Senate File 2201     

                            AN ACT
RELATING TO VARIOUS MATTERS UNDER THE PURVIEW OF THE
   INSURANCE DIVISION OF THE DEPARTMENT OF COMMERCE INCLUDING
   THE IOWA GRAIN INDEMNITY FUND BOARD, UNIFORM SECURITIES ACT,
   A HEALTH CARE AND INSURANCE COST WORK GROUP, APPLICATIONS
   FOR HEALTH INSURANCE RATE INCREASES, AN INTERNET CONSUMER
   GUIDE, EXAMINATION OF INSURANCE COMPANIES, LIFE INSURANCE
   COMPANIES AND ASSOCIATIONS, SPECIAL HEALTH AND ACCIDENT
   INSURANCE COVERAGES, UTILIZATION AND COST CONTROL, EXTERNAL
   REVIEW OF HEALTH CARE COVERAGE DECISIONS, INSURANCE OTHER
   THAN LIFE, MORTGAGE GUARANTY INSURANCE, CEMETERY AND
   FUNERAL MERCHANDISE AND FUNERAL SERVICES, AND REGULATION OF
   CEMETERIES AND MAKING PENALTIES APPLICABLE AND INCLUDING
   EFFECTIVE DATE PROVISIONS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
   Section 1.  Section 22.7, Code Supplement 2009, is amended by
adding the following new subsection:
   NEW SUBSECTION.  65.  Information obtained by the
commissioner of insurance in the course of an examination of a
cemetery as provided in section 523I.213A, subsection 7.
   Sec. 2.  Section 203D.4, subsection 1, Code 2009, is amended
to read as follows:
   1.  The Iowa grain indemnity fund board is established to
advise the department on matters relating to the fund and to
perform the duties provided it in this chapter.  The board is
composed of the secretary of agriculture or a designee who
shall serve as president; the commissioner of insurance or a
designee who shall serve as secretary; the state treasurer or
 a designee who shall serve as treasurer; a representative of
the banking industry appointed by the governor, who shall be
selected from a list of three nominations made by the secretary
of agriculture; and four representatives of the grain industry
appointed by the governor, subject to confirmation by the
senate, two of whom shall be representatives of producers and
who shall be actively participating producers, and two of whom
shall be representatives of licensed grain dealers and licensed
warehouse operators and who shall be actively participating
licensed grain dealers and licensed warehouse operators, each
of whom shall be selected from a list of three nominations
made by the secretary of agriculture.  The term of membership
of the banking industry representative and the grain industry
representatives is three years, and the representatives are
eligible for reappointment.  However, of the grain industry
representatives, only actively participating producers,
and grain dealers and warehouse operators are eligible for
reappointment.  The banking industry representative and
the grain industry representatives are entitled to a per
diem as specified in section 7E.6 for each day spent in the
performance of the duties of the board, plus actual expenses
incurred in the performance of those duties.  Four members of
the board constitute a quorum, and the affirmative vote of four
members is necessary for any action taken by the board, except
that a lesser number may adjourn a meeting.  A vacancy in the
membership of the board does not impair the rights of a quorum
to exercise all the rights and perform all the duties of the
board.
   Sec. 3.  Section 502.305, subsection 2, Code Supplement
2009, is amended to read as follows:
   2.  Filing.  Except as provided in subsection 10 and section
502.304A, subsection 3, paragraph "g", a person who files a
registration statement or a notice filing shall pay a filing
fee of one=tenth of one percent of the proposed aggregate
sales price of the securities to be offered to persons in
this state pursuant to the registration statement or notice
filing.  However, except as provided in subsection 10, section
502.302, subsection 1, paragraph "a", and section 502.304A,
subsection 3, paragraph "g", the annual filing fee shall not
be less than fifty dollars or more than one thousand dollars.
The administrator shall retain the filing fee even if the
notice filing is withdrawn or the registration is withdrawn,
denied, suspended, revoked, or abandoned.  The fees collected
under this subsection shall be deposited as provided in section
505.7.  The administrator may adopt rules requiring a filing
to be made electronically.  The rules may provide for such
electronic filing either directly with the administrator or
with a designee of the administrator.  The rules may require
that the filer pay any reasonable costs charged by the designee
of the administrator for processing the filings and that the
filer submit any fees paid through the designee.
   Sec. 4.  Section 505.7, Code Supplement 2009, is amended by
adding the following new subsection:
   NEW SUBSECTION.  10.  a.  The commissioner shall assess
the costs of carrying out the insurance division's duties
pursuant to section 505.8, subsection 18, section 505.17,
subsection 2, and sections 505.18 and 505.19 that are directly
attributable to the performance of the division's duties
involving specific health insurance carriers licensed to do
business in this state.  Such expenses shall be charged to
and paid by the specific health insurance carrier to whom the
expenses are attributable and upon failure or refusal of any
such carrier to pay such expenses, the same may be recovered
in an action brought in the name of the state.  In addition,
the commissioner may revoke the certificate of authority of a
health insurance carrier licensed to do business in this state
that fails to pay such expenses attributable to that carrier.
   b.  The commissioner shall assess the costs of carrying
out the insurance division's duties generally pursuant to
section 505.8, subsection 18, section 505.17, subsection 2,
and sections 505.18 and 505.19, and for implementation and
maintenance of health insurance information for consumers on
the insurance division internet site, that are not attributable
to a specific health insurance carrier, to all health insurance
carriers that are licensed to do business in this state on
a proportionate basis as provided by rules adopted by the
commissioner.
   Sec. 5.  Section 505.8, Code Supplement 2009, is amended by
adding the following new subsection:
   NEW SUBSECTION.  18.  The commissioner shall annually
convene a work group composed of the consumer advocate,
health insurance carriers, health care providers, small
employers that purchase health insurance under chapter 513B,
and individual consumers in the state for the purpose of
considering ways to reduce the cost of providing health
insurance coverage and health care services, including but not
limited to utilization of uniform billing codes, improvements
to provider credentialing procedures, reducing out=of=state
care expenses, annually assessing the impact of federal health
care reform legislation on health care costs in the state and
determining whether such legislation has reduced the cost of
health insurance in the state, and the electronic delivery of
explanation of benefits statements.  The recommendations made
by the work group shall be included in the annual report filed
with the general assembly pursuant to section 505.18.
   Sec. 6.  Section 505.17, Code 2009, is amended to read as
follows:
   505.17  Confidential information.
   1.  a.  Information, records, and documents utilized for the
purpose of, or in the course of, investigation, regulation,
or examination of an insurance company or insurance holding
company, received by the division from some other governmental
entity which treats such information, records, and documents
as confidential, are confidential and shall not be disclosed
by the division and are not subject to subpoena. Such
information, records, and documents do not constitute a public
record under chapter 22.
   b.  The disclosure of confidential information,
administrative or judicial orders which contain confidential
information, or information regarding other action of the
division which is not a public record subject to disclosure,
to other insurance and financial regulatory officials
may be permitted by the commissioner provided that those
officials are subject to, or agree to comply with, standards
of confidentiality comparable to those imposed on the
commissioner.
   2.  Notwithstanding subsection 1, an application for a
rate increase filed by a health insurance carrier and all
information, records, and documents accompanying such an
application or utilized for the purpose of, or in the course
of consideration of the application by the commissioner, shall
constitute a public record under chapter 22 except as provided
in this subsection.
   a.  The commissioner shall consider the written request of a
health insurance carrier to keep confidential certain details
of an application or accompanying information, records, and
documents.  If the request includes a sufficient explanation
as to why public disclosure of such details would give an
unfair advantage to competitors, the commissioner shall keep
such details confidential.  If the commissioner elects to keep
certain details confidential, the commissioner shall release
only the nonconfidential details in response to a request
for records made pursuant to chapter 22.  If confidential
details are withheld from a request for records made pursuant
to chapter 22, the commissioner shall release an explanation
of why the information was deemed confidential and a summary
of the nature of the information withheld and the reasons for
withholding the information.  
   b.  In considering requests for confidential treatment, the
commissioner shall narrowly construe the provisions of this
subsection in order to appropriately balance an applicant's
need for confidentiality against the public's right to
information about the application.
   Sec. 7.  NEW SECTION.  505.18  Annual report.
   1.  Consumers deserve to know the quality and cost of their
health care insurance.  Health care insurance transparency
provides consumers with the information necessary, and the
incentive, to choose health plans based on cost and quality.
Reliable cost and quality information about health care
insurance empowers consumer choice and consumer choice creates
incentives at all levels, and motivates the entire health care
delivery system to provide better health care and health care
benefits at a lower cost.  It is the purpose of this section to
make information regarding the costs of health care insurance
readily available to consumers through the consumer advocate
bureau of the insurance division.
   2.  The commissioner in collaboration with the consumer
advocate shall prepare and deliver a report to the governor
and to the general assembly no later than November 15 of each
year that provides findings regarding health spending costs for
health insurance plans in the state for the previous fiscal
year.  The commissioner may contract with outside vendors or
entities to assist in providing the information contained in
the annual report.  The report shall provide, at a minimum, the
following information:
   a.  Aggregate health insurance data concerning loss ratios of
health insurance carriers licensed to do business in the state.
   b.  Rate increase data.
   c.  Health care expenditures in the state and the effect of
such expenditures on health insurance premium rates.
   d.  A ranking and quantification of those factors that result
in higher costs and those factors that result in lower costs
for each health insurance plan offered in the state.
   e.  The current capital and surplus and reserve amounts held
in reserve by each health insurance carrier licensed to do
business in the state.
   f.  A listing of any apparent medical trends affecting health
insurance costs in the state.
   g.  Any additional data or analysis deemed appropriate by
the commissioner to provide the general assembly with pertinent
health insurance cost information.
   h.  Recommendations made by the work group convened pursuant
to section 505.8, subsection 18.
   Sec. 8.  NEW SECTION.  505.19  Health insurance rate increase
applications == public hearing and comment.
   1.  All health insurance carriers licensed to do business
in the state shall immediately notify policyholders of any
application for a rate increase exceeding the average annual
health spending growth rate stated in the most recent national
health expenditure projection published by the centers for
Medicare and Medicaid services of the United States department
of health and human services, that is filed with the insurance
division.  Such notice shall specify the rate increase proposed
that is applicable to each policyholder and shall include
the ranking and quantitification of those factors that are
responsible for the amount of the rate increase proposed. The
notice shall include information about how the policy holder
can contact the consumer advocate for assistance.
   2.  The commissioner shall hold a public hearing at the time
a carrier files for proposed health insurance rate increases
exceeding the average annual health spending growth rate as
provided in subsection 1, prior to approval or disapproval
of the proposed rate increases for that carrier by the
commissioner.
   3.  The consumer advocate shall solicit public comments on
each proposed health insurance rate increase application if
the increase exceeds the average annual health spending growth
rate as provided in subsection 1, and shall post without delay
all comments received on the insurance division's internet site
prior to approval or disapproval of the proposed rate increase
by the commissioner.
   4.  The consumer advocate shall present the public testimony
and comments received for consideration by the commissioner
in determining whether to approve or disapprove such health
insurance rate increase proposals.
   4A.  a.  For the purposes of this section, "health insurance"
does not include any of the following:
   (1)  Coverage for accident=only, or disability income
insurance.
   (2)  Coverage issued as a supplement to liability insurance.
   (3)  Liability insurance, including general liability
insurance and automobile liability insurance.
   (4)  Workers' compensation or similar insurance.
   (5)  Automobile medical=payment insurance.
   (6)  Credit=only insurance.
   (7)  Coverage for on=site medical clinic care.
   (8)  Other similar insurance coverage, specified in
federal regulations, under which benefits for medical care
are secondary or incidental to other insurance coverage or
benefits.
   b.  For the purposes of this section, "health insurance"
does not include benefits provided under a separate policy as
follows:
   (1)  Limited scope dental or vision benefits.
   (2)  Benefits for long=term care, nursing home care, home
health care, or community=based care.
   (3)  Any other similar limited benefits as provided by rule
of the commissioner.
   c.  For the purposes of this section, "health insurance"
does not include benefits offered as independent noncoordinated
benefits as follows:
   (1)  Coverage only for a specified disease or illness.
   (2)  A hospital indemnity or other fixed indemnity
insurance.
   d.  For the purposes of this section, "health insurance" does
not include Medicare supplemental health insurance as defined
under { 1882(g)(1) of the federal Social Security Act, coverage
supplemental to the coverage provided under 10 U.S.C. ch. 55,
and similar supplemental coverage provided to coverage under
group health insurance coverage.
   5.  The commissioner shall adopt rules pursuant to chapter
17A to implement the provisions of this section.
   Sec. 9.  NEW SECTION.  508.33A  Limited purpose subsidiary
life insurance companies.
   1.  As used in this section unless the context otherwise
requires:
   a.  "Affiliated company" means a domestic life insurance
company that is a directly or indirectly wholly owned
subsidiary of the same parent.
   b.  "Parent" means a person as defined in section 521A.1
who directly or indirectly through one or more intermediaries
wholly owns the organizing life insurance company.
   c.  "Risks" means risks associated with the life insurance
policies and contracts written by the ceding domestic life
insurance company or assumed by the ceding domestic life
insurance company from an affiliated company, which were
written by the affiliated company and for which the ceding
domestic life insurance company holds direct statutory reserves
for those policies and contracts as required by section 508.36.
   2.  a.  A domestic life insurance company organized pursuant
to the provisions of this chapter may organize a domestic
limited purpose subsidiary life insurance company pursuant
to the provisions of this chapter that is wholly owned by
the organizing life insurance company.  The limited purpose
subsidiary life insurance company may reinsure risks of the
organizing life insurance company, reinsure risks of affiliated
companies, and access alternative forms of financing.
   b.  A limited purpose subsidiary life insurance company
shall submit a plan of operation to the commissioner, and the
commissioner shall approve the plan of operation with such
amendments as the commissioner requires, before the limited
purpose subsidiary life insurance company assumes any risks
under a reinsurance contract.  The plan of operation and any
records, books, documents, reports, or other information that
the commissioner requires a limited purpose subsidiary life
insurance company to produce or disclose pursuant to rules
adopted under subsection 6 or pursuant to an order of the
commissioner shall be treated the same as information obtained
by or disclosed to the commissioner pursuant to section 521A.6
and the commissioner shall have the powers enumerated in
section 521A.6 as to that insurer.
   3.  The organizing life insurance company may invest funds
from its surplus in a limited purpose subsidiary life insurance
company organized pursuant to this section.
   4.  The organizing life insurance company's officers and
directors may serve as officers and directors of a limited
purpose subsidiary life insurance company organized pursuant to
this section.
   5.  A limited purpose subsidiary life insurance company
organized pursuant to this section shall be deemed to be
licensed to transact the business of reinsurance for the
purposes of section 521B.2, subsection 1, but may only
reinsure risks of its organizing life insurance company and
of affiliated companies.  A limited purpose subsidiary life
insurance company organized pursuant to this section may, upon
approval of the commissioner, purchase reinsurance to cede the
reinsurance risks assumed by the limited purpose subsidiary
life insurance company.
   6.  The commissioner shall adopt rules pursuant to chapter
17A concerning limited purpose subsidiary life insurance
companies, including but not limited to the organization, plans
of operation, capital requirements including risk=based capital
requirements, reserves, authorized investments, reinsurance
assumed, material transaction restrictions and requirements,
dividends and distributions, operations, and the conditions,
forms, and approval of financing of limited purpose subsidiary
life insurance companies organized pursuant to this section.
   7.  Admitted assets of a limited purpose subsidiary
life insurance company shall include assets approved by
the commissioner which shall be deemed to be, and reported
as, admitted assets of the limited purpose subsidiary life
insurance company.
   8.  The provisions of sections 508.5, 508.6, and 511.8,
section 521.2, subsection 4, sections 521A.4 and 521A.5, and
chapter 521E shall not be applicable to a limited purpose
subsidiary life insurance company organized pursuant to this
section.
   9.  A limited purpose subsidiary life insurance company
shall not be organized pursuant to this section prior to the
effective date of rules adopted by the commissioner regulating
the organization and operation of limited purpose subsidiary
life insurance companies as provided in subsection 6.
   Sec. 10.  Section 511.8, subsection 5, Code Supplement 2009,
is amended to read as follows:
   5.  Corporate obligations.  Subject to the restrictions
contained in subsection 8 hereof, bonds or other evidences of
indebtedness issued, assumed, or guaranteed by a corporation
incorporated under the laws of the United States of America, or
of any state, district, or insular or territorial possession
thereof; or of the Dominion of Canada, or any province thereof;
and which meet the following qualifications:
   a.  (1)  If fixed interest=bearing obligations, the net
earnings of the issuing, assuming, or guaranteeing corporation
available for its fixed charges for a period of five fiscal
years next preceding the date of acquisition of the obligations
by such insurance company shall have averaged per year not
less than one and one=half times such average annual fixed
charges of the issuing, assuming, or guaranteeing corporation
applicable to such period, and, during at least one of the last
two years of such period, its net earnings shall have been
not less than one and one=half times its fixed charges for
such year; or if, at the date of acquisition, the obligations
are adequately secured and have investment qualities and
characteristics wherein the speculative elements are not
predominant.
   (2)  However, with respect to fixed interest=bearing
obligations which are issued, assumed, or guaranteed by a
financial company, the net earnings by the financial company
available for its fixed charges for the period of five fiscal
years preceding the date of acquisition of the obligations by
the insurance company shall have averaged per year not less
than one and one=fourth times such average annual fixed charges
of the issuing, assuming, or guaranteeing financial company
applicable to such period, and, during at least one of the last
two years of the period, its net earnings shall have been not
less than one and one=fourth times its fixed charges for such
year; or if, at the date of acquisition, the obligations are
adequately secured and speculative elements are not predominant
in their investment qualities and characteristics. As used
in this paragraph subparagraph (2), "financial company" means
a corporation which on the average over its last five fiscal
years preceding the date of acquisition of its obligations
by the insurer, has had at least fifty percent of its net
income, including income derived from subsidiaries, derived
from the business of wholesale, retail, installment, mortgage,
commercial, industrial or consumer financing, or from banking
or factoring, or from similar or related lines of business.
   b.  If adjustment, income, or other contingent interest
obligations, the net earnings of the issuing, assuming, or
guaranteeing corporation available for its fixed charges
for a period of five fiscal years next preceding the date
of acquisition of the obligations by such insurance company
shall have averaged per year not less than one and one=half
times such average annual fixed charges of the issuing,
assuming, or guaranteeing corporation and its average annual
maximum contingent interest applicable to such period and,
during at least one of the last two years of such period, its
net earnings shall have been not less than one and one=half
times the sum of its fixed charges and maximum contingent
interest for such year, or if, at the date of acquisition,
the obligations are adequately secure and have investment
qualities and characteristics and speculative elements are not
predominant.
   c.  Are securities that at the date of acquisition are
rated three by the securities valuation office of the
national association of insurance commissioners or have the
equivalent rating by a rating organization that is approved
by the national association of insurance commissioners as an
acceptable rating organization and are listed or admitted to
trading on a securities exchange in the United States or are
publicly held and actively traded in the over=the=counter
market and market quotations are readily available.  If
a security acquired under this paragraph is subsequently
downgraded from a three rating by the securities valuation
office of the national association of insurance commissioners
or the equivalent by a national association of insurance
commissioners' acceptable rating organization, the security no
longer qualifies as a legal reserve investment.
   d.  The term "net earnings available for fixed charges" as
used herein shall mean in this section means the net income
after deducting all operating and maintenance expenses, taxes
other than any income taxes, depreciation, and depletion, but
nonrecurring items of income or expense may be excluded.
   e.  The term "fixed charges" as used herein shall include in
this section includes interest on unfunded debt and funded debt
on a parity with or having a priority to the obligation under
consideration.
   f.  The term "corporation" as used in this chapter includes
a joint stock association, a limited liability company, a
partnership, or a trust.
   g.  The securities, real estate, and mortgages described in
this section include participations, which means instruments
evidencing partial or undivided collective interests in such
securities, real estate, and mortgages.
   Sec. 11.  Section 511.8, subsection 8, Code Supplement 2009,
is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  In addition to the restrictions contained
in paragraphs "a" and "b", the investments of any company
or association in securities included under subsection 5,
paragraph "c", are not eligible in excess of two percent of the
legal reserve, but not more than one=eighth of one percent of
the legal reserve shall be invested in the securities of any
one corporation.
   Sec. 12.  Section 511.8, subsection 16, Code Supplement
2009, is amended to read as follows:
   16.  Deposit of securities.
   a.  Securities in an amount not less than the legal reserve
as defined in this section shall be deposited and the deposit
maintained with the commissioner of insurance or at such places
as the commissioner may designate as will properly safeguard
them.  There may be included in the deposit an amount of cash
on hand not in excess of five percent of the deposit required,
that deposit to be evidenced by a certified check, certificate
of deposit, or other evidence satisfactory to the commissioner
of insurance.  Deposits of securities may be made in excess
of the amounts required by this section.  A stock company
organized under the laws of this state shall not be required to
make a deposit until the legal reserve, as ascertained by the
commissioner, exceeds the amount deposited by it as capital.
Real estate may be made a part of the deposit by furnishing
evidence of ownership satisfactory to the commissioner and
by conveying the real estate to the commissioner or the
commissioner's successors in office by warranty deed.  The
commissioner and the successors in office shall hold the real
estate in trust for the benefit of the policyholders of the
company or members of the association. Real estate mortgage
loans and policy loans may be made a part of the deposit by
filing a verified statement of the loans with the commissioner,
which statement is subject to check at the discretion of the
commissioner.
   b.  The securities comprising the deposit of a company
or association against which proceedings are pending under
section 508.18 shall vest in the state for the benefit of all
policyholders of the company or association.
   c.  Securities or title to real estate on deposit may be
withdrawn at any time and other eligible securities may be
substituted, provided the amount maintained on deposit is
equal to the sum of the legal reserve and twenty=five thousand
dollars.  In the case of real estate the commissioner shall
execute and deliver to the company or association a quitclaim
deed to the real estate. Any company or association shall,
if requested by the commissioner, at the time of withdrawing
any securities on deposit, designate for what purpose the
same securities are being withdrawn.
   d.  Companies or associations having securities or title
to real estate on deposit with the commissioner of insurance
shall have the right to collect all dividends, interest, rent,
or other income from the deposit unless proceedings against
the company or association are pending under section 508.18,
in which event the commissioner shall collect such interest,
dividends, rent, or other income and add the same to the
deposit.
   e.  Any company or association receiving payments or partial
payments of principal on any securities deposited with the
commissioner of insurance shall notify the commissioner of such
fact at such times and in such manner as the commissioner may
prescribe, giving the amount and date of payment.
   f.  The commissioner of insurance may receive on deposit
securities or title to real estate of alien companies
authorized to do business in the state of Iowa, for the purpose
of securing its policyholders in the state of Iowa and the
United States.  The provisions hereof of this subsection not
inconsistent with the deposit agreement shall apply to the
deposits of such alien companies.
   g.  Common stocks or shares issued by any federal home
loan bank eligible for inclusion in the legal reserve under
subsection 18, paragraph "c", may be made a part of a deposit
by filing a verified statement of the common stocks or shares
issued by a federal home loan bank that are held in the legal
reserve.  Attached to the statement shall be the annual capital
stock statement of the respective federal home loan bank
showing membership stock balance and activity=based stock
balance.
   Sec. 13.  Section 511.8, subsection 23, paragraphs c and e,
Code Supplement 2009, are amended to read as follows:
   c.  If the loan is collateralized by cash or cash
equivalents, the cash or cash equivalent collateral may be
reinvested by the life insurance company or association in
either class one money market funds as defined in subsection
24, individual securities which are eligible for inclusion
in the legal reserve of the life insurance company or
association, or in repurchase agreements fully collateralized
by such securities if the life insurance company or association
takes delivery of the collateral either directly or through an
authorized custodian or pooled fund comprised of individual
securities which are eligible for inclusion in the legal
reserve of the life insurance company or association. If such
reinvestment is made in individual securities or in repurchase
agreements, the individual securities or the securities which
collateralize the repurchase agreements shall mature in less
than two hundred seventy days.  If such reinvestment is made
in a pooled fund, the average maturity of the securities
comprising such pooled fund must be less than two hundred
seventy one hundred eighty days or less and the individual
maturities of the securities comprising such pooled fund
must be three hundred ninety=seven days or less.  Individual
securities and securities comprising the pooled fund shall be
investment grade.  As used in this paragraph, "maturity" means
the earlier of the fixed date on which the holder of the
security is unconditionally entitled to receive principal
and interest in full or the date on which the holder of the
security is unconditionally entitled upon demand to receive
principal and interest in full.
   e.  Securities loaned pursuant to this subsection
are not eligible for inclusion in the legal reserve of
the life insurance company or association in excess of
twenty ten percent of the legal reserve.
   Sec. 14.  Section 511.8, subsection 23, Code Supplement
2009, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  f.  A life insurance company or association
may continue to hold in the legal reserve of the life insurance
company or association securities which are the subject of a
reverse repurchase agreement.  If such securities are held in
the legal reserve of a life insurance company or association,
the securities shall be subject to the limitations of paragraph
"e" as if they were securities loaned pursuant to this
subsection.
   Sec. 15.  NEW SECTION.  514C.26  Mental illness and  substance
abuse treatment coverage for veterans.
   1.  Notwithstanding the uniformity of treatment  requirements
of section 514C.6, a group policy or contract  providing for
third=party payment or prepayment of health or  medical expenses
issued by a carrier, as defined in section  513B.2, or by an
organized delivery system authorized under  1993 Iowa Acts,
chapter 158, shall provide coverage benefits  to an insured who
is a veteran for treatment of mental illness  and substance
abuse if either of the following is satisfied:
   a.  The policy or contract is issued to an employer who
on  at least fifty percent of the employer's working days
during  the preceding calendar year employed more than fifty
full=time  equivalent employees.  In determining the number
of full=time  equivalent employees of an employer, employers
who are  affiliated or who are able to file a consolidated tax
return  for purposes of state taxation shall be considered one
employer.
   b.  The policy or contract is issued to a small employer as
defined in section 513B.2, and such policy or contract  provides
coverage benefits for the treatment of mental illness  and
substance abuse.
   2.  Notwithstanding the uniformity of treatment  requirements
of section 514C.6, a plan established pursuant to  chapter 509A
for public employees shall provide coverage  benefits to an
insured who is a veteran for treatment of  mental illness and
substance abuse as defined in subsection 3.
   3.  For purposes of this section:
   a.  "Mental illness" means mental disorders as defined by  the
commissioner by rule.
   b.  "Substance abuse" means a pattern of pathological use
of alcohol or a drug that causes impairment in social or
occupational functioning, or that produces physiological
dependency evidenced by physical tolerance or by physical
symptoms when the alcohol or drug is withdrawn.
   c.  "Veteran" means the same as defined in section 35.1.
   4.  The commissioner, by rule, shall define "mental  illness"
consistent with definitions provided in the most  recent edition
of the American psychiatric association's  diagnostic and
statistical manual of mental disorders, as the  definitions may
be amended from time to time.  The  commissioner may adopt the
definitions provided in such manual  by reference.
   5.  This section shall not apply to accident only,
specified disease, short=term hospital or medical, hospital
confinement indemnity, credit, dental, vision, Medicare
supplement, long=term care, basic hospital and  medical=surgical
expense coverage as defined by the  commissioner, disability
income insurance coverage, coverage  issued as a supplement
to liability insurance, workers'  compensation or similar
insurance, or automobile medical  payment insurance, or
individual accident and sickness  policies issued to individuals
or to individual members of a  member association.
   6.  A carrier, organized delivery system, or plan
established pursuant to chapter 509A may manage the benefits
provided through common methods including but not limited to
providing payment of benefits or providing care and treatment
under a capitated payment system, prospective reimbursement
rate system, utilization control system, incentive system for
the use of least restrictive and least costly levels of care,
a preferred provider contract limiting choice of specific
providers, or any other system, method, or organization
designed to assure services are medically necessary and
clinically appropriate.
   7.  a.  A group policy or contract or plan covered under  this
section shall not impose an aggregate annual or lifetime  limit
on mental illness or substance abuse coverage benefits  unless
the policy or contract or plan imposes an aggregate  annual
or lifetime limit on substantially all medical and  surgical
coverage benefits.
   b.  A group policy or contract or plan covered under this
section that imposes an aggregate annual or lifetime limit on
substantially all medical and surgical coverage benefits shall
not impose an aggregate annual or lifetime limit on mental
illness or substance abuse coverage benefits which is less  than
the aggregate annual or lifetime limit imposed on  substantially
all medical and surgical coverage benefits.
   8.  A group policy or contract or plan covered under this
section shall at a minimum allow for thirty inpatient days
and  fifty=two outpatient visits annually.  The policy or
contract  or plan may also include deductibles, coinsurance,
or  copayments, provided the amounts and extent of such
deductibles, coinsurance, or copayments applicable to other
medical or surgical services coverage under the policy or
contract or plan are the same.  It is not a violation of this
section if the policy or contract or plan excludes entirely
from coverage benefits for the cost of providing the  following:
   a.  Care that is substantially custodial in nature.
   b.  Services and supplies that are not medically necessary  or
clinically appropriate.
   c.  Experimental treatments.
   9.  This section applies to third=party payment provider
policies or contracts and plans established pursuant to  chapter
509A delivered, issued for delivery, continued, or  renewed in
this state on or after January 1, 2011.
   Sec. 16.  Section 514F.6, Code 2009, is amended to read as
follows:
   514F.6  Credentialing == retrospective payment.
   1.  The commissioner shall adopt rules to provide for
the retrospective payment of clean claims for covered
services provided by a physician, advanced registered nurse
practitioner, or physician assistant during the credentialing
period, once the physician, advanced registered nurse
practitioner, or physician assistant is credentialed.
   2.  For purposes of this section, "physician" means a
licensed doctor of medicine and surgery or a licensed doctor of
osteopathic medicine and surgery,; "advanced registered nurse
practitioner" means a licensed nurse who is also registered
to practice in an advanced role, "physician assistant" means
a person who is licensed to practice as a physician assistant
under the supervision of one or more physicians; and
"credentialing period" means the time period between the health
insurer's receipt of a physician's, advanced registered nurse
practitioner's, or physician assistant's application for
credentialing and approval of that application by the health
insurer.  "Credentialing" means a process through which a health
insurer makes a determination based on criteria established by
the health insurer concerning whether a physician, advanced
registered nurse practitioner, or physician assistant is
eligible to provide health care services to an insured and to
receive reimbursement for the health care services provided
under an agreement entered into between the physician, advanced
registered nurse practitioner, or physician assistant and the
health insurer.  "Clean claim" means the same as defined in
section 507B.4A, subsection 2, paragraph "b".
   Sec. 17.  Section 514J.7, subsection 2, Code 2009, is amended
to read as follows:
   2.  The independent review entity, within three business
days of receipt of the notice, shall select a person to
perform the external review and shall provide notice to the
enrollee and the carrier containing a brief description of
the person including the reasons the person selected is an
expert in the treatment of the medical condition under review.
The independent review entity does not need to shall, upon
request from the carrier, the enrollee, or the enrollee's
treating health care provider, disclose the name of the
person.  A copy of the notice shall be sent by facsimile to
the commissioner.  If the independent review entity does not
have a person who is an expert in the treatment of the medical
condition under review and certified by the commissioner to
conduct an independent review, the independent review entity
may either decline the review request or may request from the
commissioner additional time to have such an expert certified.
The independent review entity shall notify the commissioner
by facsimile of its choice between these options within three
business days of receipt of the notice from the carrier or
organized delivery system.  The commissioner shall provide
a notice to the enrollee and carrier or organized delivery
system of the independent review entity's decision and of the
commissioner's decision as to how to proceed with the external
review process within three business days of receipt of the
independent review entity's decision.
   Sec. 18.  Section 515.125, subsection 1, Code 2009, is
amended to read as follows:
   1.  Unless otherwise provided in section 515.127, or
515.128, 515.129A, 515.129B, or 515.129C, a policy or contract
of insurance provided for in this chapter shall not be
forfeited, suspended, or canceled except by notice to the
insured as provided in this chapter.  A notice of cancellation
is not effective unless mailed or delivered by the insurer to
the named insured at least thirty days before the effective
date of cancellation, or, where cancellation is for nonpayment
of a premium, assessment, or installment provided for in the
policy, or in a note or contract for the payment thereof, at
least ten days prior to the date of cancellation.  The notice
may be made in person, or by sending by mail a letter addressed
to the insured at the insured's address as given in or upon
the policy, anything in the policy, application, or a separate
agreement to the contrary notwithstanding.
   Sec. 19.  NEW SECTION.  515.129A  Cancellation of personal
lines policies or contracts.
   1.  A personal lines policy or contract of insurance which
has been in effect for more than sixty days shall not be
canceled except by notice to the insured as provided in this
chapter.
   2.  Notice of cancellation of a personal lines policy or
contract of insurance is not effective unless the cancellation
is based on one or more of the following reasons:
   a.  Nonpayment of premium.
   b.  Failure to pay dues or fees where payment of dues or fees
is a prerequisite to obtaining or continuing insurance coverage
in force.
   c.  Discovery of fraud or material misrepresentation made
by or with the knowledge of the named insured in obtaining,
continuing, or presenting a claim under the policy.
   d.  Actions by the insured which substantially change or
increase the risk insured.
   e.  The insured has acted in a manner which the insured knew
or should have known was in violation or breach of a term or
condition of the insurance policy or contract.
   f.  The occurrence of a change in the risk that substantially
increases a hazard insured against after insurance coverage has
been issued or renewed.
   Sec. 20.  NEW SECTION.  515.129B  Nonrenewal of personal lines
policies or contracts.
   1.  An insurer shall not refuse to renew a personal lines
policy or contract of insurance unless at least thirty days
before the end of the policy or contract period the insurer
delivers, mails, or electronically transmits to the first named
insured, at the last known address of the first named insured,
written notice of the insurer's intention not to renew the
policy or contract upon expiration of the current policy or
contract period as provided in section 515.129C.  Proof of such
mailing, electronic transmission, or delivery to the first
named insured's last known address shall be maintained by the
insurer.
   2.  The notice of intention not to renew shall include or be
accompanied by a written explanation of the insurer's specific
reason or reasons for the nonrenewal.
   3.  The transfer of a policy between affiliates of an
insurance company shall not be considered a nonrenewal.
   Sec. 21.  NEW SECTION.  515.129C  Notice of renewal or
nonrenewal of personal lines policies of contracts.
   1.  At least thirty days before the end of the policy or
contract term, an insurer shall mail or deliver to the last
known address of the first named insured a renewal policy or
contract, an offer to renew the current policy or contract, or
a notice of nonrenewal of the policy or contract.  Information
concerning the renewal policy or contract, the offer to
renew the policy or contract, or the notice of nonrenewal of
the policy or contract shall also be mailed, delivered, or
transmitted electronically to the last known address of the
producer of record of the policy or contract.
   a.  An offer to renew the policy or contract shall state
the renewal premium and the date that the premium is due.  The
renewal premium shall be based on the known exposure as of the
date of the offer to renew.
   b.  If the renewal premium is not received by the due date
or the policy or contract expiration date, whichever is later,
the policy or contract lapses.
   2.  If an insurer fails to comply with the notice
requirements of this section, the policy or contract shall be
extended on the same terms and conditions for another policy or
contract term or until the effective date of similar insurance
procured by the insured, whichever is earlier.  The insurer may
make continued coverage contingent upon the payment of premium.
   3.  Renewal of a policy or contract does not constitute a
waiver or estoppel with respect to grounds for cancellation
that existed before the effective date of the renewal.
   Sec. 22.  Section 515C.5, Code 2009, is amended to read as
follows:
   515C.5  Limit of outstanding liability.
   1.  A Unless a request to suspend the requirements of
this section is granted by the commissioner as set forth in
subsection 2, a mortgage guaranty insurer shall not at any time
have outstanding a total liability, net of reinsurance, in
excess of twenty=five times its capital, unassigned funds and
contingency reserve.  It A mortgage guaranty insurer shall not
insure loans secured by properties in a single housing tract or
in a contiguous tract (not which is not separated by more than
one=half mile) mile in excess of ten percent of its capital,
unassigned funds, and contingency reserve.  Coverage may be
provided only if the properties in such tract are residential
buildings, buildings designed for occupancy by not more than
four families, or owner=occupied mobile homes.
   2.  Upon request of a mortgage guaranty insurer, the
commissioner may suspend the requirements contained in
subsection 1 for such time and under such conditions as the
commissioner may order.  The commissioner may adopt rules as
necessary relating to the consideration of such requests for
suspension of those requirements.
   Sec. 23.  Section 523A.204, subsection 4, Code Supplement
2009, is amended to read as follows:
   4.  The commissioner shall levy an administrative penalty
in the amount of up to five hundred dollars against a preneed
seller that fails to file the annual report when due, payable
to the state for deposit as provided in section 505.7.
However, the commissioner may waive the administrative penalty
upon a showing of good cause or financial hardship.
   Sec. 24.  Section 523A.401, Code 2009, is amended by adding
the following new subsection:
   NEW SUBSECTION.  9.  The commissioner, by rule, may require
written trust agreements and establish conditions for trusts
holding insurance policies or maintaining ownership rights
under insurance policies.  The seller or any officer, director,
agent, employee, or affiliate of the seller shall not serve as
a trustee.  The commissioner may require amendments to a trust
agreement that is not in accord with the provisions of this
chapter or rules adopted under this chapter.
   Sec. 25.  Section 523A.402, Code 2009, is amended by adding
the following new subsection:
   NEW SUBSECTION.  9.  The commissioner, by rule, may require
written trust agreements and establish conditions for trusts
holding annuities or maintaining ownership rights under
annuities.  The seller or any officer, director, agent,
employee, or affiliate of the seller shall not serve as a
trustee.  The commissioner may require amendments to a trust
agreement that is not in accord with the provisions of this
chapter or rules adopted under this chapter.
   Sec. 26.  Section 523A.502A, subsection 3, Code Supplement
2009, is amended to read as follows:
   3.  The commissioner shall levy an administrative penalty
in the amount of up to five hundred dollars against a sales
agent who fails to file an annual report when due, payable to
the state for deposit as provided in section 505.7.  However,
the commissioner may waive the administrative penalty upon a
showing of good cause or financial hardship.
   Sec. 27.  Section 523A.601, subsection 1, paragraph i, Code
2009, is amended to read as follows:
   i.  Include an explanation of regulatory oversight by
the insurance division in twelve point boldface type, in
substantially the following language:
THIS AGREEMENT IS SUBJECT TO RULES ADMINISTERED BY THE IOWA
INSURANCE DIVISION.  YOU MAY CALL THE INSURANCE DIVISION AT
(515)281=4441 (515)281=5705.  WRITTEN INQUIRIES OR COMPLAINTS
SHOULD BE MAILED TO THE IOWA SECURITIES AND REGULATED INDUSTRIES
BUREAU, 330 MAPLE STREET, DES MOINES, IOWA 50319.
   Sec. 28.  Section 523A.807, subsection 3, unnumbered
paragraph 1, Code Supplement 2009, is amended to read as
follows:
   If the commissioner finds that a person has violated section
523A.201, 523A.202, 523A.203, 523A.207, 523A.401, 523A.402,
523A.403, 523A.404, 523A.405, 523A.501, or 523A.502, or
523A.504 or any rule adopted pursuant thereto, the commissioner
may order any or all of the following:
   Sec. 29.  Section 523I.213A, Code 2009, is amended by adding
the following new subsection:
   NEW SUBSECTION.  7.  Notwithstanding chapter 22, the
commissioner shall not make information obtained in the course
of an examination public, except when a duty under this chapter
requires the commissioner to take action against a cemetery
or to cooperate with another law enforcement agency, or when
the commissioner is called as a witness in a civil or criminal
proceeding.
   Sec. 30.  Section 523I.312, subsection 2, paragraph n, Code
2009, is amended to read as follows:
   n.  Include an explanation of regulatory oversight by
the insurance division in twelve point boldface type, in
substantially the following language:
THIS AGREEMENT IS SUBJECT TO RULES ADMINISTERED BY THE IOWA
INSURANCE DIVISION.  YOU MAY CALL THE INSURANCE DIVISION WITH
INQUIRIES OR COMPLAINTS AT (515)281=4441 (515)281=5705.  WRITTEN
INQUIRIES OR COMPLAINTS SHOULD BE MAILED TO:  IOWA SECURITIES AND
REGULATED INDUSTRIES BUREAU, 330 MAPLE STREET, DES MOINES, IOWA
50319.
   Sec. 31.  Section 523I.813, subsection 3, Code Supplement
2009, is amended to read as follows:
   3.  The commissioner shall levy an administrative penalty
in the amount of up to five hundred dollars against a cemetery
that fails to file the annual report when due, payable to the
state for deposit as provided in section 505.7.  However,
the commissioner may waive the administrative penalty upon a
showing of good cause or financial hardship.
   Sec. 32.  2009 Iowa Acts, chapter 118, section 1, is amended
by adding the following new subsection:
   NEW SUBSECTION.  6A.  The commission shall also complete
an annual review of the cost of health insurance mandates
currently imposed on health insurance regulated by the state
and provide projections of the cost of any mandates that the
commission determines may be considered by the general assembly
during the upcoming legislative session.  The review and
projections shall be included in the annual reports provided
by the commission to the general assembly pursuant to this
section.
   Sec. 33.  EFFECTIVE UPON ENACTMENT.  The following
provisions of this Act, being deemed of immediate importance,
take effect upon enactment:
   1.  The section of this Act enacting section 505.7,
subsection 10.
   2.  The section of this Act enacting section 505.8,
subsection 18.
   3.  The section of this Act amending section 505.17.
   4.  The sections of this Act enacting sections 505.18 and
505.19.
   5.  The section of this Act amending 2009 Iowa Acts, chapter
118, section 1.


                                                            
                              JOHN P. KIBBIE
                              President of the Senate


                                                            
                              PATRICK J. MURPHY
                              Speaker of the House
   I hereby certify that this bill originated in the Senate and
is known as Senate File 2201, Eighty=third General Assembly.


                                                            
                              MICHAEL E. MARSHALL
                              Secretary of the Senate
Approved                , 2010


                                                            
                              CHESTER J. CULVER
                              Governor

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