SSB 3093 (LSB 5362XD (9) 88)

SENATE/HOUSE FILE _____

BY  (PROPOSED DEPARTMENT OF COMMERCE/INSURANCE DIVISION BILL)

A BILL FOR

An Act relating to matters involving insurance and the insurance division of the department of commerce, providing fees, and resolving inconsistencies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
INSURANCE

    Section 1.  Section 507B.7, Code 2020, is amended to read as follows:
   507B.7  Cease and desist orders Orders and penalties.
   1.  If, after hearing, the commissioner determines that a person has engaged in an unfair method of competition or an unfair or deceptive act or practice, the commissioner shall reduce the findings to writing and shall issue and cause to be served upon the person charged with the violation a copy of such findings, an order requiring such person to cease and desist from engaging in such method of competition, act, or practice, and the commissioner may at the commissioner’s discretion order any one or more of the following:
   a.  Payment of a civil penalty of not more than one thousand dollars for each act or violation of this subtitle, but not to exceed an aggregate of ten thousand dollars, unless the person knew or reasonably should have known the person was in violation of this subtitle, in which case the penalty shall be not more than five thousand dollars for each act or violation, but not to exceed an aggregate penalty of fifty thousand dollars in any one six-month period. If the commissioner finds that a violation of this subtitle was directed, encouraged, condoned, ignored, or ratified by the employer of the person or by an insurer, the commissioner shall also assess a penalty to the employer or insurer.
   b.  Suspension or revocation of the license of a person as defined in section 507B.2, subsection 1, if the person knew or reasonably should have known the person was in violation of this subtitle.
   c.  Payment of interest at the rate of ten percent per annum if the commissioner finds that the insurer failed to pay interest as required under section 507B.4, subsection 3, paragraph “p”.
   2.  Until the expiration of the time allowed under section 507B.8 for filing a petition for review if no such petition has been duly filed within such time, or, if a petition for review has been filed within such time, then until the transcript of the record in the proceeding has been filed in the district court, as hereinafter provided, the commissioner may at any time, upon such notice and in such manner as the commissioner may deem proper, modify or set aside in whole or in part any order issued by the commissioner under this section.
   3.  After the expiration of the time allowed for filing such a petition for review if no such petition has been duly filed within such time, the commissioner may at any time, after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any order issued by the commissioner under this section, whenever in the commissioner’s opinion conditions of fact or of law have so changed as to require such action, or if the public interest shall so require.
   4.  Any person who violates a cease and desist an order of the commissioner, and while such order is in effect, may, after notice and hearing and upon order of the commissioner, be subject at the discretion of the commissioner to any one or more of the following:
   a.  A monetary penalty of not more than ten thousand dollars for each and every act or violation. A penalty collected under this lettered paragraph shall be deposited as provided in section 505.7.
   b.  Suspension or revocation of such person’s license.
    Sec. 2.  Section 514G.103, subsection 10, Code 2020, is amended to read as follows:
   10.  “Independent review entity organization” means a review entity organization certified by the commissioner pursuant to section 514G.110, subsection 4.
    Sec. 3.  Section 514G.110, Code 2020, is amended to read as follows:
   514G.110  Independent review of benefit trigger determinations.
   1.  Request.  An insured may file a written request for independent review of a benefit trigger determination with the commissioner after the internal appeal process has been exhausted. The request shall be filed within sixty days after the insured receives written notice of the insurer’s internal appeal decision.
   2.  Eligibility for review.  The commissioner shall certify that the request is eligible for independent review if all of the following criteria are satisfied:
   a.  The insured was covered by a long-term care insurance policy issued by the insurer at the time the benefit trigger determination was made.
   b.  The sole reason for requesting an independent review is to review the insurer’s determination that the benefit trigger was not met.
   c.  The insured has exhausted all internal appeal procedures provided under the insured’s long-term care insurance policy.
   d.  The written request for independent review was filed by the insured within sixty days from the date of receipt of the insurer’s internal appeal decision.
   3.  Notice of eligibility.  The commissioner shall provide written notice regarding eligibility of a request for independent review to the insured and the insurer within two business days from the date of receipt of the request.
   a.  If the commissioner decides that the request is not eligible for independent review, the written notice shall indicate the reasons for that decision.
   b.  If the commissioner certifies that the request is eligible for independent review, the insurer may appeal that certification by filing a written notice of appeal with the commissioner within three business days from the date of receipt of the notice of certification. If upon further review, the commissioner upholds the certification, the commissioner shall promptly notify the insured and the insurer in writing of the reasons for that decision.
   4.  Qualifications of independent review entities organizations.  The commissioner shall maintain a list of qualified independent review entities organizations that are certified by the commissioner. Independent review entities organizations shall be recertified by the commissioner every two years in order to remain on the list. In order to be certified, an independent review entity organization shall meet all of the following criteria:
   a.  Have on staff, or contract with, a qualified, licensed health care professional in an appropriate field for determining an insured’s functional or cognitive impairment who can conduct an independent review.
   (1)  In order to be qualified, a licensed health care professional who is a physician shall hold a current certification by a recognized American medical specialty board in a specialty appropriate for determining an insured’s functional or cognitive impairment.
   (2)  In order to be qualified, a licensed health care professional who is not a physician shall hold a current certification in the specialty in which that person is licensed, by a recognized American specialty board in a specialty appropriate for determining an insured’s functional or cognitive impairment.
   b.  Ensure that any licensed health care professional who conducts an independent review has no history of disciplinary actions or sanctions, including but not limited to the loss of staff privileges or any participation restrictions taken or pending by any hospital or state or federal government regulatory agency.
   c.  Ensure that the independent review entity organization or any of its employees, agents, or licensed health care professionals utilized does not receive compensation of any type that is dependent on the outcome of a review.
   d.  Ensure that the independent review entity organization or any of its employees, agents, or licensed health care professionals utilized are not in any manner related to, employed by, or affiliated with the insured or with a person who previously provided medical care to the insured.
   e.  Ensure that an independent review entity organization or any of its employees, agents, or licensed health care professionals utilized is not a subsidiary of, or owned or controlled by, an insurer or by a trade association of insurers of which the insurer is a member.
   f.  Have a quality assurance program on file with the commissioner that ensures the timeliness and quality of reviews performed, the qualifications and independence of the licensed health care professionals who perform the reviews, and the confidentiality of the review process.
   g.  Have on staff or contract with a licensed health care practitioner, as defined in section 514G.103, subsection 3, who is qualified to certify that an individual is chronically ill for purposes of a qualified long-term care insurance contract.
   5.  Independent review process.  The independent review process shall be conducted as follows:
   a.  Within three business days of receiving a notice from the commissioner of the certification of a request for independent review or receipt of a denial of an insurer’s appeal from such a certification, the insurer shall do all of the following:
   (1)  Select an independent review entity organization from the list certified by the commissioner and notify the insured in writing of the name, address, and telephone number of the selected independent review entity selected organization. The selected independent review entity selected organization shall utilize a licensed health care professional with qualifications appropriate to the benefit trigger determination that is under review.
   (2)  Notify the independent review entity organization that it has been selected to conduct an independent review of a benefit trigger determination and provide sufficient descriptive information to enable the independent review entity organization to provide licensed health care professionals who will be qualified to conduct the review.
   (3)  Provide the commissioner with a copy of the notices sent to the insured and to the selected independent review entity selected organization.
   b.  Within three business days of receiving a notice from an insurer that it has been selected to conduct an independent review, the independent review entity organization shall do one of the following:
   (1)  Accept its selection as the independent review entity organization, designate a qualified licensed health care professional to perform the independent review, and provide notice of that designation to the insured and the insurer, including a brief description of the health care professional’s qualifications and the reasons that person is qualified to determine whether the insured’s benefit trigger has been met. A copy of this notice shall be sent to the commissioner via facsimile. The independent review entity organization is not required to disclose the name of the health care professional selected.
   (2)  Decline its selection as the independent review entity organization or, if the independent review entity organization does not have a licensed health care professional who is qualified to conduct the independent review available, request additional time from the commissioner to have a qualified licensed health care professional certified, and provide notice to the insured, the insurer, and the commissioner. The commissioner shall notify the independent review entity organization, the insured, and the insurer of how to proceed within three business days of receipt of such notice from the independent review entity organization.
   c.  An insured may object to the independent review entity organization selected by the insurer or to the licensed health care professional designated by the independent review entity organization to conduct the review by filing a notice of objection along with reasons for the objection, with the commissioner within ten days of receipt of a notice sent by the independent review entity organization pursuant to paragraph “b”. The commissioner shall consider the insured’s objection and shall notify the insured, the insurer, and the independent review entity organization of the commissioner’s decision to sustain or deny the objection within two business days of receipt of the objection.
   d.  Within five business days of receiving a notice from the independent review entity organization accepting its selection or within five business days of receiving a denial of an objection to the independent review entity organization selected, whichever is later, the insured may submit any information or documentation in support of the insured’s claim to both the independent review entity organization and the insurer.
   e.  Within fifteen days of receiving a notice from the independent review entity organization accepting its selection or within three business days of receipt of a denial of an objection to the independent review entity organization selected, whichever is later, an insurer shall do all of the following:
   (1)  Provide the independent review entity organization with any information submitted to the insurer by the insured in support of the insured’s internal appeal of the insurer’s benefit trigger determination.
   (2)  Provide the independent review entity organization with any other relevant documents used by the insurer in making its benefit trigger determination.
   (3)  Provide the insured and the commissioner with confirmation that the information required under subparagraphs (1) and (2) has been provided to the independent review entity organization, including the date the information was provided.
   f.  The independent review entity organization shall not commence its review until fifteen days after the selection of the independent review entity organization is final including the resolution of any objection made pursuant to paragraph “c”. During this time period, the insurer may consider any information provided by the insured pursuant to paragraph “d” and overturn or affirm the insurer’s benefit trigger determination based on such information. If the insurer overturns its benefit trigger determination, the independent review process shall immediately cease.
   g.  In conducting a review, the independent review entity organization shall consider only the information and documentation provided to the independent review entity organization pursuant to paragraphs “d” and “e”.
   h.  The independent review entity organization shall submit its decision as soon as possible, but not later than thirty days from the date the independent review entity organization receives the information required under paragraphs “d” and “e”, whichever is received later. The decision shall include a description of the basis for the decision and the date of the benefit trigger determination to which the decision relates. The independent review entity organization, for good cause, may request an extension of time from the commissioner to file its decision. A copy of the decision shall be mailed to the insured, the insurer, and the commissioner.
   i.  All medical records submitted for use by the independent review entity organization shall be maintained as confidential records as required by applicable state and federal laws. The commissioner shall keep all information obtained during the independent review process confidential pursuant to section 505.8, subsection 8, except that the commissioner may share some information obtained as provided under section 505.8, subsection 8, and as required by this chapter and rules adopted pursuant to this chapter.
   j.  If an insured dies before completion of the independent review, the review shall continue to completion if there is potential liability of an insurer to the estate of the insured or to a provider for rendering qualified long-term care services to the insured.
   6.  Costs.  All reasonable fees and costs of the independent review entity incurred organization in conducting an independent review under this section shall be paid by the insurer.
   7.  Immunity.  An independent review entity organization that conducts a review under this section is not liable for damages arising from determinations made during the review. Immunity does not apply to any act or omission made by an independent review entity organization in bad faith or that involves gross negligence.
   8.  Effect of independent review decision.
   a.  The review decision by the independent review entity organization conducting the review is binding on the insurer.
   b.  The independent review process set forth in this section shall not be considered a contested case under chapter 17A.
   c.  An insured may appeal the review decision by the independent review entity organization conducting the review by filing a petition for judicial review in the district court in the county in which the insured resides. The petition for judicial review shall be filed within fifteen business days after the issuance of the review decision by the independent review organization. The petition shall name the insured as the petitioner and the insurer as the respondent. The petitioner shall not name the independent review entity organization as a party. The commissioner shall not be named as a respondent unless the insured alleges action or inaction by the commissioner under the standards articulated under section 17A.19, subsection 10. Allegations made against the commissioner under section 17A.19, subsection 10, must be stated with particularity. The commissioner may, upon motion, intervene in a judicial review proceeding brought pursuant to this paragraph. The findings of fact by the independent review entity organization conducting the review are conclusive and binding on appeal.
   d.  An insurer shall not be subject to any penalties, sanctions, or damages for complying in good faith with a review decision rendered by an independent review entity organization pursuant to this section.
   e.  Nothing contained in this section or in section 514G.109 shall be construed to limit the right of an insurer to assert any rights an insurer may have under a long-term care insurance policy related to:
   (1)  An insured’s misrepresentation.
   (2)  Changes in the insured’s benefit eligibility.
   (3)  Terms, conditions, and exclusions contained in the policy, other than failure to meet the benefit trigger.
   f.  The requirements of this section and section 514G.109 are not applicable to a group long-term care insurance policy that is governed by the federal Employee Retirement Income Security Act of 1974, as codified at 29 U.S.C. §100 et seq.
   g.  The provisions of this section and section 514G.109 are in lieu of and supersede any other third-party review requirement contained in chapter 514J or in any other provision of law.
   h.  The insured may bring an action in the district court in the county in which the insured resides to enforce the review decision of the independent review entity organization conducting the review or the decision of the court on appeal.
   9.  Receipt of notice.  Notice required by this section shall be deemed received within five days after the date of mailing.
    Sec. 4.  Section 515D.4, subsection 2, paragraph a, Code 2020, is amended to read as follows:
   a.  The named insured or any operator who either resides in the same household or customarily operates an automobile insured under the policy has that person’s driver’s license suspended or revoked during the policy term or, if the policy is a renewal, during its term or the one hundred eighty days immediately preceding its effective date. during any of the following:
   (1)  The term of the policy.
   (2)  The term of a renewal policy.
   (3)  One hundred eighty days immediately preceding the effective date of a renewal of the policy.
    Sec. 5.  Section 515D.6, Code 2020, is amended to read as follows:
   515D.6  Prohibited reasons for nonrenewal.
   1.  No insurer shall refuse to renew a policy solely because of age, residence, sex, race, color, creed, or occupation of an insured.
   2.  No insurer shall require a physical examination of a policyholder as a condition for renewal solely on the basis of age or other arbitrary reason. In the event that an insurer requires a physical examination of a policyholder, the burden of proof in establishing reasonable and sufficient grounds for such requirement shall rest with the insurer and the expenses incident to such examination shall be borne by the insurer.
    Sec. 6.  Section 515F.32, subsection 3, Code 2020, is amended to read as follows:
   3.  “Insurer” includes all companies or associations licensed to transact insurance business in this state under chapters 515, 518, and 518A, reciprocal insurers issued a certificate of authority pursuant to chapter 520, and companies or associations admitted or seeking to be admitted to do business in this state under any of those chapters, notwithstanding any provision of the Code to the contrary.
    Sec. 7.  Section 515F.36, subsection 2, Code 2020, is amended to read as follows:
   2.  The committee shall consist of seven members.
   a.  Five Four of the members shall be elected to the committee, with one member from each of the following:
   (1)  American property casualty insurance association.
   (2)  Property casualty insurers association of America.
   (3)  (2)  Iowa insurance institute.
   (4)  (3)  Mutual insurance association of Iowa.
   (5)  (4)  Independent insurance agents of Iowa.
   b.  Two Three of the members shall be elected to the committee by other insurer members of the plan.
    Sec. 8.  NEW SECTION.  515F.39  Cancellation or nonrenewal —— FAIR notice.
   If basic property insurance coverage is canceled or not renewed other than for nonpayment of a premium pursuant to section 515.125, 515.126, 515.127, 515.128, 518.23, or 518A.29, the insurer shall notify the named insured that the named insured may be eligible for basic property insurance through the FAIR plan. The notice shall accompany the notice of cancellation or the intent not to renew.
    Sec. 9.  Section 515I.4, subsection 1, paragraph a, Code 2020, is amended to read as follows:
   a.  Capital and surplus or its equivalent under the laws of the insurer’s domiciliary jurisdiction which equals the greater of either greatest of the following:
   (1)  The minimum capital and surplus requirements under the laws of this state.
   (2)  Fifteen million dollars.
   (3)  The risk-based capital level requirements pursuant to chapter 521E.
    Sec. 10.  Section 522.9, subsection 1, Code 2020, is amended to read as follows:
   1.  If an insurer fails, without just cause, to file an own risk and solvency assessment summary report by the filing date stipulated to the commissioner pursuant to section 522.5, subsection 1, paragraph “c”, the commissioner shall, after notice and hearing, impose a penalty of five hundred dollars for each day after the stipulated date that the summary report is not filed. The penalties shall be collected by the commissioner and deposited in the general fund of the state pursuant to section 505.7. The maximum penalty which may be imposed under this section is fifty thousand dollars.
DIVISION II
CEMETERY AND PRENEED SELLERS AND SALES

    Sec. 11.  Section 523A.204, subsections 1 and 2, Code 2020, are amended to read as follows:
   1.  A preneed seller shall file an annual report with the commissioner not later than April 1 of each year an annual report 15 on a form prescribed by the commissioner.
   2.  A preneed seller filing an annual report shall pay a filing fee of ten dollars per purchase agreement sold during the year covered by the report. Duplicate filing fees are not required for the same purchase agreement. If a purchase agreement has multiple sellers, the filing fee shall be paid by the preneed seller actually providing the merchandise and services.
    Sec. 12.  Section 523A.204, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  The commissioner may impose a late fee in the amount of five dollars for each day after April 15 that a preneed seller fails to file the preneed seller’s annual report. The maximum late fee that may be imposed pursuant to this section is five hundred dollars. The fee shall be collected by the commissioner and deposited pursuant to section 505.7.
    Sec. 13.  Section 523A.501, subsection 7, Code 2020, is amended to read as follows:
   7.  A preneed seller’s license expires shall expire annually on April 15 30. If the preneed seller has filed a complete an annual report pursuant to section 523A.204, subsection 1, and paid the required filing fees as required in pursuant to section 523A.204, subsection 2, the commissioner shall renew the preneed seller’s license until April 15 30 of the following year.
    Sec. 14.  Section 523A.502, subsection 5, Code 2020, is amended to read as follows:
   5.  A sales license shall expire annually on April 15 30. If the a sales agent has filed a substantially complete annual report as required in pursuant to section 523A.502A, subsection 1, and has fulfilled the continuing education requirements pursuant to subsection 6 of this section, the commissioner shall renew the sales agent’s sales license until April 15 30 of the following year.
    Sec. 15.  Section 523A.502A, subsection 1, Code 2020, is amended to read as follows:
   1.  A No later than April 15, a sales agent shall file an annual report with the commissioner not later than April 1 of each year an annual report on a form prescribed by the commissioner describing each purchase agreement sold by the sales agent during the year. An annual report must be filed whether or not sales were made a sales agent sold any purchase agreements during the year and even if the whether or not a sales agent is no longer still an agent of a preneed seller or is still licensed by the commissioner.
    Sec. 16.  Section 523A.502A, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  The commissioner may impose a late fee in the amount of five dollars for each day after April 15 that a sales agent fails to file the sales agent’s annual report. The maximum late fee that may be imposed pursuant to this section is five hundred dollars. The fee shall be collected by the commissioner and deposited pursuant to section 505.7.
    Sec. 17.  Section 523A.601, subsection 4, Code 2020, is amended to read as follows:
   4.  A purchase agreement shall be signed by the purchaser, the seller, and if the agreement is for mortuary science services as mortuary science is defined in section 156.1, a person licensed to deliver funeral services.  All purchase agreements, including a purchase agreement delivered or executed by electronic means, must have a sales agent identified. A purchase agreement, including a purchase agreement delivered or executed by electronic means, shall be reviewed by the sales agent identified and named in the purchase agreement pursuant to subsection 1, paragraph “a”, and signed by the purchaser and seller. If the purchase agreement is for mortuary sciences as mortuary science is defined in section 156.1, the purchase agreement must also be signed by a person licensed to deliver funeral services.
    Sec. 18.  Section 523A.807, subsection 3, unnumbered paragraph 1, Code 2020, 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.502A, or any rule adopted pursuant thereto, the commissioner may order any or all of the following:
    Sec. 19.  Section 523A.812, Code 2020, is amended to read as follows:
   523A.812  Insurance division regulatory fund.
   The insurance division may authorize the creation of a special revenue fund in the state treasury, to be known as the insurance division regulatory fund. The commissioner shall allocate annually from the filing fees paid pursuant to section 523A.204, two dollars for each purchase agreement reported on a preneed seller’s annual report filed pursuant to section 523A.204 for deposit to the regulatory fund. The remainder of the filing fees collected pursuant to section 523A.204 shall be deposited as provided in section 505.7. The commissioner shall also allocate annually the examination fees paid pursuant to section 523A.814 and any examination expense reimbursement for deposit to the regulatory fund. The moneys in the regulatory fund shall be retained in the fund. The moneys are appropriated and, subject to authorization by the commissioner, may be used to pay examiners, examination expenses, investigative expenses, the expenses of mediation ordered by the commissioner, consumer education expenses, the expenses of a toll-free telephone line to receive consumer complaints, and the expenses of receiverships established under section 523A.811. If the commissioner determines that funding is not otherwise available to reimburse the expenses of a person who receives title to a cemetery subject to chapter 523I, pursuant to such a receivership, the commissioner shall use moneys in the regulatory fund as necessary to preserve, protect, restore, and maintain the physical integrity of that cemetery and to satisfy claims or demands for cemetery merchandise, funeral merchandise, and funeral services based on purchase agreements which the commissioner determines are just and outstanding. An annual allocation to the regulatory fund shall not be imposed if the current balance of the fund exceeds five hundred thousand dollars.
    Sec. 20.  Section 523I.102, subsection 6, Code 2020, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  A cemetery under the jurisdiction and control of a cemetery commission pursuant to section 331.325, subsection 3, paragraph “c”.
    Sec. 21.  Section 523I.213, Code 2020, is amended to read as follows:
   523I.213  Insurance division’s enforcement fund.
   A special revenue fund in the state treasury, to be known as the insurance division’s enforcement fund, is created under the authority of the commissioner. The commissioner shall allocate annually from the examination fees paid pursuant to section 523I.808, an amount not exceeding fifty thousand dollars, for deposit to all examination fees collected pursuant to section 523I.808 in the insurance division’s enforcement fund. The moneys in the enforcement fund shall be retained in the fund. The moneys are appropriated and, subject to authorization by the commissioner, shall be used to pay examiners, examination expenses, investigative expenses, the expenses of consumer education, compliance, and education programs for filers and other regulated persons, and educational or compliance program materials, the expenses of a toll-free telephone line for consumer complaints, and the expenses of receiverships of perpetual care cemeteries established under section 523I.212.
    Sec. 22.  Section 523I.301, subsections 1 and 2, Code 2020, are amended to read as follows:
   1.  A cemetery shall disclose, prior to the sale of interment rights, whether opening and closing of the interment space is services are included in the purchase of the interment rights. If opening and closing services are not included in the sale of interment rights and the cemetery offers opening and closing services, the cemetery must disclose that the price for this service opening and closing services is subject to change and must disclose the current prices for opening and closing services provided by the cemetery.
   2.  The cemetery shall fully disclose all fees required for interment, entombment, or inurnment of human remains and for disinterment services.
    Sec. 23.  Section 523I.808, Code 2020, is amended to read as follows:
   523I.808  Examination fee.
   An examination fee in an amount equal to ten dollars for each certificate of interment rights issued during the time period covered by the report shall be submitted with the a perpetual care cemetery’s annual report in an amount equal to five dollars for each certificate of interment rights issued during the time period covered by the report filed pursuant to section 523I.813. The cemetery may charge the examination fee directly to the purchaser of the interment rights.
    Sec. 24.  Section 523I.813, subsection 3, Code 2020, 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 may assess a late fee in the amount of five dollars for each day after the date a perpetual care cemetery’s annual report is due that the perpetual care cemetery fails to file the annual report. The maximum late fee that may be imposed pursuant to this section is five hundred dollars. The fee shall be collected by the commissioner and deposited pursuant to section 505.7.
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 various matters involving insurance and the insurance division of the department of commerce. The bill is organized into two divisions.
   DIVISION I —— INSURANCE. Code section 507B.7 (cease and desist orders) is amended to provide that a person who violates any order of the insurance commissioner (commissioner), may, after notice and hearing be subject to a monetary penalty and suspension or revocation of the person’s license. Current law provides that a person who violates a cease and desist order of the commissioner is subject to the penalty and suspension or revocation.
   Code chapter 514G (long-term care insurance) is amended to change terminology throughout the Code chapter from an “independent review entity” to an “independent review organization”. 
   The bill amends Code section 515D.4 (notice of cancellation —— reasons) to provide more specification regarding when a person can be excluded from an automobile insurance policy due to the person’s driver’s license being suspended or revoked during the term of the policy or a renewal of the policy. 
   Code section 515F.32 is amended to add reciprocal insurers to the definition of “insurer”. Code section 515F.36 is amended to change the make-up of the membership of the governing committee that administers the FAIR plan.
   The bill requires that if basic property insurance coverage is canceled or not renewed other than for nonpayment of a premium pursuant to Code section 515.125, 515.126, 515.127, 515.128, 518.23, or 518A.29, the insurer must notify the named insured that the named insured may be eligible for basic property insurance through the FAIR plan. The notice must accompany the notice of cancellation or the intent not to renew.
   The bill amends Code section 515I.4 (requirements for eligible surplus lines insurers) to allow a nonadmitted insurer seeking to qualify as an eligible surplus line insurer the option of demonstrating that the nonadmitted insurer has capital and surplus under the laws of the nonadmitted insurer’s domiciliary that equal the risk-based capital level requirements required by Iowa law. Current law requires the nonadmitted insurer to demonstrate that the nonadmitted insurer has capital and surplus under the laws of the nonadmitted insurer’s domiciliary that equal the greater of the minimum capital and surplus required under the laws of this state, or $15 million.
   Code section 522.9 is amended to allow the commissioner to deposit penalties pursuant to Code section 505.7 (fees —— expenses of division —— assessments) that have been collected due to insurers’ failure to file a timely own risk and solvency assessment summary report. Code section 505.7 requires the commissioner to transfer the collected penalties to the treasurer of state for deposit in the department of commerce revolving fund. Current law requires the commissioner to deposit the penalties into the general fund of the state.
   DIVISION II —— CEMETERY AND PRENEED SELLERS AND SALES.  The bill amends Code section 523A.204 (preneed seller annual reporting requirements) to require a preneed seller to file an annual report no later than April 15. Current law requires the report to be filed by April 1. The bill allows the commissioner to impose a late fee of $5 per day, up to a maximum late fee of $500. The fee is to be collected by the commissioner and deposited pursuant to Code section 505.7. The bill specifies that a preneed seller’s license expires annually on April 30, rather than the current expiration date of April 15. 
   Code section 523A.502A (sales agent annual reporting requirements) is amended to require a sales agent to file the sales agent’s annual report by April 15, rather than the current due date of April 1. The bill allows the commissioner to impose a late fee of $5 per day, up to a maximum late fee of $500. The fee is to be collected by the commissioner and deposited pursuant to Code section 505.7. The bill allows the commissioner to impose a civil penalty or to issue an order prohibiting the person from selling funeral merchandise, cemetery merchandise, or funeral services. 
   Code section 523A.601 is amended to require all purchase agreements, including purchase agreements delivered or executed by electronic means, to identify a sales agent. The purchase agreement must also be reviewed by the sales agent and signed by the purchaser and seller. If the purchase agreement is for mortuary sciences, the purchase agreement must also be signed by a person licensed to deliver funeral services.
   The bill amends Code section 523A.812 (insurance division regulatory fund) and removes the prohibition on an annual allocation to the regulatory fund if the current balance of the fund exceeds $500,000. 
   Code section 523I.102 is amended to exclude specific cemeteries under the jurisdiction and control of a cemetery commission that has jurisdiction and control over pioneer cemeteries from the definition of “cemetery” for purposes of Code chapter 523I (Iowa cemetery Act).
   Code section 523I.213 (insurance division’s enforcement fund) is amended to remove the cap on the allocation to the insurance division’s enforcement fund of examination fees paid by perpetual cemeteries with a perpetual cemetery’s annual report. The bill requires the commissioner to deposit all of the examination fees in the enforcement fund.
   Code section 523I.301 (disclosure requirements —— prices and fees) is amended to require a cemetery to disclose, prior to the sale of interment rights, whether opening and closing services are included in the purchase price. The bill also requires a cemetery to fully disclose all fees associated with disinterment services.
   The bill amends Code section 523I.808 to require an examination fee of $10 per certificate of interment rights issued to be filed with a perpetual care cemetery’s annual report. Under current law, the fee is $5 per certificate of interment rights issued.
   The bill amends Code section 523I.813 (annual report by perpetual care cemeteries) to allow, rather than to require, the commissioner to impose a late penalty on a perpetual care cemetery that fails to file its annual report on time.