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Senate File 2409

Partial Bill History

Bill Text

PAG LIN
  1  1                                           SENATE FILE 2409
  1  2                             AN ACT 
  1  3 RELATING TO THE OPERATION AND REGULATION OF INSURANCE
  1  4    COMPANIES, MUTUAL INSURANCE ASSOCIATIONS, BENEVOLENT
  1  5    ASSOCIATIONS, HEALTH MAINTENANCE ORGANIZATIONS, AND 
  1  6    OTHER INSURANCE OR RISK-ASSUMING ENTITIES, INCLUDING
  1  7    THE RIGHTS AND DUTIES OF SUCH ENTITIES AND THE POWERS
  1  8    AND AUTHORITY OF THE INSURANCE COMMISSIONER AND PROVIDING
  1  9    EFFECTIVE DATES.
  1 10 
  1 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1 12  
  1 13    Section 1.  Section 87.4, unnumbered paragraph 2, Code
  1 14 1999, is amended to read as follows:
  1 15    A self-insurance association formed under this section and
  1 16 an association comprised of cities or counties, or both, or
  1 17 community colleges as defined in section 260C.2 or school
  1 18 corporations, or both, or other political subdivisions, which
  1 19 have entered into an agreement under chapter 28E for the
  1 20 purpose of establishing a self-insured program for the payment
  1 21 of workers' compensation benefits are exempt from taxation
  1 22 under section 432.1.
  1 23    Sec. 2.  Section 87.4, unnumbered paragraph 4, Code 1999,
  1 24 is amended to read as follows:
  1 25    A self-insured program for the payment of workers'
  1 26 compensation benefits established by an association comprised
  1 27 of cities or counties, or both, or community colleges, as
  1 28 defined in section 260C.2, or other political subdivisions,
  1 29 which have entered into an agreement under chapter 28E, is not
  1 30 insurance, and is not subject to regulation under chapters 505
  1 31 through 523C.  Membership in such an association together with
  1 32 payment of premiums due relieves the member from obtaining
  1 33 insurance as required in section 87.1.  Such an association is
  1 34 not required to submit its plan or program to the commissioner
  1 35 of insurance for review and approval prior to its
  2  1 implementation and is not subject to rules or rates adopted by
  2  2 the commissioner relating to workers' compensation group self-
  2  3 insurance programs.  Such a program is deemed to be in
  2  4 compliance with this chapter.
  2  5    Sec. 3.  Section 100A.1, Code 1999, is amended by adding
  2  6 the following new paragraph:
  2  7    NEW PARAGRAPH.  j.  The fraud bureau within the insurance
  2  8 division of the department of commerce.
  2  9    Sec. 4.  Section 505.8, subsection 5, Code Supplement 1999,
  2 10 is amended by striking the subsection.
  2 11    Sec. 5.  Section 505.8, Code Supplement 1999, is amended by
  2 12 adding the following new subsection:
  2 13    NEW SUBSECTION.  7.  The commissioner shall adopt rules
  2 14 protecting the privacy of information held by an insurer or an
  2 15 agent consistent with the federal Gramm-Leach-Bliley Act, Pub.
  2 16 L. No. 106-102.
  2 17    Sec. 6.  NEW SECTION.  505.23  HEARINGS.
  2 18    If an evidentiary hearing is conducted in a proceeding
  2 19 pursuant to sections 508B.7, 515G.7, 521A.3, or 521A.14, or in
  2 20 a proceeding with respect to a merger or consolidation
  2 21 pursuant to chapter 521, the proceeding is a contested case
  2 22 subject to chapter 17A.
  2 23    Sec. 7.  Section 508.4, Code 1999, is amended to read as
  2 24 follows:
  2 25    508.4  APPROVAL OF AMENDMENTS.
  2 26    All amendments to such articles and amendments hereafter
  2 27 made to the articles of incorporation of companies already
  2 28 organized under the laws of this state shall be approved in
  2 29 like manner.
  2 30    A company shall file with the commissioner bylaws and
  2 31 subsequent amendments to such bylaws within thirty days of the
  2 32 adoption of such bylaws and amendments.
  2 33    Sec. 8.  Section 508B.3, unnumbered paragraph 1, Code 1999,
  2 34 is amended to read as follows:
  2 35    A plan of conversion shall not be unfair or inequitable
  3  1 fair and equitable to policyholders.  A plan of conversion is
  3  2 not unfair or inequitable fair and equitable if it satisfies
  3  3 the conditions of subsections 1, 2, or 3.  The commissioner
  3  4 may determine that whether any other plan proposed by a mutual
  3  5 company is not unfair or inequitable fair and equitable to its
  3  6 policyholders.
  3  7    Sec. 9.  Section 508B.4, Code 1999, is amended to read as
  3  8 follows:
  3  9    508B.4  ELIGIBLE POLICYHOLDERS PARTICIPATION.
  3 10    The policyholders who are entitled to notice of and to vote
  3 11 upon approval of a plan of conversion and entitled to notice
  3 12 of a public hearing are the policyholders whose policies or
  3 13 contracts are in force on the date of adoption of the plan of
  3 14 conversion.  Each policyholder whose policy has been in force
  3 15 for at least one year prior to the date is entitled to the
  3 16 consideration, if any, provided for the policyholder in the
  3 17 plan based on the policyholder's membership interest
  3 18 determined pursuant to this chapter, but only to the extent
  3 19 that if the policyholder's membership interest arose from
  3 20 policies or contracts a policy or contract in force on the
  3 21 effective date of the conversion and which were in force such
  3 22 membership interest has been held continuously for at least
  3 23 one year prior to the date of adoption of the plan.  For this
  3 24 purpose, any changes in status of, or premiums in excess of
  3 25 those required on the policies or contracts occurring or made
  3 26 after the date one year prior to the date of adoption of the
  3 27 plan shall be disregarded.
  3 28    Sec. 10.  Section 508B.7, Code 1999, is amended to read as
  3 29 follows:
  3 30    508B.7  REVIEW OF PLAN BY COMMISSIONER – HEARING
  3 31 AUTHORIZED – APPROVAL.
  3 32    The commissioner of insurance shall review the plan.  The
  3 33 commissioner shall approve the plan if the commissioner finds
  3 34 the plan complies with all provisions of law, the plan is not
  3 35 unfair or inequitable fair and equitable to the mutual company
  4  1 and its policyholders, and that the reorganized company will
  4  2 have the amount of capital and surplus deemed by the
  4  3 commissioner to be reasonably necessary for its future
  4  4 solvency.  The commissioner may order a hearing on the
  4  5 fairness and equity of the terms of the plan after giving
  4  6 written notice of the hearing to the mutual company, its
  4  7 policyholders, and other interested persons, all of whom have
  4  8 the right to appear at the hearing.  Costs incurred in
  4  9 connection with the notice shall be paid by the company.
  4 10    Sec. 11.  Section 508B.9, unnumbered paragraph 1, Code
  4 11 1999, is amended to read as follows:
  4 12    When the commissioner and the policyholders approve the
  4 13 conversion plan as provided in this chapter, the commissioner
  4 14 shall issue a new certificate of authority to the reorganized
  4 15 company effective on the effective date specified of the
  4 16 conversion as provided in the plan.  The reorganized company
  4 17 is a continuation of the mutual life insurance company and the
  4 18 conversion shall not annul or modify any of the mutual
  4 19 company's existing suits, contracts, or liabilities except as
  4 20 provided in the approved conversion plan.  All rights,
  4 21 franchises, and interests of the mutual company in and to
  4 22 property, assets, and other interests shall be transferred to
  4 23 and shall vest in the reorganized company and the reorganized
  4 24 company shall assume all obligations and liabilities of the
  4 25 mutual company.
  4 26    Sec. 12.  Section 508B.14, unnumbered paragraph 2, Code
  4 27 Supplement 1999, is amended to read as follows:
  4 28    An action challenging the validity of a conversion plan, or
  4 29 any part of a conversion plan, shall not be commenced more
  4 30 than one hundred eighty thirty days following the date of
  4 31 approval by the commissioner, unless an application for
  4 32 rehearing is filed pursuant to section 17A.16, subsection 2.
  4 33 If an application for rehearing is filed, then such action
  4 34 must be filed within thirty days after that application is
  4 35 denied or deemed denied or, if the application is granted,
  5  1 within thirty days after the issuance of the commissioner's
  5  2 final decision on rehearing.
  5  3    Sec. 13.  Section 508C.3, subsection 3, Code 1999, is
  5  4 amended by adding the following new paragraphs:
  5  5    NEW PARAGRAPH.  j.  An obligation that does not arise under
  5  6 the express written terms of a covered policy.
  5  7    NEW PARAGRAPH.  k.  A contractual agreement that
  5  8 establishes a member insurer's obligations to provide a book
  5  9 value accounting guaranty for defined contribution benefit
  5 10 plan participants by reference to a portfolio of assets that
  5 11 is owned by the benefit plan or its trustee, which in each
  5 12 case is not an affiliate of the member insurer.
  5 13    NEW PARAGRAPH.  l.  A portion of a covered policy to the
  5 14 extent it provides for interest or other change in value to be
  5 15 determined by the use of an index or other external reference
  5 16 stated in the covered policy, but which has not been credited
  5 17 to the covered policy, or as to which the covered policy
  5 18 owner's rights are subject to forfeiture, as of the date the
  5 19 member insurer becomes an impaired or insolvent insurer under
  5 20 this chapter, whichever is earlier.  If a covered policy's
  5 21 interest or change in value is credited less frequently than
  5 22 annually, then for purposes of determining the values that
  5 23 have been credited and are not subject to forfeiture under the
  5 24 covered policy, the interest or change in value determined by
  5 25 using the procedures defined in the covered policy will be
  5 26 credited as if the contractual date of crediting interest or
  5 27 changing values was the date of impairment or insolvency,
  5 28 whichever is earlier, and will not be subject to forfeiture.
  5 29    Sec. 14.  Section 508C.9, subsection 5, paragraph a, Code
  5 30 1999, is amended to read as follows:
  5 31    a.  The total of all assessments upon a member insurer for
  5 32 each account shall not in any one calendar year exceed two
  5 33 percent of the average of the insurer's premiums received in
  5 34 this state during the three most recent calendar years for
  5 35 which information is available, preceding the year in which
  6  1 the insurer becomes impaired or insolvent, on the policies
  6  2 related to that account.  However, if two or more assessments
  6  3 are authorized in one calendar year with respect to insurers
  6  4 that become impaired or insolvent in different calendar years,
  6  5 the average annual premiums for purposes of the aggregate
  6  6 assessment percentage limitation of this paragraph shall be
  6  7 equal, and limited, to the higher of the three-year average
  6  8 annual premiums for the applicable account as calculated
  6  9 pursuant to this section.  If the maximum assessment for an
  6 10 account, together with the other assets of the association in
  6 11 the account, does not provide in any one year in the account
  6 12 an amount sufficient to carry out the responsibilities of the
  6 13 association, the necessary additional funds shall be assessed
  6 14 for the account in succeeding years as soon as permitted by
  6 15 this chapter.
  6 16    Sec. 15.  Section 511.8, subsection 5, paragraph b,
  6 17 unnumbered paragraph 1, Code 1999, is amended to read as
  6 18 follows:
  6 19    If adjustment, income or other contingent interest
  6 20 obligations, the net earnings of the issuing, assuming or
  6 21 guaranteeing corporation available for its fixed charges for a
  6 22 period of five fiscal years next preceding the date of
  6 23 acquisition of the obligations by such insurance company shall
  6 24 have averaged per year not less than one and one-half times
  6 25 such average annual fixed charges of the issuing, assuming or
  6 26 guaranteeing corporation and its average annual maximum
  6 27 contingent interest applicable to such period and, during at
  6 28 least one of the last two years of such period, its net
  6 29 earnings shall have been not less than one and one-half times
  6 30 the sum of its fixed charges and maximum contingent interest
  6 31 for such year, or if, at the date of acquisition, the
  6 32 obligations are adequately secure and have investment
  6 33 qualities and characteristics and speculative elements are not
  6 34 predominant.
  6 35    Sec. 16.  Section 511.8, subsection 5, paragraph b,
  7  1 unnumbered paragraph 4, Code 1999, is amended to read as
  7  2 follows:
  7  3    The term "corporation" as used in this chapter includes a
  7  4 joint stock association, a limited liability company, a
  7  5 partnership, or a trust.
  7  6    Sec. 17.  Section 511.8, subsection 17, paragraph b, Code
  7  7 1999, is amended by striking the paragraph.
  7  8    Sec. 18.  Section 511.8, Code 1999, is amended by adding
  7  9 the following new subsection:
  7 10    NEW SUBSECTION.  22.  FINANCIAL INSTRUMENTS USED IN HEDGING
  7 11 TRANSACTIONS.
  7 12    a.  As used in this subsection, unless the context
  7 13 otherwise requires:
  7 14    (1)  "Financial instrument" means an agreement, option,
  7 15 instrument, or any series or combination agreement, option, or
  7 16 instrument that provides for either of the following:
  7 17    (a)  To make or take delivery of, or assume or relinquish,
  7 18 a specified amount of one or more underlying interests, or to
  7 19 make a cash settlement in lieu of such delivery or
  7 20 relinquishment.
  7 21    (b)  Which has a price, performance, value, or cash flow
  7 22 based primarily upon the actual or expected price, level,
  7 23 performance, value, or cash flow of one or more underlying
  7 24 interests.
  7 25    (2)  "Financial instrument transaction" means a transaction
  7 26 involving the use of one or more financial instruments.
  7 27    (3)  "Hedging transaction" means a financial instrument
  7 28 transaction which is entered into and maintained to reduce
  7 29 either of the following:
  7 30    (a)  The risk of a change in the value, yield, price, cash
  7 31 flow, or quality of assets or liabilities which the domestic
  7 32 insurer has acquired and maintains as qualified assets in its
  7 33 legal reserve deposit or which liabilities the domestic
  7 34 insurer has incurred and form the basis for calculation of its
  7 35 legal reserve.
  8  1    (b)  The currency exchange-rate risk or the degree of
  8  2 exposure as to assets or liabilities which the domestic
  8  3 insurer has acquired or incurred.
  8  4    b.  Financial instruments used in hedging transactions must
  8  5 meet the qualifications established in subsection 5 for bonds
  8  6 or other evidences of indebtedness issued, assumed, or
  8  7 guaranteed by a corporation incorporated under the laws of the
  8  8 United States or Canada, or the qualifications established in
  8  9 subsection 19 for bonds or other evidences of indebtedness
  8 10 issued, assumed, or guaranteed by a corporation incorporated
  8 11 under the laws of a foreign government other than Canada.
  8 12    c.  Investments in financial instruments used in hedging
  8 13 transactions are not eligible in excess of two percent of the
  8 14 legal reserve in the financial instruments of any one
  8 15 corporation, less any securities of that corporation owned by
  8 16 the company or association and in which its legal reserve is
  8 17 invested, except insofar as the financial instruments are
  8 18 collateralized by cash or United States government obligations
  8 19 as authorized by subsection 1 deposited with a custodian bank
  8 20 as defined in subsection 21, and held under a written
  8 21 agreement with the custodian bank that complies with
  8 22 subsection 21 and provides for the proceeds of the collateral,
  8 23 subject to the terms and conditions of the applicable
  8 24 collateral or other credit support agreement, to be remitted
  8 25 to the legal reserve deposit of the company or association and
  8 26 to vest in the state in accordance with section 508.18
  8 27 whenever proceedings under that section are instituted.
  8 28    d.  Investments in financial instruments used in hedging
  8 29 transactions are not eligible in excess of ten percent of the
  8 30 legal reserve, except insofar as the financial instruments are
  8 31 collateralized by cash or United States government obligations
  8 32 as authorized by subsection 1 deposited with a custodian bank
  8 33 as defined in subsection 21, and held under a written
  8 34 agreement with the custodian bank that complies with
  8 35 subsection 21 and provides for the proceeds of the collateral,
  9  1 subject to the terms and conditions of the applicable
  9  2 collateral or other credit support agreement, to be remitted
  9  3 to the legal reserve deposit of the company or association and
  9  4 to vest in the state in accordance with section 508.18
  9  5 whenever proceedings under this section are instituted.
  9  6    e.  Investments in financial instruments of foreign
  9  7 governments or foreign corporate obligations, other than
  9  8 Canada, used in hedging transactions are not eligible in
  9  9 excess of ten percent of the legal reserve, less any foreign
  9 10 investment authorized by subsection 19 owned by the company or
  9 11 association and in which its legal reserve is invested, except
  9 12 insofar as the financial instruments are collateralized by
  9 13 cash or United States government obligations as authorized by
  9 14 subsection 1 deposited with a custodian bank as defined in
  9 15 subsection 21, and held under a written agreement with the
  9 16 custodian bank that complies with subsection 21 and provides
  9 17 for the proceeds of the collateral, subject to the terms and
  9 18 conditions of the applicable collateral or other credit
  9 19 support agreement, to be remitted to the legal reserve deposit
  9 20 of the company or association and to vest in the state in
  9 21 accordance with section 508.18 whenever proceedings under that
  9 22 section are instituted.
  9 23    f.  Prior to engaging in hedging transactions under this
  9 24 subsection, a domestic insurer shall develop and adequately
  9 25 document policies and procedures regarding hedging transaction
  9 26 strategies and objectives.  Such policies and procedures shall
  9 27 address authorized hedging transactions, limitations, internal
  9 28 controls, documentation, and authorization and approval
  9 29 procedures.  Such policies and procedures shall also provide
  9 30 for review of hedging transactions by the domestic insurer's
  9 31 board of directors or the board of directors' designee.
  9 32    g.  A domestic insurer shall be able to demonstrate to the
  9 33 commissioner the intended hedging characteristics of hedging
  9 34 transactions under this subsection and the ongoing
  9 35 effectiveness of each hedging transaction or combination of
 10  1 hedging transactions.
 10  2    h.  Financial instruments used in hedging transactions
 10  3 shall only be eligible in accordance with this subsection
 10  4 after the commissioner has adopted rules pursuant to chapter
 10  5 17A regulating hedging transactions under this subsection.
 10  6    Sec. 19.  NEW SECTION.  512A.10  AMENDMENTS TO ARTICLES AND
 10  7 BYLAWS.
 10  8    1.  An organization shall present to the commissioner of
 10  9 insurance for approval its articles of incorporation and any
 10 10 subsequent amendment.  The commissioner shall submit the
 10 11 articles of incorporation and any subsequent amendment to the
 10 12 attorney general for examination, and if found by the attorney
 10 13 general to be in accordance with this chapter, and the
 10 14 constitution and laws of the state, the attorney general shall
 10 15 certify such fact on the articles of incorporation or
 10 16 amendment and return the articles or amendment to the
 10 17 commissioner.  Articles of incorporation or an amendment to
 10 18 the articles shall not be approved by the commissioner or
 10 19 recorded unless certified by the attorney general.
 10 20    2.  The directors of a benevolent association shall have
 10 21 the authority to enact such bylaws and regulations not
 10 22 inconsistent with law as they consider necessary for the
 10 23 regulation and conduct of the business.  A change in the
 10 24 bylaws shall not limit coverage under existing certificates.
 10 25 A benevolent association shall file with the commissioner
 10 26 bylaws and amendments to the bylaws within thirty days of
 10 27 adoption of such bylaws or amendments.
 10 28    Sec. 20.  Section 513B.2, subsections 2, 13, and 15, Code
 10 29 1999, are amended to read as follows:
 10 30    2.  "Base premium rate" means, for each class of business
 10 31 as to a rating period, the lowest premium rate charged or
 10 32 which could have been charged under a rating system for that
 10 33 class of business, by the small employer carrier to small
 10 34 employers with similar case characteristics for health
 10 35 insurance plans with the same or similar coverage.
 11  1    13.  "Index rate" means for each class of business for
 11  2 small employers with similar case characteristics the average
 11  3 of the applicable base premium rate and the corresponding
 11  4 highest premium rate.
 11  5    15.  "New business premium rate" means, for each class of
 11  6 business as to a rating period, the lowest premium rate
 11  7 charged or offered by the small employer carrier to small
 11  8 employers with similar case characteristics for newly issued
 11  9 health insurance coverages with the same or similar coverage.
 11 10    Sec. 21.  Section 513C.10, subsection 6, Code 1999, is
 11 11 amended to read as follows:
 11 12    6.  Rates for basic and standard coverages as provided in
 11 13 this chapter shall be determined by each carrier or organized
 11 14 delivery system as the average of product of a basic and
 11 15 standard factor and the lowest rate available for issuance by
 11 16 that carrier or organized delivery system adjusted for rating
 11 17 characteristics and benefits and the maximum rate allowable by
 11 18 law after adjustments for rate characteristics and benefits.
 11 19 Basic and standard factors shall be established annually by
 11 20 the Iowa individual health benefit reinsurance association
 11 21 board with the approval of the commissioner.  Multiple basic
 11 22 and standard factors for a distinct grouping of basic and
 11 23 standard policies, may be established.  A basic and standard
 11 24 factor is limited to a minimum value defined as the ratio of
 11 25 the average of the lowest rate available for issuance and the
 11 26 maximum rate allowable by law divided by the lowest rate
 11 27 available for issuance.  A basic and standard factor is
 11 28 limited to a maximum value defined as the ratio of the maximum
 11 29 rate allowable by law divided by the lowest rate available for
 11 30 issuance.  The maximum rate allowable by law and the lowest
 11 31 rate available for issuance is determined based on the rate
 11 32 restrictions under this chapter.  However, to maintain
 11 33 assessable loss assessments at or below one percent of total
 11 34 health insurance premiums or payments as determined in
 11 35 accordance with subsection 10, the Iowa individual health
 12  1 benefit reinsurance association board with the approval of the
 12  2 commissioner may increase the value for any basic and standard
 12  3 factor greater than the maximum value and with the approval of
 12  4 the commissioner may increase cost sharing provisions
 12  5 including, but not limited to, basic and standard plan
 12  6 deductibles, coinsurance, or copayments.
 12  7    Sec. 22.  Section 514.3, Code 1999, is amended to read as
 12  8 follows:
 12  9    514.3  APPROVAL BY COMMISSIONER.
 12 10    The articles of incorporation, and any subsequent
 12 11 amendments, of such a corporation shall have endorsed thereon
 12 12 on or annexed thereto to the approval of the commissioner of
 12 13 insurance before the same shall be filed for record.  A
 12 14 corporation shall file with the commissioner bylaws and
 12 15 subsequent amendments to the bylaws within thirty days of the
 12 16 adoption of the bylaws and amendments.
 12 17    Sec. 23.  Section 514.4, unnumbered paragraph 7, Code 1999,
 12 18 is amended by striking the unnumbered paragraph.
 12 19    Sec. 24.  NEW SECTION.  514B.3A  APPROVAL BY COMMISSIONER
 12 20 AND ATTORNEY GENERAL.
 12 21    The articles of incorporation, and any subsequent
 12 22 amendment, of a corporation shall have endorsed on or annexed
 12 23 to such articles or amendment the approval of the commissioner
 12 24 of insurance and the attorney general before filing for
 12 25 record.  A corporation shall file with the commissioner bylaws
 12 26 and subsequent amendments to the bylaws within thirty days of
 12 27 the adoption of the bylaws and amendments.
 12 28    Sec. 25.  Section 514B.24, unnumbered paragraph 1, Code
 12 29 1999, is amended to read as follows:
 12 30    The commissioner shall make an examination of the affairs
 12 31 of any a health maintenance organization and its providers as
 12 32 often as the commissioner deems necessary for the protection
 12 33 of the interests of the people of this state, but not less
 12 34 frequently than once every three five years.
 12 35    Sec. 26.  NEW SECTION.  514B.25A  INSOLVENCY PROTECTION –
 13  1 ASSESSMENT.
 13  2    1.  Upon a health maintenance organization or organized
 13  3 delivery system authorized to do business in this state and
 13  4 licensed by the director of public health being declared
 13  5 insolvent by the district court, the commissioner may levy an
 13  6 assessment on each health maintenance organization or
 13  7 organized delivery system doing business in this state and
 13  8 licensed by the director of public health, as applicable, to
 13  9 pay claims for uncovered expenditures for enrollees.  The
 13 10 commissioner shall not assess an amount in any one calendar
 13 11 year which is more than two percent of the aggregate premium
 13 12 written by each health maintenance organization or organized
 13 13 delivery system.
 13 14    2.  The commissioner may use funds obtained through an
 13 15 assessment under subsection 1 to pay claims for uncovered
 13 16 expenditures for enrollees of an insolvent health maintenance
 13 17 organization or organized delivery system and administrative
 13 18 costs.  The commissioner, by rule, may prescribe the time,
 13 19 manner, and form for filing claims under this section.  The
 13 20 commissioner may require claims to be allowed by an ancillary
 13 21 receiver or the domestic receiver or liquidator.
 13 22    3.  a.  A receiver or liquidator of an insolvent health
 13 23 maintenance organization or organized delivery system shall
 13 24 allow a claim in the proceeding in an amount equal to
 13 25 uncovered expenditures and administrative costs paid under
 13 26 this section.
 13 27    b.  A person receiving benefits under this section for
 13 28 uncovered expenditures is deemed to have assigned the rights
 13 29 under the covered health care plan certificates to the
 13 30 commissioner to the extent of the benefits received.  The
 13 31 commissioner may require an assignment of such rights by a
 13 32 payee, enrollee, or beneficiary, to the commissioner as a
 13 33 condition precedent to the receipt of such benefits.  The
 13 34 commissioner is subrogated to these rights against the assets
 13 35 of the insolvent health maintenance organization or organized
 14  1 delivery system that are held by a receiver or liquidator of a
 14  2 foreign jurisdiction.
 14  3    c.  The assigned subrogation rights of the commissioner and
 14  4 allowed claims under this subsection have the same priority
 14  5 against the assets of the insolvent health maintenance
 14  6 organization or organized delivery system as those claims of
 14  7 persons entitled to receive benefits under this section or for
 14  8 similar expenses in the receivership or liquidation.
 14  9    4.  If funds assessed under subsection 1 are unused
 14 10 following the completion of the liquidation of an insolvent
 14 11 health maintenance organization or organized delivery system,
 14 12 the commissioner shall distribute the remaining amounts, if
 14 13 such amounts are not de minimis, to the health maintenance
 14 14 organizations or organized delivery systems that were
 14 15 assessed.
 14 16    5.  The aggregate coverage of uncovered expenditures under
 14 17 this section shall not exceed three hundred thousand dollars
 14 18 with respect to one individual.  Continuation of coverage
 14 19 shall cease after the lesser of one year after the health
 14 20 maintenance organization or organized delivery system is
 14 21 terminated by insolvency or the remaining term of the
 14 22 contract.  The commissioner may provide continuation of
 14 23 coverage on a reasonable basis, including, but not limited to,
 14 24 continuation of the health maintenance organization or
 14 25 organized delivery system contract or substitution of
 14 26 indemnity coverage in a form as determined by the
 14 27 commissioner.
 14 28    6.  The commissioner may waive an assessment of a health
 14 29 maintenance organization or organized delivery system if such
 14 30 organization or system is impaired financially or would be
 14 31 impaired financially as a result of such assessment.  A health
 14 32 maintenance organization or organized delivery system that
 14 33 fails to pay an assessment within thirty days after notice of
 14 34 the assessment is subject to a civil forfeiture of not more
 14 35 than one thousand dollars for each day the failure continues,
 15  1 and suspension or revocation of its certificate of authority.
 15  2 An action taken by the commissioner to enforce an assessment
 15  3 under this section may be appealed by the health maintenance
 15  4 organization or organized delivery system pursuant to chapter
 15  5 17A.
 15  6    Sec. 27.  Section 515.2, Code 1999, is amended to read as
 15  7 follows:
 15  8    515.2  ARTICLES – APPROVAL.
 15  9    Each such organization shall present to the commissioner of
 15 10 insurance its articles of incorporation, which shall show its
 15 11 name, objects, location of its principal place of business,
 15 12 and amount of its capital stock, who shall submit it to the
 15 13 attorney general for examination, and if found by the attorney
 15 14 general to be in accordance with the provisions of this title,
 15 15 the laws of the United States, and the Constitution and laws
 15 16 of the state, the attorney general shall certify such fact
 15 17 thereon and return the same to said commissioner, and no
 15 18 articles shall be approved by the commissioner or recorded
 15 19 unless accompanied with such certificate.  A company shall
 15 20 file with the commissioner bylaws and subsequent amendments to
 15 21 the bylaws within thirty days of the adoption of the bylaws
 15 22 and amendments.
 15 23    Sec. 28.  Section 515.46, Code 1999, is amended to read as
 15 24 follows:
 15 25    515.46  FORFEITURE OF CERTIFICATE OF AUTHORITY.
 15 26    Any dividend made contrary to the provisions of sections
 15 27 section 515.44 and 515.45 or rules adopted by the commissioner
 15 28 shall subject the company making it to forfeiture of its
 15 29 certificate of authority.
 15 30    Sec. 29.  Section 515.71, unnumbered paragraph 1, Code
 15 31 1999, is amended to read as follows:
 15 32    Every alien insurer authorized to transact business in this
 15 33 state shall at all times maintain a deposit with the
 15 34 commissioner of insurance in cash or in securities in which
 15 35 insurance companies are authorized to invest, of a sum equal
 16  1 to the greater of the reserve on all policies covering risks
 16  2 located in this state or one million dollars.  The securities
 16  3 shall be approved, and the amount of the deposit shall be
 16  4 determined, by the commissioner in accordance with section
 16  5 515.47.  The commissioner, in the commissioner's discretion,
 16  6 may permit the withdrawal of interest earnings.
 16  7    Sec. 30.  Section 515B.2, subsection 5, Code 1999, is
 16  8 amended to read as follows:
 16  9    5.  "Insurer" means an insurer licensed to transact
 16 10 insurance business in this state under either chapter 515 or
 16 11 chapter 520, either at the time the policy was issued or when
 16 12 the insured event occurred.  It does not include county or
 16 13 state mutual assessment insurance associations licensed under
 16 14 chapter 518 or chapter 518A, or fraternal beneficiary
 16 15 societies, orders, or associations licensed under chapter
 16 16 512B, or corporations operating nonprofit service plans under
 16 17 chapter 514, or life insurance companies or life, accident, or
 16 18 health associations licensed under chapter 508, or those
 16 19 professions under chapter 519.
 16 20    Sec. 31.  Section 515C.3, Code 1999, is amended to read as
 16 21 follows:
 16 22    515C.3  BASES FOR COMPUTATIONS.
 16 23    The unearned premium reserve shall be computed in
 16 24 accordance with section 515.47, except that all premiums on
 16 25 risks written for one year or less must be reserved on a
 16 26 monthly pro rata basis, and the reserve for those policies
 16 27 covering a risk period of more than five years shall be
 16 28 computed in accordance with formulae filed by the insurer and
 16 29 approved pursuant to rules adopted by the commissioner of
 16 30 insurance.
 16 31    Sec. 32.  Section 515F.3, subsection 6, Code 1999, is
 16 32 amended to read as follows:
 16 33    6.  Insurance written by a county mutual assessment
 16 34 insurance association as provided in chapter 518A.
 16 35    Sec. 33.  Section 515G.7, Code 1999, is amended to read as
 17  1 follows:
 17  2    515G.7  REVIEW OF PLAN BY COMMISSIONER – HEARING
 17  3 AUTHORIZED – APPROVAL.
 17  4    The commissioner of insurance shall review the plan.  The
 17  5 commissioner shall approve the plan if the commissioner finds
 17  6 the plan complies with all provisions of law, the plan is not
 17  7 unfair or inequitable fair and equitable to the mutual insurer
 17  8 and its policyholders, and that the reorganized company will
 17  9 have the amount of capital and surplus deemed by the
 17 10 commissioner to be reasonably necessary for its future
 17 11 solvency.  The commissioner may order a hearing on the
 17 12 fairness and equity of the terms of the plan after giving
 17 13 written notice of the hearing to the mutual insurer, and its
 17 14 policyholders, all of whom have the right to appear at the
 17 15 hearing.
 17 16    Sec. 34.  Section 515G.14, unnumbered paragraph 1, Code
 17 17 1999, is amended to read as follows:
 17 18    An action challenging the validity of a conversion plan, or
 17 19 any part of a conversion plan, shall not be commenced more
 17 20 than thirty days following the date of approval by the
 17 21 commissioner, unless an application for rehearing is filed
 17 22 pursuant to section 17A.16, subsection 2.  If an application
 17 23 for rehearing is filed, then such action must be filed within
 17 24 thirty days after that application is denied or deemed denied
 17 25 or, if the application is granted, within thirty days after
 17 26 the issuance of the commissioner's final decision on
 17 27 rehearing.
 17 28    Sec. 35.  Section 518.7, Code 1999, is amended to read as
 17 29 follows:
 17 30    518.7  OFFICERS AND DIRECTORS – ELECTION.
 17 31    Officers or directors shall be elected in the manner and
 17 32 for the length of time prescribed in the articles of
 17 33 incorporation.  The same person shall not simultaneously hold
 17 34 the offices of president and secretary.  A director shall be a
 17 35 member of the association.
 18  1    Sec. 36.  Section 518.8, Code 1999, is amended to read as
 18  2 follows:
 18  3    518.8  BYLAWS.
 18  4    The directors of the association shall have the authority
 18  5 to enact such bylaws and regulations not inconsistent with law
 18  6 as they consider necessary for the regulation and conduct of
 18  7 the business.  No change in the bylaws shall have the effect
 18  8 of limiting coverage under existing policies of insurance.  An
 18  9 association shall file with the commissioner bylaws and
 18 10 subsequent amendments to the bylaws within thirty days of the
 18 11 adoption of the bylaws and amendments.
 18 12    Sec. 37.  NEW SECTION.  518.13A  ASSESSMENTS PROHIBITED.
 18 13    An association doing business under this chapter shall not
 18 14 levy an assessment on any member of the association.
 18 15    Sec. 38.  Section 518.17, Code Supplement 1999, is amended
 18 16 to read as follows:
 18 17    518.17  REINSURANCE.
 18 18    A county mutual insurance association may reinsure a part
 18 19 or all of its risks coverages written pursuant to this chapter
 18 20 with any an association operating under the provisions of this
 18 21 chapter, or with any other association or company licensed in
 18 22 this state and authorized to write the kinds of insurance
 18 23 enumerated in section 518.11.
 18 24    Reinsurance sufficient to protect the financial stability
 18 25 of the state mutual association is also required.  Reinsurance
 18 26 coverage obtained by a county mutual insurance association
 18 27 shall not expose the association to a loss losses from
 18 28 coverages written pursuant to this chapter of more than
 18 29 fifteen percent from surplus in any calendar year.  The
 18 30 commissioner of insurance may require additional reinsurance
 18 31 if necessary to protect the policyholders of the association.
 18 32    Sec. 39.  Section 518.23, Code 1999, is amended to read as
 18 33 follows:
 18 34    518.23  CANCELLATION OF POLICIES.
 18 35    1.  CANCELLATION BY INSURED.  Any A policy shall be
 19  1 canceled at any time at the request of the insured upon the
 19  2 return of the policy to the home office of the association,
 19  3 and the payment of all premium charges against such policy; or
 19  4 by the association by giving five days' notice of such
 19  5 cancellation.  Such service
 19  6    2.  CANCELLATION BY ASSOCIATION.
 19  7    a.  Except as provided in paragraph "b", notice of
 19  8 cancellation is not effective unless mailed or delivered by
 19  9 the association to the named insured at least twenty days
 19 10 before the effective date of cancellation.
 19 11    b.  Notice of cancellation resulting from nonpayment of a
 19 12 premium or installment provided for in the policy, or provided
 19 13 for in a note or contract for the payment of such premium or
 19 14 installment, is not effective unless mailed or delivered by
 19 15 the association to the named insured at least ten days prior
 19 16 to the date of cancellation.
 19 17    c.  If a notice of cancellation under paragraph "a" or "b"
 19 18 fails to include the reason for such cancellation, the
 19 19 association, upon receipt of a timely request by the named
 19 20 insured, shall provide in writing the reason for the
 19 21 cancellation.
 19 22    3.  NONRENEWAL BY ASSOCIATION.  A notice of intention not
 19 23 to renew is not effective unless mailed or delivered by the
 19 24 insurer to the named insured at least thirty days prior to the
 19 25 expiration date of the policy.  If the reason does not
 19 26 accompany the notice of nonrenewal, the association, upon
 19 27 receipt of a timely request by the named insured, shall
 19 28 provide the reason for the nonrenewal in writing.
 19 29    4.  NOTICE.  Service of notice under subsection 2 or 3 may
 19 30 be made in person, or by mailing such notice by certified mail
 19 31 deposited in the post office and directed to the insured at
 19 32 the insured's post office address as given in or upon the
 19 33 policy, or to such other address as the insured shall have
 19 34 given to the association in writing.  A post office department
 19 35 receipt of certified or registered mail shall be deemed proof
 20  1 of receipt of such notice.  If in either case the cash
 20  2 payments shall exceed the amount properly chargeable, the
 20  3 excess will shall be refunded to the insured upon the
 20  4 surrender of the policy to the association at its home office.
 20  5    Sec. 40.  Section 518A.6, Code 1999, is amended to read as
 20  6 follows:
 20  7    518A.6  OFFICERS – ELECTION.
 20  8    Officers or directors shall be elected in the manner and
 20  9 for the length of time prescribed in the articles of
 20 10 incorporation or bylaws.  The same person shall not
 20 11 simultaneously hold the offices of president and secretary.  A
 20 12 director shall be a member of the association.
 20 13    Sec. 41.  NEW SECTION.  518A.6A  BYLAWS.
 20 14    The directors of the association may enact the bylaws and
 20 15 regulations not inconsistent with law as they consider
 20 16 necessary for the regulation and conduct of the business.  A
 20 17 change in the bylaws shall not limit coverage under existing
 20 18 policies of insurance.  An association shall file with the
 20 19 commissioner bylaws and amendments to bylaws within thirty
 20 20 days of adoption.
 20 21    Sec. 42.  Section 518A.7, Code 1999, is amended to read as
 20 22 follows:
 20 23    518A.7  POLICIES – ISSUANCE – CONDITIONS.
 20 24    No A state mutual assessment insurance association shall
 20 25 not issue policies until at least one hundred twenty-five
 20 26 applications have been received in any class as shown by
 20 27 section 518A.1, representing the following amount of
 20 28 insurance:  Classes one, two, three, and five, two hundred
 20 29 fifty thousand dollars each; class four, one hundred thousand
 20 30 dollars, and no county mutual assessment association shall
 20 31 issue policies until applications for insurance to the amount
 20 32 of fifty thousand dollars representing at least fifty
 20 33 applicants have been received, and no an application for
 20 34 insurance during the period of organization shall not exceed
 20 35 two percent of the amount required for organization, or after
 21  1 one year of organization, one percent of the total insurance
 21  2 in force, any reinsurance taking effect simultaneously with
 21  3 the policy being deducted in determining such maximum single
 21  4 risk.
 21  5    Sec. 43.  Section 518A.9, Code 1999, is amended by striking
 21  6 the section and inserting in lieu thereof the following:
 21  7    518A.9  PREMIUM CHARGES.
 21  8    An association, by action of its board of directors, may
 21  9 establish premium charges for the purpose of payment of losses
 21 10 and expenses and for the establishment or maintenance of a
 21 11 reserve fund.
 21 12    A policy shall stand suspended if any default is made in
 21 13 the payment of any premium on or before the date specified in
 21 14 a written notice requiring the payment of such premium and
 21 15 mailed to the insured and directed to the insured's last known
 21 16 address not less than thirty days prior to such suspension
 21 17 date.  The notice shall specify the amount and due date of the
 21 18 premium.  The association is not liable for any loss occurring
 21 19 during such period of suspension.
 21 20    Sec. 44.  NEW SECTION.  518A.9A  ASSESSMENTS PROHIBITED.
 21 21    An association doing business under this chapter shall not
 21 22 levy an assessment on any member of the association.
 21 23    Sec. 45.  Section 518A.12, subsection 1, paragraphs a and
 21 24 c, Code 1999, are amended to read as follows:
 21 25    a.  This section applies to the investments of state mutual
 21 26 casualty assessment insurance associations.
 21 27    c.  Financial terms relating to state mutual casualty
 21 28 assessment insurance associations have the meanings assigned
 21 29 to them under statutory accounting methods.  Financial terms
 21 30 relating to companies other than state mutual casualty
 21 31 assessment insurance associations have the meanings assigned
 21 32 to them under generally accepted accounting principles.
 21 33    Sec. 46.  Section 518A.18, Code 1999, is amended to read as
 21 34 follows:
 21 35    518A.18  ANNUAL REPORT.
 22  1    An association doing business under this chapter shall, on
 22  2 or before March 1 of each year, report to the commissioner of
 22  3 insurance the facts required of domestic insurance companies
 22  4 organizing under chapter 515, which are applicable to this
 22  5 chapter.  These reports shall prepare under oath and file with
 22  6 the commissioner of insurance an accurate and complete
 22  7 statement of the condition of the association as of the last
 22  8 day of the preceding calendar year.  The statement shall
 22  9 conform to the annual statement blank prepared pursuant to
 22 10 instructions prescribed by the commissioner.  All financial
 22 11 information reflected in the annual report shall be kept and
 22 12 prepared pursuant to accounting practices and procedures
 22 13 prescribed by the commissioner.  Statements filed with the
 22 14 commissioner pursuant to this section shall be tabulated and
 22 15 published by the commissioner of insurance in the annual
 22 16 report of insurance.
 22 17    Sec. 47.  Section 518A.29, Code 1999, is amended by
 22 18 striking the section and inserting in lieu thereof the
 22 19 following:
 22 20    518A.29  CANCELLATION BY ASSOCIATION – NOTICE.
 22 21    1.  CANCELLATION BY INSURED.  A policy shall be canceled at
 22 22 any time at the request of the insured upon the return of the
 22 23 policy to the home office of the association and the payment
 22 24 of all premium charges against such policy.
 22 25    2.  CANCELLATION BY ASSOCIATION.
 22 26    a.  Except as provided in paragraph "b", notice of
 22 27 cancellation is not effective unless mailed or delivered by
 22 28 the association to the named insured at least twenty days
 22 29 before the effective date of cancellation.
 22 30    b.  Notice of cancellation resulting from nonpayment of a
 22 31 premium or installment provided for in the policy, or provided
 22 32 for in a note or contract for the payment of such premium or
 22 33 installment, is not effective unless mailed or delivered by
 22 34 the association to the named insured at least ten days prior
 22 35 to the date of cancellation.
 23  1    c.  If a notice of cancellation under paragraph "a" or "b"
 23  2 fails to include the reason for such cancellation, the
 23  3 association, upon receipt of a timely request by the named
 23  4 insured, shall provide the reason for the cancellation in
 23  5 writing.
 23  6    3.  NONRENEWAL BY ASSOCIATION.  A notice of intention not
 23  7 to renew is not effective unless mailed or delivered by the
 23  8 insurer to the named insured at least thirty days prior to the
 23  9 expiration date of the policy.  If the reason does not
 23 10 accompany the notice of nonrenewal, the association, upon
 23 11 receipt of a timely request by the named insured, shall
 23 12 provide in writing the reason for the nonrenewal.
 23 13    4.  NOTICE.  Service of notice under subsection 2 or 3 may
 23 14 be made in person, or by mailing such notice by certified mail
 23 15 deposited in the post office and directed to the insured at
 23 16 the insured's post office address as given in or upon the
 23 17 policy, or to such other address as the insured shall have
 23 18 given to the association in writing.  A post office department
 23 19 receipt of certified or registered mail shall be deemed proof
 23 20 of receipt of such notice.  If in either case the cash
 23 21 payments exceed the amount properly chargeable, the excess
 23 22 shall be refunded upon the surrender of the policy to the
 23 23 association at its home office.
 23 24    Sec. 48.  Section 518A.35, Code 1999, is amended to read as
 23 25 follows:
 23 26    518A.35  ANNUAL TAX.
 23 27    Every A state mutual insurance association doing business
 23 28 under this chapter shall on or before the first day of March,
 23 29 each year, pay to the director of the department of revenue
 23 30 and finance, or a depository designated by the director, a sum
 23 31 equivalent to two percent of the gross receipts from premiums,
 23 32 assessments, and fees, and promissory obligations for business
 23 33 done within the state, including all insurance upon property
 23 34 situated in the state without including or deducting any
 23 35 amounts received or paid for reinsurance except that any.
 24  1 However, a company reinsuring windstorm or hail risks written
 24  2 by county mutual associations shall be is required to pay a
 24  3 two percent tax on the gross amount of reinsurance premiums
 24  4 received upon such risks, but after deducting the amount
 24  5 returned upon canceled policies and rejected applications
 24  6 covering property situated within the state, and dividends
 24  7 returned to policyholders on property situated within the
 24  8 state.
 24  9    Sec. 49.  Section 518A.44, Code Supplement 1999, is amended
 24 10 to read as follows:
 24 11    518A.44  REINSURANCE.
 24 12    A state mutual insurance association may reinsure a part or
 24 13 all of its risks coverages written pursuant to this chapter
 24 14 with any an association operating under the provisions of this
 24 15 chapter, or with any other association or company licensed in
 24 16 this state and authorized to write the kinds of insurance
 24 17 enumerated in section 518A.1.
 24 18    Reinsurance sufficient to protect the financial stability
 24 19 of the state mutual insurance association is required.
 24 20 Reinsurance coverage obtained by an association shall not
 24 21 expose the association to a loss losses from coverages written
 24 22 pursuant to this chapter of more than fifteen percent from
 24 23 surplus in any calendar year.  The commissioner of insurance
 24 24 may require additional reinsurance if necessary to protect the
 24 25 policyholders of the association.
 24 26    Sec. 50.  Section 518A.52, Code 1999, is amended to read as
 24 27 follows:
 24 28    518A.52  FORM – APPROVAL.
 24 29    The form of all policies, applications, agreements, and
 24 30 endorsements modifying the provisions of policies, and all
 24 31 permits and riders used in this state, issued or proposed to
 24 32 be issued by a state mutual casualty assessment insurance
 24 33 association doing business in this state under the provisions
 24 34 of this chapter, shall first be examined and approved by the
 24 35 commissioner of insurance.
 25  1    Sec. 51.  Section 518A.53, Code 1999, is amended to read as
 25  2 follows:
 25  3    518A.53  FAILURE TO FILE COPY.
 25  4    Upon the failure of a state mutual casualty assessment
 25  5 insurance association to file a copy of its forms of policies
 25  6 or contracts pursuant to section 518A.52, the commissioner of
 25  7 insurance may suspend its authority to transact business
 25  8 within the state until such forms of policies or contracts
 25  9 have been filed and approved.
 25 10    Sec. 52.  Section 518A.54, Code 1999, is amended to read as
 25 11 follows:
 25 12    518A.54  DISAPPROVAL OF FILINGS.
 25 13    If the commissioner finds that a filing does not meet the
 25 14 requirements of this chapter, written notice of disapproval
 25 15 shall be sent to the state mutual casualty assessment
 25 16 insurance association specifying in what respect the filing
 25 17 fails to meet the requirements of this chapter and stating
 25 18 that the filing is not effective.  If a filing is disapproved
 25 19 by the commissioner, the association may request a hearing on
 25 20 the disapproval within thirty days.  The association bears the
 25 21 burden of proving compliance with the standards established by
 25 22 this chapter.
 25 23    If, at any time after a form has been approved, the
 25 24 commissioner finds that the form no longer meets the
 25 25 requirements of this chapter, the commissioner may order the
 25 26 discontinuance of the use of the form.  The order of
 25 27 discontinuance shall be in writing and may be issued only
 25 28 after a hearing with at least ten days' prior notice to all
 25 29 state mutual casualty assessment insurance associations
 25 30 affected by the order.  The order shall state the grounds upon
 25 31 which the order is based and when the order of discontinuance
 25 32 is effective.
 25 33    Sec. 53.  Section 518A.55, Code 1999, is amended to read as
 25 34 follows:
 25 35    518A.55  CERTIFICATE SUSPENSION.
 26  1    The commissioner of insurance may suspend a state mutual
 26  2 casualty assessment insurance association's certificate of
 26  3 authority to do business if the association neglects or fails
 26  4 to comply with this chapter.
 26  5    Sec. 54.  Section 519.10, Code 1999, is amended to read as
 26  6 follows:
 26  7    519.10  POWERS OF COMMISSIONER.
 26  8    The commissioner of insurance shall have and exercise the
 26  9 same control over such corporations as the commissioner now
 26 10 has over state mutual assessment insurance associations
 26 11 organized and doing business under chapter 518A.
 26 12    Sec. 55.  Section 519.11, Code Supplement 1999, is amended
 26 13 to read as follows:
 26 14    519.11  LIABILITY TO ASSESSMENTS.
 26 15    The provisions as to maximum liability of members to
 26 16 assessments when assets are insufficient and to assessments
 26 17 when the corporation is insolvent, found in sections section
 26 18 518A.9 and 518A.14, shall apply to all mutual insurance
 26 19 corporations organized under this chapter.
 26 20    Sec. 56.  Section 521E.1, subsection 4, paragraph e, Code
 26 21 1999, is amended to read as follows:
 26 22    e.  A state mutual casualty assessment insurance
 26 23 association organized under chapter 518A.
 26 24    Sec. 57.  Section 522.3, unnumbered paragraph 3, Code 1999,
 26 25 is amended by striking the unnumbered paragraph.
 26 26    Sec. 58.  Section 573.3, Code 1999, is amended by adding
 26 27 the following new unnumbered paragraph:
 26 28    NEW UNNUMBERED PARAGRAPH.  A public corporation, with
 26 29 respect to a public improvement which is or has been
 26 30 competitively bid or negotiated, shall not require a
 26 31 contractor to procure a bond, as required under section 573.2,
 26 32 from a particular insurance or surety company, agent, or
 26 33 broker.
 26 34    Sec. 59.  Sections 515.45, 515.47, 518A.11, 518A.14,
 26 35 518A.15, 518A.30, 518A.31, and 518A.32, Code 1999, are
 27  1 repealed.
 27  2    Sec. 60.  EFFECTIVE DATES.
 27  3    1.  Section 8 of this Act, which amends section 508B.3, and
 27  4 section 10 of this Act, which amends section 508B.7, being
 27  5 deemed of immediate importance, take effect upon enactment.
 27  6    2.  Section 17 of this Act, which amends section 511.8 by
 27  7 striking subsection 17, paragraph "b", section 28 of this Act,
 27  8 which amends section 515.46, section 29 of this Act, which
 27  9 amends section 515.71, and section 31 of this Act, which
 27 10 amends section 515C.3, and the repeal of sections 515.45 and
 27 11 515.47, take effect on January 1, 2001.  
 27 12 
 27 13 
 27 14                                                             
 27 15                               MARY E. KRAMER
 27 16                               President of the Senate
 27 17 
 27 18 
 27 19                                                             
 27 20                               BRENT SIEGRIST
 27 21                               Speaker of the House
 27 22 
 27 23    I hereby certify that this bill originated in the Senate and
 27 24 is known as Senate File 2409, Seventy-eighth General Assembly.
 27 25 
 27 26 
 27 27                                                             
 27 28                               MICHAEL E. MARSHALL
 27 29                               Secretary of the Senate
 27 30 Approved                , 2000
 27 31 
 27 32 
 27 33                               
 27 34 THOMAS J. VILSACK
 27 35 Governor
     
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