HF 2345 (LSB 5358HV (1) 88)

HOUSE FILE 2345

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 574)

A BILL FOR

An Act relating to the financial exploitation of designated eligible adults, and making an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  502.801  Definitions.
   For purposes of this article, unless the context otherwise requires:
   1.  “Eligible adult” means any of the following:
   a.  A person sixty-five years of age or older.
   b.  A dependent adult as defined in section 235B.2.
   2.  “Financial exploitation” means any act or omission taken by a person to wrongfully and knowingly deprive an eligible adult of money, assets, or property, or to obtain control over or otherwise use, convert, or divert the benefits, property, resources, or assets of the eligible adult by intimidation, deception, coercion, fraud, extortion, or undue influence.
   3.  “Permissible third party” means any of the following:
   a.  A person the eligible adult previously designated to receive the notification described in section 502.804.
   b.  A person otherwise permitted to receive the notification described in section 502.804 by any state or federal law or any rule issued by the financial industry regulatory authority.
   4.  “Qualified individual” means any of the following:
   a.  An agent who has received training pursuant to section 502.808.
   b.  An investment adviser representative who has received training pursuant to section 502.808.
   c.  A person who has received training pursuant to section 502.808 and who serves in a supervisory, compliance, senior investor protection, or legal capacity for any of the following:
   (1)  A broker-dealer.
   (2)  An investment adviser.
    Sec. 2.  NEW SECTION.  502.802  Notification to administrator.
   If a broker-dealer, investment adviser, or qualified individual reasonably believes financial exploitation of an eligible adult has occurred, has been attempted, or is being attempted, the broker-dealer, investment adviser, or qualified individual may promptly notify the administrator. The administrator may adopt rules regarding the form and manner of the notification under this section.
    Sec. 3.  NEW SECTION.  502.803  Notification to administrator —— immunity.
   A broker-dealer, investment adviser, or qualified individual who, acting reasonably and in good faith, makes a disclosure of information to the administrator pursuant to this article shall be immune from administrative or civil liability that might otherwise arise from such disclosure or for any failure to notify the eligible adult of the disclosure. This section shall not abrogate or modify any existing statutory or common law privileges or immunities.
    Sec. 4.  NEW SECTION.  502.804  Notification to permissible third party.
   1.  If a broker-dealer, investment adviser, or qualified individual reasonably believes financial exploitation of an eligible adult has occurred, has been attempted, or is being attempted, the broker-dealer, investment adviser, or qualified individual may notify a permissible third party. The administrator may adopt rules regarding the form and manner of the notification under this section.
   2.  Broker-dealers, investment advisers, and qualified individuals shall not notify a permissible third party the broker-dealer, investment adviser, or qualified individual reasonably suspects of financial exploitation or other abuse of the eligible adult.
    Sec. 5.  NEW SECTION.  502.805  Notification to permissible third party —— immunity.
   A broker-dealer, investment adviser, or qualified individual who, acting reasonably and in good faith, complies with section 502.804 shall be immune from any administrative or civil liability that might otherwise arise from such disclosure.
    Sec. 6.  NEW SECTION.  502.806  Disbursements or transactions —— delay.
   1.  If a broker-dealer, investment adviser, or qualified individual reasonably believes a disbursement or transaction will likely result in or contribute to the financial exploitation of an eligible adult, the broker-dealer, investment adviser, or qualified individual shall initiate an internal review of the requested disbursement or transaction.
   2.  A broker-dealer or investment adviser may delay a disbursement or transaction from an eligible adult’s account or an account on which an eligible adult is a beneficiary if all of the following apply: 
   a.  The broker-dealer, investment adviser, or qualified individual reasonably believes, after initiating the internal review referenced in subsection 1, that the requested disbursement or transaction will likely result in or contribute to the financial exploitation of an eligible adult. 
   b.  Immediately, but in no event more than two business days after the disbursement or transaction is delayed, the broker-dealer or investment adviser provides written notification of the delay and the reason for the delay to all persons authorized to transact business on the account. Broker-dealers, investment advisers, and qualified individuals shall not notify a person authorized to transact business on the account if the broker-dealer, investment adviser, or qualified individual reasonably believes the person has committed financial exploitation, attempted financial exploitation, or other abuse of the eligible adult.
   c.  Immediately, but in no event more than two business days after the disbursement or transaction is delayed, the broker-dealer or investment adviser notifies the administrator of the delay and provides to the administrator the reason for the delay, including the results of the internal review referenced in subsection 1.
   d.  The broker-dealer continues the internal review of the suspected or attempted financial exploitation of the eligible adult, as necessary, and provides the administrator with updates upon request.
   3.  Any delay of a disbursement or transaction authorized by this section will expire upon the first to occur of any of the following: 
   a.  A determination by the broker-dealer or investment adviser that the disbursement or transaction will not result in or contribute to financial exploitation of the eligible adult. 
   b.  Fifteen business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds or transaction, unless the administrator requests the broker-dealer or investment adviser to extend the delay, in which case the delay shall expire no more than twenty-five business days after the date on which the broker-dealer or investment adviser first delayed the disbursement of the funds or the transaction. 
   4.  Notwithstanding subsection 3, upon the petition of the administrator, the broker-dealer or investment adviser who initiated the delay pursuant to this section, or another interested party, a court of competent jurisdiction may enter an order terminating, extending, or modifying the delay of the disbursement or transaction and may order other protective relief.
   5.  The administrator may adopt rules regarding the form and manner of the notifications under this section.
    Sec. 7.  NEW SECTION.  502.807  Disbursements of transactions —— delay —— immunity.
   A broker-dealer or investment adviser who, acting reasonably and in good faith, complies with section 502.806 shall be immune from any administrative or civil liability that might otherwise arise from such delay in a disbursement or transaction.
    Sec. 8.  NEW SECTION.  502.808  Training requirements.
   1.  A broker-dealer or investment adviser shall provide to its qualified individuals training appropriate to the job responsibilities of a qualified individual. The training shall include all of the following:
   a.  Instruction on how to identify the suspected or attempted exploitation of an eligible adult, including common signs indicating the financial exploitation of an eligible adult, and how to provide notification regarding the suspected or attempted exploitation of an eligible adult.
   b.  Instruction regarding privacy and confidentiality requirements.
   2.  A broker-dealer or investment adviser shall provide the training required by this section as soon as reasonably practicable, but at least within one year after the date the qualified individual begins employment with or becomes affiliated or associated with a broker-dealer or investment adviser.
   3.  The administrator may adopt rules specifying the content and method of the training required by this section.
    Sec. 9.  NEW SECTION.  502.809  Records.
   1.  A broker-dealer or investment adviser shall provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of an eligible adult to the administrator and to law enforcement, either as part of a referral to the administrator or law enforcement, or upon the request of the administrator or law enforcement pursuant to an investigation. The records may include historical records as well as records relating to the most recent transactions that may comprise financial exploitation of an eligible adult.
   2.  All records made available to the administrator, the department of human services, or law enforcement pursuant to this section shall be considered confidential public records under chapter 22 and shall not be available for examination by the public pursuant to section 22.2.
   3.  Nothing in this section shall limit or otherwise impede the authority of the administrator to access or examine the books and records of broker-dealers or investment advisers as otherwise provided by law.
    Sec. 10.  NEW SECTION.  502.810  Financial exploitation —— appropriation.
   1.  For the fiscal year beginning July 1, 2020, and each fiscal year thereafter, there is appropriated from the department of commerce revolving fund created in section 546.12 to the insurance division seventy-five thousand dollars for the sole and exclusive purpose of investigating complaints and notifications related to financial exploitation of eligible adults. The insurance division shall use the funds appropriated under this subsection for one full-time equivalent position. 
   2.  Notwithstanding section 8.33, moneys appropriated in this section that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the financial exploitation of persons designated as eligible adults. The bill defines an eligible adult as persons 65 years of age or older and certain dependent adults as defined in Code section 252B.2.
   The bill permits broker-dealers, investment advisers, and qualified individuals to notify the commissioner of insurance if they reasonably believe financial exploitation of an eligible adult has occurred, has been attempted, or is being attempted. The bill provides immunity for broker-dealers, investment advisers, and qualified individuals from administrative or civil liability incurred or imposed as a result of this notification or as a result of any failure to alert the eligible adult of the notification.
   The bill allows broker-dealers, investment advisers, and qualified individuals to notify permissible third parties if they reasonably believe financial exploitation of an eligible adult has occurred, has been attempted, or is being attempted. The bill similarly provides immunity for broker-dealers, investment advisers, and qualified individuals from administrative or civil liability incurred or imposed as a result of this notification. 
   The bill prohibits broker-dealers, investment advisers, and qualified individuals from notifying a permissible third party if the broker-dealer, investment adviser, or qualified individual reasonably suspects the permissible third party of financial exploitation or other abuse of the eligible adult.
   The bill requires a broker-dealer, investment adviser, or qualified individual to initiate an internal review of a requested disbursement or transaction if the broker-dealer, investment adviser, or qualified individual reasonably believes the disbursement or transaction will likely result in or contribute to the financial exploitation of an eligible adult.
   The bill allows a broker-dealer or investment adviser to delay a disbursement or transaction from an eligible adult’s account or an account on which an eligible adult is a beneficiary if certain enumerated steps are followed. The bill also prohibits broker-dealers, investment advisers, and qualified individuals from notifying a person authorized to transact business on the eligible adult’s account or an account on which an eligible adult is a beneficiary if the broker-dealer, investment adviser, or qualified individual reasonably believes the person has committed financial exploitation or other abuse of the eligible adult.
   The bill establishes when and under what conditions the delay of the disbursement or transaction is to end. The bill provides immunity for broker-dealers and investment advisers from administrative or civil liability incurred or imposed as a result of the delay.
   The bill requires broker-dealers or investment advisers to provide to qualified individuals training related to identifying financial exploitation of eligible adults and privacy and confidentiality requirements. 
   The bill also requires broker-dealers and investment advisers to provide the commissioner of insurance and law enforcement officers access to and copies of records relevant to investigations of financial exploitation of eligible adults in certain enumerated circumstances. The bill provides these records are considered confidential records for purposes of Code chapter 22, and are not available for examination under Code section 22.2. 
   The bill makes an appropriation from the commerce revolving fund created in Code section 546.12 to the insurance division of the department of commerce for the fiscal year beginning July 1, 2020, and each year thereafter, for purposes of investigating complaints and notifications related to financial exploitation of eligible adults.