17-201 § 31A-17-201. Qualified assets.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_201.md)
- [Utah Code § 31A-17-202 § 31A-17-202. Status of assets that are not "qualified assets."](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_202.md)
- [Utah Code § 31A-17-203 § 31A-17-203. Encumbering of assets.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_203.md)
- [Utah Code § 31A-17-401 § 31A-17-401. Valuation of assets.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_401.md)
- [Utah Code § 31A-17-402 § 31A-17-402. Valuation of liabilities.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_402.md)
- [Utah Code § 31A-17-404 § 31A-17-404. Credit allowed a domestic ceding insurer against reserves for reinsurance.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_404.md)
- [Utah Code § 31A-17-404.1 § 31A-17-404.1. Asset or reduction from liability for reinsurance ceded by a domestic insurer to other assuming insurers.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_404.1.md)
- [Utah Code § 31A-17-404.3 § 31A-17-404.3. Rules.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_404.3.md)
- [Utah Code § 31A-17-404.4 § 31A-17-404.4. Transition -- Application to reinsurance agreement.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_404.4.md)
- [Utah Code § 31A-17-405 § 31A-17-405. Fraternal rates and reserves.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_405.md)
- [Utah Code § 31A-17-406 § 31A-17-406. Adjustment of reserves.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_406.md)
- [Utah Code § 31A-17-407 § 31A-17-407. Accounting for repurchased shares.](https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_407.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_UT_T31A_S31A_17_203. Check the current official text before relying on it. Not legal advice.