Text: S05177                            Text: S05179
Text: S05100 - S05199                   Text: S Index
Bills and Amendments: General Index     Bill History: General Index

Senate Amendment 5178

Amendment Text

PAG LIN
  1  1    Amend House File 2317, as amended, passed, and
  1  2 reprinted by the House, as follows:
  1  3    #1.  Page 1, by inserting before line 1 the
  1  4 following:  
  1  5                       "DIVISION I 
  1  6             MOTOR VEHICLE SERVICE CONTRACTS 
  1  7    Section 1.  Section 321I.1, subsection 1, Code
  1  8 1999, is amended to read as follows:
  1  9    1.  "Commissioner" means the commissioner of
  1 10 insurance as provided in section 505.1 or the deputy
  1 11 administrator appointed under section 502.601.
  1 12    Sec. 2.  Section 321I.1, Code 1999, is amended by
  1 13 adding the following new subsection:
  1 14    NEW SUBSECTION.  6A.  "Record" means information
  1 15 stored or preserved in any medium, including in an
  1 16 electronic or paper format.  A record includes but is
  1 17 not limited to documents, books, publications,
  1 18 accounts, correspondence, memoranda, agreements,
  1 19 computer files, film, microfilm, photographs, and
  1 20 audio or visual tapes.
  1 21    Sec. 3.  Section 321I.2, subsection 2, Code 1999,
  1 22 is amended to read as follows:.
  1 23    2.  The issuer of a reimbursement insurance policy
  1 24 shall not cancel a reimbursement insurance policy
  1 25 unless a written notice has been received by the
  1 26 insurance division commissioner and by each applicable
  1 27 provider, including automobile dealers and third-party
  1 28 administrators, which.  The notice shall fix the date
  1 29 of cancellation at a date no earlier than ten days
  1 30 after receipt of the notice by the insurance division
  1 31 commissioner and by the applicable provider.  The
  1 32 notice may be made in person or by mail and a post
  1 33 office department receipt of certified or registered
  1 34 mailing shall be deemed proof of receipt of the
  1 35 notice.
  1 36    Sec. 4.  Section 321I.3, subsection 2, Code 1999,
  1 37 is amended to read as follows:
  1 38    2.  In addition to any other required filings, a
  1 39 true and correct an accurate copy of the service
  1 40 contract and the provider's reimbursement insurance
  1 41 policy, the consent to service of process on the
  1 42 commissioner, and such other information as the
  1 43 commissioner requires, shall be filed annually with
  1 44 the commissioner no later than the first day of
  1 45 August.  If the first day of August falls on a weekend
  1 46 or a holiday, the date for filing shall be the next
  1 47 business day.  In addition to the annual filing, the
  1 48 provider shall promptly file copies of any amended
  1 49 documents if material amendments have been made in the
  1 50 materials on file with the division commissioner.  If
  2  1 an annual filing is made after the first of August and
  2  2 sales have occurred during the period when the
  2  3 provider was in noncompliance with this section, the
  2  4 division commissioner shall assess an additional
  2  5 filing fee that is two times the amount normally
  2  6 required for an annual filing.  A fee shall not be
  2  7 charged for interim filings made to keep the materials
  2  8 filed with the division current and accurate.  The
  2  9 annual filing shall be accompanied by a filing fee
  2 10 determined by the commissioner which shall be
  2 11 sufficient to defray the costs of administering this
  2 12 chapter.
  2 13    Sec. 5.  Section 321I.3, Code 1999, is amended by
  2 14 adding the following new subsection:
  2 15    NEW SUBSECTION.  3.  a.  A motor vehicle service
  2 16 contract provider shall promptly file the following
  2 17 information with the insurance commissioner:
  2 18    (1)  A change in the name or ownership of the
  2 19 provider.
  2 20    (2)  The termination of the provider's business.
  2 21    b.  The provider is not required to submit a fee as
  2 22 part of this filing.
  2 23    Sec. 6.  Section 321I.10, Code 1999, is amended to
  2 24 read as follows:
  2 25    321I.10  MISREPRESENTATIONS OF STATE APPROVAL.
  2 26    It is unlawful for a A motor vehicle service
  2 27 contract provider to shall not represent or imply in
  2 28 any manner that the provider has been sponsored,
  2 29 recommended, or approved or that the provider's
  2 30 abilities or qualifications have in any respect been
  2 31 passed upon by the securities bureau, the insurance
  2 32 division, or the state of Iowa, including the
  2 33 commissioner, the insurance division, or the
  2 34 division's securities bureau.
  2 35    Sec. 7.  Section 321I.11, Code 1999, is amended by
  2 36 adding the following new subsection:
  2 37    NEW SUBSECTION.  5A.  A motor vehicle service
  2 38 contract provider shall not repair a motor vehicle
  2 39 covered by a motor vehicle service contract with any
  2 40 of the following:
  2 41    a.  Used parts, unless the provider receives prior
  2 42 written authorization by the vehicle owner.
  2 43    b.  Rebuilt parts, unless the parts are rebuilt
  2 44 according to national standards recognized by the
  2 45 insurance division.
  2 46    Sec. 8.  Section 321I.12, subsection 1, unnumbered
  2 47 paragraph 1, Code 1999, is amended to read as follows:
  2 48    A motor vehicle service contract provider shall
  2 49 keep accurate accounts, books, and records concerning
  2 50 transactions regulated under this chapter.
  3  1    Sec. 9.  Section 321I.12, subsection 1, paragraph
  3  2 a, unnumbered paragraph 1, Code 1999, is amended to
  3  3 read as follows:
  3  4    A motor vehicle service contract provider's
  3  5 accounts, books, and records shall include all of the
  3  6 following:
  3  7    Sec. 10.  Section 321I.12, subsection 1, paragraphs
  3  8 b and c, Code 1999, are amended to read as follows:
  3  9    b.  A motor vehicle service contract provider shall
  3 10 retain all required accounts, books, and records
  3 11 pertaining to a service contract holder for at least
  3 12 two years after the specified period of coverage has
  3 13 expired.  A provider discontinuing business in this
  3 14 state shall maintain its records until the provider
  3 15 furnishes the commissioner satisfactory proof that the
  3 16 provider has discharged all obligations to contract
  3 17 holders in this state.
  3 18    c.  Motor vehicle service contract providers shall
  3 19 make all accounts, books, and records concerning
  3 20 transactions regulated under the chapter available to
  3 21 the commissioner for the purpose of examination.
  3 22    Sec. 11.  Section 321I.14, subsections 1, 2, and 4,
  3 23 Code 1999, are amended to read as follows:
  3 24    1.  The administrator of this chapter commissioner
  3 25 may take actions which are necessary or appropriate
  3 26 for the protection of service contract holders or to
  3 27 administer for the effective administration of this
  3 28 chapter.  The administrator commissioner may make
  3 29 private and public investigations and examinations as
  3 30 the administrator commissioner deems necessary to
  3 31 determine whether any person has violated or is about
  3 32 to violate this chapter or a rule or order adopted or
  3 33 issued pursuant to this chapter.
  3 34    2.  For the purpose of In an investigation or
  3 35 proceeding under this chapter, the administrator
  3 36 commissioner or any officer designated by the
  3 37 administrator commissioner may administer oaths and
  3 38 affirmations, subpoena witnesses and compel their
  3 39 attendance, take evidence, and require the production
  3 40 of books, papers, correspondence, memoranda,
  3 41 agreements, or other documents or records which the
  3 42 administrator commissioner deems relevant or material
  3 43 to an inquiry, all of which may be enforced in
  3 44 accordance with chapter 17A.
  3 45    4.  If an investigation provides reasonable
  3 46 evidence Upon the commissioner's determination that a
  3 47 person violated provider has engaged, is engaging, or
  3 48 is about to engage in any act or practice constituting
  3 49 a violation of this chapter or a rule adopted pursuant
  3 50 to this chapter, the commissioner may issue an a
  4  1 summary order directed at directing the person to
  4  2 cease and desist from engaging in the act or practice
  4  3 resulting in the violation or to take other
  4  4 affirmative action as in the judgment of the
  4  5 commissioner is necessary to comply with the
  4  6 requirements of this chapter.
  4  7    a.  If a hearing is not timely requested, the
  4  8 summary order becomes final by operation of law.  The
  4  9 order shall remain effective from the date of issuance
  4 10 until the date the order becomes final by operation of
  4 11 law or is overturned by a presiding officer or court
  4 12 following a request for hearing.  A person who has
  4 13 been issued a summary order under this subsection may
  4 14 contest the order by filing a request for a contested
  4 15 case proceeding as provided in chapter 17A and in
  4 16 accordance with rules adopted by the commissioner.
  4 17 However, the person shall have at least thirty days
  4 18 from the date that the order is issued in order to
  4 19 file the request.  Section 17A.18A is inapplicable to
  4 20 a summary order issued under this subsection.
  4 21    b.  A person violating a summary order issued under
  4 22 this subsection shall be deemed in contempt of that
  4 23 order.  The commissioner may petition the district
  4 24 court to enforce the order as certified by the
  4 25 commissioner.  The district court shall adjudge the
  4 26 person in contempt of the order if the court finds
  4 27 after hearing that the person is not in compliance
  4 28 with the order.  The court shall assess a civil
  4 29 penalty against the person in an amount not less than
  4 30 three thousand dollars but not greater than ten
  4 31 thousand dollars per violation, and may issue further
  4 32 orders as it deems appropriate.
  4 33    Sec. 12.  Section 321I.15, Code 1999, is amended to
  4 34 read as follows:
  4 35    321I.15  AUDITS.
  4 36    The commissioner may examine or cause to be
  4 37 examined the books, papers, records, memoranda, or
  4 38 documents of a motor vehicle service contract provider
  4 39 for the purpose of verifying compliance with this
  4 40 chapter.  The commissioner may require, by a subpoena,
  4 41 the attendance of the provider, or the provider's
  4 42 representative, and any other witness whom the
  4 43 commissioner deems necessary or expedient, and the
  4 44 production of books, papers, records, memoranda, or
  4 45 documents relating in any manner to compliance with
  4 46 this chapter if a provider or witness fails or refuses
  4 47 to produce the documents for examination when
  4 48 requested by the commissioner.
  4 49    Sec. 13.  Section 321I.16, Code 1999, is amended to
  4 50 read as follows:
  5  1    321I.16  VIOLATIONS – PENALTIES.
  5  2    1.  a.  Except as provided in paragraph "b", all of
  5  3 the following shall apply:
  5  4    (1)  A violation of this chapter or a rule adopted
  5  5 pursuant to this chapter is a violation of section
  5  6 714.16, subsection 2, paragraph "a".  The remedies and
  5  7 penalties provided by section 714.16, including but
  5  8 not limited to injunctive relief and civil penalties,
  5  9 apply to violations of this chapter.
  5 10    (2)  A person who willfully and knowingly violates
  5 11 this chapter or a rule adopted pursuant to this
  5 12 chapter is, upon conviction, guilty of a class "D"
  5 13 felony.
  5 14    b.  A motor vehicle service contract provider who
  5 15 fails to file documents and information with the
  5 16 commissioner as required pursuant to section 321I.3
  5 17 may be subject to a civil penalty.  The amount of the
  5 18 civil penalty shall not be more than four hundred
  5 19 dollars plus two dollars for each motor vehicle
  5 20 service contract that the person executed prior to
  5 21 satisfying the filing requirement.  However, a person
  5 22 who fails to file information regarding a change in
  5 23 the provider's name or the termination of the
  5 24 provider's business as required pursuant to section
  5 25 321I.3 is subject to a civil penalty of not more than
  5 26 five hundred dollars.
  5 27    2.  If the commissioner believes that grounds exist
  5 28 for the criminal prosecution of persons subject to
  5 29 this chapter a motor vehicle service contract provider
  5 30 for violations of violating this chapter or any other
  5 31 law of this state, the commissioner may forward to the
  5 32 attorney general or the county attorney the grounds
  5 33 for the belief, including all evidence in the
  5 34 commissioner's possession, in order that the attorney
  5 35 general or the county attorney may proceed with the
  5 36 matter as for action deemed appropriate by the
  5 37 attorney general or county attorney.  At the request
  5 38 of the attorney general, the county attorney shall
  5 39 appear and prosecute the action when brought in the
  5 40 county served by the county attorney.
  5 41    3.  A person who willfully and knowingly violates
  5 42 this chapter or a rule adopted pursuant to this
  5 43 chapter is, upon conviction, guilty of a class "D"
  5 44 felony.
  5 45    Sec. 14.  Section 321I.9, Code 1999, is repealed.
  5 46    Sec. 15.  DIRECTIONS TO THE CODE EDITOR.  The Code
  5 47 editor is directed to transfer chapter 321I to or near
  5 48 chapter 523J, and correct internal references as
  5 49 necessary.  
  5 50                       DIVISION II
  6  1               IOWA UNIFORM SECURITIES ACT
  6  2    Sec. 16.  Section 502.304, subsection 1, unnumbered
  6  3 paragraph 1, Code Supplement 1999, is amended to read
  6  4 as follows:
  6  5    The administrator may by order deny, suspend, or
  6  6 revoke a registration or may censure, impose a civil
  6  7 penalty upon, or bar an applicant, registrant, branch
  6  8 manager, assistant branch manager, supervisor, or any
  6  9 officer, director, partner, or person occupying a
  6 10 similar status or performing similar functions for a
  6 11 registrant.  A person barred under this subsection may
  6 12 be prohibited by the administrator from employment
  6 13 with a registered broker-dealer or investment adviser.
  6 14 The administrator may restrict the person barred from
  6 15 engaging in any activity for which registration is
  6 16 required.  Any action by the administrator under this
  6 17 subsection may be taken if the order is found to be in
  6 18 the public interest and it is found that the applicant
  6 19 or registrant or, in the case of a broker-dealer or
  6 20 investment adviser, a partner, an officer, or a
  6 21 director, a person occupying a similar status or
  6 22 performing similar functions, or a person directly or
  6 23 indirectly controlling the broker-dealer or investment
  6 24 adviser, or a branch manager, assistant branch
  6 25 manager, or supervisor:
  6 26    Sec. 17.  Section 502.604, subsection 1, Code
  6 27 Supplement 1999, is amended to read as follows:
  6 28    1.  Issue an a summary order directed at the person
  6 29 requiring the person to cease and desist from engaging
  6 30 in such act or practice or to take other affirmative
  6 31 action as in the judgment of the administrator is
  6 32 necessary to comply with the requirements of this
  6 33 chapter.
  6 34    a.  If a hearing is not timely requested, the
  6 35 summary order becomes final by operation of law.  The
  6 36 order shall remain effective from the date of issuance
  6 37 until the date the order becomes final by operation of
  6 38 law or is overturned by a presiding officer or court
  6 39 following a request for hearing.  A person who has
  6 40 been issued a summary order under this subsection may
  6 41 contest the order by filing a request for a contested
  6 42 case proceeding as provided in chapter 17A and in
  6 43 accordance with rules adopted by the administrator.
  6 44 However, the person shall have at least thirty days
  6 45 from the date that the order is issued in order to
  6 46 file the request.  Section 17A.18A is inapplicable to
  6 47 a summary order issued under this subsection.
  6 48    b.  A person violating a summary order issued under
  6 49 this subsection shall be deemed in contempt of that
  6 50 order.  The administrator may petition the district
  7  1 court to enforce the order as certified by the
  7  2 administrator.  The district court shall adjudge the
  7  3 person in contempt of the order, if the court finds
  7  4 after hearing that the person is not in compliance
  7  5 with the order.  The court shall assess a civil
  7  6 penalty against the person in an amount not less than
  7  7 three thousand dollars but not greater than ten
  7  8 thousand dollars per violation, and may issue further
  7  9 orders as it deems appropriate.
  7 10    Sec. 18.  Section 502.605, subsection 1, Code 1999,
  7 11 is amended to read as follows:
  7 12    1.  a.  Any Except as provided in paragraph "b", a
  7 13 person who willfully and knowingly violates any
  7 14 provision of this chapter, or any rule or order under
  7 15 this chapter, shall be is guilty of a class "D"
  7 16 felony.
  7 17    b.  A person who willfully and knowingly violates
  7 18 section 502.401, 502.402, or 502.403, or section
  7 19 502.408, subsection 1 or 2, resulting in a loss of
  7 20 more than ten thousand dollars is guilty of a class
  7 21 "C" felony.
  7 22    Sec. 19.  Section 502.609, subsection 1, unnumbered
  7 23 paragraph 1, Code 1999, is amended to read as follows:
  7 24    Every applicant for registration under this
  7 25 chapter, and every issuer which proposes to offer a
  7 26 security in this state, unless exempt under section
  7 27 502.202 or 502.203 and the administrator by rule or
  7 28 order waives the filing, shall file with the
  7 29 administrator, in such form as the administrator by
  7 30 rule prescribes, an irrevocable consent appointing the
  7 31 administrator or the administrator's successor in
  7 32 office to be such person's attorney to receive service
  7 33 of any lawful process in any noncriminal suit, action
  7 34 or proceeding against such person or the successor,
  7 35 executor or administrator of such person which arises
  7 36 under this chapter or any rule or order hereunder
  7 37 after the consent has been filed, with the same
  7 38 validity as if served personally on the person filing
  7 39 the consent.  The consent need not be filed by a
  7 40 person who has filed a consent in connection with a
  7 41 previous registration or notice filing which is then
  7 42 in effect.  Service may be made by leaving a copy of
  7 43 the process in the office of the administrator, but it
  7 44 is not effective unless the plaintiff, including the
  7 45 administrator when acting as such, does the following:  
  7 46                      DIVISION III
  7 47             BUSINESS OPPORTUNITY PROMOTIONS
  7 48    Sec. 20.  Section 523B.1, Code Supplement 1999, is
  7 49 amended by adding the following new subsection:
  7 50    NEW SUBSECTION.  10A.  "Record" means the same as
  8  1 defined in section 321I.1.
  8  2    Sec. 21.  Section 523B.2, subsection 2, paragraph
  8  3 b, subparagraph (2), Code Supplement 1999, is amended
  8  4 to read as follows:
  8  5    (2)  A disclosure document prepared pursuant to the
  8  6 federal trade commission rule entitled "Disclosure
  8  7 relating to disclosure requirements and prohibitions
  8  8 concerning franchising and business opportunity
  8  9 ventures", as adopted by rule of the administrator in
  8 10 accordance with 16 C.F.R. } 436 (1979).  The
  8 11 administrator may by rule adopt any amendment to the
  8 12 disclosure document prepared pursuant to 16 C.F.R. }
  8 13 436 (1979) that has been adopted by the federal trade
  8 14 commission.
  8 15    Sec. 22.  Section 523B.2, subsection 2, Code
  8 16 Supplement 1999, is amended by adding the following
  8 17 new paragraph:
  8 18    NEW PARAGRAPH.  c.  The seller shall disclose to
  8 19 the administrator in the disclosure document or
  8 20 otherwise any sales or offers made in this state prior
  8 21 to registration.
  8 22    Sec. 23.  Section 523B.2, subsection 4, Code
  8 23 Supplement 1999, is amended to read as follows:
  8 24    4.  EFFECTIVE DATE.  A registration automatically
  8 25 becomes effective upon the expiration of the fifteenth
  8 26 thirtieth full business day after the complete filing
  8 27 is received by the administrator, provided that no an
  8 28 order has not been issued or a proceeding is not
  8 29 pending under subsection 10.  The administrator may by
  8 30 order waive or reduce the time period prior to
  8 31 effectiveness, provided that a complete filing has
  8 32 been made.  The administrator may by order defer the
  8 33 effective date until the expiration of the fifteenth
  8 34 thirtieth full business day after the filing of an
  8 35 amendment with the administrator.
  8 36    Sec. 24.  Section 523B.2, subsection 9, paragraph
  8 37 c, Code Supplement 1999, is amended by adding the
  8 38 following new subparagraph:
  8 39    NEW SUBPARAGRAPH.  (8)  The rights and
  8 40 responsibilities of the parties regarding the
  8 41 marketing of a business opportunity, including but not
  8 42 limited to all of the following:
  8 43    (a)  Whether the seller assigns the purchaser a
  8 44 territory in which to sell a business opportunity.
  8 45    (b)  Whether the seller assists the purchaser in
  8 46 finding locations in which to sell a business
  8 47 opportunity.
  8 48    (c)  Whether the purchaser is solely responsible
  8 49 for marketing a business opportunity.
  8 50    Sec. 25.  Section 523B.8, subsection 1, Code 1999,
  9  1 is amended to read as follows:
  9  2    1.  a.  If it appears to the administrator Upon the
  9  3 administrator's determination that a person has
  9  4 engaged, is engaging, or is about to engage in any act
  9  5 or practice constituting a violation of this chapter
  9  6 or a rule or order adopted or issued under this
  9  7 chapter, the administrator may issue an a summary
  9  8 order directed at directing the person requiring the
  9  9 person to cease and desist from engaging in the act or
  9 10 practice or to take other affirmative action as in the
  9 11 judgment of the administrator is necessary to comply
  9 12 with the requirements of this chapter.
  9 13    b.  The If a hearing is not timely requested, the
  9 14 summary order becomes final by operation of law.  The
  9 15 order shall remain effective from the date of issuance
  9 16 until the date the order becomes final by operation of
  9 17 law or is overturned by a presiding officer or court
  9 18 following a request for hearing.  A person named in
  9 19 the order may, within fourteen days of the date of the
  9 20 order, file a written who has been issued a summary
  9 21 order under this subsection may contest it by filing a
  9 22 request for a hearing.  The hearing shall be held in
  9 23 accordance with contested case proceeding as provided
  9 24 in chapter 17A and in accordance with the rules
  9 25 adopted by the administrator.  However, the person
  9 26 shall have at least thirty days from the date that the
  9 27 order is issued in order to file the request.  Section
  9 28 17A.18A is inapplicable to a summary order issued
  9 29 under this subsection.
  9 30    c.  A person violating a summary order issued under
  9 31 this subsection shall be deemed in contempt of that
  9 32 order.  The administrator may petition the district
  9 33 court to enforce the order as certified by the
  9 34 administrator.  The district court shall adjudge the
  9 35 person in contempt of the order if the court finds
  9 36 after hearing that the person is not in compliance
  9 37 with the order.  The court shall assess a civil
  9 38 penalty against the person in an amount not less than
  9 39 three thousand dollars but not greater than ten
  9 40 thousand dollars per violation, and may issue further
  9 41 orders as it deems appropriate.
  9 42    Any A consent agreement between the administrator
  9 43 and the seller may be filed in the miscellaneous
  9 44 docket of the clerk of the district court.
  9 45    Sec. 26.  Section 523B.8, subsection 2, paragraph
  9 46 b, Code 1999, is amended to read as follows:
  9 47    b.  For the purpose of an investigation or
  9 48 proceeding under this chapter, the administrator or an
  9 49 officer designated by the administrator may administer
  9 50 oaths and affirmations, subpoena witnesses, compel the
 10  1 attendance of witnesses, take evidence and require the
 10  2 production of books, papers, correspondence,
 10  3 memoranda, agreements, or other documents or records
 10  4 which the administrator deems relevant or material to
 10  5 the inquiry.  
 10  6                       DIVISION IV
 10  7              RESIDENTIAL SERVICE CONTRACTS
 10  8    Sec. 27.  Section 22.7, Code Supplement 1999, is
 10  9 amended by adding the following new subsection:
 10 10    NEW SUBSECTION.  39.  Information obtained by the
 10 11 commissioner of insurance in the course of an
 10 12 investigation as provided in section 502.603, 523B.8,
 10 13 or 523C.23.
 10 14    Sec. 28.  Section 523C.1, Code 1999, is amended by
 10 15 adding the following new subsection:
 10 16    NEW SUBSECTION.  6A.  "Record" means the same as
 10 17 defined in section 321I.1.
 10 18    Sec. 29.  Section 523C.7, subsection 4, Code 1999,
 10 19 is amended to read as follows:
 10 20    4.  To the extent necessary to administer the
 10 21 provisions of this chapter, the commissioner may,
 10 22 after notice and hearing, institute a residential
 10 23 service contract form approval or form review fee as
 10 24 the commissioner shall by.  If the commissioner
 10 25 establishes a fee, the amount of the fee shall be set
 10 26 by rule set adopted pursuant to chapter 17A.  The fee,
 10 27 if imposed, may be by dollar amount or based upon a
 10 28 percentage of the sale value of the contract.
 10 29 However, the fee shall not exceed fifty thousand
 10 30 dollars.
 10 31    Sec. 30.  Section 523C.19, Code 1999, is amended to
 10 32 read as follows:
 10 33    523C.19  CEASE AND DESIST ORDERS.
 10 34    1.  If an investigation provides reasonable
 10 35 evidence Upon the commissioner's determination that a
 10 36 person violated any provision has engaged, is
 10 37 engaging, or is about to engage in any act or practice
 10 38 constituting a violation of this chapter or any rule
 10 39 adopted pursuant to this chapter, the commissioner may
 10 40 issue an order directed at directing the person to
 10 41 cease and desist from engaging in the act or practice
 10 42 resulting in the violation or to take other
 10 43 affirmative action as in the judgment of the
 10 44 commissioner is necessary to comply with the
 10 45 requirements of this chapter.
 10 46    2.  If a hearing is not timely requested, the
 10 47 summary order becomes final by operation of law.  The
 10 48 order shall remain effective from the date of issuance
 10 49 until the date the order becomes final by operation of
 10 50 law or is overturned by a presiding officer or court
 11  1 following a request for hearing.  A person who has
 11  2 been issued a summary order under this section may
 11  3 contest it by filing a request for a contested case
 11  4 proceeding as provided in chapter 17A and in
 11  5 accordance with rules adopted by the commissioner.
 11  6 However, the person shall have at least thirty days
 11  7 from the date that the order is issued in order to
 11  8 file the request.  Section 17A.18A is inapplicable to
 11  9 a summary order issued under this subsection.
 11 10    3.  A person violating a summary order issued under
 11 11 this subsection shall be deemed in contempt of that
 11 12 order.  The commissioner may petition the district
 11 13 court to enforce the order as certified by the
 11 14 commissioner.  The district court shall adjudge the
 11 15 person in contempt of the order if the court finds
 11 16 after hearing that the person is not in compliance
 11 17 with the order.  The court shall assess a civil
 11 18 penalty against the person in an amount not less than
 11 19 three thousand dollars but not greater than ten
 11 20 thousand dollars per violation, and may issue further
 11 21 orders as it deems appropriate.
 11 22    Sec. 31.  NEW SECTION.  523C.23  INVESTIGATIONS AND
 11 23 SUBPOENAS.
 11 24    1.  a.  In enforcing this chapter, the commissioner
 11 25 may conduct a public or private investigation in order
 11 26 to do any of the following:
 11 27    (1)  Determine whether a person has violated or is
 11 28 about to violate a provision of this chapter or a rule
 11 29 or order under this chapter.
 11 30    (2)  Aid in the enforcement of this chapter or in
 11 31 the prescribing of rules and forms under this chapter.
 11 32    b.  In carrying out this subsection, the
 11 33 commissioner may do all of the following:
 11 34    (1)  Conduct the investigation within or outside of
 11 35 this state.
 11 36    (2)  Require or allow a person to file a statement
 11 37 in writing regarding the facts or circumstances
 11 38 concerning a matter to be investigated.  The
 11 39 commissioner may require that the statement be made
 11 40 under oath.
 11 41    (3)  Apply to the district court for the issuance
 11 42 of an order requiring a person's appearance before the
 11 43 commissioner or the attorney general.  The person may
 11 44 also be required to produce documentary evidence
 11 45 germane to the subject of the investigation.  The
 11 46 failure to obey an order under this subsection
 11 47 constitutes contempt of court.
 11 48    c.  Information obtained in the course of an
 11 49 investigation is confidential as provided in section
 11 50 22.7.  However, upon a determination that disclosure
 12  1 of the information is necessary or appropriate in the
 12  2 public interest or for the protection of consumers,
 12  3 the commissioner may do any of the following:
 12  4    (1)  Share information obtained during the course
 12  5 of the investigation with another regulatory authority
 12  6 or government agency.
 12  7    (2)  Publish information obtained during the course
 12  8 of the investigation which concerns a violation of
 12  9 this chapter or a rule or order under this chapter.
 12 10    2.  Except as provided in section 523C.19, a
 12 11 proceeding instituted under this chapter shall be
 12 12 conducted pursuant to chapter 17A and rules adopted by
 12 13 the commissioner pursuant to chapter 17A.
 12 14    3.  In an investigation or proceeding conducted
 12 15 under this chapter, the commissioner or any designee
 12 16 of the commissioner may administer oaths and
 12 17 affirmations, subpoena witnesses, compel their
 12 18 attendance, take evidence, and require the production
 12 19 of any records which the commissioner deems relevant
 12 20 or material to the inquiry.
 12 21    4.  A person is not excused from attending and
 12 22 testifying or from producing a document or record
 12 23 before the commissioner or in obedience to a subpoena
 12 24 of the commissioner or an officer designated by the
 12 25 commissioner, or in a proceeding instituted by the
 12 26 commissioner, on the grounds that the testimony or
 12 27 evidence, documentary or otherwise, required of the
 12 28 person may tend to incriminate or subject the person
 12 29 to a penalty or forfeiture.  However, a person shall
 12 30 not be prosecuted or subjected to any penalty or
 12 31 forfeiture due to a transaction or matter about which
 12 32 the person is compelled, after claiming privilege
 12 33 against self-incrimination, to testify or produce
 12 34 evidence, documentary or otherwise.  The person
 12 35 testifying, however, is not exempt from prosecution
 12 36 and punishment for perjury or contempt committed while
 12 37 testifying.  
 12 38                       DIVISION V
 12 39                RETIREMENT CARE CONTRACTS
 12 40    Sec. 32.  Section 523D.13, Code 1999, is amended to
 12 41 read as follows:
 12 42    523D.13  COMPLIANCE ORDERS.
 12 43    1.  Upon the commissioner's determination that a
 12 44 provider has violated a provision has engaged, is
 12 45 engaging, or is about to engage in any act or practice
 12 46 constituting a violation of this chapter or a rule
 12 47 adopted pursuant to this chapter, the commissioner may
 12 48 issue an a summary order requiring a directing the
 12 49 provider to cease and desist from an unlawful engaging
 12 50 in the act or practice resulting in the violation or
 13  1 to take other affirmative action as in the judgment of
 13  2 the commissioner is necessary to comply with the
 13  3 requirements of this chapter.
 13  4    2.  The person named in the order may, within
 13  5 fourteen days after receipt of the order, file a
 13  6 written request for a hearing.  The hearing shall be
 13  7 held in accordance with chapter 17A.  If a hearing is
 13  8 not requested, the order shall become permanent.  If a
 13  9 hearing is not timely requested, the summary order
 13 10 becomes final by operation of law.  The order shall
 13 11 remain effective from the date of issuance until the
 13 12 date the order becomes final by operation of law or is
 13 13 overturned by a presiding officer or court following a
 13 14 request for hearing.  A person who has been issued a
 13 15 summary order under this section may contest it by
 13 16 filing a request for a contested case proceeding as
 13 17 provided in chapter 17A and in accordance with rules
 13 18 adopted by the commissioner.  However, the person
 13 19 shall have at least thirty days from the date that the
 13 20 order is issued in order to file the request.  Section
 13 21 17A.18A is inapplicable to a summary order issued
 13 22 under this section.
 13 23    3.  A person violating a summary order issued under
 13 24 this section shall be deemed in contempt of that
 13 25 order.  The commissioner may petition the district
 13 26 court to enforce the order as certified by the
 13 27 commissioner.  The district court shall adjudge the
 13 28 person in contempt of the order if the court finds
 13 29 after hearing that the person is not in compliance
 13 30 with the order.  The court shall assess a civil
 13 31 penalty against the person in an amount not less than
 13 32 three thousand dollars but not greater than ten
 13 33 thousand dollars per violation, and may issue further
 13 34 orders as it deems appropriate.  
 13 35                       DIVISION VI
 13 36                PROBATE TRANSFER ON DEATH
 13 37    Sec. 33.  Section 633.801, subsection 6, Code 1999,
 13 38 is amended to read as follows:
 13 39    6.  "Security" means a security as defined in
 13 40 section 502.102.  For purposes of this chapter,
 13 41 "security" includes, but is not limited to, a
 13 42 certificated security, an uncertificated security, and
 13 43 a security account.  
 13 44                      DIVISION VII
 13 45             VIATICAL SETTLEMENT CONTRACTS".
 13 46    #2.  Title page, by striking lines 1 and 2 and
 13 47 inserting the following:
 13 48    "An Act relating to entities and subject matter
 13 49 under the regulatory authority of the insurance
 13 50 division, including motor vehicle service contracts,
 14  1 securities, business opportunities, residential
 14  2 service contracts, retirement care contracts, transfer
 14  3 on death probate provisions, viatical settlement
 14  4 contracts; and establishing penalties and making
 14  5 penalties applicable."
 14  6    #3.  By renumbering as necessary.  
 14  7 
 14  8 
 14  9                               
 14 10 MICHAEL E. GRONSTAL
 14 11 HF 2317.301 78
 14 12 mj/cf
     

Text: S05177                            Text: S05179
Text: S05100 - S05199                   Text: S Index
Bills and Amendments: General Index     Bill History: General Index

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