Text: HSB150            Text: HSB152


House Study Bill 151

SENATE/HOUSE FILE BY (PROPOSED DEPARTMENT OF COMMERCE/INSURANCE DIVISION BILL) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to various matters under the purview of the 2 insurance division of the department of commerce including the 3 uniform securities act; insurance division; examination of 4 insurance companies; articles of incorporation filing 5 requirements; viatical settlements contracts; life insurance 6 companies and associations; long=term care insurance; 7 long=term care asset disregard incentives; insurance other 8 than life; insurance guaranty association; county mutual 9 insurance associations; state mutual insurance associations; 10 consolidation, merger, and reinsurance; and cemetery and 11 funeral merchandise and funeral services; and providing for 12 retroactive applicability. 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 14 TLSB 1321XD 83 15 av/rj/14 PAG LIN 1 1 Section 1. Section 20.4, Code 2009, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 13. Full=time persons employed by the 1 4 insurance division of the department of commerce who examine 1 5 or analyze the accounts and affairs of persons subject to the 1 6 supervision and regulation of the commissioner of insurance 1 7 pursuant to chapter 507. 1 8 Sec. 2. Section 249A.35, Code 2009, is amended to read as 1 9 follows: 1 10 249A.35 PURCHASE OF CERTIFIED QUALIFIED LONG=TERM CARE 1 11 INSURANCE POLICY == COMPUTATION UNDER MEDICAL ASSISTANCE 1 12 PROGRAM. 1 13 A computation for the purposes of determining eligibility 1 14 under this chapter concerning an individual who is the 1 15 beneficiary of a certified qualified long=term care insurance 1 16 policy under chapter 514H shall include consideration of the 1 17 asset disregard provided in section 514H.5. 1 18 Sec. 3. Section 502.409, subsection 1, Code 2009, is 1 19 amended to read as follows: 1 20 1. WITHDRAWAL OF REGISTRATION. Withdrawal of registration 1 21 by a broker=dealer, agent, investment adviser, or investment 1 22 adviser representative becomes effective sixty days after the 1 23 filing of the application to withdraw or within any shorter 1 24 period as provided by rule adopted or order issued under this 1 25 chapter unless a revocation or suspension proceeding is 1 26 pending when the application is filed. If a proceeding is 1 27 pending, withdrawal becomes effective when and upon such 1 28 conditions as required by rule adopted or order issued under 1 29 this chapter. The administrator may institute a revocation or 1 30 suspension proceeding disciplinary action under section 1 31 502.412, including an action to revoke, suspend, condition, or 1 32 limit the registration of a registrant, censure, impose a bar, 1 33 or impose a civil penalty, within one year after the 1 34 withdrawal became effective automatically and issue a 1 35 revocation or suspension disciplinary order as of the last 2 1 date on which registration was effective if a proceeding is 2 2 not pending. 2 3 Sec. 4. Section 502.410, subsection 4, Code 2009, is 2 4 amended to read as follows: 2 5 4. INVESTMENT ADVISER REPRESENTATIVES. The fee for an 2 6 individual is thirty forty dollars when filing an application 2 7 for registration as an investment adviser representative, a 2 8 fee of thirty forty dollars when filing a renewal of 2 9 registration as an investment adviser representative, and a 2 10 fee of thirty forty dollars when filing a change of 2 11 registration as an investment adviser representative. If the 2 12 filing results in a denial or withdrawal, the administrator 2 13 shall retain the fee. 2 14 However, fee. However, an investment adviser 2 15 representative is not required to pay a filing fee if the 2 16 investment adviser is a sole proprietorship or the substantial 2 17 equivalent and the investment adviser representative is the 2 18 same individual as the investment adviser. 2 19 Sec. 5. Section 505.8, subsection 6, Code 2009, is amended 2 20 to read as follows: 2 21 6. The commissioner shall provide assistance to the public 2 22 and to consumers of insurance products and services in this 2 23 state. 2 24 a. The commissioner shall accept inquiries and complaints 2 25 from the public regarding the business of insurance. The 2 26 commissioner may respond to inquiries and complaints, and may 2 27 examine or investigate such inquiries and complaints to 2 28 determine whether laws in this subtitle and rules adopted 2 29 pursuant to such laws have been violated. 2 30 a. b. The commissioner shall establish a bureau, to be 2 31 known as the "consumer advocate bureau", which shall be 2 32 responsible for ensuring fair treatment of consumers by 2 33 persons in the business of insurance and for preventing unfair 2 34 or deceptive trade practices in the insurance marketplace and 2 35 by persons under the jurisdiction of the commissioner 3 1 including the securities and regulated industries bureau of 3 2 the insurance division of the department of commerce under 3 3 chapter 502. 3 4 b. (1) The commissioner, with the advice of the governor, 3 5 shall appoint a consumer advocate who shall be knowledgeable 3 6 in the area of insurance and particularly in the area of 3 7 consumer protection. The consumer advocate shall be the chief 3 8 administrator of the consumer advocate bureau. 3 9 c. (2) The consumer advocate bureau shall may receive and 3 10 may investigate consumer complaints and inquiries from the 3 11 public, and shall may conduct investigations to determine 3 12 whether any person has violated any provision of the insurance 3 13 code, including chapters 507B and 522B, and any provisions 3 14 related to the establishment of insurance rates. 3 15 d. When necessary or appropriate to protect the public 3 16 interest or consumers, the consumer advocate may request that 3 17 the commissioner conduct administrative hearings as provided 3 18 in section 505.29. 3 19 e. (3) The consumer advocate bureau shall perform other 3 20 functions as may be assigned to it by the commissioner related 3 21 to consumer advocacy. 3 22 f. (4) The consumer advocate bureau shall work in 3 23 conjunction with other areas of the insurance division on 3 24 matters of mutual interest. The insurance division shall 3 25 cooperate with the consumer advocate in fulfilling the duties 3 26 of the consumer advocate bureau. The consumer advocate may 3 27 also seek assistance from other federal or state agencies or 3 28 private entities for the purpose of assisting consumers. 3 29 g. (5) The commissioner, in cooperation with the consumer 3 30 advocate, shall prepare and deliver a report to the general 3 31 assembly by January 15 of each year that contains findings and 3 32 recommendations regarding the activities of the consumer 3 33 advocate bureau including but not limited to all of the 3 34 following: 3 35 (1) (a) An overview of the functions of the bureau. 4 1 (2) (b) The structure of the bureau including the number 4 2 and type of staff positions. 4 3 (3) (c) Statistics showing the number of complaints 4 4 handled by the bureau, the nature of the complaints including 4 5 the line of business involved and their disposition, and the 4 6 disposition of similar issues in other states. 4 7 (4) (d) Actions commenced by the consumer advocate. 4 8 (5) (e) Studies performed by the consumer advocate. 4 9 (6) (f) Educational and outreach efforts of the consumer 4 10 advocate bureau. 4 11 (7) (g) Recommendations from the commissioner and the 4 12 consumer advocate about additional consumer protection 4 13 functions that would be appropriate and useful for the bureau 4 14 or the insurance division to fulfill based on observations and 4 15 analysis of trends in complaints and information derived from 4 16 national or other sources. 4 17 (8) (h) Recommendations from the commissioner and the 4 18 consumer advocate about any needs for additional funding, 4 19 staffing, legislation, or administrative rules. 4 20 c. When necessary or appropriate to protect the public 4 21 interest or consumers, the commissioner may conduct, or the 4 22 consumer advocate may request that the commissioner conduct 4 23 administrative hearings as provided in this subtitle. 4 24 d. The commissioner may adopt rules for the administration 4 25 of this subsection. 4 26 Sec. 6. Section 505.15, subsection 2, Code 2009, is 4 27 amended to read as follows: 4 28 2. The commissioner may, or at the request of the consumer 4 29 advocate may, retain attorneys, appraisers, independent 4 30 actuaries, independent certified public accountants, or other 4 31 professionals or specialists to assist the division or the 4 32 consumer advocate bureau in carrying out its duties in regard 4 33 to rate filing reviews. The reasonable cost of retaining such 4 34 professionals and specialists shall be borne by the insurer 4 35 which is the subject of the rate filing review. 5 1 Sec. 7. Section 507.4, subsection 2, Code 2009, is amended 5 2 to read as follows: 5 3 2. The commissioner may, when in the commissioner's 5 4 judgment it is advisable, appoint assistants to aid in 5 5 conducting examinations. The commissioner shall employ rates 5 6 of compensation consistent with current standards in the 5 7 industry for certified public accountants, attorneys, and 5 8 skilled insurance examiners. The commissioner may use 5 9 compensation rates suggested by the national association of 5 10 insurance commissioners. Insurance examiners employed under 5 11 this section shall be exempt from the merit system provisions 5 12 of chapter 8A, subchapter IV, under section 8A.412, subsection 5 13 17. Pay plans which are substantially equivalent to those 5 14 paid to examiners under section 524.208 shall be established 5 15 for employees who examine or analyze the accounts and affairs 5 16 of persons subject to the supervision and regulation of the 5 17 commissioner. Compensation shall be paid from appropriations 5 18 for such purposes upon certification of the commissioner, 5 19 which shall be reimbursed as provided in sections 507.8 and 5 20 507.9. 5 21 Sec. 8. Section 508.2, Code 2009, is amended by striking 5 22 the section and inserting in lieu thereof the following: 5 23 508.2 ARTICLES == APPROVAL == BYLAWS. 5 24 The articles of incorporation, and any subsequent 5 25 amendments, of a company shall be filed with and approved by 5 26 the commissioner of insurance before filing with the secretary 5 27 of state. A company shall file with the commissioner bylaws 5 28 and subsequent amendments to the bylaws within thirty days of 5 29 adoption of the bylaws and amendments. 5 30 Sec. 9. Section 508E.3, subsection 1, paragraph b, 5 31 subparagraphs (1) and (2), Code 2009, are amended to read as 5 32 follows: 5 33 (1) A life insurance producer who has been duly licensed 5 34 as a resident insurance producer with a life line of authority 5 35 in this state or the life insurance producer's home state for 6 1 at least one year immediately prior to operating as a viatical 6 2 settlement broker and is licensed as a nonresident producer in 6 3 this state shall be deemed to meet the licensing requirements 6 4 of this section and shall be permitted to operate as a 6 5 viatical settlement broker. 6 6 (2) Not later than thirty days from the first day of 6 7 operating as a viatical settlement broker, the life insurance 6 8 producer shall notify the commissioner that the life insurance 6 9 producer is acting as a viatical settlement broker on a form 6 10 prescribed by the commissioner, and shall pay any applicable 6 11 fee of up to one hundred dollars as provided by rules adopted 6 12 by the commissioner. The notification shall include an 6 13 acknowledgment by the life insurance producer that the life 6 14 insurance producer will operate as a viatical settlement 6 15 broker in accordance with this chapter. The notification 6 16 shall also include proof that the life insurance producer is 6 17 covered by an errors and omissions policy for an amount of not 6 18 less than one hundred thousand dollars per occurrence and not 6 19 less than one hundred thousand dollars total annual aggregate 6 20 for all claims during the policy period. 6 21 Sec. 10. Section 508E.3, subsections 3 and 9, Code 2009, 6 22 are amended to read as follows: 6 23 3. A The license may be renewed from year to year on the 6 24 anniversary date term shall be three years and the license may 6 25 be renewed upon payment of the annual renewal fee of not more 6 26 than one hundred dollars as provided by rules adopted by the 6 27 commissioner. A failure to pay the fee by the renewal date 6 28 results in expiration of the license. 6 29 9. An individual licensed as a viatical settlement broker 6 30 shall complete on a biennial basis fifteen hours triennial 6 31 basis running concurrent with the license term twenty credits 6 32 of training related to viatical settlements and viatical 6 33 settlement transactions, as required by the commissioner; 6 34 provided, however, that a life insurance producer who is 6 35 operating as a viatical settlement broker pursuant to 7 1 subsection 1, paragraph "b", shall not be subject to the 7 2 requirements of this subsection. Any person failing to meet 7 3 the requirements of this subsection shall be subject to the 7 4 penalties imposed by the commissioner. 7 5 Sec. 11. Section 511.8, subsection 18, paragraph b, Code 7 6 2009, is amended to read as follows: 7 7 b. Common stocks or shares in a subsidiary corporation, 7 8 the acquisition or purchase of which is authorized by section 7 9 508.33 are eligible if the total investment in these stocks or 7 10 shares does not exceed five percent of the legal reserve; 7 11 provided, however, that common stocks or shares of stock in a 7 12 direct or indirect subsidiary insurance company which is 7 13 domiciled in the United States are eligible up to an 7 14 additional two percent of the legal reserve upon application 7 15 by the insurer to and upon approval by the commissioner. 7 16 Stocks or shares of the insurer's subsidiary corporations are 7 17 not eligible in total in excess of seven percent of the legal 7 18 reserve and the stock or shares of any one subsidiary 7 19 corporation are not eligible in excess of five percent of the 7 20 legal reserve. These stocks or shares are eligible even if 7 21 the stocks or shares are not listed or admitted to trading on 7 22 a securities exchange in the United States and are not 7 23 publicly held and have not been traded in the 7 24 "over=the=counter market". The stocks or shares shall be 7 25 valued at their book value; provided, however, that stocks or 7 26 shares of a direct or indirect subsidiary insurance company 7 27 held in the legal reserve of up to an additional two percent 7 28 of the legal reserve shall be valued at their statutory book 7 29 value, excluding approved permitted practices. 7 30 Sec. 12. Section 512A.10, subsection 1, Code 2009, is 7 31 amended by striking the subsection and inserting in lieu 7 32 thereof the following: 7 33 1. The articles of incorporation, and any subsequent 7 34 amendments, of an organization shall be filed with and 7 35 approved by the commissioner of insurance before filing with 8 1 the secretary of state. An organization shall file bylaws and 8 2 subsequent amendments to bylaws with the commissioner within 8 3 thirty days of adoption of the bylaws and amendments. 8 4 Sec. 13. Section 514B.3A, Code 2009, is amended by 8 5 striking the section and inserting in lieu thereof the 8 6 following: 8 7 514B.3A ARTICLES == APPROVAL == BYLAWS. 8 8 The articles of incorporation, and any subsequent 8 9 amendments, of a corporation shall be filed with and approved 8 10 by the commissioner of insurance before filing with the 8 11 secretary of state. A corporation shall file bylaws and 8 12 subsequent amendments to the bylaws with the commissioner 8 13 within thirty days of adoption of the bylaws and amendments. 8 14 Sec. 14. Section 514G.102, Code 2009, is amended to read 8 15 as follows: 8 16 514G.102 SCOPE. 8 17 The requirements of this chapter apply to policies 8 18 delivered or issued for delivery in this state on or after 8 19 July 1, 2008. The requirements of this chapter related to 8 20 independent review of benefit trigger determinations apply to 8 21 all claims made on or after January 1, 2009. This chapter is 8 22 not intended to supersede the obligations of entities subject 8 23 to this chapter to comply with the substance of other 8 24 applicable insurance laws not in conflict with this chapter, 8 25 except that laws and regulations designed and intended to 8 26 apply to Medicare supplement insurance policies shall not be 8 27 applied to long=term care insurance. 8 28 Sec. 15. Section 514G.104, Code 2009, is amended to read 8 29 as follows: 8 30 514G.104 EXTRATERRITORIAL JURISDICTION == GROUP LONG=TERM 8 31 CARE INSURANCE. 8 32 Group long=term care insurance coverage shall not be 8 33 offered to a resident of this state under a group policy 8 34 issued in another state unless either this state or another 8 35 state with statutory and regulatory requirements for long=term 9 1 care insurance that are substantially similar to those adopted 9 2 in this state has made a determination that the group to which 9 3 the policy is issued meets the requirements of section 9 4 514G.103, subsection 9, paragraph "d". 9 5 Sec. 16. Section 514H.1, subsection 1, Code 2009, is 9 6 amended by striking the subsection and inserting in lieu 9 7 thereof the following: 9 8 1. "Deficit Reduction Act of 2005" means section 9 9 6021(a)(1)(A) of Public Law 109=171 as it pertains to the 9 10 expansion of state long=term care insurance partnership 9 11 programs. 9 12 Sec. 17. Section 514H.1, Code 2009, is amended by adding 9 13 the following new subsections: 9 14 NEW SUBSECTION. 3A. "Qualified long=term care insurance 9 15 policy" means a long=term care insurance contract that is 9 16 issued by an insurer or other person who complies with section 9 17 514H.4. 9 18 NEW SUBSECTION. 5. "Qualified state long=term care 9 19 insurance partnership" means an approved state plan amendment, 9 20 according to the Deficit Reduction Act of 2005 that provides 9 21 for the disregard of any assets or resources in an amount 9 22 equal to the insurance benefit payments that are made to or on 9 23 behalf of an individual who is a beneficiary. 9 24 Sec. 18. Section 514H.2, subsection 2, Code 2009, is 9 25 amended to read as follows: 9 26 2. The insurance division of the department of commerce 9 27 shall administer the program in cooperation with the division 9 28 responsible for medical services within the department of 9 29 human services. Each agency shall take appropriate action to 9 30 maintain the waiver granted by the centers for Medicare and 9 31 Medicaid services of the United States department of health 9 32 and human services under 42 U.S.C. } 1396 relating to 9 33 providing medical assistance under chapter 249A, in effect 9 34 prior to November 17, 2005 all necessary actions, including 9 35 filing an appropriate medical assistance state plan amendment 10 1 to the state Medicaid plan to take full advantage of the 10 2 benefits and features of the Deficit Reduction Act of 2005. 10 3 Sec. 19. Section 514H.3, Code 2009, is amended to read as 10 4 follows: 10 5 514H.3 ELIGIBILITY. 10 6 An individual who is the beneficiary of a certified 10 7 qualified long=term care insurance policy approved by the 10 8 insurance division may be eligible for assistance under the 10 9 medical assistance program using the asset disregard 10 10 provisions pursuant to section 514H.5. 10 11 Sec. 20. Section 514H.4, Code 2009, subsections 1 and 2, 10 12 are amended to read as follows: 10 13 514H.4 INSURER REQUIREMENTS. 10 14 1. An insurer or other person who wishes to issue a 10 15 certified qualified long=term care insurance policy meeting 10 16 the requirements of this chapter shall, at a minimum, offer to 10 17 each policyholder or prospective policyholder a policy that 10 18 provides both of the following: in Iowa shall conform with all 10 19 policy guidelines as expressed in the Deficit Reduction Act of 10 20 2005 and in Iowa law and rules. 10 21 a. Facility coverage, including but not limited to 10 22 long=term care facility coverage. 10 23 b. Nonfacility coverage, including but not limited to home 10 24 and community=based care coverage. 10 25 2. An insurer or other person who complies with subsection 10 26 1 may also elect to offer a certified long=term care insurance 10 27 policy that provides only facility coverage. 10 28 Sec. 21. Section 514H.5, Code 2009, is amended to read as 10 29 follows: 10 30 514H.5 ASSET DISREGARD ADJUSTMENT. 10 31 1. As used in this section, "asset disregard" means a one 10 32 dollar increase in the amount of assets an individual who is 10 33 the beneficiary of a certified qualified long=term care 10 34 insurance policy and meets the requirements of section 514H.3 10 35 may retain under section 249A.35 for each one dollar of 11 1 benefit paid out under the individual's certified qualified 11 2 long=term care insurance policy for qualified long=term care 11 3 services if the policy meets all of the following criteria:. 11 4 a. If purchased prior to January 1, 2005, provides 11 5 benefits in an amount equal to at least seventy thousand 11 6 dollars as computed on January 1, 2005. 11 7 b. If purchased on or after January 1, 2005, provides 11 8 benefits in an amount equal to at least seventy thousand 11 9 dollars as computed on January 1, 2005, compounded annually by 11 10 at least five percent, or an amount equal to at least the 11 11 minimum face amount specified by the commissioner of insurance 11 12 pursuant to subsection 3, whichever amount is greater. 11 13 c. Includes a provision under which the total amount of 11 14 the benefit increases by at least five percent, compounded 11 15 annually. 11 16 2. When the division responsible for medical services 11 17 within the department of human services determines whether an 11 18 individual is eligible for medical assistance under chapter 11 19 249A, the division shall make an asset disregard adjustment 11 20 for any individual who meets the requirements of section 11 21 514H.3. The asset disregard shall be available after benefits 11 22 of the certified qualified long=term care insurance policy 11 23 have been applied to the cost of qualified long=term care 11 24 services as required under this chapter. 11 25 3. Beginning September 1, 2006, or one year after November 11 26 17, 2005, whichever is later, the commissioner of insurance 11 27 shall issue a bulletin annually on that date, declaring the 11 28 minimum face amount for policies to qualify for the Iowa 11 29 long=term care asset disregard incentive program for the 11 30 following calendar year. In making this determination, the 11 31 commissioner shall consult with the division responsible for 11 32 collecting data on average nursing home costs in Iowa. 11 33 Additionally, in making this determination, the commissioner 11 34 shall consider the current average daily cost for three years 11 35 of nursing home care and other relevant information. 12 1 Sec. 22. Section 514H.7, subsection 1, Code 2009, is 12 2 amended to read as follows: 12 3 1. If the Iowa long=term care asset disregard incentive 12 4 program is discontinued, an individual who is covered by a 12 5 certified qualified long=term care insurance policy prior to 12 6 the date the program is discontinued is eligible to continue 12 7 to receive an asset disregard as defined under section 514H.5. 12 8 Sec. 23. Section 514H.8, Code 2009, is amended to read as 12 9 follows: 12 10 514H.8 RECIPROCAL AGREEMENTS TO EXTEND ASSET DISREGARD. 12 11 The division responsible for medical services within the 12 12 department of human services may enter into reciprocal 12 13 agreements with other states to extend the asset disregard 12 14 under section 514H.5 to Iowa residents who had purchased or 12 15 were covered by certified qualified long=term care insurance 12 16 policies in other states. 12 17 Sec. 24. Section 514H.9, Code 2009, is amended to read as 12 18 follows: 12 19 514H.9 RULES. 12 20 The insurance division of the department of commerce in 12 21 cooperation with the department of human services shall adopt 12 22 rules pursuant to chapter 17A as necessary to administer this 12 23 chapter. The insurance division shall consult with 12 24 representatives of the insurance industry in adopting such 12 25 rules. This delegation of rulemaking authority shall be 12 26 construed narrowly. 12 27 Sec. 25. Section 515.2, Code 2009, is amended by striking 12 28 the section and inserting in lieu thereof the following: 12 29 515.2 ARTICLES == APPROVAL == BYLAWS. 12 30 The articles of incorporation, and any subsequent 12 31 amendments, of an organization shall be filed with and 12 32 approved by the commissioner of insurance before filing with 12 33 the secretary of state. An organization shall file with the 12 34 commissioner bylaws and subsequent amendments to the bylaws 12 35 within thirty days of adoption of the bylaws and amendments. 13 1 Sec. 26. Section 515.101, subsection 2, paragraph i, Code 13 2 2009, is amended to read as follows: 13 3 i. The fraud Fraud, concealment, or misrepresentation of 13 4 the an insured in the procurement of the contract of 13 5 insurance. 13 6 Sec. 27. Section 515.120, Code 2009, is amended to read as 13 7 follows: 13 8 515.120 BUSINESS WITH NONADMITTED INSURERS. 13 9 This chapter does not prevent a licensed resident or 13 10 nonresident producer of this state, qualified to write excess 13 11 and surplus lines insurance, from procuring insurance in with 13 12 certain nonadmitted insurers, if such insurance is restricted 13 13 to the type and kind of insurance authorized by this chapter 13 14 including individual disability insurance, but otherwise 13 15 excluding the types of insurance authorized under section 13 16 515.48, subsection 5, paragraph "a", and the producer makes 13 17 oath to the commissioner of insurance in the form prescribed 13 18 by the commissioner using the surplus lines certification 13 19 report, which states that the producer has made a diligent 13 20 effort to place the insurance in authorized insurers with an 13 21 admitted insurer and has either exhausted the capacity of all 13 22 authorized admitted insurers or has been unable to obtain the 13 23 desired insurance in insurers licensed to transact business in 13 24 this state with an admitted insurer. The procuring of a 13 25 contract of insurance in with a nonadmitted insurer makes the 13 26 insurer liable for, and the producer shall pay, the taxes on 13 27 the premiums as if the insurer were duly authorized to 13 28 transact business in the state. A sworn report of all 13 29 business transacted by producers of this state in with 13 30 nonadmitted insurers shall be made to the commissioner of 13 31 insurance on or before March 1 of each year for the preceding 13 32 calendar year, on the form required by the commissioner of 13 33 insurance. The report shall be accompanied by a remittance to 13 34 cover the taxes on the premiums. A producer who makes the 13 35 files the surplus lines certification report under oath, pays 14 1 the taxes on the premiums, and files the transaction report 14 2 has not written such contracts of insurance unlawfully, and is 14 3 not personally liable for the contracts. 14 4 Sec. 28. Section 515B.1, subsection 9, Code 2009, is 14 5 amended to read as follows: 14 6 9. Insurance provided by or, guaranteed by, or reinsured 14 7 by government. 14 8 Sec. 29. Section 515B.2, subsection 4, paragraph b, 14 9 subparagraphs (4) and (7), Code 2009, are amended to read as 14 10 follows: 14 11 (4) That is due an attorney, adjuster, or witness as fees 14 12 for services rendered to the insolvent insurer or its insured. 14 13 (7) That would otherwise be a covered claim, but is an 14 14 obligation to or on behalf of a person who has a net worth 14 15 greater than that allowed by the guarantee fund law of the 14 16 state of residence of the claimant person, and which state has 14 17 denied coverage to that claimant person on that basis. 14 18 Sec. 30. Section 515B.5, subsection 1, paragraph a, 14 19 subparagraph (3), Code 2009, is amended to read as follows: 14 20 (3) An amount not exceeding the lesser of the policy 14 21 limits or three hundred thousand dollars per claim for all 14 22 covered claims for all damages arising out of any one or 14 23 series of accidents, occurrences, or incidents, regardless of 14 24 the number of persons making claims or the number of 14 25 applicable policies. 14 26 Sec. 31. Section 515B.5, subsection 1, paragraph b, Code 14 27 2009, is amended by striking the paragraph and inserting in 14 28 lieu thereof the following: 14 29 b. Be obligated to pay covered claims but not in excess of 14 30 the obligation under the policy of the insolvent insurer, 14 31 regardless of whether such claim is based on contract or tort. 14 32 Sec. 32. Section 515B.14, Code 2009, is amended to read as 14 33 follows: 14 34 515B.14 IMMUNITY. 14 35 There is no liability, and no cause of action of any nature 15 1 shall arise against any member insurer, the association, its 15 2 agents or employees, the board of directors, the commissioner, 15 3 or the commissioner's representatives, for any reasonable 15 4 action taken by them or failure to act in the performance of 15 5 their duties and powers under this chapter. 15 6 Sec. 33. Section 518.2, Code 2009, is amended by striking 15 7 the section and inserting in lieu thereof the following: 15 8 518.2 ARTICLES == APPROVAL == BYLAWS. 15 9 The articles of incorporation, and any subsequent 15 10 amendments, of an organization shall be filed with and 15 11 approved by the commissioner of insurance before filing with 15 12 the secretary of state. The organization shall file with the 15 13 commissioner bylaws and subsequent amendments to the bylaws 15 14 within thirty days of adoption of the bylaws or amendments. 15 15 Sec. 34. Section 518.5, Code 2009, is amended to read as 15 16 follows: 15 17 518.5 COMMENCEMENT OF BUSINESS == CONDITIONS. 15 18 No A county mutual insurance association formed on or after 15 19 July 1, 2009, shall not issue policies until applications for 15 20 insurance of not less than fifty one hundred thousand dollars, 15 21 representing at least fifty two hundred applicants, have been 15 22 received, and no application for insurance during the period 15 23 of organization shall exceed two percent of the amount 15 24 required for organization, any reinsurance taking effect 15 25 simultaneously with the policy being deducted in determining 15 26 such maximum single risk. 15 27 Sec. 35. Section 518.13, Code 2009, is amended to read as 15 28 follows: 15 29 518.13 PREMIUM CHARGES. 15 30 Any association may by action of its board of directors 15 31 establish premium charges for the purpose of payment of losses 15 32 and expenses and for the establishment or maintenance of a 15 33 reserve fund. 15 34 Any policy shall stand suspended if any default shall be 15 35 made in the payment of any premium on or before the date 16 1 specified in a written notice requiring the payment of such 16 2 premium and mailed to the insured and directed to the 16 3 insured's last known address not less than thirty days prior 16 4 to such suspension date. Such notice shall specify the amount 16 5 and due date of the premium. The association shall in no 16 6 event be liable for any loss occurring during such period of 16 7 suspension. 16 8 Sec. 36. Section 518.14, subsection 3, paragraph a, 16 9 subparagraph (2), Code 2009, is amended by striking the 16 10 subparagraph. 16 11 Sec. 37. Section 518.14, subsection 4, paragraph f, 16 12 subparagraphs (1) and (2), Code 2009, are amended to read as 16 13 follows: 16 14 (1) Stocks purchased under this lettered paragraph shall 16 15 not exceed fifty percent of surplus. 16 16 (2) With the approval of the commissioner, an association 16 17 may invest any amount in common stocks, preferred stocks, or 16 18 other securities of one or more subsidiaries provided that 16 19 after both of the following occur: 16 20 (a) After such investments the association's surplus as 16 21 regards policyholders will be reasonable in relation to the 16 22 association's outstanding liabilities and adequate to its 16 23 financial needs. 16 24 (b) The association owns one hundred percent of the stock 16 25 of the subsidiary. 16 26 (2) (3) An association shall not invest more than ten 16 27 percent of its surplus in the stocks of any one corporation. 16 28 Sec. 38. Section 518.14, subsection 4, paragraph g, Code 16 29 2009, is amended to read as follows: 16 30 g. HOME OFFICE REAL ESTATE. Funds With the prior approval 16 31 of the commissioner, funds may be invested in a home office 16 32 building real estate for the association or a subsidiary, at 16 33 the direction of the board of directors and with the prior 16 34 approval of the commissioner of insurance. An The association 16 35 or subsidiary shall obtain the approval of the commissioner 17 1 prior to the sale or disposition of home office real estate 17 2 owned by the association or subsidiary. Effective as to home 17 3 office real estate acquired on or after July 1, 2009, an 17 4 association shall not invest more than twenty=five twenty 17 5 percent of its total admitted assets in such real estate. 17 6 With the prior approval of the commissioner, an association 17 7 may exceed the real estate investment limitation to effectuate 17 8 a merger with, or the acquisition of, another association. 17 9 Sec. 39. Section 518.17, Code 2009, is amended to read as 17 10 follows: 17 11 518.17 REINSURANCE. 17 12 1. A county mutual insurance association may reinsure a 17 13 part or all of its coverages written pursuant to this chapter 17 14 with an association operating under this chapter, or with any 17 15 other association or company licensed in this state and 17 16 authorized to write the kinds of insurance enumerated in 17 17 section 518.11. 17 18 2. Reinsurance sufficient to protect the financial 17 19 stability of the state county mutual insurance association is 17 20 also required. In general, reinsurance coverage obtained by a 17 21 county mutual insurance association shall not expose the 17 22 association to losses from coverages written pursuant to this 17 23 chapter of more than fifteen percent from surplus in any 17 24 calendar year. The commissioner of insurance may require 17 25 additional reinsurance if necessary to protect the 17 26 policyholders of the association. 17 27 Sec. 40. Section 518.19, Code 2009, is amended to read as 17 28 follows: 17 29 518.19 PROOF OF LOSS == REQUIREMENT FOR REPORTING. 17 30 The insured shall give immediate written notice to the 17 31 association of any loss for which claim is made and shall then 17 32 furnish a written proof of loss to the association within 17 33 sixty days from the time the loss occurred, unless such time 17 34 is extended in writing by the association. The proof A proof 17 35 of loss shall contain such information as is required by the 18 1 policy provisions of the association, which information shall 18 2 be signed and sworn to by the insured. 18 3 Sec. 41. Section 518.22, Code 2009, is amended to read as 18 4 follows: 18 5 518.22 LIMITATION OF ACTION. 18 6 No A suit or action on a policy for the recovery of any 18 7 loss shall be begun sooner than forty days after proof of loss 18 8 has been given to the association claim shall not be 18 9 sustainable in any court of law or equity unless all 18 10 requirements of the policy have been complied with, and unless 18 11 commenced within twelve months next after the inception of the 18 12 loss. 18 13 Sec. 42. Section 518.23, subsections 1 and 4, Code 2009, 18 14 are amended to read as follows: 18 15 1. CANCELLATION BY INSURED. A policy shall be canceled at 18 16 any time at the request of the insured upon the return of the 18 17 policy to the home office of the association, and the payment 18 18 of all premium charges against such policy. 18 19 4. NOTICE. Service of notice under subsection 2 or 3 may 18 20 be delivered in person or mailed to the insured at the 18 21 insured's post office address as given in or upon the policy, 18 22 or to such other address as the insured shall have given to 18 23 the association in writing. A post office department 18 24 certificate of mailing shall be deemed proof of receipt of 18 25 such mailing. If in either case the cash payments exceed the 18 26 amount properly chargeable, the excess shall be refunded to 18 27 the insured upon the surrender of the policy to the 18 28 association at its home office. 18 29 Sec. 43. Section 518.25, Code 2009, is amended to read as 18 30 follows: 18 31 518.25 SURPLUS. 18 32 An association organized under this chapter before July 1, 18 33 2009, shall at all times maintain a surplus of not less than 18 34 fifty thousand dollars or one=tenth of one percent of the 18 35 gross risk in force, whichever is greater. An association 19 1 organized under this chapter on or after July 1, 2009, shall 19 2 at all times maintain a surplus of not less than one hundred 19 3 thousand dollars or one=tenth of one percent of the gross risk 19 4 in force, whichever is greater. 19 5 Sec. 44. NEW SECTION. 518.31 RULEMAKING. 19 6 The commissioner may adopt rules pursuant to chapter 17A as 19 7 necessary for the administration of this chapter. 19 8 Sec. 45. Section 518A.8, Code 2009, is amended by striking 19 9 the section and inserting in lieu thereof the following: 19 10 518A.8 ARTICLES == APPROVAL == BYLAWS. 19 11 The articles of incorporation, and any subsequent 19 12 amendments, to the articles of an organization shall be filed 19 13 with and approved by the commissioner of insurance before 19 14 filing with the secretary of state. The organization shall 19 15 file with the commissioner bylaws and subsequent amendments to 19 16 the bylaws within thirty days of adoption of the bylaws or 19 17 amendments. 19 18 Sec. 46. Section 518A.9, Code 2009, is amended to read as 19 19 follows: 19 20 518A.9 PREMIUM CHARGES. 19 21 An association, by action of its board of directors, may 19 22 establish premium charges for the purpose of payment of losses 19 23 and expenses and for the establishment or maintenance of a 19 24 reserve fund. 19 25 A policy shall stand suspended if any default is made in 19 26 the payment of any premium on or before the date specified in 19 27 a written notice requiring the payment of such premium and 19 28 mailed to the insured and directed to the insured's last known 19 29 address not less than thirty days prior to such suspension 19 30 date. The notice shall specify the amount and due date of the 19 31 premium. The association is not liable for any loss occurring 19 32 during such period of suspension. 19 33 Sec. 47. Section 518A.12, subsection 3, paragraph a, 19 34 subparagraph (2), Code 2009, is amended by striking the 19 35 subparagraph. 20 1 Sec. 48. Section 518A.12, subsection 4, paragraph f, 20 2 subparagraphs (1) and (2), Code 2009, are amended to read as 20 3 follows: 20 4 (1) Stocks purchased under this lettered paragraph shall 20 5 not exceed fifty percent of surplus. 20 6 (2) With the approval of the commissioner, an association 20 7 may invest any amount in common stocks, preferred stocks, or 20 8 other securities of one or more subsidiaries provided that 20 9 after both of the following occur: 20 10 (a) After such investments the association's surplus as 20 11 regards policyholders will be reasonable in relation to the 20 12 association's outstanding liabilities and adequate to its 20 13 financial needs. 20 14 (b) The association owns one hundred percent of the stock 20 15 of the subsidiary. 20 16 (2) (3) An association shall not invest more than ten 20 17 percent of its surplus in the stocks of any one corporation. 20 18 Sec. 49. Section 518A.12, subsection 4, paragraph g, Code 20 19 2009, is amended to read as follows: 20 20 g. HOME OFFICE REAL ESTATE. Funds With the prior approval 20 21 of the commissioner, funds may be invested in a home office 20 22 building real estate for the association or a subsidiary, at 20 23 the direction of the board of directors and with the prior 20 24 approval of the commissioner of insurance. An The association 20 25 or subsidiary shall obtain the approval of the commissioner 20 26 prior to the sale or disposition of home office real estate 20 27 owned by the association or subsidiary. Effective as to home 20 28 office real estate acquired on or after July 1, 2009, an 20 29 association shall not invest more than twenty=five twenty 20 30 percent of its total admitted assets in such real estate. 20 31 With the prior approval of the commissioner, an association 20 32 may exceed the real estate investment limitation to effectuate 20 33 a merger with, or the acquisition of, another association. 20 34 Sec. 50. Section 518A.19, Code 2009, is amended by 20 35 striking the section and inserting in lieu thereof the 21 1 following: 21 2 518A.19 PROOF OF LOSS. 21 3 A proof of loss shall contain such information as is 21 4 required by the policy provisions of the association, which 21 5 information shall be signed and sworn to by the insured. 21 6 Sec. 51. Section 518A.22, Code 2009, is amended to read as 21 7 follows: 21 8 518A.22 LIMITATION OF ACTION. 21 9 No A suit or action on any loss a policy for the recovery 21 10 of any claim shall not be begun until the date when such loss 21 11 becomes due in accordance with the articles of incorporation 21 12 or bylaws of such association and in no event sooner than 21 13 forty days after such proof has been given to the association 21 14 and no action can be started after one year from the date such 21 15 cause of action accrues sustainable in any court of law or 21 16 equity unless all requirements of the policy have been 21 17 complied with, and unless commenced with twelve months next 21 18 after the inception of the loss. 21 19 Sec. 52. Section 518A.29, subsections 1 and 4, Code 2009, 21 20 are amended to read as follows: 21 21 1. CANCELLATION BY INSURED. A policy shall be canceled at 21 22 any time at the request of the insured upon the return of the 21 23 policy to the home office of the association and the payment 21 24 of all premium charges against such policy. 21 25 4. NOTICE. Service of notice under subsection 2 or 3 may 21 26 be delivered in person or mailed to the insured at the 21 27 insured's post office address as given in or upon the policy, 21 28 or to such other address as the insured shall have given to 21 29 the association in writing. A post office department 21 30 certificate of mailing shall be deemed proof of receipt of 21 31 such mailing. If in either case the cash payments exceed the 21 32 amount properly chargeable, the excess shall be refunded upon 21 33 the surrender of the policy to the association at its home 21 34 office to the insured. 21 35 Sec. 53. Section 518A.37, Code 2009, is amended to read as 22 1 follows: 22 2 518A.37 SURPLUS. 22 3 An association organized under this chapter before July 1, 22 4 2009, shall at all times maintain a surplus of not less than 22 5 one hundred thousand dollars, or one=tenth of one percent of 22 6 the gross risk in force, whichever is greater. An association 22 7 organized under this chapter on or after July 1, 2009, shall 22 8 at all times maintain a surplus of not less than two hundred 22 9 thousand dollars or one=tenth of one percent of the gross risk 22 10 in force, whichever is greater. 22 11 Sec. 54. Section 518A.40, subsection 1, Code 2009, is 22 12 amended to read as follows: 22 13 1. Such associations shall pay the same fees for annual 22 14 reports and annual certificates of authority as are required 22 15 to be paid by domestic companies organized and doing business 22 16 under chapter 515, which certificates shall expire May June 1 22 17 of the year following the date of issue. 22 18 Sec. 55. NEW SECTION. 518A.56 RULEMAKING AUTHORITY. 22 19 The commissioner may adopt rules, pursuant to chapter 17A, 22 20 as necessary for the administration of this chapter. 22 21 Sec. 56. NEW SECTION. 518A.57 POWERS OF MEMBERS. 22 22 Members of the association shall have the power to make or 22 23 amend articles of incorporation at any membership meeting, 22 24 provided that notice of such proposed addition or amendment 22 25 has been mailed to each member of the association at least ten 22 26 days in advance of the meeting in which such proposed action 22 27 is to be considered, and provided that no such addition or 22 28 amendment shall become effective until approved by the 22 29 commissioner of insurance and recorded in the office of the 22 30 secretary of state. 22 31 Sec. 57. Section 519.3, Code 2009, is amended by striking 22 32 the section and inserting in lieu thereof the following: 22 33 519.3 ARTICLES == APPROVAL == BYLAWS. 22 34 The articles of incorporation, and any subsequent 22 35 amendments, of such mutual insurance corporation shall be 23 1 filed with and approved by the commissioner of insurance 23 2 before being filed with the secretary of state. A mutual 23 3 insurance corporation shall file with the commissioner bylaws 23 4 and subsequent amendments to the bylaws within thirty days of 23 5 adoption of the bylaws or amendments. 23 6 Sec. 58. Section 521.2, subsection 1, Code 2009, is 23 7 amended to read as follows: 23 8 1. One or more domestic mutual insurance companies 23 9 organized under chapter 491 may merge or consolidate with a 23 10 domestic or foreign mutual insurance company as provided in 23 11 this chapter. Sections 491.101 491.102 through 491.105 shall 23 12 not be applicable to a merger or consolidation of a domestic 23 13 mutual insurance company pursuant to this chapter. 23 14 Sec. 59. Section 521A.14, subsection 3, Code 2009, is 23 15 amended to read as follows: 23 16 3. A mutual insurance holding company resulting from the 23 17 reorganization of a domestic mutual insurance company 23 18 organized under chapter 491 shall be incorporated pursuant to 23 19 chapter 491. This requirement shall supersede any conflicting 23 20 provisions of section 491.1. The articles of incorporation 23 21 and any amendments to such articles of the mutual insurance 23 22 holding company shall be subject to approval of the 23 23 commissioner and the attorney general in the same manner as 23 24 those of an insurance company. 23 25 Sec. 60. Section 523A.202, subsection 1, Code 2009, is 23 26 amended to read as follows: 23 27 1. All funds held in trust pursuant to section 523A.201 23 28 shall be deposited in a financial institution within fifteen 23 29 days after the close of the month a seller receives following 23 30 receipt of the funds. The financial institution shall hold 23 31 the funds for the designated beneficiary until released. 23 32 Sec. 61. Sections 518A.4, 518A.7, and 518A.23, Code 2009, 23 33 are repealed. 23 34 Sec. 62. IMMEDIATE EFFECTIVE DATE AND RETROACTIVE 23 35 APPLICABILITY. The section of this Act amending Code section 24 1 514G.102, being deemed of immediate importance, takes effect 24 2 upon enactment, and is retroactively applicable to January 1, 24 3 2009, and applicable on and after that date. 24 4 EXPLANATION 24 5 This bill amends various provisions under the purview of 24 6 the insurance division of the department of commerce. 24 7 PUBLIC EMPLOYMENT RELATIONS (COLLECTIVE BARGAINING). Code 24 8 section 20.4 is amended to exempt full=time persons employed 24 9 by the insurance division of the department of commerce who 24 10 examine or analyze the accounts and affairs of persons subject 24 11 to the supervision and regulation of the commissioner of 24 12 insurance pursuant to Code chapter 507, from the provisions of 24 13 Code chapter 20 relating to public employee collective 24 14 bargaining. 24 15 UNIFORM SECURITIES ACT. Code section 502.409 is amended to 24 16 expand the types of disciplinary tools available to an 24 17 administrator upon withdrawal of a registrant under the Act to 24 18 include not only an action to revoke or suspend a license but 24 19 also other enumerated actions. 24 20 Code section 502.410 is amended to increase the fee for 24 21 license registration or renewal of investment adviser 24 22 representatives from $30 to $40. 24 23 INSURANCE DIVISION. Code section 505.8 is amended to 24 24 provide that the commissioner of insurance shall accept 24 25 inquiries and complaints from the public and may respond, 24 26 examine, or investigate such inquiries and complaints 24 27 including conducting administrative hearings, in addition to 24 28 overseeing the consumer advocate bureau, which may also 24 29 receive and investigate consumer inquiries and complaints. 24 30 The consumer advocate is the chief of the consumer advocate 24 31 bureau. The consumer advocate bureau is given expanded 24 32 responsibility for ensuring fair treatment of consumers in the 24 33 marketplace and by persons under the jurisdiction of the 24 34 commissioner or the securities and regulated industries bureau 24 35 of the insurance division. For the purposes of investigations 25 1 conducted by the commissioner or by the consumer advocate, the 25 2 confidentiality provisions of the Code section are applicable. 25 3 Code section 505.15 is amended to allow the commissioner, 25 4 at the request of the consumer advocate, to retain various 25 5 professionals and specialists to assist the consumer advocate 25 6 bureau in carrying out its duties in regard to rate filing 25 7 reviews. 25 8 EXAMINATION OF INSURANCE COMPANIES. Code section 507.4 is 25 9 amended to require that pay plans be established which are 25 10 substantially equivalent to those paid to bank examiners, for 25 11 employees who examine or analyze the accounts and affairs of 25 12 persons subject to the supervision and regulation of the 25 13 commissioner. 25 14 FILING OF ARTICLES OF INCORPORATION == BYLAWS. Code 25 15 sections 508.2, 512A.10(1), 514B.3A, 515.2, 518.2, 518A.8, 25 16 519.3, and 521A.14(3), are amended to provide that articles of 25 17 incorporation and their amendments, that are required to be 25 18 filed with the commissioner of insurance, of certain life 25 19 insurance companies, benevolent associations, health 25 20 maintenance organizations, insurance other than life 25 21 companies, county mutual insurance associations, state mutual 25 22 insurance associations, professional liability insurance 25 23 companies, and insurance holding company systems are no longer 25 24 also required to be filed with the attorney general. Bylaws 25 25 or subsequent amendments to bylaws are required to be filed 25 26 with the commissioner within 30 days of adoption. 25 27 VIATICAL SETTLEMENT CONTRACTS. Code section 25 28 508E.3(1)(b)(1) and (2) are amended to provide that a licensed 25 29 life insurance producer meets the requirements for licensure 25 30 as a viatical settlement broker only if the person was 25 31 licensed as a life insurance producer for at least one year 25 32 immediately prior to operating as a viatical settlement broker 25 33 and the licensed life insurance producer provides proof of 25 34 coverage by an errors and omissions policy of not less than 25 35 $100,000 per occurrence and not less than $100,000 total 26 1 annual aggregate for all claims during the policy period. 26 2 Code section 508E.3(3) and (9) are amended to change the 26 3 term of licensure for a viatical settlement provider or broker 26 4 from one to three years and to require a viatical settlement 26 5 broker to complete 20 credits of training related to viatical 26 6 settlements and viatical settlement transactions every three 26 7 years. 26 8 LIFE INSURANCE COMPANIES AND ASSOCIATIONS. Code section 26 9 511.8(18) is amended to provide that insurance companies may 26 10 invest in additional percentages of common stocks or shares of 26 11 stock in a direct or indirect subsidiary company domiciled in 26 12 the United States upon application to the commissioner of 26 13 insurance. 26 14 LONG=TERM CARE INSURANCE. Code section 514G.102 is amended 26 15 to provide that the requirements of Code chapter 514G related 26 16 to independent review of benefit trigger determinations apply 26 17 to all claims made on or after January 1, 2009. This 26 18 provision is effective upon enactment and is retroactively 26 19 applicable to January 1, 2009, and applicable on and after 26 20 that date. 26 21 Code section 514G.104 is amended to allow group long=term 26 22 care insurance issued in another state to be offered in Iowa 26 23 upon certain findings by the commissioner of insurance. This 26 24 amendment makes the provision consistent with the national 26 25 association of insurance commissioners' model Act. 26 26 LONG=TERM CARE ASSET DISREGARD INCENTIVES. Code section 26 27 514H.1 is amended by changing the terminology of "certified 26 28 long=term care insurance policy" to "qualified long=term care 26 29 insurance policy". Code sections 249A.35, 514H.3, 514H.4, 26 30 514H.5, 514H.7, and 514H.8 are amended to reflect this change. 26 31 Code section 514H.1 is also amended to include new definitions 26 32 for the federal "Deficit Reduction Act of 2005" and "qualified 26 33 state long=term care insurance partnership". 26 34 Code section 514H.2(2) is amended to require the department 26 35 of human services to take necessary actions, including filing 27 1 an appropriate medical assistance state plan amendment to the 27 2 state Medicaid plan to take full advantage of the benefits and 27 3 features of the federal Deficit Reduction Act of 2005. 27 4 Code section 514H.4 is amended to require an insurer who 27 5 issues qualified long=term care insurance policies in Iowa to 27 6 conform with policy guidelines expressed in the federal 27 7 Deficit Reduction Act of 2005. 27 8 Code section 514H.5, concerning the asset disregard 27 9 adjustment, is amended by deleting previously specified 27 10 eligibility criteria. The Code section is also amended to 27 11 remove a requirement that the commissioner of insurance issue 27 12 an annual bulletin about qualifying amounts for the Iowa 27 13 long=term care asset disregard incentive program. 27 14 Code section 514H.9 is amended to remove requirements that 27 15 the commissioner of insurance consult with the insurance 27 16 industry before adopting rules concerning long=term care 27 17 insurance and that such rulemaking power be construed 27 18 narrowly. 27 19 INSURANCE OTHER THAN LIFE. Code section 515.101 is amended 27 20 to provide that an application, policy, or contract of 27 21 insurance may stipulate that fraud, concealment, or 27 22 misrepresentation of an insured may make such application, 27 23 policy, or contract void before a loss occurs. 27 24 Code section 515.120 is amended to allow a resident or 27 25 nonresident insurance producer, qualified to write excess and 27 26 surplus lines insurance, to procure insurance from certain 27 27 nonadmitted insurers including individual disability 27 28 insurance, upon filing a surplus lines certification report 27 29 with the commissioner of insurance stating the producer has 27 30 not been able to place the insurance with an admitted insurer. 27 31 INSURANCE GUARANTY ASSOCIATION. Code section 515B.1 is 27 32 amended to make Code chapter 515B applicable to insurance 27 33 reinsured by government. 27 34 Code section 515B.2 is amended to provide that a "covered 27 35 claim" does not include payments on behalf of the insured of 28 1 an insolvent insurer for attorney, adjuster, or witness fees. 28 2 The Code section is also amended to specify that a "covered 28 3 claim" does not include obligations to a nonresident person 28 4 who has a net worth greater than that allowed by the person's 28 5 state guarantee fund law and who has been denied that state's 28 6 coverage. 28 7 Code section 515B.5(1)(a) is amended to require the 28 8 guaranty association to pay amounts not exceeding the lesser 28 9 of the policy limits or $300,000 for all covered claims rather 28 10 than per claim, arising out of any one or series of accidents, 28 11 occurrences, or incidents. 28 12 Code section 515B.5(1)(b) is amended to limit the guaranty 28 13 association's obligation to pay covered claims either in 28 14 contract or tort to an amount not in excess of the obligation 28 15 under the policy of the insolvent insurer. 28 16 Code section 515B.14 is amended to provide there is no 28 17 liability or cause of action against a member association, the 28 18 guaranty association or its board, or the commissioner of 28 19 insurance for failure to act in the performance of their 28 20 duties. The change is consistent with the national 28 21 association of insurance commissioners' and national 28 22 conference of insurance legislatures' model Acts. 28 23 COUNTY MUTUAL INSURANCE ASSOCIATIONS. Code section 518.5 28 24 is amended to increase from $50,000 to $100,000 the amount of 28 25 insurance and from 50 to 200 applicants from which a county 28 26 mutual insurance association formed on or after July 1, 2009, 28 27 must receive applications, before issuing policies. 28 28 Code section 518.13 is amended to delete a requirement that 28 29 a county mutual insurance association suspend a policy of an 28 30 insured if there is a premium default. 28 31 Code section 518.14(3)(a)(2), which allows a county mutual 28 32 insurance association to loan stocks or obligations held by it 28 33 to a registered broker=dealer or to a member bank, is 28 34 stricken. 28 35 Code section 518.14(4)(f)(1) and (2) are amended to provide 29 1 that a county mutual insurance association may invest in 29 2 common stocks, preferred stocks, or other securities of a 29 3 subsidiary if such investments are reasonable as to the 29 4 association's surplus, liabilities, and needs, and the 29 5 association owns 100 percent of the subsidiary's stock. 29 6 Code section 518.14(4)(g) is amended to provide that an 29 7 association must receive prior approval of the commissioner of 29 8 insurance before investing funds in a home office real estate 29 9 for a subsidiary. As to all home office real estate acquired 29 10 on or after July 1, 2009, an association is prohibited from 29 11 investing more than 20 percent instead of 25 percent of its 29 12 total admitted assets in such real estate. The amendment also 29 13 requires an association or subsidiary to obtain prior approval 29 14 of the commissioner before selling or disposing of home office 29 15 real estate. 29 16 Code section 518.17 is amended to correct an error in 29 17 terminology and to number the unnumbered paragraphs. 29 18 Code section 518.19 is amended to delete a requirement that 29 19 an insured give notice of proof of loss within a statutorily 29 20 specified time and to allow the requirements of the policy to 29 21 control. 29 22 Code section 518.22 is amended to eliminate a requirement 29 23 that a suit or action on a policy for recovery of a claim 29 24 cannot be brought until 40 days after proof of loss has been 29 25 given to the association and to instead allow the requirements 29 26 of the policy to control. 29 27 Code section 518.23(1) is amended to require an association 29 28 to cancel a policy at any time at the request of the insured 29 29 without first requiring that the policy be returned to the 29 30 home office of the association and all premium charges be 29 31 paid. 29 32 Code section 518.23(4) is amended to delete the requirement 29 33 that a policy must be surrendered by the insured to the home 29 34 office of the association before the insured can receive a 29 35 refund of excess payments. 30 1 Code section 518.25 is amended to provide that an 30 2 association organized before July 1, 2009, must maintain a 30 3 surplus of not less than $50,000 or one=tenth of 1 percent of 30 4 the gross risk in force, whichever is greater, while an 30 5 association organized on or after July 1, 2009, must maintain 30 6 a surplus of not less than $100,000 or one=tenth of 1 percent 30 7 of the gross risk in force, whichever is greater. 30 8 New Code section 518.31 provides that the commissioner of 30 9 insurance may adopt administrative rules as necessary for the 30 10 administration of the Code chapter. 30 11 STATE MUTUAL INSURANCE ASSOCIATIONS. Code section 518A.4, 30 12 pertaining to the power of the association to make or amend 30 13 articles of incorporation at an annual meeting, is repealed. 30 14 Code section 518A.7, pertaining to requirements for a state 30 15 mutual insurance association to issue policies based on 30 16 specified numbers of applications and dollar amounts of 30 17 insurance coverage, is repealed. 30 18 Code section 518A.9 is amended by deleting a requirement 30 19 that a state mutual insurance association suspend a policy if 30 20 there is a premium default. 30 21 Code section 518A.12(2), which allows a state mutual 30 22 insurance association to loan stocks or obligations held by it 30 23 to a registered broker=dealer or to a member bank, is 30 24 stricken. 30 25 Code section 518A.12(4)(f)(1) and (2) are amended to 30 26 provide that a state mutual insurance association may invest 30 27 in common stocks, preferred stocks, or other securities of a 30 28 subsidiary if such investments are reasonable as to the 30 29 association's surplus, liabilities, and needs, and the 30 30 association owns 100 percent of the subsidiary's stock. 30 31 Code section 518A.12(4)(g) is amended to provide that an 30 32 association must receive prior approval of the commissioner of 30 33 insurance before investing funds in a home office real estate 30 34 for a subsidiary. As to all home office real estate acquired 30 35 on or after July 1, 2009, an association is prohibited from 31 1 investing more than 20 percent instead of 25 percent of its 31 2 total admitted assets in such real estate. The amendment also 31 3 requires an association or subsidiary to obtain prior approval 31 4 of the commissioner before selling or disposing of home office 31 5 real estate. 31 6 Code section 518A.19 is amended to delete a requirement 31 7 that an insured give notice of proof of loss within a 31 8 statutorily specified time and allow proof of loss to contain 31 9 such information as is required by the provisions of the 31 10 policy. 31 11 Code section 518A.22 is amended to eliminate a requirement 31 12 that a suit or action on a policy for recovery of a loss 31 13 cannot be brought until 40 days after proof of loss has been 31 14 given to the association and instead to allow the requirements 31 15 of the policy to control so long as the suit or action is 31 16 commenced within 12 months after the inception of the loss. 31 17 Code section 518A.23, pertaining to a presumption that the 31 18 amount stated in the policy is prima facie evidence of the 31 19 insurable value of a building lost, is repealed. 31 20 Code section 518A.29(1) is amended to require an 31 21 association to cancel a policy at any time at the request of 31 22 the insured without first requiring that the policy be 31 23 returned to the home office of the association and all premium 31 24 charges be paid. 31 25 Code section 518A.29(4) is amended to delete the 31 26 requirement that a policy must be surrendered by the insured 31 27 to the home office of the association before the insured can 31 28 receive a refund of excess payments. 31 29 Code section 518A.37 is amended to provide that an 31 30 association organized before July 1, 2009, must maintain a 31 31 surplus of not less than $100,000 or one=tenth of 1 percent of 31 32 the gross risk in force, whichever is greater, while an 31 33 association organized on or after July 1, 2009, must maintain 31 34 a surplus of not less than $200,000 or one=tenth of 1 percent 31 35 of the gross risk in force, whichever is greater. 32 1 Code section 518A.40(1) is amended to provide that 32 2 certificates of authority expire on June 1 instead of May 1 32 3 following the year of issue. 32 4 New Code section 518A.56 provides that the commissioner of 32 5 insurance may adopt administrative rules as necessary for the 32 6 administration of the Code chapter. 32 7 New Code section 518A.57 provides that members of a state 32 8 mutual insurance association have the power to make or amend 32 9 articles of incorporation at any membership meeting upon 32 10 proper notice, with such changes becoming effective only after 32 11 approval by the commissioner of insurance and recording in the 32 12 office of the secretary of state. 32 13 CONSOLIDATION, MERGER, AND REINSURANCE. Code section 32 14 521.2(1) is amended to provide that Code sections 491.101, 32 15 491.101A, and 491.101B, which provide definitions, authorize a 32 16 poison pill defense, and allow consideration of community 32 17 interests in consideration of acquisition proposals, are 32 18 applicable to mergers or consolidations of domestic and 32 19 foreign mutual insurance companies. 32 20 CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES. 32 21 Code section 523A.202(1) is amended to provide that funds 32 22 required to be held in trust by a seller of cemetery and 32 23 funeral merchandise, and funeral services, must be deposited 32 24 in a financial institution within 15 days following receipt of 32 25 the funds instead of within 15 days after the close of the 32 26 month in which the seller receives the funds. 32 27 LSB 1321XD 83 32 28 av/rj/14.2
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