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Senate File 2395

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  1  1    Section 1.  Section 508.5, Code Supplement 1995, is amended
  1  2 to read as follows:
  1  3    508.5  CAPITAL AND SURPLUS REQUIRED.
  1  4    1.  A stock life insurance company shall not be authorized
  1  5 to transact business under this chapter with less than two
  1  6 million five hundred thousand dollars capital stock fully paid
  1  7 for in cash and two million five hundred thousand dollars of
  1  8 surplus paid in cash or invested as provided by law.  A stock
  1  9 life insurance company shall not increase its capital stock
  1 10 unless the amount of the increase is fully paid in cash.  The
  1 11 stock shall be divided into shares of not less than one dollar
  1 12 par value each.  A stock life insurance company authorized to
  1 13 do business in Iowa that undergoes a change of control as
  1 14 defined under chapter 521A shall maintain the minimum capital
  1 15 and surplus requirements mandated by this section.
  1 16    2.  Notwithstanding subsection 1, a stock life insurance
  1 17 company, or any other life insurance company authorized to
  1 18 transact business under this chapter shall comply with the
  1 19 minimum capital and surplus requirements of this chapter or
  1 20 chapter 521E, whichever is greater.
  1 21    Sec. 2.  Section 508.9, Code Supplement 1995, is amended to
  1 22 read as follows:
  1 23    508.9  MUTUAL COMPANIES – CONDITIONS.
  1 24    1.  Level premium and natural premium life insurance
  1 25 companies organized under the laws of this state upon the
  1 26 mutual plan shall, before issuing policies, have actual
  1 27 applications on at least two hundred and fifty lives for an
  1 28 average amount of one thousand dollars each.  A list of the
  1 29 applications giving the name, age, residence, amount of
  1 30 insurance, and annual premium of each applicant shall be filed
  1 31 with the commissioner of insurance, and a deposit made with
  1 32 the commissioner of an amount equal to three-fifths of the
  1 33 whole annual premium on the applications, in cash or the
  1 34 securities required by section 508.5.  In addition, a deposit
  1 35 of cash or securities of the character provided by law for the
  2  1 investment of funds for life insurance companies in the sum of
  2  2 five million dollars shall be made with the commissioner,
  2  3 which shall constitute a security fund for the protection of
  2  4 policyholders.  The contribution to the security fund shall
  2  5 not give to contributors to the fund or to other persons any
  2  6 voting or other power in the management of the affairs of the
  2  7 company.  The security fund may be repaid to the contributors
  2  8 to the security fund with interest at six percent from the
  2  9 date of contribution, at any time, in whole or in part, if the
  2 10 repayment does not reduce the surplus of the company below the
  2 11 amount of five million dollars and then only if consent in
  2 12 writing for the repayment is obtained from the commissioner of
  2 13 insurance.  Upon compliance with this section, the
  2 14 commissioner shall issue to the mutual company the certificate
  2 15 prescribed in this chapter.  A mutual insurance company
  2 16 authorized to do business in Iowa that undergoes a change of
  2 17 control as defined in chapter 521A shall maintain the minimum
  2 18 surplus requirement mandated by this section.
  2 19    2.  Notwithstanding subsection 1, a mutual insurance
  2 20 company authorized to transact business under this chapter
  2 21 shall comply with the minimum surplus requirements of this
  2 22 section or chapter 521E, whichever is greater.
  2 23    Sec. 3.  Section 515.8, Code Supplement 1995, is amended to
  2 24 read as follows:
  2 25    515.8  PAID-UP CAPITAL REQUIRED.
  2 26    1.  An insurance company other than a life insurance
  2 27 company shall not be incorporated to transact business upon
  2 28 the stock plan with less than two million five hundred
  2 29 thousand dollars capital, the entire amount of which shall be
  2 30 fully paid up in cash and invested as provided by law.  An
  2 31 insurance company other than a life insurance company shall
  2 32 not increase its capital stock unless the amount of the
  2 33 increase is fully paid up in cash.  The stock shall be divided
  2 34 into shares of not less than one dollar each.  An insurance
  2 35 company authorized to do business in Iowa that undergoes a
  3  1 change of control as defined under chapter 521A shall maintain
  3  2 the minimum capital requirements mandated by this section.
  3  3    2.  Notwithstanding subsection 1, an insurance company,
  3  4 other than a life insurance company, authorized to transact
  3  5 business under this chapter shall comply with the minimum
  3  6 capital requirements of this section or chapter 521E,
  3  7 whichever is greater.
  3  8    Sec. 4.  Section 515.10, Code Supplement 1995, is amended
  3  9 to read as follows:
  3 10    515.10  SURPLUS REQUIRED.
  3 11    1.  An insurance company other than a life insurance
  3 12 company shall have, in addition to the required paid-up
  3 13 capital, a surplus in cash or invested in securities
  3 14 authorized by law of not less than two million five hundred
  3 15 thousand dollars.  An insurance company authorized to do
  3 16 business in Iowa that undergoes a change of control as defined
  3 17 under chapter 521A shall maintain the minimum surplus
  3 18 requirements mandated by this section.
  3 19    2.  Notwithstanding subsection 1, an insurance company,
  3 20 other than a life insurance company, authorized to transact
  3 21 business under this chapter shall comply with the minimum
  3 22 surplus requirements of this section or chapter 521E,
  3 23 whichever is greater.
  3 24    Sec. 5.  Section 515.69, Code 1995, is amended to read as
  3 25 follows:
  3 26    515.69  FOREIGN COMPANIES – CAPITAL REQUIRED.
  3 27    1.  A stock insurance company organized under or by the
  3 28 laws of any other state or foreign government for the purpose
  3 29 specified in this chapter, shall not, directly or indirectly,
  3 30 take risks or transact business of insurance in this state
  3 31 unless the company has two and one-half million dollars of
  3 32 actual paid-up capital, and a surplus in cash or invested in
  3 33 securities authorized by law of not less than two and one-half
  3 34 million dollars, exclusive of assets deposited in a state,
  3 35 territory, district, or country for the special benefit or
  4  1 security of those insured in that state, territory, district,
  4  2 or country.
  4  3    2.  Notwithstanding subsection 1, a stock insurance company
  4  4 authorized to transact business under this section shall
  4  5 comply with the minimum capital and surplus requirements of
  4  6 this section or chapter 521E, whichever is greater.
  4  7    Sec. 6.  Section 515.76, Code 1995, is amended to read as
  4  8 follows:
  4  9    515.76  FOREIGN MUTUAL COMPANIES – SURPLUS.
  4 10    1.  Any mutual insurance company organized outside of this
  4 11 state and authorized to transact the business of insurance on
  4 12 the mutual plan in any other state of the United States or in
  4 13 the District of Columbia, may be admitted to this state and
  4 14 authorized to transact herein any of the kinds of insurance
  4 15 authorized by its charter or articles of incorporation, when
  4 16 so permitted by the provisions of this chapter, with the
  4 17 powers and privileges and subject to the conditions and
  4 18 limitations specified in said chapter; provided, however, such
  4 19 company has complied with all the statutory provisions which
  4 20 require stock companies to file papers and to furnish
  4 21 information and to submit to examination, and is also solvent
  4 22 according to the requirements of this chapter and is possessed
  4 23 of a surplus safely invested as follows:
  4 24    1. a.  In case of a mutual company issuing policies for a
  4 25 cash premium without an additional contingent liability equal
  4 26 to or greater than the cash premium, the surplus shall be at
  4 27 least two million dollars.
  4 28    2. b.  In case of any other such mutual company issuing
  4 29 policies for a cash premium or payment with an additional
  4 30 contingent liability equal to or greater than the cash premium
  4 31 or payment, the surplus shall be such an amount as the
  4 32 commissioner of insurance of Iowa may require, but in no case
  4 33 less than three hundred thousand dollars, provided that the
  4 34 provisions of this section fixing a minimum surplus of three
  4 35 hundred thousand dollars shall not apply to companies now
  5  1 admitted to do business in Iowa; provided, further, that no
  5  2 such mutual company shall be authorized to transact
  5  3 compensation insurance without a surplus of at least three
  5  4 hundred thousand dollars unless all liability for each
  5  5 adjusted claim in this state, the payment of any part of which
  5  6 is deferred for more than one year, shall be provided for by a
  5  7 special deposit, in a trust company or a bank having fiduciary
  5  8 powers, located in this state, which shall be a trust fund
  5  9 applicable solely and exclusively to the payment of the
  5 10 compensation benefits for which such deposit is made, or shall
  5 11 be reinsured in an authorized stock company, or in an
  5 12 authorized mutual company with a surplus of at least three
  5 13 hundred thousand dollars.
  5 14    2.  Notwithstanding subsection 1, a mutual insurance
  5 15 company authorized to transact business under this section
  5 16 shall comply with the minimum surplus requirements of this
  5 17 section or chapter 521E, whichever is greater.
  5 18    Sec. 7.  NEW SECTION.  515.12A  ALTERNATIVE MINIMUM SURPLUS
  5 19 LEVELS.
  5 20    A mutual company authorized to transact business under this
  5 21 chapter shall comply with the minimum surplus requirements of
  5 22 section 515.12 or chapter 521E, whichever is greater.
  5 23    Sec. 8.  Section 520.9, Code 1995, is amended to read as
  5 24 follows:
  5 25    520.9  STANDARD OF SOLVENCY.
  5 26    1.  There shall at all times be maintained as assets a sum
  5 27 in cash, or in securities of the kind designated by the laws
  5 28 of the state where the principal office is located for the
  5 29 investment of funds of insurance companies, equal to one
  5 30 hundred percent of the net unearned premiums or deposits
  5 31 collected and credited to the account of subscribers, or
  5 32 assets equal to fifty percent of the net annual deposits
  5 33 collected and credited to the account of subscribers on
  5 34 policies having one year or less to run and pro rata on those
  5 35 for longer periods; in addition to which there shall be
  6  1 maintained in cash, or in such securities, assets sufficient
  6  2 to discharge all liabilities on all outstanding losses arising
  6  3 under policies issued, the same to be calculated in accordance
  6  4 with the laws of the state relating to similar reserves for
  6  5 companies insuring similar risks; provided that where the
  6  6 assets on hand available for the payment of losses other than
  6  7 determined losses, do not equal two million dollars, all
  6  8 liability for each determined loss or claim deferred for more
  6  9 than one year, shall be provided for by a special deposit in a
  6 10 trust company or bank having fiduciary powers of the state in
  6 11 which the principal office is located, to be used in payment
  6 12 of compensation benefits for disability; such deposit to be a
  6 13 trust fund and applicable only to the purposes stated, or such
  6 14 liability may be reinsured in authorized companies with a
  6 15 surplus of at least two million dollars.  For the purpose of
  6 16 such reserves, net deposits shall be construed to mean the
  6 17 advance payments of subscribers after deducting the amount
  6 18 specifically provided in the subscribers' agreements for
  6 19 expenses.  If at any time the assets so held in cash or such
  6 20 securities shall be less than required above, or less than two
  6 21 million dollars, the subscribers or their attorney for them
  6 22 shall make up the deficiency within thirty days after notice
  6 23 from the commissioner of insurance to do so.  In computing the
  6 24 assets required by this section, the amount specified in
  6 25 section 520.4, subsection 7, shall be included.
  6 26    2.  Notwithstanding subsection 1, a person issuing
  6 27 reciprocal contracts and authorized to transact business under
  6 28 this chapter shall comply with the minimum surplus
  6 29 requirements of this section or chapter 521E, whichever is
  6 30 greater.
  6 31    Sec. 9.  NEW SECTION.  521E.1  DEFINITIONS.
  6 32    As used in this chapter, unless the context otherwise
  6 33 requires:
  6 34    1.  "Adjusted risk-based capital report" means a risk-based
  6 35 capital report adjusted by the commissioner pursuant to
  7  1 section 521E.2, subsection 5.
  7  2    2.  "Commissioner" means the commissioner of insurance.
  7  3    3.  "Corrective order" means an order issued by the
  7  4 commissioner of insurance specifying corrective actions which
  7  5 the commissioner has determined are required.
  7  6    4.  "Domestic insurer" means an insurance company domiciled
  7  7 in this state and licensed to transact the business of
  7  8 insurance under chapter 508, 515, or 520, except that it shall
  7  9 not include any of the following:
  7 10    a.  An agency, authority, or instrumentality of the United
  7 11 States, its possessions and territories, the commonwealth of
  7 12 Puerto Rico, the District of Columbia, or a state or political
  7 13 subdivision of a state.
  7 14    b.  A fraternal benefit society organized under chapter
  7 15 512B.
  7 16    c.  A nonprofit medical, hospital, or dental service
  7 17 corporation organized under chapter 514.
  7 18    d.  A county mutual insurance association organized under
  7 19 chapter 518.
  7 20    e.  A mutual casualty assessment insurance association
  7 21 organized under chapter 518A.
  7 22    f.  A health maintenance organization organized under
  7 23 chapter 514B.
  7 24    5.  "Filing date" means March 1 of each year.
  7 25    6.  "Foreign insurer" means an insurance company not
  7 26 domiciled in this state which is licensed to transact the
  7 27 business of insurance in this state under chapter 508, 515, or
  7 28 520.
  7 29    7.  "Life and health insurer" means an insurance company
  7 30 licensed under chapter 508 or a licensed property and casualty
  7 31 insurer writing only accident and health insurance under
  7 32 chapter 515.
  7 33    8.  "Negative trend" means a negative trend over a period
  7 34 of time as determined in accordance with the trend test
  7 35 calculation included in the risk-based capital instructions.
  8  1    9.  "Property and casualty insurer" means an insurance
  8  2 company licensed under chapter 515 but does not include
  8  3 monoline mortgage guaranty insurers, financial guaranty
  8  4 insurers, or title insurers.
  8  5    10.  "Revised risk-based capital plan" is a risk-based
  8  6 capital plan which has been rejected by the commissioner and
  8  7 has been revised by the insurer, with or without the
  8  8 commissioner's recommendation.
  8  9    11.  "Risk-based capital instructions" means the
  8 10 instructions included in the risk-based capital report as
  8 11 adopted by the national association of insurance
  8 12 commissioners, as such risk-based capital instructions may be
  8 13 amended by the national association of insurance commissioners
  8 14 from time to time in accordance with the procedures adopted by
  8 15 the national association of insurance commissioners.
  8 16    12.  "Risk-based capital level" means an insurer's company-
  8 17 action-level risk-based capital, regulatory-action-level risk-
  8 18 based capital, authorized-control-level risk-based capital, or
  8 19 mandatory-control-level risk-based capital as follows:
  8 20    a.  "Company-action-level risk-based capital" means, with
  8 21 respect to any insurer, the product of two and the insurer's
  8 22 authorized-control-level risk-based capital.
  8 23    b.  "Regulatory-action-level risk-based capital" means the
  8 24 product of one and one-half and the insurer's authorized-
  8 25 control-level risk-based capital.
  8 26    c.  "Authorized-control-level risk-based capital" means the
  8 27 number determined under the risk-based capital formula in
  8 28 accordance with the risk-based capital instructions.
  8 29    d.  "Mandatory-control-level risk-based capital" means the
  8 30 product of seven-tenths and the insurer's authorized-control-
  8 31 level risk-based capital.
  8 32    13.  "Risk-based capital plan" means a comprehensive
  8 33 financial plan containing the elements identified in section
  8 34 521E.3, subsection 2.
  8 35    14.  "Risk-based capital report" means the report required
  9  1 to be prepared and submitted to the commissioner pursuant to
  9  2 section 521E.2.
  9  3    15.  "Total adjusted capital" means the sum of the
  9  4 following:
  9  5    a.  An insurer's statutory capital and surplus.
  9  6    b.  Such other items, if any, as identified in the risk-
  9  7 based capital instructions.
  9  8    Sec. 10.  NEW SECTION.  521E.2  RISK-BASED CAPITAL REPORTS.
  9  9    1.  A domestic insurer, on or prior to the filing date,
  9 10 shall prepare and submit to the commissioner a report of the
  9 11 insurer's risk-based capital level as of the end of the
  9 12 calendar year immediately preceding the filing date, in a form
  9 13 and containing the information required by the risk-based
  9 14 capital instructions.  A domestic insurer shall also file its
  9 15 risk-based capital report with both of the following:
  9 16    a.  The national association of insurance commissioners.
  9 17    b.  The insurance commissioner in each state in which the
  9 18 insurer is authorized to do business, if such insurance
  9 19 commissioner has notified the insurer of its request in
  9 20 writing.  Upon receipt of the written request, the insurer
  9 21 shall file its risk-based capital report with the requesting
  9 22 commissioner by no later than the later of the following:
  9 23    (1)  Fifteen days from the receipt of the written request.
  9 24    (2)  The filing date.
  9 25    2.  A life and health insurer's risk-based capital shall be
  9 26 determined pursuant to the formula set forth in the risk-based
  9 27 capital instructions.  The formula shall take into account all
  9 28 of the following, and may be adjusted, as deemed appropriate
  9 29 by the commissioner, for the covariance between the following:
  9 30    a.  The risk with respect to the insurer's assets.
  9 31    b.  The risk of adverse insurance experience with respect
  9 32 to the insurer's liabilities and obligations.
  9 33    c.  The interest rate risk with respect to the insurer's
  9 34 business.
  9 35    d.  All other business risks and other relevant risks as
 10  1 identified in the risk-based capital instructions, determined
 10  2 in each case by applying the factors in the manner provided
 10  3 for in the risk-based capital instructions.
 10  4    3.  A property and casualty insurer's risk-based capital
 10  5 shall be determined pursuant to the formula set forth in the
 10  6 risk-based capital instructions.  The formula shall take into
 10  7 account all of the following, and may be adjusted, as deemed
 10  8 appropriate by the commissioner, for the covariance between
 10  9 the following:
 10 10    a.  Asset risk.
 10 11    b.  Credit risk.
 10 12    c.  Underwriting risk.
 10 13    d.  All other business risks and other relevant risks as
 10 14 identified in the risk-based capital instructions, determined
 10 15 in each case by applying the factors in the manner provided
 10 16 for in the risk-based capital instructions.
 10 17    4.  An insurer shall seek to maintain capital above the
 10 18 risk-based capital levels required by this chapter.
 10 19    5.  A risk-based capital report filed by a domestic insurer
 10 20 which in the judgment of the commissioner is inaccurate, shall
 10 21 be adjusted by the commissioner to correct the inaccuracy.
 10 22 The commissioner shall notify the insurer of the adjustment.
 10 23 The notice shall contain a statement of the reason for the
 10 24 adjustment.
 10 25    Sec. 11.  NEW SECTION.  521E.3  COMPANY-ACTION-LEVEL EVENT.
 10 26    1.  "Company-action-level event" means any of the
 10 27 following:
 10 28    a.  The filing of a risk-based capital report by an insurer
 10 29 which indicates either of the following:
 10 30    (1)  For an insurer other than a life and health insurer,
 10 31 the insurer's total adjusted capital is greater than or equal
 10 32 to its regulatory-action-level risk-based capital but less
 10 33 than its company-action-level risk-based capital.
 10 34    (2)  For a life and health insurer, the insurer's total
 10 35 adjusted capital is greater than or equal to its company-
 11  1 action-level risk-based capital but less than the product of
 11  2 its authorized-control-level risk-based capital and two and
 11  3 one-half, and has a negative trend.
 11  4    b.  Notification by the commissioner to the insurer of an
 11  5 adjusted risk-based capital report that indicates an event in
 11  6 paragraph "a", provided the insurer does not challenge the
 11  7 adjusted risk-based capital report and request a hearing
 11  8 pursuant to section 521E.7.
 11  9    c.  If a hearing is requested pursuant to section 521E.7,
 11 10 notification by the commissioner to the insurer after the
 11 11 hearing that the commissioner has rejected the insurer's
 11 12 challenge of the adjusted risk-based capital report indicating
 11 13 an event in paragraph "a".
 11 14    2.  Upon the occurrence of a company-action-level event,
 11 15 the insurer shall prepare and submit to the commissioner a
 11 16 risk-based capital plan which shall include all of the
 11 17 following:
 11 18    a.  Identification of the conditions which contributed to
 11 19 the company-action-level event.
 11 20    b.  Proposed corrective actions which the insurer intends
 11 21 to implement and which are expected to result in the
 11 22 elimination of the company-action-level event.
 11 23    c.  Projections of the insurer's financial results for the
 11 24 current year and at least the four succeeding years, including
 11 25 projections of statutory operating income, net income,
 11 26 capital, and surplus.  Projections shall be provided assuming
 11 27 the absence of the proposed corrective actions and assuming
 11 28 the implementation of the proposed corrective actions.  The
 11 29 projections for both new and renewal business may include
 11 30 separate projections for each major line of business and
 11 31 separately identify each significant income, expense, and
 11 32 benefit component.
 11 33    d.  Identification of the primary assumptions impacting the
 11 34 insurer's projections and the sensitivity of the projections
 11 35 to the assumptions.
 12  1    e.  Identification of the quality of, and problems
 12  2 associated with, the insurer's business, including but not
 12  3 limited to its assets, anticipated business growth and
 12  4 associated surplus strain, extraordinary exposure to risk, mix
 12  5 of business, and use of reinsurance, if any, in each case.
 12  6    3.  The risk-based capital plan shall be submitted within
 12  7 forty-five days of the company-action-level event, or, if the
 12  8 insurer requests a hearing pursuant to section 521E.7 for the
 12  9 purpose of challenging the adjusted risk-based capital report,
 12 10 within forty-five days after notification to the insurer that
 12 11 the commissioner, after hearing, has rejected the insurer's
 12 12 challenge.
 12 13    4.  Within sixty days after the submission by an insurer of
 12 14 a risk-based capital plan to the commissioner, the
 12 15 commissioner shall notify the insurer whether the risk-based
 12 16 capital plan shall be implemented or, in the judgment of the
 12 17 commissioner, is unsatisfactory.  If the commissioner
 12 18 determines the risk-based capital plan is unsatisfactory, the
 12 19 notification to the insurer shall set forth the reasons for
 12 20 the determination, and may set forth proposed revisions which
 12 21 in the judgment of the commissioner will render the risk-based
 12 22 capital plan satisfactory.  Upon the receipt of notification
 12 23 from the commissioner pursuant to this subsection, the insurer
 12 24 shall prepare a revised risk-based capital plan, which may
 12 25 incorporate by reference any revisions proposed by the
 12 26 commissioner, and submit the revised risk-based capital plan
 12 27 to the commissioner within forty-five days of the receipt of
 12 28 notification from the commissioner of the commissioner's
 12 29 determination that the risk-based capital plan is
 12 30 unsatisfactory, or, if the insurer requests a hearing pursuant
 12 31 to section 521E.7 for the purpose of challenging the
 12 32 commissioner's determination, within forty-five days after
 12 33 notification to the insurer that the commissioner, after
 12 34 hearing, has rejected the insurer's challenge.
 12 35    5.  After notification of the insurer by the commissioner
 13  1 that the insurer's risk-based capital plan or revised risk-
 13  2 based capital plan is unsatisfactory, the commissioner, at the
 13  3 commissioner's discretion and subject to the insurer's right
 13  4 to a hearing pursuant to section 521E.7, may specify in the
 13  5 notification that the notification constitutes a regulatory-
 13  6 action-level event.
 13  7    6.  A domestic insurer that files a risk-based capital plan
 13  8 or revised risk-based capital plan with the commissioner shall
 13  9 file a copy of the risk-based capital plan or revised risk-
 13 10 based capital plan with the insurance commissioner in a state
 13 11 in which the insurer is authorized to do business if both of
 13 12 the following apply:
 13 13    a.  The other state has a provision substantially similar
 13 14 to section 521E.8, subsection 1, with respect to the
 13 15 confidentiality and availability of such plans.
 13 16    b.  The insurance commissioner of that state has notified
 13 17 the insurer in writing of its request to receive a copy of the
 13 18 risk-based capital plan or revised risk-based capital plan.
 13 19 Upon receipt of the written request, the insurer shall file a
 13 20 copy of the risk-based capital plan or revised risk-based
 13 21 capital plan with the requesting commissioner by no later than
 13 22 the later of the following:
 13 23    (1)  Fifteen days from the receipt of the written request.
 13 24    (2)  The date on which the risk-based capital plan or
 13 25 revised risk-based capital plan is filed pursuant to
 13 26 subsection 3 or 4, as applicable.
 13 27    Sec. 12.  NEW SECTION.  521E.4  REGULATORY-ACTION-LEVEL
 13 28 EVENT.
 13 29    1.  "Regulatory-action-level event" means any of the
 13 30 following:
 13 31    a.  The filing of a risk-based capital report by the
 13 32 insurer which indicates that the insurer's total adjusted
 13 33 capital is greater than or equal to its authorized-control-
 13 34 level risk-based capital but less than its regulatory-action-
 13 35 level risk-based capital.
 14  1    b.  Notification by the commissioner to an insurer of an
 14  2 adjusted risk-based capital report that indicates the event in
 14  3 paragraph "a", provided the insurer does not challenge the
 14  4 adjusted risk-based capital report and request a hearing
 14  5 pursuant to section 521E.7.
 14  6    c.  After a hearing pursuant to section 521E.7,
 14  7 notification by the commissioner to the insurer that the
 14  8 commissioner has rejected the insurer's challenge of the
 14  9 adjusted risk-based capital report indicating the event in
 14 10 paragraph "a".
 14 11    d.  Failure of the insurer to file a risk-based capital
 14 12 report by the filing date, unless the insurer has provided an
 14 13 explanation for the failure which is satisfactory to the
 14 14 commissioner and has cured the failure within ten days after
 14 15 the filing date.
 14 16    e.  Failure of the insurer to submit a risk-based capital
 14 17 plan to the commissioner within the time period set forth in
 14 18 section 521E.3, subsection 3.
 14 19    f.  Notification by the commissioner to the insurer of both
 14 20 of the following:
 14 21    (1)  The risk-based capital plan or revised risk-based
 14 22 capital plan submitted by the insurer, in the judgment of the
 14 23 commissioner, is unsatisfactory.
 14 24    (2)  Notification pursuant to this paragraph constitutes a
 14 25 regulatory-action-level event with respect to the insurer,
 14 26 provided the insurer has not challenged the determination
 14 27 pursuant to section 521E.7.
 14 28    g.  After a hearing pursuant to section 521E.7,
 14 29 notification by the commissioner to the insurer that the
 14 30 commissioner has rejected the insurer's challenge of the
 14 31 determination made by the commissioner pursuant to paragraph
 14 32 "f".
 14 33    h.  Notification by the commissioner to the insurer that
 14 34 the insurer has failed to adhere to the insurer's risk-based
 14 35 capital plan or revised risk-based capital plan, but only if
 15  1 the failure has a substantial adverse effect on the ability of
 15  2 the insurer to eliminate the company-action-level event
 15  3 pursuant to the insurer's risk-based capital plan or revised
 15  4 risk-based capital plan and the commissioner has so stated in
 15  5 the notification.  However, notification by the commissioner
 15  6 pursuant to this paragraph does not constitute a company-
 15  7 action-level event if the insurer has challenged the
 15  8 determination of the commissioner pursuant to section 521E.7.
 15  9    i.  After a hearing pursuant to section 521E.7,
 15 10 notification by the commissioner to the insurer that the
 15 11 commissioner has rejected the insurer's challenge of the
 15 12 commissioner's determination pursuant to paragraph "h".
 15 13    2.  In the event of a regulatory-action-level event the
 15 14 commissioner shall do all of the following:
 15 15    a.  Require the insurer to prepare and submit a risk-based
 15 16 capital plan or a revised risk-based capital plan, as
 15 17 applicable.
 15 18    b.  Perform an examination or analysis of the assets,
 15 19 liabilities, and operations of the insurer, including a review
 15 20 of its risk-based capital plan or revised risk-based capital
 15 21 plan, as deemed necessary by the commissioner.
 15 22    c.  Subsequent to the examination or analysis pursuant to
 15 23 paragraph "b", issue a corrective order.
 15 24    3.  In determining the corrective actions to be specified,
 15 25 the commissioner shall take into account factors the
 15 26 commissioner deems to be relevant with respect to the insurer
 15 27 based upon the commissioner's examination or analysis of the
 15 28 assets, liabilities, and operations of the insurer, including,
 15 29 but not limited to, the results of any sensitivity tests
 15 30 undertaken pursuant to the risk-based capital instructions.
 15 31 The risk-based capital plan or revised risk-based capital plan
 15 32 shall be submitted within forty-five days after the occurrence
 15 33 of the regulatory-action-level event, except as follows:
 15 34    a.  If the insurer challenges an adjusted risk-based
 15 35 capital report pursuant to section 521E.7, and in the judgment
 16  1 of the commissioner the challenge is not frivolous, within
 16  2 forty-five days after the notification to the insurer that the
 16  3 commissioner, after a hearing pursuant to section 521E.7, has
 16  4 rejected the insurer's challenge.
 16  5    b.  If the insurer challenges a revised risk-based capital
 16  6 plan pursuant to section 521E.7, and in the judgment of the
 16  7 commissioner the challenge is not frivolous, within forty-five
 16  8 days after the notification to the insurer that the
 16  9 commissioner, after a hearing pursuant to section 521E.7, has
 16 10 rejected the insurer's challenge.
 16 11    4.  The commissioner may retain actuaries, investment
 16 12 experts, and other consultants as deemed necessary by the
 16 13 commissioner to review the insurer's risk-based capital plan
 16 14 or revised risk-based capital plan; examine or analyze the
 16 15 assets, liabilities, and operations of the insurer; and assist
 16 16 in the formulation of the corrective order with respect to the
 16 17 insurer.  Fees of the actuaries, investment experts, or other
 16 18 consultants retained by the commissioner shall be paid by the
 16 19 insurer subject to the review or examination.
 16 20    Sec. 13.  NEW SECTION.  521E.5  AUTHORIZED-CONTROL-LEVEL
 16 21 EVENT.
 16 22    1.  "Authorized-control-level event" means any of the
 16 23 following:
 16 24    a.  The filing of a risk-based capital report by the
 16 25 insurer which indicates that the insurer's total adjusted
 16 26 capital is greater than or equal to its mandatory-control-
 16 27 level risk-based capital but less than its authorized-control-
 16 28 level risk-based capital.
 16 29    b.  Notification by the commissioner to an insurer of an
 16 30 adjusted risk-based capital report that indicates the event in
 16 31 paragraph "a", provided the insurer does not challenge the
 16 32 adjusted risk-based capital report and request a hearing
 16 33 pursuant to section 521E.7.
 16 34    c.  After a hearing pursuant to section 521E.7,
 16 35 notification by the commissioner to the insurer that the
 17  1 commissioner has rejected the insurer's challenge of the
 17  2 adjusted risk-based capital report indicating the event in
 17  3 paragraph "a".
 17  4    d.  Failure of the insurer to respond to a corrective order
 17  5 in a manner satisfactory to the commissioner, unless the
 17  6 insurer has challenged the corrective order pursuant to
 17  7 section 521E.7.
 17  8    e.  Failure of the insurer to respond to the corrective
 17  9 order in a manner satisfactory to the commissioner after the
 17 10 insurer has challenged the corrective order pursuant to
 17 11 section 521E.7, and the commissioner, after a hearing pursuant
 17 12 to section 521E.7, has rejected the challenge or modified the
 17 13 corrective order.
 17 14    2.  In the event of an authorized-control-level event the
 17 15 commissioner shall do either of the following:
 17 16    a.  Take action as required pursuant to section 521E.4 in
 17 17 the same manner as if a regulatory-action-level event has
 17 18 occurred.
 17 19    b.  Take action as necessary to cause the insurer to be
 17 20 placed under supervision or other regulatory control under
 17 21 chapter 507C, if the commissioner deems such action to be in
 17 22 the best interests of the policyholders and creditors of the
 17 23 insurer and of the public.  If the commissioner takes action
 17 24 pursuant to this paragraph, the authorized-control-level event
 17 25 is deemed sufficient grounds for the commissioner to take
 17 26 action pursuant to chapter 507C, and the commissioner has the
 17 27 rights, powers, and duties with respect to the insurer as set
 17 28 forth in chapter 507C.  If the commissioner takes action under
 17 29 this paragraph pursuant to an adjusted risk-based capital
 17 30 report, the insurer is entitled to the protections afforded to
 17 31 insurers under the provisions of chapter 17A relating to
 17 32 summary proceedings.
 17 33    Sec. 14.  NEW SECTION.  521E.6  MANDATORY-CONTROL-LEVEL
 17 34 EVENT.
 17 35    1.  "Mandatory-control-level event" means any of the
 18  1 following events:
 18  2    a.  The filing of a risk-based capital report which
 18  3 indicates that an insurer's total adjusted capital is less
 18  4 than its mandatory-control-level risk-based capital.
 18  5    b.  Notification by the commissioner to an insurer of an
 18  6 adjusted risk-based capital report that indicates the event in
 18  7 paragraph "a", provided the insurer does not challenge the
 18  8 adjusted risk-based capital report and request a hearing
 18  9 pursuant to section 521E.7.
 18 10    c.  After a hearing pursuant to section 521E.7,
 18 11 notification by the commissioner to the insurer that the
 18 12 commissioner has rejected the insurer's challenge of the
 18 13 adjusted risk-based capital report indicating the event in
 18 14 paragraph "a".
 18 15    2.  In the event of a mandatory-control-level event the
 18 16 commissioner shall do the following:
 18 17    a.  With respect to a life insurer, take action as
 18 18 necessary to place the insurer under supervision or other
 18 19 regulatory control under chapter 507C.  If the commissioner
 18 20 takes action pursuant to this paragraph, the mandatory-
 18 21 control-level event is deemed sufficient grounds for the
 18 22 commissioner to take action pursuant to chapter 507C, and the
 18 23 commissioner shall have the rights, powers, and duties with
 18 24 respect to the insurer as set forth in chapter 507C.  If the
 18 25 commissioner takes action pursuant to an adjusted risk-based
 18 26 capital report, the insurer is entitled to the protections of
 18 27 chapter 17A pertaining to summary proceedings.
 18 28 Notwithstanding the provisions of this paragraph, the
 18 29 commissioner may forego any action pursuant to this paragraph
 18 30 for up to ninety days after the mandatory-control-level event
 18 31 if the commissioner finds a reasonable expectation exists that
 18 32 the mandatory-control-level event may be eliminated within the
 18 33 ninety-day period.
 18 34    b.  With respect to a property and casualty insurer, take
 18 35 action as necessary to place the insurer under supervision or
 19  1 other regulatory control under chapter 507C, or, in the case
 19  2 of an insurer which is no longer writing business and which is
 19  3 running off its existing business, the commissioner may allow
 19  4 the insurer to continue its run-off under the supervision of
 19  5 the commissioner.  In either event, the mandatory-control-
 19  6 level event is deemed sufficient grounds for the commissioner
 19  7 to take action under chapter 507C and the commissioner shall
 19  8 have the rights, powers, and duties with respect to the
 19  9 insurer as set forth in chapter 507C.  If the commissioner
 19 10 takes action pursuant to an adjusted risk-based capital
 19 11 report, the insurer is entitled to the protections of chapter
 19 12 17A pertaining to summary proceedings.  Notwithstanding the
 19 13 provisions of this paragraph, the commissioner may forego
 19 14 action for up to ninety days after the mandatory-control-level
 19 15 event if the commissioner finds a reasonable expectation
 19 16 exists that the mandatory-control-level event may be
 19 17 eliminated within the ninety-day period.
 19 18    Sec. 15.  NEW SECTION.  521E.7  CONFIDENTIAL HEARINGS.
 19 19    1.  An insurer shall notify the commissioner of the
 19 20 insurer's request for a confidential hearing within five days
 19 21 after the occurrence of any of the following:
 19 22    a.  Notification to an insurer by the commissioner of an
 19 23 adjusted risk-based capital report.
 19 24    b.  Notification to an insurer by the commissioner of both
 19 25 of the following:
 19 26    (1)  The insurer's risk-based capital plan or revised risk-
 19 27 based capital plan is unsatisfactory.
 19 28    (2)  That the notification pursuant to this paragraph
 19 29 constitutes a regulatory-action-level event with respect to
 19 30 the insurer.
 19 31    c.  Notification to an insurer by the commissioner that the
 19 32 insurer has failed to adhere to its risk-based capital plan or
 19 33 revised risk-based capital plan and that the failure has a
 19 34 substantial adverse effect on the ability of the insurer to
 19 35 eliminate the company-action-level event in accordance with
 20  1 its risk-based capital plan or revised risk-based capital
 20  2 plan.
 20  3    d.  Notification to an insurer by the commissioner of a
 20  4 corrective order with respect to the insurer.
 20  5    2.  An insurer receiving a notification pursuant to
 20  6 subsection 1 is entitled to a confidential hearing before the
 20  7 insurance division, at which the insurer may challenge a
 20  8 determination or action by the commissioner.  Upon receipt of
 20  9 the insurer's request for a hearing, the commissioner shall
 20 10 set a date for the hearing, which shall be no less than ten or
 20 11 more than thirty days after the date of the insurer's request.
 20 12    Sec. 16.  NEW SECTION.  521E.8  CONFIDENTIALITY – USE OF
 20 13 REPORTS AND INFORMATION – PROHIBITION ON ANNOUNCEMENTS –
 20 14 PROHIBITION ON USE IN RATEMAKING.
 20 15    1.  A risk-based capital report, to the extent the
 20 16 information in the report is not required to be set forth in a
 20 17 publicly available annual statement schedule, or a risk-based
 20 18 capital plan, including the results or report of any
 20 19 examination or analysis of an insurer performed pursuant to
 20 20 this chapter, and any corrective order issued by the
 20 21 commissioner pursuant to an examination or analysis, with
 20 22 respect to a domestic insurer or foreign insurer, which are
 20 23 filed with the commissioner, are deemed not to be public
 20 24 records under chapter 22 and are privileged and confidential.
 20 25 This information shall not be made public and is not subject
 20 26 to subpoena, other than by the commissioner, and then only for
 20 27 the purpose of enforcement actions taken by the commissioner
 20 28 pursuant to this chapter or any other provision of the
 20 29 insurance laws of this state.
 20 30    2.  The comparison of an insurer's total adjusted capital
 20 31 to any of its risk-based capital levels is a regulatory tool
 20 32 which may indicate the need for possible corrective action
 20 33 with respect to the insurer, and is not to be used as a means
 20 34 to rank insurers generally.
 20 35    3.  Except as otherwise required under this chapter or as
 21  1 required of a publicly held company by the United States
 21  2 securities and exchange commission or other regulatory agency,
 21  3 the publication or dissemination in any manner of an
 21  4 announcement or statement which contains an assertion,
 21  5 representation, or statement with regard to the risk-based
 21  6 capital levels of an insurer, or of a component derived in the
 21  7 calculation, by an insurer, agent, broker, or other person
 21  8 engaged in any manner in the business of insurance which would
 21  9 be misleading, is prohibited.  However, if a materially false
 21 10 statement comparing an insurer's total adjusted capital to its
 21 11 risk-based capital levels or a misleading comparison of any
 21 12 other amount to the insurer's risk-based capital levels is
 21 13 published or disseminated in any manner and if the insurer is
 21 14 able to demonstrate to the commissioner with substantial proof
 21 15 that the statement is false, misleading, or inappropriate, as
 21 16 the case may be, the insurer may publish an announcement in a
 21 17 written publication for the sole purpose of rebutting the
 21 18 materially false, misleading, or inappropriate statement.
 21 19    4.  The risk-based capital instructions, risk-based capital
 21 20 reports, adjusted risk-based capital reports, risk-based
 21 21 capital plans, and revised risk-based capital plans shall be
 21 22 solely used by the commissioner in monitoring the solvency of
 21 23 insurers and the need for possible corrective action with
 21 24 respect to insurers.  The risk-based capital instructions,
 21 25 risk-based capital reports, adjusted risk-based capital
 21 26 reports, risk-based capital plans, and revised risk-based
 21 27 capital plans shall not be used by the commissioner for
 21 28 ratemaking and shall not be considered or introduced as
 21 29 evidence in any rate proceeding or used by the commissioner to
 21 30 calculate or derive any elements of an appropriate premium
 21 31 level or rate of return for any line of insurance which an
 21 32 insurer or any affiliate is authorized to write.
 21 33    5.  A violation of this section by an insurer, agent,
 21 34 broker, or other person engaged in any manner in the business
 21 35 of insurance constitutes an unfair trade practice under
 22  1 chapter 507B.
 22  2    Sec. 17.  NEW SECTION.  521E.9  SUPPLEMENTAL PROVISIONS –
 22  3 RULES – EXEMPTION.
 22  4    1.  The provisions of this chapter are supplemental to any
 22  5 other provisions of the laws of this state, and shall not
 22  6 preclude or limit any other powers or duties of the
 22  7 commissioner under such laws, including, but not limited to,
 22  8 chapter 507C.
 22  9    2.  The commissioner may adopt rules pursuant to chapter
 22 10 17A necessary for the administration of this chapter.
 22 11    3.  The commissioner may exempt from the application of
 22 12 this chapter any domestic property and casualty insurer which
 22 13 satisfies all of the following:
 22 14    a.  Writes direct business only in this state.
 22 15    b.  Writes direct annual premiums of one million dollars or
 22 16 less.
 22 17    c.  Does not assume reinsurance in excess of five percent
 22 18 of direct premiums written.
 22 19    Sec. 18.  NEW SECTION.  521E.10  FOREIGN INSURERS.
 22 20    1.  A foreign insurer, upon the written request of the
 22 21 commissioner, shall submit to the commissioner a risk-based
 22 22 capital report as of the end of the calendar year just ended
 22 23 by the later of the following:
 22 24    a.  The filing date.
 22 25    b.  Fifteen days after the request is received by the
 22 26 foreign insurer.
 22 27    A foreign insurer, upon the written request of the
 22 28 commissioner, shall promptly submit to the commissioner a copy
 22 29 of any risk-based capital plan that is filed with the
 22 30 insurance commissioner of any other state.
 22 31    2.  In the event of a company-action-level event,
 22 32 regulatory-action-level event, or authorized-control-level
 22 33 event with respect to a foreign insurer as determined under
 22 34 the risk-based capital statute applicable in the state of
 22 35 domicile of the insurer, or, if no risk-based capital statute
 23  1 is in force in that state, under the provisions of this
 23  2 chapter, and if the insurance commissioner of the state of
 23  3 domicile of the foreign insurer fails to require the foreign
 23  4 insurer to file a risk-based capital plan in the manner
 23  5 specified under that state's risk-based capital statute, or,
 23  6 if no risk-based capital statute is in force in that state,
 23  7 pursuant to section 521E.2, the commissioner may require the
 23  8 foreign insurer to file a risk-based capital plan with the
 23  9 commissioner.  The failure of the foreign insurer to file a
 23 10 risk-based capital plan with the commissioner shall be
 23 11 sufficient grounds for the commissioner to order the insurer
 23 12 to cease and desist from writing new insurance business in
 23 13 this state.
 23 14    3.  In the event of a mandatory-control-level event with
 23 15 respect to a foreign insurer, if a domiciliary receiver has
 23 16 not been appointed with respect to the foreign insurer under
 23 17 the rehabilitation and liquidation statute applicable in the
 23 18 state of domicile of the foreign insurer, the commissioner may
 23 19 make application to the district court as permitted under
 23 20 chapter 507C with respect to the liquidation of property of
 23 21 foreign insurers found in this state, and the occurrence of
 23 22 the mandatory-control-level event shall be considered adequate
 23 23 grounds for the application.
 23 24    Sec. 19.  NEW SECTION.  521E.11  IMMUNITY.
 23 25    No liability shall arise on the part of, and no cause of
 23 26 action shall arise against, the commissioner or the insurance
 23 27 division or its employees or agents for an action taken in the
 23 28 exercise of powers or performance of duties under this
 23 29 chapter.
 23 30    Sec. 20.  NEW SECTION.  521E.12  EFFECT OF NOTICES.
 23 31    Notice by the commissioner to an insurer which may result
 23 32 in regulatory action under this chapter is effective upon
 23 33 being sent if transmitted by certified mail, or in the case of
 23 34 any other transmission is effective upon the insurer's receipt
 23 35 of the notice.
 24  1    Sec. 21.  APPLICABILITY.
 24  2    1.  Notwithstanding the provisions of this Act, for risk-
 24  3 based capital reports to be filed in 1997 by a life insurance
 24  4 company, the following shall apply:
 24  5    a.  The commissioner shall take no regulatory action
 24  6 pursuant to this chapter as the result of a risk-based capital
 24  7 report which indicates a company-action-level event.
 24  8    b.  The commissioner shall take the regulatory action
 24  9 provided for under section 521E.3 upon the submission of a
 24 10 risk-based capital report which indicates a regulatory-action-
 24 11 level event under section 521E.4, subsection 1, paragraph "a",
 24 12 "b", or "c".
 24 13    c.  The commissioner shall take the regulatory action
 24 14 provided for under section 521E.4 upon the submission of a
 24 15 risk-based capital report which indicates a regulatory-action-
 24 16 level event under section 521E.4, subsection 1, paragraphs "d"
 24 17 through "i".
 24 18    d.  The commissioner shall take the regulatory action
 24 19 provided for under section 521E.5 upon the submission of a
 24 20 risk-based capital report which indicates a mandatory-control-
 24 21 level event under section 521E.6.
 24 22    2.  Notwithstanding the provisions of this Act, for risk-
 24 23 based capital reports to be filed in 1997 by a property and
 24 24 casualty insurance company, the following shall apply:
 24 25    a.  The commissioner shall take no regulatory action
 24 26 pursuant to this chapter as the result of a risk-based capital
 24 27 report which indicates a company-action-level event.
 24 28    b.  The commissioner shall take the regulatory action
 24 29 provided for under section 521E.3 upon the submission of a
 24 30 risk-based capital report which indicates a regulatory-action-
 24 31 level event under section 521E.4, subsection 1, paragraph "a",
 24 32 "b", or "c".
 24 33    c.  The commissioner shall take the regulatory action
 24 34 provided for under section 521E.4 upon the submission of a
 24 35 risk-based capital report which indicates a regulatory-action-
 25  1 level event under section 521E.4, subsection 1, paragraphs "d"
 25  2 through "i".
 25  3    d.  The commissioner shall take the regulatory action
 25  4 provided for under section 521E.5 upon the submission of a
 25  5 risk-based capital report which indicates a mandatory-control-
 25  6 level event under section 521E.6.  
 25  7                           EXPLANATION
 25  8    This bill relates to measures of risk-based capital for
 25  9 purposes of regulating insurance companies in this state.  The
 25 10 bill establishes a new chapter 521E.
 25 11    New section 515.12A is created and sections 508.5 (stock
 25 12 life insurance company), 508.9 (mutual life insurance
 25 13 company), 515.8 (insurance company other than life insurance
 25 14 company), 515.10 (insurance company other than life insurance
 25 15 company), 515.12 (mutual insurance company other than mutual
 25 16 life insurance company), 515.69 (foreign stock insurance
 25 17 company other than life insurance company), 515.76 (foreign
 25 18 mutual insurance company other than life insurance company),
 25 19 and 520.9 (reciprocals) are amended to provide that capital
 25 20 and surplus requirements for insurers subject to those
 25 21 sections are the greater of the capital and surplus
 25 22 requirements identified in those sections or the applicable
 25 23 capital and surplus requirements under chapter 521E.
 25 24    New section 521E.1 establishes the definitions of terms
 25 25 used in the bill.
 25 26    New section 521E.2 requires a domestic insurer to annually
 25 27 file with the commissioner a report of the insurer's risk-
 25 28 based capital level as of the end of a calendar year.  In
 25 29 addition to the insurance commissioner, the report is to be
 25 30 filed with the national association of insurance commissioners
 25 31 and with the insurance commissioner in each state in which the
 25 32 insurance company is authorized to do business.  The section
 25 33 defines how the risk-based capital is determined for a life
 25 34 and health insurer, and a property and casualty insurer.
 25 35    New section 521E.3 establishes and defines a company-
 26  1 action-level event and the steps which the insurer must take
 26  2 as a result of the event.
 26  3    New section 521E.4 establishes and defines a regulatory-
 26  4 action-level event and steps which the insurer must take as a
 26  5 result of the event.
 26  6    New section 521E.5 establishes and defines an authorized-
 26  7 control-level event.  Upon the occurrence of an authorized-
 26  8 control-level event, the commissioner may take action in the
 26  9 same manner as if a regulatory-action-level event has
 26 10 occurred, or may take action to place the insurer under
 26 11 supervision or other regulatory control.
 26 12    New section 521E.6 establishes and defines a mandatory-
 26 13 control-level event.  Upon the occurrence of a mandatory-
 26 14 control-level event, the commissioner is to take the necessary
 26 15 action to place the insurer under supervision or other
 26 16 regulatory control.
 26 17    New section 521E.7 establishes the right of an insurer to
 26 18 request a hearing upon receipt of the insurer of notification
 26 19 by the commissioner of an adjusted risk-based capital report,
 26 20 or notification by the commissioner that an insurer's risk-
 26 21 based capital plan or revised risk-based capital plan is
 26 22 unsatisfactory and that the notification constitutes a
 26 23 regulatory-action-level event with respect to the insurer.
 26 24    New section 521E.8 provides that all risk-based capital
 26 25 reports are confidential and provides that such reports are
 26 26 not to be used or introduced as evidence with regard to any
 26 27 rate proceeding.  A violation of this section constitutes an
 26 28 unfair trade practice.
 26 29    New section 521E.9 exempts a domestic property and casualty
 26 30 insurer from the application of the chapter if the insurer
 26 31 writes direct business only in this state, writes direct
 26 32 annual premiums of no more than $1 million, and does not
 26 33 assume reinsurance in an amount in excess of five percent of
 26 34 the insurer's direct written premium.
 26 35    New section 521E.10 establishes the manner in which the
 27  1 chapter applies to foreign insurers.
 27  2    New section 521E.11 provides that the commissioner,
 27  3 insurance division, and employees and agents of the division
 27  4 do not incur liability as the result of any action taken in
 27  5 the exercise of powers or performance of duties under chapter
 27  6 521E.
 27  7    New section 521E.12 provides that notice by the
 27  8 commissioner to an insurer which may result in regulatory
 27  9 action under chapter 521E is effective upon being sent if
 27 10 transmitted by certified mail, or in the case of any other
 27 11 transmission is effective upon the insurer's receipt of the
 27 12 notice.
 27 13    The last section of the bill provides for a phased-in
 27 14 application of the bill.  
 27 15 LSB 3372SV 76
 27 16 mj/sc/14.1
     

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