Start with the proposition that the insurer had contractual liability that it tried to avoid. Why let them avoid their obligation. Dividing one entity into different ones based on the capacity in which they are acting is not that unusual. If Utah allowed direct action against liability insurers (who, after all, is the real party in interest on the defense side here), this would not seem odd at all. What should seem odd is that liability insurers have persuaded (bribed) legislatures in many states to prohibit their joinder in underlying liability lawsuits.
Bob