Text: HF00499 Text: HF00501 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 272C.1, subsection 6, paragraph z, Code 1 2 2001, is amended to read as follows: 1 3 z. The commissioner of insurance in licensing insurance 1 4agentsproducers pursuant to chapter522522B, except those 1 5agentsproducers authorized to sell only creditlife and1 6credit accident and healthinsurance or crop insurance. 1 7 Sec. 2. Section 272C.3, subsection 2, paragraph a, Code 1 8 2001, is amended to read as follows: 1 9 a. Revoke a license, or suspend a license either until 1 10 further order of the board or for a specified period, upon any 1 11 of the grounds specified in section 147.55, 148.6, 148B.7, 1 12 152.10, 153.34, 154A.24, 169.13, 542B.21, 542C.21, 543B.29, 1 13 544A.13, 544B.15, or 602.3203 or chapter 151, 155, 507B, or 1 14522522B, as applicable, or upon any other grounds 1 15 specifically provided for in this chapter for revocation of 1 16 the license of a licensee subject to the jurisdiction of that 1 17 board, or upon failure of the licensee to comply with a 1 18 decision of the board imposing licensee discipline; 1 19 Sec. 3. Section 272C.4, subsection 6, Code 2001, is 1 20 amended to read as follows: 1 21 6. Define by rule acts or omissions which are grounds for 1 22 revocation or suspension of a license under section 147.55, 1 23 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13, 455B.191, 1 24 542B.21, 542C.21, 543B.29, 544A.13, 544B.15, or 602.3203 or 1 25 chapter 151, 155, 507B, or522522B, as applicable, and to 1 26 define by rule acts or omissions which constitute negligence, 1 27 careless acts or omissions within the meaning of section 1 28 272C.3, subsection 2, paragraph "b", which licensees are 1 29 required to report to the board pursuant to section 272C.9, 1 30 subsection 2; 1 31 Sec. 4. Section 422.45, subsection 27, paragraph d, 1 32 subparagraph (3), Code 2001, is amended to read as follows: 1 33 (3) "Insurance company" means an insurer organized or 1 34 operating under chapter 508, 514, 515, 518, 518A, 519, or 520, 1 35 or authorized to do business in Iowa as an insurer ora2 1licensed insurance agentan insurance producer under chapter 2 2522522B. 2 3 Sec. 5. Section 502.102, subsection 11, paragraph d, Code 2 4 2001, is amended to read as follows: 2 5 d. As used in this subsection, "compensation" does not 2 6 include a commission, fee, or a combination of a commission 2 7 and a fee, which is paid to an insuranceagentproducer 2 8 licensed under chapter522522B, if the insuranceagent2 9 producer receives the commission, fee, or the combination of a 2 10 commission and a fee, for the sale of insurance as regulated 2 11 pursuant to Title XIII, subtitle 1. 2 12 Sec. 6. Section 502.304, subsection 1, paragraph e, Code 2 13 2001, is amended to read as follows: 2 14 e. Is the subject of an order of the administrator 2 15 denying, suspending, or revoking registration as a broker- 2 16 dealer, agent, investment adviser, investment adviser 2 17 representative, or insuranceagentproducer; 2 18 Sec. 7. Section 508A.5, Code 2001, is amended to read as 2 19 follows: 2 20 508A.5 OTHER PROVISIONS APPLICABLE. 2 21 Except for section 508.37 and section 509.2, subsection 1, 2 22 and except as otherwise provided in this chapter, all 2 23 pertinent provisions of chapters 508, 509, 511, and522522B 2 24 shall apply to separate accounts and contracts relating 2 25 thereto. Any individual variable life insurance contract, 2 26 delivered or issued for delivery in this state, shall contain 2 27 nonforfeiture provisions appropriate to such a contract. Any 2 28 group variable life insurance contract, delivered or issued 2 29 for delivery in this state, shall contain a grace provision 2 30 appropriate to such a contract. The reserve liability for 2 31 variable contracts shall be established in accordance with 2 32 actuarial procedures that recognize the variable nature of the 2 33 benefits provided and any mortality guarantees. 2 34 Sec. 8. Section 511.4, Code 2001, is amended to read as 2 35 follows: 3 1 511.4 ADVERTISEMENTS – WHO DEEMED AGENT. 3 2 The provisions ofsections 515.122 to 515.126section 3 3 515.125 shall apply to life insurance companies and 3 4 associations. 3 5 Sec. 9. Section 515.125, Code 2001, is amended to read as 3 6 follows: 3 7 515.125AGENT – SPECIFIC DEFINITIONAGENCY RELATIONSHIP. 3 8 Any officer,agentinsurance producer, or representative of 3 9 an insurance company doing business in this state who may 3 10 solicit insurance, procure applications, issue policies, 3 11 adjust losses, or transact the business generally of such 3 12 companies, shall be held to be the agent of such insurance 3 13 company with authority to transact all business within the 3 14 scope of theagent's employmentagency relationship, anything 3 15 in the application, policy, contract, bylaws, or articles of 3 16 incorporation of such company to the contrary notwithstanding. 3 17 Sec. 10. Section 516A.1, unnumbered paragraph 2, Code 3 18 2001, is amended to read as follows: 3 19 However, the named insured may reject all of such coverage, 3 20 or reject the uninsured motor vehicle (hit-and-run motor 3 21 vehicle) coverage, or reject the underinsured motor vehicle 3 22 coverage, by written rejections signed by the named insured. 3 23 If rejection is made on a form or document furnished by an 3 24 insurance company or insuranceagentproducer, it shall be on 3 25 a separate sheet of paper which contains only the rejection 3 26 and information directly related to it. Such coverage need 3 27 not be provided in or supplemental to a renewal policy if the 3 28 named insured has rejected the coverage in connection with a 3 29 policy previously issued to the named insured by the same 3 30 insurer. 3 31 Sec. 11. Section 521A.2, subsection 1, paragraph b, Code 3 32 2001, is amended to read as follows: 3 33 b. Acting as an insurancebroker or as an insurance agent3 34 producer for its parent or for any of its parent's insurer 3 35 subsidiaries or intermediate insurer subsidiaries. 4 1 Sec. 12. Section 522A.3, subsection 1, Code 2001, is 4 2 amended to read as follows: 4 3 1. Notwithstanding the provisions of chapter522522B, the 4 4 commissioner may issue a limited license to a rental company 4 5 that has complied with the requirements of this chapter. The 4 6 limited license shall authorize the limited licensee to offer 4 7 or sell insurance with the rental of vehicles. 4 8 Sec. 13. Section 523H.1, subsection 3, paragraph c, Code 4 9 2001, is amended to read as follows: 4 10 c. "Franchise" also does not include any contract under 4 11 which a petroleum retailer or petroleum distributor is 4 12 authorized or permitted to occupy leased marketing premises, 4 13 which premises are to be employed in connection with the sale, 4 14 consignment, or distribution of motor fuel under a trademark 4 15 which is owned or controlled by a refiner which is regulated 4 16 by the federal Petroleum Marketing Practices Act, 15 U.S.C. } 4 17 2801 et seq. The term "refiner" means any person engaged in 4 18 the refining of crude oil to produce motor fuel, and includes 4 19 any affiliate of such person. "Franchise" also does not 4 20 include a contract entered into by any person regulated under 4 21 chapter 123, 322, 322A, 322B, 322C, 322D, 322F,522522B, or 4 22 543B, or a contract establishing a franchise relationship with 4 23 respect to the sale of construction equipment, lawn or garden 4 24 equipment, or real estate. 4 25 Sec. 14. Section 514B.19, Code 2001, is amended to read as 4 26 follows: 4 27 514B.19 REGULATION OFAGENTSINSURANCE PRODUCERS. 4 28 The commissioner may, after notice and hearing, promulgate 4 29 such reasonable rules under the provisions of chapter522522B 4 30 that are necessary to provide for the licensing ofagents4 31 insurance producers who engage in solicitation or enrollment 4 32 for a health maintenance organization. 4 33 Sec. 15. NEW SECTION. 522B.1 DEFINITIONS. 4 34 As used in this chapter, unless the context otherwise 4 35 requires: 5 1 1. "Business entity" means a corporation, association, 5 2 partnership, limited liability company, limited liability 5 3 partnership, or other legal entity. 5 4 2. "Commissioner" means the commissioner of insurance. 5 5 3. "Home state" means the District of Columbia and any 5 6 state or territory of the United States in which an insurance 5 7 producer maintains the producer's principal place of residence 5 8 or principal place of business and is licensed to act as an 5 9 insurance producer. 5 10 4. "Insurance" means any of the lines of authority an 5 11 insurer is authorized to sell in this state. 5 12 5. "Insurance producer" means a person required to be 5 13 licensed under the laws of this state to sell, solicit, or 5 14 negotiate insurance. 5 15 6. "Insurer" means a person engaged in the business of 5 16 insurance who is licensed under chapter 508, 512B, 515, or 5 17 520. 5 18 7. "License" means a document issued pursuant to this 5 19 chapter by the commissioner authorizing a person to act as an 5 20 insurance producer for the lines of authority specified in the 5 21 document. A license by itself does not create any authority, 5 22 actual, apparent, or inherent, in the holder to represent or 5 23 commit an insurer. 5 24 8. "Limited lines insurance" means any authority granted 5 25 by the home state which restricts the authority of the license 5 26 to less than the total authority prescribed in the associated 5 27 major lines pursuant to section 522B.6, subsection 2, 5 28 paragraphs "a" through "f", and any other line of insurance 5 29 that the commissioner may deem it necessary to recognize for 5 30 the purposes of complying with section 522B.7, subsection 4. 5 31 9. "Limited lines producer" means a person authorized by 5 32 the commissioner to sell, solicit, or negotiate limited lines 5 33 insurance. 5 34 10. "Negotiate" means the act of conferring directly with 5 35 or offering advice directly to a purchaser or prospective 6 1 purchaser of a particular contract of insurance concerning any 6 2 of the substantive benefits, terms, or conditions of the 6 3 contract, provided that the person engaged in that act either 6 4 sells insurance or obtains insurance from insurers for 6 5 purchasers. 6 6 11. "Person" means an individual or a business entity. 6 7 12. "Producer database" means the national database of 6 8 insurance producers maintained by the national association of 6 9 insurance commissioners, its affiliates, or subsidiaries. 6 10 13. "Sell" means to exchange a contract of insurance by 6 11 any means, for money or its equivalent, on behalf of an 6 12 insurer. 6 13 14. "Solicit" or "solicitation" means attempting to sell 6 14 insurance or asking or urging a person to apply for a 6 15 particular kind of insurance from a particular company. 6 16 15. "Terminate" means the cancellation of the relationship 6 17 between an insurance producer and the insurer or the 6 18 termination of an insurance producer's authority to transact 6 19 insurance. 6 20 16. "Uniform application" means the current version of the 6 21 national association of insurance commissioners uniform 6 22 application for resident and nonresident insurance producer 6 23 licensing. 6 24 17. "Uniform business entity application" means the 6 25 current version of the national association of insurance 6 26 commissioners uniform business entity application for resident 6 27 and nonresident business entities. 6 28 Sec. 16. NEW SECTION. 522B.2 LICENSE REQUIRED. 6 29 1. A person shall not sell, solicit, or negotiate 6 30 insurance in this state for any line of insurance unless the 6 31 person is licensed as an insurance producer for that line of 6 32 insurance as provided in this chapter. 6 33 2. A person offering to the public, for a fee or 6 34 commission, to engage in the business of offering any advice, 6 35 counsel, or service with respect to the benefits, advantages, 7 1 or disadvantages promised under any policy of insurance must 7 2 also be licensed as an insurance producer. 7 3 Sec. 17. NEW SECTION. 522B.3 EXCEPTIONS TO LICENSING. 7 4 1. Nothing in this chapter shall be construed to require 7 5 an insurer to obtain an insurance producer license. For the 7 6 purposes of this section, "insurer" does not mean an officer, 7 7 director, employee, subsidiary, or affiliate of the insurer. 7 8 2. A license as an insurance producer shall not be 7 9 required of any the following: 7 10 a. An officer, director, or employee of an insurer or of 7 11 an insurance producer, provided that the officer, director, or 7 12 employee does not receive any commission on policies written 7 13 or sold to insure risks residing, located, or to be performed 7 14 in this state, and one of the following applies: 7 15 (1) The activities of the officer, director, or employee 7 16 are executive, administrative, managerial, clerical, or a 7 17 combination of these, and are only indirectly related to the 7 18 sale, solicitation, or negotiation of insurance. 7 19 (2) The function of the officer, director, or employee 7 20 relates to underwriting, loss control, inspection, or the 7 21 processing, adjusting, investigating, or settling of a claim 7 22 on a contract of insurance. 7 23 (3) The officer, director, or employee is acting in the 7 24 capacity of a special agent or agency supervisor assisting 7 25 insurance producers where the person's activities are limited 7 26 to providing technical advice and assistance to licensed 7 27 insurance producers and do not include the sale, solicitation, 7 28 or negotiation of insurance. 7 29 b. A person who performs any of the following services and 7 30 who is not paid a commission for the performance of such 7 31 service: 7 32 (1) Secures and furnishes information for the purpose of 7 33 group life insurance, group property and casualty insurance, 7 34 group annuities, group or blanket accident and health 7 35 insurance. 8 1 (2) Secures and furnishes information for the purpose of 8 2 enrolling individuals under plans, issuing certificates under 8 3 plans, or otherwise assisting in administering plans. 8 4 (3) Performs administrative services related to mass 8 5 marketed property and casualty insurance. 8 6 c. An employer or association, or an officer, director, or 8 7 employee of such employer or association, or the trustees of 8 8 an employee trust plan, to the extent that such employer, 8 9 association, officer, director, employee, or trustee is 8 10 engaged in the administration or operation of a program of 8 11 employee benefits for the employer's or association's own 8 12 employees or the employees of its subsidiaries or affiliates, 8 13 which program involves the use of insurance issued by an 8 14 insurer, as long as such employer, association, officer, 8 15 director, employee, or trustee is not in any manner 8 16 compensated, directly or indirectly, by the insurer issuing 8 17 the contracts. 8 18 d. An employee of an insurer, or an organization employed 8 19 by an insurer, who engages in the inspection, rating, or 8 20 classification of risks, or in the supervision of the training 8 21 of insurance producers and who is not individually engaged in 8 22 the sale, solicitation, or negotiation of insurance. 8 23 e. A person whose activities in this state are limited to 8 24 advertising without the intent to solicit insurance in this 8 25 state through communications in printed publications or other 8 26 forms of electronic mass media whose distribution is not 8 27 limited to residents of the state, provided that the person 8 28 does not sell, solicit, or negotiate insurance that would 8 29 insure risks residing, located, or to be performed in this 8 30 state. 8 31 f. A person who is not a resident of this state who sells, 8 32 solicits, or negotiates a contract of insurance for commercial 8 33 property and casualty risks to an insured with risks located 8 34 in more than one state insured under that contract, provided 8 35 that that person is otherwise licensed as an insurance 9 1 producer to sell, solicit, or negotiate that insurance in the 9 2 state where the insured maintains its principal place of 9 3 business and the contract of insurance insures risks located 9 4 in that state. 9 5 g. A salaried full-time employee who counsels or advises 9 6 the employee's employer relative to the insurance interests of 9 7 the employer or of the subsidiaries or business affiliates of 9 8 the employer, provided that the employee does not sell or 9 9 solicit insurance or receive a commission. 9 10 h. A licensed attorney providing surety bonds incident to 9 11 the attorney's practice. 9 12 i. A person selling transportation tickets of a common 9 13 carrier of persons or property when that person also sells, in 9 14 connection with and related to the transportation ticket, a 9 15 trip and accident insurance policy or an insurance policy on 9 16 personal effects being carried as baggage. 9 17 Sec. 18. NEW SECTION. 522B.4 APPLICATION FOR 9 18 EXAMINATION. 9 19 1. A resident individual applying for an insurance 9 20 producer license shall pass a written examination unless 9 21 exempt pursuant to section 522B.8. The examination shall test 9 22 the knowledge of the individual concerning the lines of 9 23 authority for which application is made, the duties and 9 24 responsibilities of an insurance producer, and the insurance 9 25 laws and regulations of this state. The commissioner shall 9 26 adopt rules pursuant to chapter 17A related to development and 9 27 conduct of the examination. 9 28 2. The commissioner may make arrangements, including 9 29 contracting with an outside testing service or other 9 30 appropriate entity, for administering examinations and 9 31 collecting fees. 9 32 3. An individual applying for an examination shall remit a 9 33 nonrefundable fee as established by rule of the commissioner. 9 34 4. An individual who fails to appear for the examination 9 35 as scheduled or fails to pass the examination, shall reapply 10 1 for an examination and remit all required fees and forms 10 2 before being rescheduled for another examination. 10 3 Sec. 19. NEW SECTION. 522B.5 APPLICATION FOR LICENSE. 10 4 1. A person applying for a resident insurance producer 10 5 license shall make application to the commissioner on the 10 6 uniform application and declare under penalty of refusal, 10 7 suspension, or revocation of the license that the statements 10 8 made in the application are true, correct, and complete to the 10 9 best of the individual's knowledge and belief. Before 10 10 approving the application, the commissioner shall find all of 10 11 the following: 10 12 a. The individual is at least eighteen years of age. 10 13 b. The individual has not committed any act that is a 10 14 ground for denial, suspension, or revocation as set forth in 10 15 section 522B.11. 10 16 c. The individual has paid the license fee of fifty 10 17 dollars. 10 18 d. The individual has successfully passed the examinations 10 19 for the lines of authority for which the person has applied. 10 20 e. In order to protect the public interest, the individual 10 21 has the requisite character and competence to receive a 10 22 license as an insurance producer. 10 23 2. A business entity acting as an insurance producer may 10 24 elect to obtain an insurance producer license. Application 10 25 shall be made using the uniform business entity application. 10 26 Prior to approving the application, the commissioner shall 10 27 find both of the following: 10 28 a. The business entity has paid the appropriate fees. 10 29 b. The business entity has designated a licensed producer 10 30 responsible for the business entity's compliance with the 10 31 insurance laws and rules of this state. 10 32 3. The commissioner may require any documents reasonably 10 33 necessary to verify the information contained in an 10 34 application. 10 35 Sec. 20. NEW SECTION. 522B.6 LICENSE. 11 1 1. A person who meets the requirements of sections 522B.4 11 2 and 522B.5, unless otherwise denied licensure pursuant to 11 3 section 522B.11, shall be issued an insurance producer 11 4 license. An insurance producer license is valid for three 11 5 years. 11 6 2. An insurance producer may qualify for a license in one 11 7 or more of the following lines of authority: 11 8 a. Life insurance providing coverage on human lives 11 9 including benefits of endowment and annuities, and may include 11 10 benefits in the event of death or dismemberment by accident 11 11 and benefits for disability income. 11 12 b. Accident and health or sickness insurance providing 11 13 coverage for sickness, bodily injury, or accidental death, and 11 14 may include benefits for disability income. 11 15 c. Property insurance providing coverage for the direct or 11 16 consequential loss or damage to property of any kind. 11 17 d. Casualty insurance providing coverage against legal 11 18 liability, including that for death, injury, or disability, or 11 19 damage to real or personal property. 11 20 e. Variable life and variable annuity products insurance 11 21 providing coverage provided under variable life insurance 11 22 contracts and variable annuities. 11 23 f. Personal lines property and casualty insurance sold to 11 24 individuals and families primarily for noncommercial purposes. 11 25 g. Excess and surplus lines insurance provided by certain 11 26 nonadmitted insurers pursuant to section 515.147. 11 27 h. Credit insurance, including credit life, credit 11 28 disability, credit property, credit unemployment, involuntary 11 29 unemployment, mortgage life, mortgage guaranty, mortgage 11 30 disability, guaranteed automobile protection insurance, and 11 31 any other form of insurance offered in connection with an 11 32 extension of credit that is limited to partially or wholly 11 33 extinguishing a credit obligation and that the commissioner 11 34 determines should be designated a form of credit insurance. 11 35 i. Any other line of insurance permitted under state law 12 1 or by rule. 12 2 3. An insurance producer license remains in effect unless 12 3 revoked or suspended as long as all required fees are paid and 12 4 continuing education requirements for resident individual 12 5 insurance producers are met by any applicable due date. 12 6 4. An individual insurance producer who allows the 12 7 producer's license to lapse, within twelve months from the due 12 8 date of the renewal fee, may have the same license reinstated 12 9 without the necessity of passing a written examination upon 12 10 the payment of a reinstatement fee as specified by rule of the 12 11 commissioner. Such reinstatement fee shall be in addition to 12 12 the required renewal fee. 12 13 5. A licensed insurance producer who is unable to comply 12 14 with license renewal procedures due to military service or 12 15 some other extenuating circumstance may request a waiver of 12 16 those procedures. Such insurance producer may also request a 12 17 waiver of any examination requirement or any other penalty or 12 18 sanction imposed for failure to comply with renewal 12 19 procedures. 12 20 6. The license shall contain the licensee's name, address, 12 21 personal identification number, and the date of issuance, the 12 22 lines of authority, the expiration date, and any other 12 23 information the commissioner deems necessary. 12 24 7. A licensee shall inform the commissioner by any means 12 25 acceptable to the commissioner of a change of address within 12 26 thirty days of the change. Failure to timely inform the 12 27 commissioner of a change in legal name or address may result 12 28 in a penalty as specified in section 522B.17. 12 29 8. In order to assist with the commissioner's duties, the 12 30 commissioner may contract with a nongovernmental entity, 12 31 including the national association of insurance commissioners 12 32 or any affiliate or subsidiary the national association of 12 33 insurance commissioners oversees, to perform any ministerial 12 34 functions, including the collection of fees, related to 12 35 producer licensing, that the commissioner deems appropriate. 13 1 Sec. 21. NEW SECTION. 522B.7 NONRESIDENT LICENSING. 13 2 1. Unless denied licensure pursuant to section 522B.11, a 13 3 nonresident person shall receive a nonresident insurance 13 4 producer license if all of the following apply: 13 5 a. The person is currently licensed as an insurance 13 6 producer and is in good standing in the person's home state. 13 7 b. The person has submitted the proper request for 13 8 licensure and has paid the required fees. 13 9 c. The person has submitted or transmitted to the 13 10 commissioner the application for licensure that the person 13 11 submitted to the person's home state, or in lieu of such 13 12 application, a completed uniform application. 13 13 d. The person's home state awards nonresident insurance 13 14 producer licenses to residents of this state on the same 13 15 basis. 13 16 2. The commissioner may verify the insurance producer's 13 17 licensing status through the producer database. 13 18 3. A nonresident insurance producer who moves from one 13 19 state to another state or a resident insurance producer who 13 20 moves from this state to another state shall file a change of 13 21 address and provide certification from the new resident state 13 22 within thirty days of the change of legal residence. No fee 13 23 or license application is required. The certification may be 13 24 obtained through the producer database. 13 25 4. Notwithstanding any other provision of this chapter, a 13 26 person licensed as a limited lines insurance producer in the 13 27 person's home state shall receive a nonresident limited lines 13 28 insurance producer license, pursuant to subsection 1, granting 13 29 the same scope of authority as granted under the license 13 30 issued by such person's home state. 13 31 Sec. 22. NEW SECTION. 522B.8 EXEMPTION FROM EXAMINATION. 13 32 1. An individual who applies for an insurance producer 13 33 license in this state who was previously licensed for the same 13 34 lines of authority in another state shall not be required to 13 35 complete an examination. This exemption is only available if 14 1 the person is currently licensed in that other state or if the 14 2 request for licensure is received within ninety days of the 14 3 cancellation of the applicant's previous license and if the 14 4 prior state issues a certification that, at the time of 14 5 cancellation, the applicant was in good standing in that 14 6 state. The certification may be obtained through the producer 14 7 database. 14 8 2. A person licensed as an insurance producer in another 14 9 state who moves to this state shall make application within 14 10 ninety days of establishing legal residence to become a 14 11 resident licensee pursuant to section 522B.5. An examination 14 12 shall not be required of that person to obtain an insurance 14 13 producer license for any line of authority previously held in 14 14 the prior state except where the commissioner determines 14 15 otherwise by regulation. 14 16 Sec. 23. NEW SECTION. 522B.9 ASSUMED NAMES. 14 17 An insurance producer doing business under any name other 14 18 than the insurance producer's legal name is required to notify 14 19 the commissioner prior to using the assumed name. 14 20 Sec. 24. NEW SECTION. 522B.10 TEMPORARY LICENSING. 14 21 1. The commissioner may issue a temporary insurance 14 22 producer license for a period not to exceed one hundred eighty 14 23 days without requiring an examination if the commissioner 14 24 deems that the temporary license is necessary for the 14 25 servicing of an insurance business in the following cases: 14 26 a. To the surviving spouse or court-appointed personal 14 27 representative of a licensed insurance producer who dies or 14 28 becomes mentally or physically disabled, to allow adequate 14 29 time for the sale of the insurance business owned by the 14 30 insurance producer, for the recovery or return of the 14 31 insurance producer to the business, or for the training and 14 32 licensing of new personnel to operate the insurance producer's 14 33 business. 14 34 b. To a member or employee of a business entity licensed 14 35 as an insurance producer, upon the death or disability of an 15 1 individual designated in the business entity application or 15 2 the license. 15 3 c. To the designee of a licensed insurance producer 15 4 entering active service in the armed forces of the United 15 5 States. 15 6 d. In any other circumstance where the commissioner deems 15 7 that the public interest will best be served by the issuance 15 8 of a temporary license. 15 9 2. The commissioner may by order limit the authority of 15 10 any temporary licensee in any way deemed necessary to protect 15 11 insureds and the public. The commissioner may require the 15 12 temporary licensee to have a suitable sponsor who is a 15 13 licensed insurance producer or insurer and who assumes 15 14 responsibility for all acts of the temporary licensee and may 15 15 impose other similar requirements designed to protect insureds 15 16 and the public. The commissioner may by order revoke a 15 17 temporary license if the interest of insureds or the public is 15 18 endangered. A temporary license shall not continue after the 15 19 owner or the personal representative disposes of the business. 15 20 Sec. 25. NEW SECTION. 522B.11 LICENSE DENIAL, 15 21 NONRENEWAL, OR REVOCATION. 15 22 1. The commissioner may place on probation, suspend, 15 23 revoke, or refuse to issue or renew an insurance producer's 15 24 license or may levy a civil penalty as provided in section 15 25 522B.17 for any one or more of the following causes: 15 26 a. Providing incorrect, misleading, incomplete, or 15 27 materially untrue information in the license application. 15 28 b. Violating any insurance laws, or violating any 15 29 regulation, subpoena, or order of the commissioner or of a 15 30 commissioner of another state. 15 31 c. Obtaining or attempting to obtain a license through 15 32 misrepresentation or fraud. 15 33 d. Improperly withholding, misappropriating, or converting 15 34 any moneys or properties received in the course of doing 15 35 insurance business. 16 1 e. Intentionally misrepresenting the terms of an actual or 16 2 proposed insurance contract or application for insurance. 16 3 f. Having been convicted of a felony. 16 4 g. Having admitted or been found to have committed any 16 5 unfair insurance trade practice or fraud. 16 6 h. Using fraudulent, coercive, or dishonest practices, or 16 7 demonstrating incompetence, untrustworthiness, or financial 16 8 irresponsibility in the conduct of business in this state or 16 9 elsewhere. 16 10 i. Having an insurance producer license, or its 16 11 equivalent, denied, suspended, or revoked in any other state, 16 12 province, district, or territory. 16 13 j. Forging another's name to an application for insurance 16 14 or to any document related to an insurance transaction. 16 15 k. Improperly using notes or any other reference material 16 16 to complete an examination for an insurance license. 16 17 l. Knowingly accepting insurance business from an 16 18 individual who is not licensed. 16 19 m. Failing to comply with an administrative or court order 16 20 imposing a child support obligation. 16 21 n. Failing to comply with an administrative or court order 16 22 related to repayment of loans to the college student aid 16 23 commission. 16 24 o. Failing to pay state income tax or comply with any 16 25 administrative or court order directing payment of state 16 26 income tax. 16 27 p. Failing or refusing to cooperate in an investigation by 16 28 the commissioner. 16 29 2. If the commissioner does not renew a license or denies 16 30 an application for a license, the commissioner shall notify 16 31 the applicant or licensee and advise, in writing, the licensee 16 32 or applicant of the reason for the nonrenewal of the license 16 33 or denial of the application for a license. The licensee or 16 34 applicant may request a hearing on the nonrenewal or denial. 16 35 A hearing shall be conducted according to section 507B.6. 17 1 3. The license of a business entity may be suspended, 17 2 revoked, or refused if the commissioner finds, after hearing, 17 3 that an individual licensee's violation was known or should 17 4 have been known by a partner, officer, or manager acting on 17 5 behalf of the business entity and the violation was not 17 6 reported to the commissioner and corrective action was not 17 7 taken. 17 8 4. In addition to, or in lieu of, any applicable denial, 17 9 suspension, or revocation of a license, a person, after 17 10 hearing, may be subject to a civil penalty as provided in 17 11 section 522B.17. 17 12 5. The commissioner may enforce the provisions and impose 17 13 any penalty or remedy authorized by this chapter and chapter 17 14 507B against any person who is under investigation for, or 17 15 charged with, a violation of either chapter even if the 17 16 person's license has been surrendered or has lapsed by 17 17 operation of law. 17 18 Sec. 26. NEW SECTION. 522B.12 COMMISSIONS. 17 19 1. An insurer or insurance producer shall not pay a 17 20 commission, service fee, brokerage, or other valuable 17 21 consideration to a person for selling, soliciting, or 17 22 negotiating insurance in this state if that person is required 17 23 to be licensed under this chapter and is not so licensed. 17 24 2. A person shall not accept a commission, service fee, 17 25 brokerage, or other valuable consideration for selling, 17 26 soliciting, or negotiating insurance in this state if that 17 27 person is required to be licensed under this chapter and is 17 28 not so licensed. 17 29 3. Renewal or other deferred commissions may be paid to a 17 30 person for selling, soliciting, or negotiating insurance in 17 31 this state if the person was required to be licensed under 17 32 this chapter at the time of the sale, solicitation, or 17 33 negotiation and was so licensed at that time. 17 34 4. An insurer or insurance producer may pay or assign a 17 35 commission, service fee, brokerage, or other valuable 18 1 consideration to an insurance agency or to a person who does 18 2 not sell, solicit, or negotiate insurance in this state, 18 3 unless the payment would violate chapter 507B or section 18 4 515.130. 18 5 Sec. 27. NEW SECTION. 522B.13 APPOINTMENTS. 18 6 1. An individual insurance producer who acts as an agent 18 7 of an insurer must be appointed by that insurer. An insurance 18 8 producer who is not acting as an agent of an insurer need not 18 9 be appointed. A business entity is not required to be 18 10 appointed. 18 11 2. The appointing insurer, for the purpose of appointing 18 12 an insurance producer as its agent, shall file, in a format 18 13 approved by the commissioner, a notice of appointment within 18 14 thirty days from the date the agency contract is executed or 18 15 the first insurance application is submitted. 18 16 3. An insurer shall pay an appointment fee, in the amount 18 17 and method of payment set forth by rule of the commissioner, 18 18 for each insurance producer appointed by the insurer. 18 19 4. An insurer shall remit a renewal appointment fee in the 18 20 manner and amount as set forth by rule of the commissioner. 18 21 Sec. 28. NEW SECTION. 522B.14 NOTIFICATION TO 18 22 COMMISSIONER OF TERMINATION – PENALTIES. 18 23 1. An insurer or authorized representative of the insurer 18 24 that terminates the appointment, employment, contract, or 18 25 other insurance business relationship with an insurance 18 26 producer shall notify the commissioner within thirty days 18 27 following the effective date of the termination, using a 18 28 format prescribed by the commissioner, if the reason for 18 29 termination is one of the reasons set forth in section 18 30 522B.11, or the insurer has knowledge the insurance producer 18 31 was found by a court, government body, or self-regulatory 18 32 organization authorized by law to have engaged in any of the 18 33 activities set forth in section 522B.11. Upon request of the 18 34 commissioner, the insurer or authorized representative of the 18 35 insurer shall provide additional information, documents, 19 1 records, or other data pertaining to the termination or 19 2 activity of the insurance producer. 19 3 2. An insurer or authorized representative of the insurer 19 4 that terminates the appointment, employment, contract, or 19 5 other insurance business relationship with an insurance 19 6 producer for any reason not set forth in section 522B.11, 19 7 shall notify the commissioner within thirty days following the 19 8 effective date of the termination, using a format prescribed 19 9 by the commissioner. Upon request of the commissioner, the 19 10 insurer shall provide additional information, documents, 19 11 records, or other data pertaining to the termination. 19 12 3. The insurer or the authorized representative of the 19 13 insurer shall promptly notify the commissioner using a format 19 14 prescribed by the commissioner, if, upon further review or 19 15 investigation, the insurer or authorized representative of the 19 16 insurer discovers additional information that would have been 19 17 reportable to the commissioner pursuant to subsection 1, had 19 18 the insurer then known of its existence. 19 19 4. Within fifteen days after making the notification 19 20 required by this section, the insurer shall mail a copy of the 19 21 notification to the insurance producer at the insurance 19 22 producer's last known address. If the insurance producer is 19 23 terminated for any of the reasons set forth in section 19 24 522B.11, the insurer shall provide a copy of the notification 19 25 to the insurance producer at the insurance producer's last 19 26 known address by restricted certified mail, as defined in 19 27 section 618.15, or by overnight delivery using a nationally 19 28 recognized carrier. 19 29 5. Within thirty days after the insurance producer has 19 30 received the original or additional notification, the 19 31 insurance producer may file written comments concerning the 19 32 substance of the notification with the commissioner. The 19 33 insurance producer, by the same means, shall simultaneously 19 34 send a copy of the comments to the reporting insurer, and the 19 35 comments shall become a part of the commissioner's record and 20 1 accompany every copy of a report distributed or disclosed for 20 2 any reason about the insurance producer, as permitted under 20 3 subsection 8. 20 4 6. In the absence of actual malice, an insurer, the 20 5 authorized representative of the insurer, an insurance 20 6 producer, the commissioner, or an organization of which the 20 7 commissioner is a member and that compiles the information and 20 8 makes it available to other commissioners or regulatory or law 20 9 enforcement agencies shall not be subject to civil liability. 20 10 A civil cause of action of any nature shall not arise against 20 11 any of these entities or their respective agents or employees, 20 12 as a result of any statement or information required by or 20 13 provided pursuant to this section or any information relating 20 14 to any statement that may be requested in writing by the 20 15 commissioner from an insurer or insurance producer; or a 20 16 statement by a terminating insurer or insurance producer to an 20 17 insurer or insurance producer limited solely and exclusively 20 18 to whether a termination for cause under subsection 1 was 20 19 reported to the commissioner, provided that the propriety of 20 20 any termination for cause under subsection 1 is certified in 20 21 writing by an officer or authorized representative of the 20 22 insurer or insurance producer terminating the relationship. 20 23 In any action brought against a person that may have 20 24 immunity under this section for making any statement required 20 25 by this section or providing any information relating to any 20 26 statement that may be requested by the commissioner, the party 20 27 bringing the action shall plead specifically in any allegation 20 28 that this section does not apply because the person making the 20 29 statement or providing the information did so with actual 20 30 malice. This section shall not abrogate or modify any 20 31 existing statutory or common law privileges or immunities. 20 32 7. Any document, material, or other information in the 20 33 control or possession of the insurance division that is 20 34 furnished by an insurer, insurance producer, or an employee or 20 35 agent of such insurer or insurance producer acting on behalf 21 1 of the insurer or insurance producer, or obtained by the 21 2 commissioner in an investigation pursuant to this section are 21 3 considered confidential records and shall not be subject to 21 4 subpoena, or subject to discovery, or admissible in evidence 21 5 in any private civil action. However, the commissioner is 21 6 authorized to use such document, material, or other 21 7 information in the furtherance of any regulatory or legal 21 8 action brought as a part of the commissioner's duties. 21 9 Neither the commissioner nor any person who received any 21 10 document, material, or other information while acting under 21 11 the authority of the commissioner shall be permitted or 21 12 required to testify in any private civil action concerning any 21 13 confidential document, material, or information subject to 21 14 this section. 21 15 8. The commissioner may share documents, materials, or 21 16 other information, including the confidential and privileged 21 17 documents, materials, or information subject to subsection 7 21 18 with other state, federal, and international regulatory 21 19 agencies, with the national association of insurance 21 20 commissioners, its affiliates or subsidiaries, and with state, 21 21 federal, and international law enforcement authorities, 21 22 provided that the recipient agrees to maintain the 21 23 confidentiality and privileged status of the document, 21 24 material, or other information. 21 25 The commissioner may receive documents, materials, or 21 26 information, including otherwise confidential and privileged 21 27 documents, materials, or information, from the national 21 28 association of insurance commissioners, its affiliates or 21 29 subsidiaries, and from regulatory and law enforcement 21 30 officials of other foreign or domestic jurisdictions, and 21 31 shall maintain as confidential or privileged any document, 21 32 material, or information received with notice or the 21 33 understanding that it is confidential or privileged under the 21 34 laws of the jurisdiction that is the source of the document, 21 35 material, or information. 22 1 The commissioner may enter into agreements governing 22 2 sharing and use of information consistent with this 22 3 subsection. 22 4 9. A waiver of any applicable privilege or claim of 22 5 confidentiality in the documents, materials, or information 22 6 shall not occur as a result of disclosure to the commissioner 22 7 or sharing of information received under this section. 22 8 10. Nothing in this chapter shall prohibit the 22 9 commissioner from releasing information regarding final, 22 10 adjudicated actions that are considered public records subject 22 11 to examination and copying under chapter 22 to a database or 22 12 other clearinghouse service maintained by the national 22 13 association of insurance commissioners, or an affiliate or 22 14 subsidiary of the national association of insurance 22 15 commissioners. 22 16 11. An insurer, the authorized representative of the 22 17 insurer, or an insurance producer that fails to report as 22 18 required under this section, or that is found to have reported 22 19 with actual malice by a court of competent jurisdiction, after 22 20 notice and hearing, may have its license or certificate of 22 21 authority suspended or revoked and may be fined as provided in 22 22 section 522B.17. 22 23 Sec. 29. NEW SECTION. 522B.15 RECIPROCITY. 22 24 1. The commissioner shall waive any requirements for a 22 25 nonresident license applicant with a valid license from such 22 26 applicant's home state, except for the requirements imposed by 22 27 section 522B.7, if the applicant's home state awards 22 28 nonresident licenses to residents of this state on the same 22 29 basis. 22 30 2. A nonresident insurance producer's satisfaction of the 22 31 producer's home state's continuing education requirements for 22 32 licensed insurance producers shall constitute satisfaction of 22 33 this state's continuing education requirements if the 22 34 nonresident insurance producer's home state recognizes the 22 35 satisfaction of its continuing education requirements imposed 23 1 upon insurance producers from this state on the same basis. 23 2 Sec. 30. NEW SECTION. 522B.16 REPORTING OF ACTIONS. 23 3 An insurance producer shall report to the commissioner any 23 4 administrative action taken against the insurance producer in 23 5 another jurisdiction or by another governmental agency in this 23 6 state within thirty days of the final disposition of the 23 7 matter. This report shall include a copy of the order, 23 8 consent to the order, or other relevant legal documents. 23 9 Within thirty days of the initial pretrial hearing date, an 23 10 insurance producer shall report to the commissioner any 23 11 criminal prosecution of the insurance producer taken in any 23 12 jurisdiction. The report shall include a copy of the initial 23 13 complaint filed, the order resulting from the hearing, and any 23 14 other relevant legal documents. 23 15 Sec. 31. NEW SECTION. 522B.17 PENALTY. 23 16 An insurer or insurance producer who, after hearing, is 23 17 found to have violated this chapter may be assessed a civil 23 18 penalty pursuant to chapter 507B. 23 19 A person found, after hearing, to have acted as an agent of 23 20 an insurer or otherwise selling, soliciting, or negotiating 23 21 insurance in this state, or offering to the public advice, 23 22 counsel, or services with regard to insurance who is not 23 23 properly licensed is subject to penalty according to the 23 24 provisions of chapter 507A. 23 25 Sec. 32. NEW SECTION. 522B.18 RULES. 23 26 The commissioner may adopt reasonable rules according to 23 27 chapter 17A as are necessary or proper to carry out the 23 28 purposes of this chapter. 23 29 Sec. 33. Section 536.26, unnumbered paragraph 1, Code 23 30 2001, is amended to read as follows: 23 31 A licensee shall not, directly or indirectly, sell or offer 23 32 for sale any life, or accident and health insurance in 23 33 connection with a loan made under this chapter except as and 23 34 to the extent authorized by this section. Life, accident and 23 35 health insurance, or any of them, may be written by a licensed 24 1 insuranceagentproducer upon or in connection with any loan 24 2 for a term not extending beyond the final maturity date of the 24 3 loan contract but only upon one obligor on any one loan 24 4 contract. 24 5 Sec. 34. Section 536A.23, subsection 3, Code 2001, is 24 6 amended to read as follows: 24 7 3. Require any borrower to purchase insurance from the 24 8 lender as a condition for obtaining a loan. However, an 24 9 industrial loan company may collect from the borrower, at the 24 10 option of the borrower, and transmit the premiums charged for 24 11 insuring real or personal property used by the borrower as 24 12 security for a loan and provided that such insurance is 24 13 obtained from a licensed insuranceagentproducer for an 24 14 insurance company authorized to do business in Iowa; and the 24 15 premiums charged for insuring the life of one party on the 24 16 loan in an amount not to exceed the total amount of the note 24 17 or contract, including cash advance, interest and service 24 18 charge, provided that no licensee shall require that the 24 19 contract of life insurance be outstanding for more than the 24 20 unpaid balance of the indebtedness and provided that such 24 21 insurance is obtained from a licensed insuranceagentproducer 24 22 for an insurance company authorized to do business in Iowa; 24 23 and an industrial loan company may receive and transmit the 24 24 premiums charged for accident and health insurance on the 24 25 borrower, provided such insurance bears a reasonable 24 26 relationship to the existing hazards or risk of loss, and the 24 27 aggregate benefits of which shall not exceed the approximate 24 28 amount of the contractual payments on the loan outstanding at 24 29 the time of loss, and provided that such insurance is obtained 24 30 from a licensedagentproducer for an insurance company 24 31 authorized to do business in Iowa. However, all life 24 32 insurance rates in connection with industrial loans shall be 24 33 subject to the rules and regulations of the insurance 24 34 commissioner of the state of Iowa. 24 35 Sec. 35. Section 537.3207, Code 2001, is amended to read 25 1 as follows: 25 2 537.3207 FORM OF INSURANCE PREMIUM LOAN AGREEMENT. 25 3 An agreement pursuant to which an insurance premium loan is 25 4 made shall contain the names of the insuranceagent or broker25 5 producer negotiating each policy or contract and of the 25 6 insurer issuing each policy or contract, the number and 25 7 inception date of, and premium for, each policy or contract, 25 8 the date on which the term of the loan begins, and a clear and 25 9 conspicuous notice that each policy or contract may be 25 10 canceled if payment is not made in accordance with the 25 11 agreement. If a policy or contract has not been issued when 25 12 the agreement is signed, the agreement may provide that the 25 13 insuranceagent or brokerproducer may insert the appropriate 25 14 information in the agreement and, if they do so, shall furnish 25 15 the information promptly in writing to the insured. 25 16 Sec. 36. 25 17 1. Sections 512B.31, 515.123, 515.124, and 515.126, Code 25 18 2001, are repealed. 25 19 2. Chapter 522, Code 2001, is repealed. 25 20 3. Chapter 523F, Code 2001, is repealed. 25 21 Sec. 37. EFFECTIVE DATE. This Act takes effect January 1, 25 22 2002. 25 23 EXPLANATION 25 24 This bill creates new Code chapter 522B, relating to the 25 25 licensing of persons acting as insurance producers, and makes 25 26 certain changes to other statutes that relate to insurance 25 27 producers and agents. The bill takes effect January 1, 2002. 25 28 New Code section 522B.1 provides definitions for the new 25 29 chapter, including "business entity", "commissioner", "home 25 30 state", "insurance", "insurance producer", "insurer", 25 31 "license", "limited lines insurance", "limited lines 25 32 producer", "negotiate", "person", "producer database", "sell", 25 33 "solicit", "terminate", "uniform application", and "uniform 25 34 business entity application". 25 35 The bill creates new Code section 522B.2, which requires a 26 1 person to obtain a license as an insurance producer for any 26 2 line of insurance the person sells, solicits, or negotiates in 26 3 this state. A person who, for a fee or commission, offers 26 4 advice, counsel, or service, with respect to the benefits, 26 5 advantages, or disadvantages promised under any policy of 26 6 insurance that could be sold in this state, must also be 26 7 licensed as an insurance producer. 26 8 New Code section 522B.3 addresses exceptions to licensing 26 9 requirements. The bill states that nothing in the chapter 26 10 should be construed to require an insurer to obtain an insurer 26 11 producer license, and does not require an insurance producer 26 12 license for any of the following: (1) an officer, director, 26 13 or employee of an insurer or insurance producer who does not 26 14 receive any commission on policies written or sold, and who is 26 15 not involved in the sale of insurance, in one of the specific 26 16 ways provided by the bill; (2) a person who, without receiving 26 17 a commission, performs certain services related to group 26 18 insurance or the administration of insurance plans or mass- 26 19 marketed property and casualty insurance; (3) an employer or 26 20 association, including certain persons affiliated with the 26 21 employer or association, to the extent that the employer, 26 22 association, or other person is administering an employee 26 23 benefits program provided that the employer, association, or 26 24 other person is not compensated by the insurer responsible for 26 25 the insurance used in the employee benefits program; (4) an 26 26 employee of an insurer who is involved in inspection, rating, 26 27 classification of risks, or in the supervision of the training 26 28 of insurance producers, and who is not involved in the sale or 26 29 negotiation of insurance; (5) a person who only advertises in 26 30 printed or electronic mass media not limited in distribution 26 31 to this state, provided that the person does not sell or 26 32 negotiate insurance related to risks in this state; (6) a 26 33 nonresident who sells or negotiates insurance for commercial 26 34 property and casualty risks with an insured who has risks in 26 35 more than one state covered under that contract, provided that 27 1 the person is licensed as an insurance producer in the state 27 2 where the insured maintains its principal place of business, 27 3 and the contract insures risks in that state; (7) a full-time 27 4 employee who advises the employee's employer on insurance for 27 5 the employer, and who does not sell insurance or receive a 27 6 commission; (8) a licensed attorney providing surety bonds 27 7 incident to the attorney's practice; and (9) a person selling 27 8 accident or baggage insurance in connection with a ticket for 27 9 transportation on a common carrier. 27 10 New Code section 522B.4 provides that an applicant for an 27 11 insurance producer license must pass a written examination, 27 12 unless previously licensed in another jurisdiction, as 27 13 provided in new Code section 522B.8. The commissioner is 27 14 authorized to adopt rules related to development and conduct 27 15 of the examination, and may make arrangements for 27 16 administering examinations and collecting fees. A person 27 17 applying for the examination shall remit a nonrefundable fee, 27 18 and must reapply for the examination if the person fails to 27 19 appear, pass, or remit all required fees and forms. 27 20 New Code section 522B.5 provides that a person applying for 27 21 a resident insurance producer license must be at least 18, has 27 22 not committed any act that is a ground for denial, suspension, 27 23 or revocation as set forth in new Code section 522B.11, paid a 27 24 $50 license fee, has passed the examinations for the lines for 27 25 which the person has applied, and has the requisite character 27 26 and competence to receive a license as an insurance producer. 27 27 The person shall complete the application declaring that the 27 28 information contained within is true and complete to the best 27 29 of the individual's knowledge, subject to the penalty of 27 30 refusal, suspension, or revocation of the license. A business 27 31 entity may also obtain an insurance producer license, by 27 32 completing an application, paying the appropriate fees, and 27 33 designating a licensed producer as responsible for the 27 34 entity's compliance with state insurance laws and rules. 27 35 New Code section 522B.6 provides that a person who meets 28 1 the requirements for licensure shall be issued a license that 28 2 is valid for three years, and so long as it is not suspended 28 3 or revoked, remains in effect as long as all required fees are 28 4 paid and continuing education requirements are met. Special 28 5 provisions apply for late renewals and renewals affected by 28 6 military service. The licensee must inform the commissioner 28 7 of a change of address within 30 days, or be subject to 28 8 penalty. The commissioner may contract with a nongovernmental 28 9 entity to perform ministerial functions related to the 28 10 licensing procedures. 28 11 An insurance producer may qualify for a license in one or 28 12 more of the following lines of authority: (1) life, including 28 13 endowments, annuities, accident, and death benefits; (2) 28 14 accident and health or sickness insurance, including bodily 28 15 injury, accidental death, and disability; (3) property; (4) 28 16 casualty, including death, injury, disability, or damage to 28 17 property; (5) variable life and variable annuity products; (6) 28 18 personal lines property and casualty insurance sold to 28 19 individuals and families primarily for noncommercial purposes; 28 20 (7) excess and surplus lines insurance provided by certain 28 21 nonadmitted insurers; (8) credit insurance, including credit 28 22 life, disability, property, unemployment, mortgage life, 28 23 mortgage guarantee, mortgage disability, and guaranteed 28 24 automobile protection insurance; and (9) any other line of 28 25 insurance permitted under state law or by rule. 28 26 New Code section 522B.7 relates to licensing for 28 27 nonresidents. A nonresident producer license is issued if the 28 28 person is licensed in good standing in the person's home 28 29 state, has submitted the request and paid the fees for 28 30 licensure, has submitted the application submitted in the 28 31 person's home state or a uniform application, and the person's 28 32 home state awards nonresident licenses on the same basis. A 28 33 nonresident who moves to another state is required to submit a 28 34 change of address within 30 days of the change. 28 35 Notwithstanding any other provision of the chapter, a person 29 1 licensed as a limited lines producer in the person's home 29 2 state shall receive a nonresident limited lines insurance 29 3 producer license granting the same scope of authority as in 29 4 the home state, upon application and payment of fees as 29 5 previously described. 29 6 New Code section 522B.8 provides that an individual who was 29 7 previously licensed for the same lines of authority in another 29 8 state shall not be required to complete an examination, if the 29 9 person is currently licensed in the other state or if the 29 10 request for licensure is within 90 days of cancellation and 29 11 the applicant was in good standing. Application to become a 29 12 resident licensee in this state must be made within 90 days of 29 13 establishing legal residency. 29 14 New Code section 522B.9 requires an insurance producer 29 15 doing business under any name other than the insurance 29 16 producer's legal name to notify the commissioner prior to 29 17 using the assumed name. 29 18 New Code section 522B.10 allows the commissioner to issue a 29 19 temporary insurance producer license for up to 180 days 29 20 without an examination if necessary in the following cases: 29 21 (1) to a surviving spouse or court-appointed personal 29 22 representative of a licensed insurance producer who dies or 29 23 becomes physically or mentally disabled, to allow time for the 29 24 sale of the business, recovery of the insurance producer, or 29 25 training and licensing of new personnel; (2) to a member or 29 26 employee of a business entity licensed as an insurance 29 27 producer, upon the death or disability of an individual 29 28 designated in the business entity application; (3) to the 29 29 designee of a licensed insurance producer entering active 29 30 military service; and (4) in any other circumstance where the 29 31 commissioner deems the public interest will be best served by 29 32 the issuance of a temporary license. The commissioner may by 29 33 order limit the authority of a temporary licensee as necessary 29 34 to protect insureds and the public, and may require the 29 35 temporary licensee to have a sponsor who assumes 30 1 responsibility for all acts of the temporary licensee. The 30 2 commissioner may also revoke a temporary license if the public 30 3 interest or that of insureds is endangered. 30 4 New Code section 522B.11 addresses denial, nonrenewal, and 30 5 revocation of licenses. The commissioner may place on 30 6 probation, suspend, revoke, or refuse to issue or renew a 30 7 license or may levy a civil penalty for one or more of the 30 8 following: (1) providing incorrect, misleading, incomplete, 30 9 or materially untrue information in the license application; 30 10 (2) violating any insurance laws, or any regulation, subpoena, 30 11 or order of the commissioner of this or another state; (3) 30 12 obtaining or attempting to obtain a license through 30 13 misrepresentation or fraud; (4) improperly withholding, 30 14 misappropriating, or converting any moneys or properties 30 15 received in the course of doing insurance business; (5) 30 16 intentionally misrepresenting the terms of an actual or 30 17 proposed insurance contract or application for insurance; (6) 30 18 having been convicted of a felony; (7) having admitted or been 30 19 found to have committed any unfair insurance trade practice or 30 20 fraud; (8) using fraudulent, coercive, or dishonest practices, 30 21 or demonstrating incompetence, untrustworthiness, or financial 30 22 irresponsibility in the conduct of business in this state or 30 23 elsewhere; (9) having an insurance producer license or its 30 24 equivalent denied, suspended, or revoked in any other state, 30 25 province, district, or territory; (10) forging another's name 30 26 to an application for insurance or to any document related to 30 27 an insurance transaction; (11) improperly using notes or any 30 28 other reference material to complete an examination for an 30 29 insurance license; (12) knowingly accepting insurance business 30 30 from an individual who is not licensed; (13) failing to comply 30 31 with an administrative or court order imposing a child support 30 32 obligation; (14) failing to comply with an administrative or 30 33 court order related to repayment of loans to the college 30 34 student aid commission; (15) failing to pay state income tax 30 35 or comply with any administrative or court order directing 31 1 payment of state income tax; and (16) failing or refusing to 31 2 cooperate in an investigation by the commissioner. 31 3 The commissioner shall notify a person in writing of the 31 4 reason for the nonrenewal of the license or denial of the 31 5 application. The licensee or applicant may request a hearing. 31 6 The license of business entity may be suspended, revoked, or 31 7 refused if the commissioner finds, after hearing, that an 31 8 individual licensee's violation was known or should have been 31 9 known and was not reported to the commissioner, and corrective 31 10 action was not taken. A person may also be subject to civil 31 11 penalty. 31 12 New Code section 522B.12 addresses commissions, and 31 13 provides that an insurer or producer shall not pay a 31 14 commission or other consideration for selling insurance if a 31 15 person is required to be licensed and is not licensed. A 31 16 person is prohibited from accepting a commission for selling 31 17 insurance if the person is required to be licensed and is not 31 18 licensed. Renewal commissions can be paid if the person was 31 19 licensed at the time of the sale. An insurer or producer may 31 20 assign a commission to an insurance agency or to a person who 31 21 does not sell insurance, unless the payment would violate Code 31 22 chapter 507B, insurance trade practices, or Code section 31 23 515.130, relating to prohibited rebates. 31 24 New Code section 522B.13 requires that an insurance 31 25 producer who acts as an agent of an insurer must be appointed 31 26 by that insurer. A business entity is not required to be 31 27 appointed. The appointing insurer must file a notice of 31 28 appointment within 30 days from the date of the agency 31 29 contract, and shall pay an appointment fee and renewal 31 30 appointment fees for each insurance producer appointed. 31 31 New Code section 522B.14 requires an insurer that 31 32 terminates the appointment relationship with an insurance 31 33 producer to notify the commissioner within 30 days of the 31 34 effective date of the termination. The insurer may be 31 35 obligated to report certain other information known about the 32 1 producer to the commissioner. The insurance producer may file 32 2 written comments concerning the substance of the insurer's 32 3 notification, which shall become part of the commissioner's 32 4 record. The bill provides that a civil cause of action shall 32 5 not arise against the regulatory and enforcement agencies in 32 6 the absence of actual malice as a result of any statement of 32 7 information provided pursuant to this Code section. An 32 8 insurer or producer that fails to report as required, or is 32 9 found to have reported with actual malice by a court, may have 32 10 its license or certificate of authority revoked after notice 32 11 and hearing, or may be fined. 32 12 Documents and other information in the possession of the 32 13 insurance division are considered confidential records not 32 14 subject to subpoena or civil discovery, and the commissioner 32 15 and other persons who received the documents and other 32 16 information are not required to testify in any civil action. 32 17 The commissioner may share documents and other information 32 18 with other state and federal regulatory agencies, law 32 19 enforcement authorities, and the national association of 32 20 insurance commissioners, provided that confidentiality is 32 21 maintained. Waiver shall not occur as a result of any 32 22 disclosure. 32 23 New Code section 522B.15 addresses reciprocity requirements 32 24 for license applicants holding licenses in another state, 32 25 including when continuing education requirements are 32 26 considered satisfied. 32 27 New Code section 522B.16 requires an insurance producer to 32 28 report to the commissioner any administrative action taken 32 29 against the producer in another jurisdiction or by another 32 30 governmental agency, within 30 days of the final disposition. 32 31 The report must include a copy of the order and other relevant 32 32 legal documents. The producer must report any criminal 32 33 prosecution within 30 days of the initial pretrial hearing 32 34 date, including any complaint filed and any other relevant 32 35 legal documents. 33 1 New Code section 522B.17 provides that an insurer or 33 2 producer who after hearing is found to have violated Code 33 3 chapter 522B may be assessed a civil penalty pursuant to Code 33 4 chapter 507B. A person who sells insurance without proper 33 5 licensing is subject to penalty according to the provisions of 33 6 Code chapter 507A, which provides for cease and desist orders 33 7 and civil penalties for violations of those orders. 33 8 New Code section 522B.18 provides that the commissioner may 33 9 adopt rules as necessary to carry out the purposes of the 33 10 chapter. 33 11 The following Code sections are repealed: Code section 33 12 512B.31, relating to the licensing of agents; and Code 33 13 sections 515.123, 515.124, and 515.126, relating to various 33 14 definitions pertaining to agents. 33 15 The bill also repeals Code chapter 522, relating to the 33 16 licensing of agents; and Code chapter 523F, relating to legal 33 17 expense insurance. 33 18 The following Code sections contain technical, 33 19 corresponding amendments related to the enactment of new Code 33 20 chapter 522B and repeal of Code chapter 522, and change in 33 21 terminology from "insurance agent" to "insurance producer": 33 22 272C.1, 272C.3, 272C.4, 422.45, 505.102, 502.304, 508A.5, 33 23 514B,19, 515.125, 516A.1, 521A.2, 522A.3, 523H.1, 536.26, 33 24 536A.23, and 537.3207. 33 25 LSB 1074HV 79 33 26 jj/cls/14
Text: HF00499 Text: HF00501 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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