Text: SF00275 Text: SF00277 Text: SF00200 - SF00299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 SENATE FILE 276 1 2 1 3 AN ACT 1 4 RELATING TO THE LICENSURE OF PERSONS ACTING AS INSURANCE 1 5 PRODUCERS, PROVIDING AN EFFECTIVE DATE, AND APPLYING PENALTIES. 1 6 1 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 8 1 9 Section 1. Section 272C.1, subsection 6, paragraph z, Code 1 10 2001, is amended to read as follows: 1 11 z. The commissioner of insurance in licensing insurance 1 12agentsproducers pursuant to chapter522522B, except those 1 13agentsproducers authorized to sell only creditlife and1 14credit accident and healthinsurance or crop insurance. 1 15 Sec. 2. Section 272C.3, subsection 2, paragraph a, Code 1 16 2001, is amended to read as follows: 1 17 a. Revoke a license, or suspend a license either until 1 18 further order of the board or for a specified period, upon any 1 19 of the grounds specified in section 147.55, 148.6, 148B.7, 1 20 152.10, 153.34, 154A.24, 169.13, 542B.21, 542C.21, 543B.29, 1 21 544A.13, 544B.15, or 602.3203 or chapter 151, 155, 507B, or 1 22522522B, as applicable, or upon any other grounds 1 23 specifically provided for in this chapter for revocation of 1 24 the license of a licensee subject to the jurisdiction of that 1 25 board, or upon failure of the licensee to comply with a 1 26 decision of the board imposing licensee discipline; 1 27 Sec. 3. Section 272C.4, subsection 6, Code 2001, is 1 28 amended to read as follows: 1 29 6. Define by rule acts or omissions which are grounds for 1 30 revocation or suspension of a license under section 147.55, 1 31 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13, 455B.191, 1 32 542B.21, 542C.21, 543B.29, 544A.13, 544B.15, or 602.3203 or 1 33 chapter 151, 155, 507B, or522522B, as applicable, and to 1 34 define by rule acts or omissions which constitute negligence, 1 35 careless acts or omissions within the meaning of section 2 1 272C.3, subsection 2, paragraph "b", which licensees are 2 2 required to report to the board pursuant to section 272C.9, 2 3 subsection 2; 2 4 Sec. 4. Section 422.45, subsection 27, paragraph d, 2 5 subparagraph (3), Code 2001, is amended to read as follows: 2 6 (3) "Insurance company" means an insurer organized or 2 7 operating under chapter 508, 514, 515, 518, 518A, 519, or 520, 2 8 or authorized to do business in Iowa as an insurer ora2 9licensed insurance agentan insurance producer under chapter 2 10522522B. 2 11 Sec. 5. Section 502.102, subsection 11, paragraph d, Code 2 12 2001, is amended to read as follows: 2 13 d. As used in this subsection, "compensation" does not 2 14 include a commission, fee, or a combination of a commission 2 15 and a fee, which is paid to an insuranceagentproducer 2 16 licensed under chapter522522B, if the insuranceagent2 17 producer receives the commission, fee, or the combination of a 2 18 commission and a fee, for the sale of insurance as regulated 2 19 pursuant to Title XIII, subtitle 1. 2 20 Sec. 6. Section 502.304, subsection 1, paragraph e, Code 2 21 2001, is amended to read as follows: 2 22 e. Is the subject of an order of the administrator 2 23 denying, suspending, or revoking registration as a broker- 2 24 dealer, agent, investment adviser, investment adviser 2 25 representative, or insuranceagentproducer; 2 26 Sec. 7. Section 508A.5, Code 2001, is amended to read as 2 27 follows: 2 28 508A.5 OTHER PROVISIONS APPLICABLE. 2 29 Except for section 508.37 and section 509.2, subsection 1, 2 30 and except as otherwise provided in this chapter, all 2 31 pertinent provisions of chapters 508, 509, 511, and522522B 2 32 shall apply to separate accounts and contracts relating 2 33 thereto. Any individual variable life insurance contract, 2 34 delivered or issued for delivery in this state, shall contain 2 35 nonforfeiture provisions appropriate to such a contract. Any 3 1 group variable life insurance contract, delivered or issued 3 2 for delivery in this state, shall contain a grace provision 3 3 appropriate to such a contract. The reserve liability for 3 4 variable contracts shall be established in accordance with 3 5 actuarial procedures that recognize the variable nature of the 3 6 benefits provided and any mortality guarantees. 3 7 Sec. 8. Section 511.4, Code 2001, is amended to read as 3 8 follows: 3 9 511.4 ADVERTISEMENTS – WHO DEEMED AGENT. 3 10 The provisions ofsections 515.122 to 515.126section 3 11 515.125 shall apply to life insurance companies and 3 12 associations. 3 13 Sec. 9. Section 515.125, Code 2001, is amended to read as 3 14 follows: 3 15 515.125AGENT – SPECIFIC DEFINITIONAGENCY RELATIONSHIP. 3 16 Any officer,agentinsurance producer, or representative of 3 17 an insurance company doing business in this state who may 3 18 solicit insurance, procure applications, issue policies, 3 19 adjust losses, or transact the business generally of such 3 20 companies, shall be held to be the agent of such insurance 3 21 company with authority to transact all business within the 3 22 scope of theagent's employmentagency relationship, anything 3 23 in the application, policy, contract, bylaws, or articles of 3 24 incorporation of such company to the contrary notwithstanding. 3 25 Sec. 10. Section 516A.1, unnumbered paragraph 2, Code 3 26 2001, is amended to read as follows: 3 27 However, the named insured may reject all of such coverage, 3 28 or reject the uninsured motor vehicle (hit-and-run motor 3 29 vehicle) coverage, or reject the underinsured motor vehicle 3 30 coverage, by written rejections signed by the named insured. 3 31 If rejection is made on a form or document furnished by an 3 32 insurance company or insuranceagentproducer, it shall be on 3 33 a separate sheet of paper which contains only the rejection 3 34 and information directly related to it. Such coverage need 3 35 not be provided in or supplemental to a renewal policy if the 4 1 named insured has rejected the coverage in connection with a 4 2 policy previously issued to the named insured by the same 4 3 insurer. 4 4 Sec. 11. Section 521A.2, subsection 1, paragraph b, Code 4 5 2001, is amended to read as follows: 4 6 b. Acting as an insurancebroker or as an insurance agent4 7 producer for its parent or for any of its parent's insurer 4 8 subsidiaries or intermediate insurer subsidiaries. 4 9 Sec. 12. Section 522A.3, subsection 1, Code 2001, is 4 10 amended to read as follows: 4 11 1. Notwithstanding the provisions of chapter522522B, the 4 12 commissioner may issue a limited license to a rental company 4 13 that has complied with the requirements of this chapter. The 4 14 limited license shall authorize the limited licensee to offer 4 15 or sell insurance with the rental of vehicles. 4 16 Sec. 13. Section 523H.1, subsection 3, paragraph c, Code 4 17 2001, is amended to read as follows: 4 18 c. "Franchise" also does not include any contract under 4 19 which a petroleum retailer or petroleum distributor is 4 20 authorized or permitted to occupy leased marketing premises, 4 21 which premises are to be employed in connection with the sale, 4 22 consignment, or distribution of motor fuel under a trademark 4 23 which is owned or controlled by a refiner which is regulated 4 24 by the federal Petroleum Marketing Practices Act, 15 U.S.C. } 4 25 2801 et seq. The term "refiner" means any person engaged in 4 26 the refining of crude oil to produce motor fuel, and includes 4 27 any affiliate of such person. "Franchise" also does not 4 28 include a contract entered into by any person regulated under 4 29 chapter 123, 322, 322A, 322B, 322C, 322D, 322F,522522B, or 4 30 543B, or a contract establishing a franchise relationship with 4 31 respect to the sale of construction equipment, lawn or garden 4 32 equipment, or real estate. 4 33 Sec. 14. Section 514B.19, Code 2001, is amended to read as 4 34 follows: 4 35 514B.19 REGULATION OFAGENTSINSURANCE PRODUCERS. 5 1 The commissioner may, after notice and hearing, promulgate 5 2 such reasonable rules under the provisions of chapter522522B 5 3 that are necessary to provide for the licensing ofagents5 4 insurance producers who engage in solicitation or enrollment 5 5 for a health maintenance organization. 5 6 Sec. 15. NEW SECTION. 522B.1 DEFINITIONS. 5 7 As used in this chapter, unless the context otherwise 5 8 requires: 5 9 1. "Business entity" means a corporation, association, 5 10 partnership, limited liability company, limited liability 5 11 partnership, or other legal entity. 5 12 2. "Commissioner" means the commissioner of insurance. 5 13 3. "Home state" means the District of Columbia and any 5 14 state or territory of the United States in which an insurance 5 15 producer maintains the producer's principal place of residence 5 16 or principal place of business and is licensed to act as an 5 17 insurance producer. 5 18 4. "Insurance" means any of the lines of authority an 5 19 insurer is authorized to sell in this state. 5 20 5. "Insurance producer" means a person required to be 5 21 licensed under the laws of this state to sell, solicit, or 5 22 negotiate insurance. 5 23 6. "Insurer" means a person engaged in the business of 5 24 insurance who is licensed under chapter 508, 512B, 515, or 5 25 520. 5 26 7. "License" means a document issued pursuant to this 5 27 chapter by the commissioner authorizing a person to act as an 5 28 insurance producer for the lines of authority specified in the 5 29 document. A license by itself does not create any authority, 5 30 actual, apparent, or inherent, in the holder to represent or 5 31 commit an insurer. 5 32 8. "Limited lines insurance" means any authority granted 5 33 by the home state which restricts the authority of the license 5 34 to less than the total authority prescribed in the associated 5 35 major lines pursuant to section 522B.6, subsection 2, 6 1 paragraphs "a" through "f", and any other line of insurance 6 2 that the commissioner may deem it necessary to recognize for 6 3 the purposes of complying with section 522B.7, subsection 4. 6 4 9. "Limited lines producer" means a person authorized by 6 5 the commissioner to sell, solicit, or negotiate limited lines 6 6 insurance. 6 7 10. "Negotiate" means the act of conferring directly with 6 8 or offering advice directly to a purchaser or prospective 6 9 purchaser of a particular contract of insurance concerning any 6 10 of the substantive benefits, terms, or conditions of the 6 11 contract, provided that the person engaged in that act either 6 12 sells insurance or obtains insurance from insurers for 6 13 purchasers. 6 14 11. "Person" means an individual or a business entity. 6 15 12. "Producer database" means the national database of 6 16 insurance producers maintained by the national association of 6 17 insurance commissioners, its affiliates, or subsidiaries. 6 18 13. "Sell" means to exchange a contract of insurance by 6 19 any means, for money or its equivalent, on behalf of an 6 20 insurer. 6 21 14. "Solicit" or "solicitation" means attempting to sell 6 22 insurance or asking or urging a person to apply for a 6 23 particular kind of insurance from a particular company. 6 24 15. "Terminate" means the cancellation of the relationship 6 25 between an insurance producer and the insurer or the 6 26 termination of an insurance producer's authority to transact 6 27 insurance. 6 28 16. "Uniform application" means the current version of the 6 29 national association of insurance commissioners uniform 6 30 application for resident and nonresident insurance producer 6 31 licensing. 6 32 17. "Uniform business entity application" means the 6 33 current version of the national association of insurance 6 34 commissioners uniform business entity application for resident 6 35 and nonresident business entities. 7 1 Sec. 16. NEW SECTION. 522B.2 LICENSE REQUIRED. 7 2 1. A person shall not sell, solicit, or negotiate 7 3 insurance in this state for any line of insurance unless the 7 4 person is licensed as an insurance producer for that line of 7 5 insurance as provided in this chapter. 7 6 2. A person offering to the public, for a fee or 7 7 commission, to engage in the business of offering any advice, 7 8 counsel, or service with respect to the benefits, advantages, 7 9 or disadvantages promised under any policy of insurance must 7 10 also be licensed as an insurance producer. 7 11 Sec. 17. NEW SECTION. 522B.3 EXCEPTIONS TO LICENSING. 7 12 1. Nothing in this chapter shall be construed to require 7 13 an insurer to obtain an insurance producer license. For the 7 14 purposes of this section, "insurer" does not mean an officer, 7 15 director, employee, subsidiary, or affiliate of the insurer. 7 16 2. A license as an insurance producer shall not be 7 17 required of any the following: 7 18 a. An officer, director, or employee of an insurer or of 7 19 an insurance producer, provided that the officer, director, or 7 20 employee does not receive any commission on policies written 7 21 or sold to insure risks residing, located, or to be performed 7 22 in this state, and one of the following applies: 7 23 (1) The activities of the officer, director, or employee 7 24 are executive, administrative, managerial, clerical, or a 7 25 combination of these, and are only indirectly related to the 7 26 sale, solicitation, or negotiation of insurance. 7 27 (2) The function of the officer, director, or employee 7 28 relates to underwriting, loss control, inspection, or the 7 29 processing, adjusting, investigating, or settling of a claim 7 30 on a contract of insurance. 7 31 (3) The officer, director, or employee is acting in the 7 32 capacity of a special agent or agency supervisor assisting 7 33 insurance producers where the person's activities are limited 7 34 to providing technical advice and assistance to licensed 7 35 insurance producers and do not include the sale, solicitation, 8 1 or negotiation of insurance. 8 2 b. A person who performs any of the following services and 8 3 who is not paid a commission for the performance of such 8 4 service: 8 5 (1) Secures and furnishes information for the purpose of 8 6 group life insurance, group property and casualty insurance, 8 7 group annuities, group or blanket accident and health 8 8 insurance. 8 9 (2) Secures and furnishes information for the purpose of 8 10 enrolling individuals under plans, issuing certificates under 8 11 plans, or otherwise assisting in administering plans. 8 12 (3) Performs administrative services related to mass 8 13 marketed property and casualty insurance. 8 14 c. An employer or association, or an officer, director, or 8 15 employee of such employer or association, or the trustees of 8 16 an employee trust plan, to the extent that such employer, 8 17 association, officer, director, employee, or trustee is 8 18 engaged in the administration or operation of a program of 8 19 employee benefits for the employer's or association's own 8 20 employees or the employees of its subsidiaries or affiliates, 8 21 which program involves the use of insurance issued by an 8 22 insurer, as long as such employer, association, officer, 8 23 director, employee, or trustee is not in any manner 8 24 compensated, directly or indirectly, by the insurer issuing 8 25 the contracts. 8 26 d. An employee of an insurer, or an organization employed 8 27 by an insurer, who engages in the inspection, rating, or 8 28 classification of risks, or in the supervision of the training 8 29 of insurance producers and who is not individually engaged in 8 30 the sale, solicitation, or negotiation of insurance. 8 31 e. A person whose activities in this state are limited to 8 32 advertising without the intent to solicit insurance in this 8 33 state through communications in printed publications or other 8 34 forms of electronic mass media whose distribution is not 8 35 limited to residents of the state, provided that the person 9 1 does not sell, solicit, or negotiate insurance that would 9 2 insure risks residing, located, or to be performed in this 9 3 state. 9 4 f. A person who is not a resident of this state who sells, 9 5 solicits, or negotiates a contract of insurance for commercial 9 6 property and casualty risks to an insured with risks located 9 7 in more than one state insured under that contract, provided 9 8 that that person is otherwise licensed as an insurance 9 9 producer to sell, solicit, or negotiate that insurance in the 9 10 state where the insured maintains its principal place of 9 11 business and the contract of insurance insures risks located 9 12 in that state. 9 13 g. A salaried full-time employee who counsels or advises 9 14 the employee's employer relative to the insurance interests of 9 15 the employer or of the subsidiaries or business affiliates of 9 16 the employer, provided that the employee does not sell or 9 17 solicit insurance or receive a commission. 9 18 h. A licensed attorney providing surety bonds incident to 9 19 the attorney's practice. 9 20 i. A person selling transportation tickets of a common 9 21 carrier of persons or property when that person also sells, in 9 22 connection with and related to the transportation ticket, a 9 23 trip and accident insurance policy or an insurance policy on 9 24 personal effects being carried as baggage. 9 25 Sec. 18. NEW SECTION. 522B.4 APPLICATION FOR 9 26 EXAMINATION. 9 27 1. A resident individual applying for an insurance 9 28 producer license shall pass a written examination unless 9 29 exempt pursuant to section 522B.8. The examination shall test 9 30 the knowledge of the individual concerning the lines of 9 31 authority for which application is made, the duties and 9 32 responsibilities of an insurance producer, and the insurance 9 33 laws and regulations of this state. The commissioner shall 9 34 adopt rules pursuant to chapter 17A related to development and 9 35 conduct of the examination. 10 1 2. The commissioner may make arrangements, including 10 2 contracting with an outside testing service or other 10 3 appropriate entity, for administering examinations and 10 4 collecting fees. 10 5 3. An individual applying for an examination shall remit a 10 6 nonrefundable fee as established by rule of the commissioner. 10 7 4. An individual who fails to appear for the examination 10 8 as scheduled or fails to pass the examination, shall reapply 10 9 for an examination and remit all required fees and forms 10 10 before being rescheduled for another examination. 10 11 Sec. 19. NEW SECTION. 522B.5 APPLICATION FOR LICENSE. 10 12 1. A person applying for a resident insurance producer 10 13 license shall make application to the commissioner on the 10 14 uniform application and declare under penalty of refusal, 10 15 suspension, or revocation of the license that the statements 10 16 made in the application are true, correct, and complete to the 10 17 best of the individual's knowledge and belief. Before 10 18 approving the application, the commissioner shall find all of 10 19 the following: 10 20 a. The individual is at least eighteen years of age. 10 21 b. The individual has not committed any act that is a 10 22 ground for denial, suspension, or revocation as set forth in 10 23 section 522B.11. 10 24 c. The individual has paid the license fee of fifty 10 25 dollars. 10 26 d. The individual has successfully passed the examinations 10 27 for the lines of authority for which the person has applied. 10 28 e. In order to protect the public interest, the individual 10 29 has the requisite character and competence to receive a 10 30 license as an insurance producer. 10 31 2. A business entity acting as an insurance producer may 10 32 elect to obtain an insurance producer license. Application 10 33 shall be made using the uniform business entity application. 10 34 Prior to approving the application, the commissioner shall 10 35 find both of the following: 11 1 a. The business entity has paid the appropriate fees. 11 2 b. The business entity has designated a licensed producer 11 3 responsible for the business entity's compliance with the 11 4 insurance laws and rules of this state. 11 5 3. The commissioner may require any documents reasonably 11 6 necessary to verify the information contained in an 11 7 application. 11 8 Sec. 20. NEW SECTION. 522B.6 LICENSE. 11 9 1. A person who meets the requirements of sections 522B.4 11 10 and 522B.5, unless otherwise denied licensure pursuant to 11 11 section 522B.11, shall be issued an insurance producer 11 12 license. An insurance producer license is valid for three 11 13 years. 11 14 2. An insurance producer may qualify for a license in one 11 15 or more of the following lines of authority: 11 16 a. Life insurance providing coverage on human lives 11 17 including benefits of endowment and annuities, and may include 11 18 benefits in the event of death or dismemberment by accident 11 19 and benefits for disability income. 11 20 b. Accident and health or sickness insurance providing 11 21 coverage for sickness, bodily injury, or accidental death, and 11 22 may include benefits for disability income. 11 23 c. Property insurance providing coverage for the direct or 11 24 consequential loss or damage to property of any kind. 11 25 d. Casualty insurance providing coverage against legal 11 26 liability, including that for death, injury, or disability, or 11 27 damage to real or personal property. 11 28 e. Variable life and variable annuity products insurance 11 29 providing coverage provided under variable life insurance 11 30 contracts and variable annuities. 11 31 f. Personal lines property and casualty insurance sold to 11 32 individuals and families primarily for noncommercial purposes. 11 33 g. Excess and surplus lines insurance provided by certain 11 34 nonadmitted insurers pursuant to section 515.147. 11 35 h. Credit insurance, including credit life, credit 12 1 disability, credit property, credit unemployment, involuntary 12 2 unemployment, mortgage life, mortgage guaranty, mortgage 12 3 disability, guaranteed automobile protection insurance, and 12 4 any other form of insurance offered in connection with an 12 5 extension of credit that is limited to partially or wholly 12 6 extinguishing a credit obligation and that the commissioner 12 7 determines should be designated a form of credit insurance. 12 8 i. Any other line of insurance permitted under state law 12 9 or by rule. 12 10 3. An insurance producer license remains in effect unless 12 11 revoked or suspended as long as all required fees are paid and 12 12 continuing education requirements for resident individual 12 13 insurance producers are met by any applicable due date. 12 14 4. An individual insurance producer who allows the 12 15 producer's license to lapse, within twelve months from the due 12 16 date of the renewal fee, may have the same license reinstated 12 17 without the necessity of passing a written examination upon 12 18 the payment of a reinstatement fee as specified by rule of the 12 19 commissioner. Such reinstatement fee shall be in addition to 12 20 the required renewal fee. 12 21 5. A licensed insurance producer who is unable to comply 12 22 with license renewal procedures due to military service or 12 23 some other extenuating circumstance may request a waiver of 12 24 those procedures. Such insurance producer may also request a 12 25 waiver of any examination requirement or any other penalty or 12 26 sanction imposed for failure to comply with renewal 12 27 procedures. 12 28 6. The license shall contain the licensee's name, address, 12 29 personal identification number, and the date of issuance, the 12 30 lines of authority, the expiration date, and any other 12 31 information the commissioner deems necessary. 12 32 7. A licensee shall inform the commissioner by any means 12 33 acceptable to the commissioner of a change of address within 12 34 thirty days of the change. Failure to timely inform the 12 35 commissioner of a change in legal name or address may result 13 1 in a penalty as specified in section 522B.17. 13 2 8. In order to assist with the commissioner's duties, the 13 3 commissioner may contract with a nongovernmental entity, 13 4 including the national association of insurance commissioners 13 5 or any affiliate or subsidiary the national association of 13 6 insurance commissioners oversees, to perform any ministerial 13 7 functions, including the collection of fees, related to 13 8 producer licensing, that the commissioner deems appropriate. 13 9 Sec. 21. NEW SECTION. 522B.7 NONRESIDENT LICENSING. 13 10 1. Unless denied licensure pursuant to section 522B.11, a 13 11 nonresident person shall receive a nonresident insurance 13 12 producer license if all of the following apply: 13 13 a. The person is currently licensed as an insurance 13 14 producer and is in good standing in the person's home state. 13 15 b. The person has submitted the proper request for 13 16 licensure and has paid the required fees. 13 17 c. The person has submitted or transmitted to the 13 18 commissioner the application for licensure that the person 13 19 submitted to the person's home state, or in lieu of such 13 20 application, a completed uniform application. 13 21 d. The person's home state awards nonresident insurance 13 22 producer licenses to residents of this state on the same 13 23 basis. 13 24 2. The commissioner may verify the insurance producer's 13 25 licensing status through the producer database. 13 26 3. A nonresident insurance producer who moves from one 13 27 state to another state or a resident insurance producer who 13 28 moves from this state to another state shall file a change of 13 29 address and provide certification from the new resident state 13 30 within thirty days of the change of legal residence. No fee 13 31 or license application is required. The certification may be 13 32 obtained through the producer database. 13 33 4. Notwithstanding any other provision of this chapter, a 13 34 person licensed as a limited lines insurance producer in the 13 35 person's home state shall receive a nonresident limited lines 14 1 insurance producer license, pursuant to subsection 1, granting 14 2 the same scope of authority as granted under the license 14 3 issued by such person's home state. 14 4 Sec. 22. NEW SECTION. 522B.8 EXEMPTION FROM EXAMINATION. 14 5 1. An individual who applies for an insurance producer 14 6 license in this state who was previously licensed for the same 14 7 lines of authority in another state shall not be required to 14 8 complete an examination. This exemption is only available if 14 9 the person is currently licensed in that other state or if the 14 10 request for licensure is received within ninety days of the 14 11 cancellation of the applicant's previous license and if the 14 12 prior state issues a certification that, at the time of 14 13 cancellation, the applicant was in good standing in that 14 14 state. The certification may be obtained through the producer 14 15 database. 14 16 2. A person licensed as an insurance producer in another 14 17 state who moves to this state shall make application within 14 18 ninety days of establishing legal residence to become a 14 19 resident licensee pursuant to section 522B.5. An examination 14 20 shall not be required of that person to obtain an insurance 14 21 producer license for any line of authority previously held in 14 22 the prior state except where the commissioner determines 14 23 otherwise by regulation. 14 24 Sec. 23. NEW SECTION. 522B.9 ASSUMED NAMES. 14 25 An insurance producer doing business under any name other 14 26 than the insurance producer's legal name is required to notify 14 27 the commissioner prior to using the assumed name. 14 28 Sec. 24. NEW SECTION. 522B.10 TEMPORARY LICENSING. 14 29 1. The commissioner may issue a temporary insurance 14 30 producer license for a period not to exceed one hundred eighty 14 31 days without requiring an examination if the commissioner 14 32 deems that the temporary license is necessary for the 14 33 servicing of an insurance business in the following cases: 14 34 a. To the surviving spouse or court-appointed personal 14 35 representative of a licensed insurance producer who dies or 15 1 becomes mentally or physically disabled, to allow adequate 15 2 time for the sale of the insurance business owned by the 15 3 insurance producer, for the recovery or return of the 15 4 insurance producer to the business, or for the training and 15 5 licensing of new personnel to operate the insurance producer's 15 6 business. 15 7 b. To a member or employee of a business entity licensed 15 8 as an insurance producer, upon the death or disability of an 15 9 individual designated in the business entity application or 15 10 the license. 15 11 c. To the designee of a licensed insurance producer 15 12 entering active service in the armed forces of the United 15 13 States. 15 14 d. In any other circumstance where the commissioner deems 15 15 that the public interest will best be served by the issuance 15 16 of a temporary license. 15 17 2. The commissioner may by order limit the authority of 15 18 any temporary licensee in any way deemed necessary to protect 15 19 insureds and the public. The commissioner may require the 15 20 temporary licensee to have a suitable sponsor who is a 15 21 licensed insurance producer or insurer and who assumes 15 22 responsibility for all acts of the temporary licensee and may 15 23 impose other similar requirements designed to protect insureds 15 24 and the public. The commissioner may by order revoke a 15 25 temporary license if the interest of insureds or the public is 15 26 endangered. A temporary license shall not continue after the 15 27 owner or the personal representative disposes of the business. 15 28 Sec. 25. NEW SECTION. 522B.11 LICENSE DENIAL, 15 29 NONRENEWAL, OR REVOCATION. 15 30 1. The commissioner may place on probation, suspend, 15 31 revoke, or refuse to issue or renew an insurance producer's 15 32 license or may levy a civil penalty as provided in section 15 33 522B.17 for any one or more of the following causes: 15 34 a. Providing incorrect, misleading, incomplete, or 15 35 materially untrue information in the license application. 16 1 b. Violating any insurance laws, or violating any 16 2 regulation, subpoena, or order of the commissioner or of a 16 3 commissioner of another state. 16 4 c. Obtaining or attempting to obtain a license through 16 5 misrepresentation or fraud. 16 6 d. Improperly withholding, misappropriating, or converting 16 7 any moneys or properties received in the course of doing 16 8 insurance business. 16 9 e. Intentionally misrepresenting the terms of an actual or 16 10 proposed insurance contract or application for insurance. 16 11 f. Having been convicted of a felony. 16 12 g. Having admitted or been found to have committed any 16 13 unfair insurance trade practice or fraud. 16 14 h. Using fraudulent, coercive, or dishonest practices, or 16 15 demonstrating incompetence, untrustworthiness, or financial 16 16 irresponsibility in the conduct of business in this state or 16 17 elsewhere. 16 18 i. Having an insurance producer license, or its 16 19 equivalent, denied, suspended, or revoked in any other state, 16 20 province, district, or territory. 16 21 j. Forging another's name to an application for insurance 16 22 or to any document related to an insurance transaction. 16 23 k. Improperly using notes or any other reference material 16 24 to complete an examination for an insurance license. 16 25 l. Knowingly accepting insurance business from an 16 26 individual who is not licensed. 16 27 m. Failing to comply with an administrative or court order 16 28 imposing a child support obligation. 16 29 n. Failing to comply with an administrative or court order 16 30 related to repayment of loans to the college student aid 16 31 commission. 16 32 o. Failing to pay state income tax or comply with any 16 33 administrative or court order directing payment of state 16 34 income tax. 16 35 p. Failing or refusing to cooperate in an investigation by 17 1 the commissioner. 17 2 2. If the commissioner does not renew a license or denies 17 3 an application for a license, the commissioner shall notify 17 4 the applicant or licensee and advise, in writing, the licensee 17 5 or applicant of the reason for the nonrenewal of the license 17 6 or denial of the application for a license. The licensee or 17 7 applicant may request a hearing on the nonrenewal or denial. 17 8 A hearing shall be conducted according to section 507B.6. 17 9 3. The license of a business entity may be suspended, 17 10 revoked, or refused if the commissioner finds, after hearing, 17 11 that an individual licensee's violation was known or should 17 12 have been known by a partner, officer, or manager acting on 17 13 behalf of the business entity and the violation was not 17 14 reported to the commissioner and corrective action was not 17 15 taken. 17 16 4. In addition to, or in lieu of, any applicable denial, 17 17 suspension, or revocation of a license, a person, after 17 18 hearing, may be subject to a civil penalty as provided in 17 19 section 522B.17. 17 20 5. The commissioner may enforce the provisions and impose 17 21 any penalty or remedy authorized by this chapter and chapter 17 22 507B against any person who is under investigation for, or 17 23 charged with, a violation of either chapter even if the 17 24 person's license has been surrendered or has lapsed by 17 25 operation of law. 17 26 Sec. 26. NEW SECTION. 522B.12 COMMISSIONS. 17 27 1. An insurer or insurance producer shall not pay a 17 28 commission, service fee, brokerage, or other valuable 17 29 consideration to a person for selling, soliciting, or 17 30 negotiating insurance in this state if that person is required 17 31 to be licensed under this chapter and is not so licensed. 17 32 2. A person shall not accept a commission, service fee, 17 33 brokerage, or other valuable consideration for selling, 17 34 soliciting, or negotiating insurance in this state if that 17 35 person is required to be licensed under this chapter and is 18 1 not so licensed. 18 2 3. Renewal or other deferred commissions may be paid to a 18 3 person for selling, soliciting, or negotiating insurance in 18 4 this state if the person was required to be licensed under 18 5 this chapter at the time of the sale, solicitation, or 18 6 negotiation and was so licensed at that time. 18 7 4. An insurer or insurance producer may pay or assign a 18 8 commission, service fee, brokerage, or other valuable 18 9 consideration to an insurance agency or to a person who does 18 10 not sell, solicit, or negotiate insurance in this state, 18 11 unless the payment would violate chapter 507B or section 18 12 515.130. 18 13 Sec. 27. NEW SECTION. 522B.13 APPOINTMENTS. 18 14 1. An individual insurance producer who acts as an agent 18 15 of an insurer must be appointed by that insurer. An insurance 18 16 producer who is not acting as an agent of an insurer need not 18 17 be appointed. A business entity is not required to be 18 18 appointed. 18 19 2. The appointing insurer, for the purpose of appointing 18 20 an insurance producer as its agent, shall file, in a format 18 21 approved by the commissioner, a notice of appointment within 18 22 thirty days from the date the agency contract is executed or 18 23 the first insurance application is submitted. 18 24 3. An insurer shall pay an appointment fee, in the amount 18 25 and method of payment set forth by rule of the commissioner, 18 26 for each insurance producer appointed by the insurer. 18 27 4. An insurer shall remit a renewal appointment fee in the 18 28 manner and amount as set forth by rule of the commissioner. 18 29 Sec. 28. NEW SECTION. 522B.14 NOTIFICATION TO 18 30 COMMISSIONER OF TERMINATION – PENALTIES. 18 31 1. An insurer or authorized representative of the insurer 18 32 that terminates the appointment, employment, contract, or 18 33 other insurance business relationship with an insurance 18 34 producer shall notify the commissioner within thirty days 18 35 following the effective date of the termination, using a 19 1 format prescribed by the commissioner, if the reason for 19 2 termination is one of the reasons set forth in section 19 3 522B.11, or the insurer has knowledge the insurance producer 19 4 was found by a court, government body, or self-regulatory 19 5 organization authorized by law to have engaged in any of the 19 6 activities set forth in section 522B.11. Upon request of the 19 7 commissioner, the insurer or authorized representative of the 19 8 insurer shall provide additional information, documents, 19 9 records, or other data pertaining to the termination or 19 10 activity of the insurance producer. 19 11 2. An insurer or authorized representative of the insurer 19 12 that terminates the appointment, employment, contract, or 19 13 other insurance business relationship with an insurance 19 14 producer for any reason not set forth in section 522B.11, 19 15 shall notify the commissioner within thirty days following the 19 16 effective date of the termination, using a format prescribed 19 17 by the commissioner. Upon request of the commissioner, the 19 18 insurer shall provide additional information, documents, 19 19 records, or other data pertaining to the termination. 19 20 3. The insurer or the authorized representative of the 19 21 insurer shall promptly notify the commissioner using a format 19 22 prescribed by the commissioner, if, upon further review or 19 23 investigation, the insurer or authorized representative of the 19 24 insurer discovers additional information that would have been 19 25 reportable to the commissioner pursuant to subsection 1, had 19 26 the insurer then known of its existence. 19 27 4. Within fifteen days after making the notification 19 28 required by this section, the insurer shall mail a copy of the 19 29 notification to the insurance producer at the insurance 19 30 producer's last known address. If the insurance producer is 19 31 terminated for any of the reasons set forth in section 19 32 522B.11, the insurer shall provide a copy of the notification 19 33 to the insurance producer at the insurance producer's last 19 34 known address by restricted certified mail, as defined in 19 35 section 618.15, or by overnight delivery using a nationally 20 1 recognized carrier. 20 2 5. Within thirty days after the insurance producer has 20 3 received the original or additional notification, the 20 4 insurance producer may file written comments concerning the 20 5 substance of the notification with the commissioner. The 20 6 insurance producer, by the same means, shall simultaneously 20 7 send a copy of the comments to the reporting insurer, and the 20 8 comments shall become a part of the commissioner's record and 20 9 accompany every copy of a report distributed or disclosed for 20 10 any reason about the insurance producer, as permitted under 20 11 subsection 8. 20 12 6. In the absence of actual malice, an insurer, the 20 13 authorized representative of the insurer, an insurance 20 14 producer, the commissioner, or an organization of which the 20 15 commissioner is a member and that compiles the information and 20 16 makes it available to other commissioners or regulatory or law 20 17 enforcement agencies shall not be subject to civil liability. 20 18 A civil cause of action of any nature shall not arise against 20 19 any of these entities or their respective agents or employees, 20 20 as a result of any statement or information required by or 20 21 provided pursuant to this section or any information relating 20 22 to any statement that may be requested in writing by the 20 23 commissioner from an insurer or insurance producer; or a 20 24 statement by a terminating insurer or insurance producer to an 20 25 insurer or insurance producer limited solely and exclusively 20 26 to whether a termination for cause under subsection 1 was 20 27 reported to the commissioner, provided that the propriety of 20 28 any termination for cause under subsection 1 is certified in 20 29 writing by an officer or authorized representative of the 20 30 insurer or insurance producer terminating the relationship. 20 31 In any action brought against a person that may have 20 32 immunity under this section for making any statement required 20 33 by this section or providing any information relating to any 20 34 statement that may be requested by the commissioner, the party 20 35 bringing the action shall plead specifically in any allegation 21 1 that this section does not apply because the person making the 21 2 statement or providing the information did so with actual 21 3 malice. This section shall not abrogate or modify any 21 4 existing statutory or common law privileges or immunities. 21 5 7. Any document, material, or other information in the 21 6 control or possession of the insurance division that is 21 7 furnished by an insurer, insurance producer, or an employee or 21 8 agent of such insurer or insurance producer acting on behalf 21 9 of the insurer or insurance producer, or obtained by the 21 10 commissioner in an investigation pursuant to this section are 21 11 considered confidential records and shall not be subject to 21 12 subpoena, or subject to discovery, or admissible in evidence 21 13 in any private civil action. However, the commissioner is 21 14 authorized to use such document, material, or other 21 15 information in the furtherance of any regulatory or legal 21 16 action brought as a part of the commissioner's duties. 21 17 Neither the commissioner nor any person who received any 21 18 document, material, or other information while acting under 21 19 the authority of the commissioner shall be permitted or 21 20 required to testify in any private civil action concerning any 21 21 confidential document, material, or information subject to 21 22 this section. 21 23 8. The commissioner may share documents, materials, or 21 24 other information, including the confidential and privileged 21 25 documents, materials, or information subject to subsection 7 21 26 with other state, federal, and international regulatory 21 27 agencies, with the national association of insurance 21 28 commissioners, its affiliates or subsidiaries, and with state, 21 29 federal, and international law enforcement authorities, 21 30 provided that the recipient agrees to maintain the 21 31 confidentiality and privileged status of the document, 21 32 material, or other information. 21 33 The commissioner may receive documents, materials, or 21 34 information, including otherwise confidential and privileged 21 35 documents, materials, or information, from the national 22 1 association of insurance commissioners, its affiliates or 22 2 subsidiaries, and from regulatory and law enforcement 22 3 officials of other foreign or domestic jurisdictions, and 22 4 shall maintain as confidential or privileged any document, 22 5 material, or information received with notice or the 22 6 understanding that it is confidential or privileged under the 22 7 laws of the jurisdiction that is the source of the document, 22 8 material, or information. 22 9 The commissioner may enter into agreements governing 22 10 sharing and use of information consistent with this 22 11 subsection. 22 12 9. A waiver of any applicable privilege or claim of 22 13 confidentiality in the documents, materials, or information 22 14 shall not occur as a result of disclosure to the commissioner 22 15 or sharing of information received under this section. 22 16 10. Nothing in this chapter shall prohibit the 22 17 commissioner from releasing information regarding final, 22 18 adjudicated actions that are considered public records subject 22 19 to examination and copying under chapter 22 to a database or 22 20 other clearinghouse service maintained by the national 22 21 association of insurance commissioners, or an affiliate or 22 22 subsidiary of the national association of insurance 22 23 commissioners. 22 24 11. An insurer, the authorized representative of the 22 25 insurer, or an insurance producer that fails to report as 22 26 required under this section, or that is found to have reported 22 27 with actual malice by a court of competent jurisdiction, after 22 28 notice and hearing, may have its license or certificate of 22 29 authority suspended or revoked and may be fined as provided in 22 30 section 522B.17. 22 31 Sec. 29. NEW SECTION. 522B.15 RECIPROCITY. 22 32 1. The commissioner shall waive any requirements for a 22 33 nonresident license applicant with a valid license from such 22 34 applicant's home state, except for the requirements imposed by 22 35 section 522B.7, if the applicant's home state awards 23 1 nonresident licenses to residents of this state on the same 23 2 basis. 23 3 2. A nonresident insurance producer's satisfaction of the 23 4 producer's home state's continuing education requirements for 23 5 licensed insurance producers shall constitute satisfaction of 23 6 this state's continuing education requirements if the 23 7 nonresident insurance producer's home state recognizes the 23 8 satisfaction of its continuing education requirements imposed 23 9 upon insurance producers from this state on the same basis. 23 10 Sec. 30. NEW SECTION. 522B.16 REPORTING OF ACTIONS. 23 11 An insurance producer shall report to the commissioner any 23 12 administrative action taken against the insurance producer in 23 13 another jurisdiction or by another governmental agency in this 23 14 state within thirty days of the final disposition of the 23 15 matter. This report shall include a copy of the order, 23 16 consent to the order, or other relevant legal documents. 23 17 Within thirty days of the initial pretrial hearing date, an 23 18 insurance producer shall report to the commissioner any 23 19 criminal prosecution of the insurance producer taken in any 23 20 jurisdiction. The report shall include a copy of the initial 23 21 complaint filed, the order resulting from the hearing, and any 23 22 other relevant legal documents. 23 23 Sec. 31. NEW SECTION. 522B.17 PENALTY. 23 24 An insurer or insurance producer who, after hearing, is 23 25 found to have violated this chapter may be assessed a civil 23 26 penalty pursuant to chapter 507B. 23 27 A person found, after hearing, to have acted as an agent of 23 28 an insurer or otherwise selling, soliciting, or negotiating 23 29 insurance in this state, or offering to the public advice, 23 30 counsel, or services with regard to insurance who is not 23 31 properly licensed is subject to penalty according to the 23 32 provisions of chapter 507A. 23 33 Sec. 32. NEW SECTION. 522B.18 RULES. 23 34 The commissioner may adopt reasonable rules according to 23 35 chapter 17A as are necessary or proper to carry out the 24 1 purposes of this chapter. 24 2 Sec. 33. Section 536.26, unnumbered paragraph 1, Code 24 3 2001, is amended to read as follows: 24 4 A licensee shall not, directly or indirectly, sell or offer 24 5 for sale any life, or accident and health insurance in 24 6 connection with a loan made under this chapter except as and 24 7 to the extent authorized by this section. Life, accident and 24 8 health insurance, or any of them, may be written by a licensed 24 9 insuranceagentproducer upon or in connection with any loan 24 10 for a term not extending beyond the final maturity date of the 24 11 loan contract but only upon one obligor on any one loan 24 12 contract. 24 13 Sec. 34. Section 536A.23, subsection 3, Code 2001, is 24 14 amended to read as follows: 24 15 3. Require any borrower to purchase insurance from the 24 16 lender as a condition for obtaining a loan. However, an 24 17 industrial loan company may collect from the borrower, at the 24 18 option of the borrower, and transmit the premiums charged for 24 19 insuring real or personal property used by the borrower as 24 20 security for a loan and provided that such insurance is 24 21 obtained from a licensed insuranceagentproducer for an 24 22 insurance company authorized to do business in Iowa; and the 24 23 premiums charged for insuring the life of one party on the 24 24 loan in an amount not to exceed the total amount of the note 24 25 or contract, including cash advance, interest and service 24 26 charge, provided that no licensee shall require that the 24 27 contract of life insurance be outstanding for more than the 24 28 unpaid balance of the indebtedness and provided that such 24 29 insurance is obtained from a licensed insuranceagentproducer 24 30 for an insurance company authorized to do business in Iowa; 24 31 and an industrial loan company may receive and transmit the 24 32 premiums charged for accident and health insurance on the 24 33 borrower, provided such insurance bears a reasonable 24 34 relationship to the existing hazards or risk of loss, and the 24 35 aggregate benefits of which shall not exceed the approximate 25 1 amount of the contractual payments on the loan outstanding at 25 2 the time of loss, and provided that such insurance is obtained 25 3 from a licensedagentproducer for an insurance company 25 4 authorized to do business in Iowa. However, all life 25 5 insurance rates in connection with industrial loans shall be 25 6 subject to the rules and regulations of the insurance 25 7 commissioner of the state of Iowa. 25 8 Sec. 35. Section 537.3207, Code 2001, is amended to read 25 9 as follows: 25 10 537.3207 FORM OF INSURANCE PREMIUM LOAN AGREEMENT. 25 11 An agreement pursuant to which an insurance premium loan is 25 12 made shall contain the names of the insuranceagent or broker25 13 producer negotiating each policy or contract and of the 25 14 insurer issuing each policy or contract, the number and 25 15 inception date of, and premium for, each policy or contract, 25 16 the date on which the term of the loan begins, and a clear and 25 17 conspicuous notice that each policy or contract may be 25 18 canceled if payment is not made in accordance with the 25 19 agreement. If a policy or contract has not been issued when 25 20 the agreement is signed, the agreement may provide that the 25 21 insuranceagent or brokerproducer may insert the appropriate 25 22 information in the agreement and, if they do so, shall furnish 25 23 the information promptly in writing to the insured. 25 24 Sec. 36. 25 25 1. Sections 512B.31, 515.123, 515.124, and 515.126, Code 25 26 2001, are repealed. 25 27 2. Chapter 522, Code 2001, is repealed. 25 28 3. Chapter 523F, Code 2001, is repealed. 25 29 Sec. 37. EFFECTIVE DATE. This Act takes effect January 1, 25 30 2002. 25 31 25 32 25 33 25 34 MARY E. KRAMER 25 35 President of the Senate 26 1 26 2 26 3 26 4 BRENT SIEGRIST 26 5 Speaker of the House 26 6 26 7 I hereby certify that this bill originated in the Senate and 26 8 is known as Senate File 276, Seventy-ninth General Assembly. 26 9 26 10 26 11 26 12 MICHAEL E. MARSHALL 26 13 Secretary of the Senate 26 14 Approved , 2001 26 15 26 16 26 17 26 18 THOMAS J. VILSACK 26 19 Governor
Text: SF00275 Text: SF00277 Text: SF00200 - SF00299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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