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PAG LIN 1 1 SENATE FILE 500 1 2 1 3 AN ACT 1 4 RELATING TO INSURANCE, BY ADDRESSING THE OPERATION AND 1 5 REGULATION OF INSURANCE COMPANIES, MUTUAL INSURANCE 1 6 ASSOCIATIONS, THE IOWA INSURANCE GUARANTY ASSOCIATION, AND 1 7 OTHER INSURANCE OR RISK-ASSUMING ENTITIES, INCLUDING THE 1 8 RIGHTS AND DUTIES OF SUCH ENTITIES AND THE POWERS AND 1 9 AUTHORITY OF THE INSURANCE COMMISSIONER; BY ESTABLISHING 1 10 JURISDICTION AND VENUE REQUIREMENTS FOR ACTIONS AGAINST THE 1 11 IOWA INSURANCE GUARANTY ASSOCIATION; AND PROVIDING PENALTIES, 1 12 REPEALS, AND EFFECTIVE DATES. 1 13 1 14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 15 1 16 Section 1. Section 87.11, unnumbered paragraph 1, Code 1 17 2001, is amended to read as follows: 1 18 When an employer coming under this chapter furnishes 1 19 satisfactory proofs to the insurance commissioner of such 1 20 employer's solvency and financial ability to pay the 1 21 compensation and benefits as by law provided and to make such 1 22 payments to the parties when entitled thereto, or when such 1 23 employer deposits with the insurance commissioner security 1 24 satisfactory to the insurance commissioner and the workers' 1 25 compensation commissioner as guaranty for the payment of such 1 26 compensation, such employer shall be relieved of the 1 27 provisions of this chapter requiring insurance; but such 1 28 employer shall, from time to time, furnish such additional 1 29 proof of solvency and financial ability to pay as may be 1 30 required by such insurance commissioner or workers' 1 31 compensation commissioner. A political subdivision, including 1 32 a city, county, community college, or school corporation, that 1 33 is self-insured for workers' compensation is not required to 1 34 submit a plan or program to the insurance commissioner for 1 35 review and approval. 2 1 Sec. 2. Section 505.11, Code 2001, is amended to read as 2 2 follows: 2 3 505.11 REFUNDS. 2 4 Whenever it appears to the satisfaction of the commissioner 2 5 of insurance that because of error, mistake, or erroneous 2 6 interpretation of statute that a foreign or domestic insurance 2 7 corporation has paid to the state of Iowa taxes, fines, 2 8 penalties, or license fees in excess of the amount legally 2 9 chargeable against it, the commissioner of insurance shall 2 10 have power to refund to such corporation any such excess by 2 11 applying the amountthereofof the excess payment toward the 2 12 payment of taxes, fines, penalties, or license fees already 2 13 due or which mayhereafterbecome due, until such excess 2 14 payments have been fully refunded.The commissioner shall2 15certify to the department of revenue and finance the amount of2 16any such credit to be applied to future taxes due and notify2 17the insurance company affected of the amount thereof.2 18 Sec. 3. Section 507.10, subsection 2, Code 2001, is 2 19 amended to read as follows: 2 20 2. FILING OF EXAMINATION REPORT. No later than sixty days 2 21 following completion of the examination, the examiner in 2 22 charge shall file with the division a verified written report 2 23 of examinationunder oath. Upon receipt of the verified 2 24 report and after administrative review, the division shall 2 25 transmit the report to the company examined, together with a 2 26 notice which shall afford the company examined a reasonable 2 27 opportunity of not more than thirty days to make a written 2 28 submission or rebuttal with respect to any matters contained 2 29 in the examination report. 2 30 Sec. 4. Section 507A.4, subsection 7, Code 2001, is 2 31 amended by striking the subsection. 2 32 Sec. 5. Section 507B.4, subsection 9, paragraph f, Code 2 33 2001, is amended to read as follows: 2 34 f. Not attempting in good faith to effectuate prompt, 2 35 fair, and equitable settlements of claims in which liability 3 1 has become reasonably clear, or failing to include interest on 3 2 the payment of claims when required under section 511.38 or 3 3 subsection 10B. 3 4 Sec. 6. Section 507B.4, subsection 9, Code 2001, is 3 5 amended by adding the following new paragraph: 3 6 NEW PARAGRAPH. o. Failing to comply with the procedures 3 7 for auditing claims submitted by health care providers as set 3 8 forth by rule of the commissioner. However, this paragraph 3 9 shall have no applicability to liability insurance, workers' 3 10 compensation or similar insurance, automobile or homeowners' 3 11 medical payment insurance, disability income, or long-term 3 12 care insurance. 3 13 Sec. 7. Section 507B.4, Code 2001, is amended by adding 3 14 the following new subsection: 3 15 NEW SUBSECTION. 10B. PAYMENT OF INTEREST. Failure of an 3 16 insurer to pay interest at the rate of ten percent per annum 3 17 on all health insurance claims that the insurer fails to 3 18 timely accept and pay pursuant to section 507B.4A, subsection 3 19 1, paragraph "e". Interest shall accrue commencing on the 3 20 thirty-first day after receipt of all properly completed proof 3 21 of loss forms. 3 22 For purposes of this subsection, "insurer" means an entity 3 23 providing a plan of health insurance, health care benefits, or 3 24 health care services, or an entity subject to the jurisdiction 3 25 of the commissioner performing utilization review, including 3 26 an insurance company offering sickness and accident plans, a 3 27 health maintenance organization, an organized delivery system 3 28 authorized under 1993 Iowa Acts, chapter 158, and licensed by 3 29 the department of public health, a nonprofit health service 3 30 corporation, a plan established pursuant to chapter 509A for 3 31 public employees, or any other entity providing a plan of 3 32 health insurance, health care benefits, or health care 3 33 services. However, "insurer" does not include an entity that 3 34 sells disability income or long-term care insurance. 3 35 Sec. 8. NEW SECTION. 507B.4A DUTY TO RESPOND TO 4 1 INQUIRIES AND PROMPT PAYMENT OF CLAIM. 4 2 1. A person shall promptly respond to inquiries from the 4 3 commissioner. 4 4 a. A person's actions are deemed untimely under this 4 5 subsection if the person fails to respond to an inquiry from 4 6 the commissioner within thirty days of the receipt of the 4 7 inquiry, unless good cause exists for delay. 4 8 b. Failure to respond to inquiries from the commissioner 4 9 pursuant to this subsection with such frequency as to indicate 4 10 a general business practice shall subject the person to 4 11 penalty under this chapter. 4 12 2. a. An insurer providing accident and sickness 4 13 insurance under chapter 509, 514, or 514A; a health 4 14 maintenance organization; an organized delivery system 4 15 authorized under 1993 Iowa Acts, chapter 158, and licensed by 4 16 the department of public health; or another entity providing 4 17 health insurance or health benefits subject to state insurance 4 18 regulation shall either accept and pay or deny a clean claim. 4 19 b. For purposes of this subsection, "clean claim" means a 4 20 properly completed paper or electronic billing instrument 4 21 containing all reasonably necessary information, that does not 4 22 involve coordination of benefits for third-party liability, 4 23 preexisting condition investigations, or subrogation, and that 4 24 does not involve the existence of particular circumstances 4 25 requiring special treatment that prevents a prompt payment 4 26 from being made. 4 27 c. The commissioner shall adopt rules establishing 4 28 processes for timely adjudication and payment of claims by 4 29 insurers for health care benefits. The rules shall be 4 30 consistent with the time frames and other procedural standards 4 31 for claims decisions by group health plans established by the 4 32 United States department of labor pursuant to 29 C.F.R. pt. 4 33 2560 in effect at the time of passage of this Act. 4 34 d. Payment of a clean claim shall include interest at the 4 35 rate of ten percent per annum when an insurer or other entity 5 1 as defined in this subsection that administers or processes 5 2 claims on behalf of the insurer or other entity fails to 5 3 timely pay a claim. 5 4 e. This subsection shall not apply to liability insurance, 5 5 workers' compensation or similar insurance, automobile or 5 6 homeowners' medical payment insurance, disability income, or 5 7 long-term care insurance. 5 8 Sec. 9. Section 507B.6, subsection 1, Code 2001, is 5 9 amended to read as follows: 5 10 1. Whenever the commissionershall have reason to believe5 11 believes that anysuchperson has been engaged or is engaging 5 12 in this state in any unfair method of competition or any 5 13 unfair or deceptive act or practice whether or not defined in 5 14 section 507B.4, 507B.4A, or 507B.5 and that a proceeding by 5 15 the commissioner in respecttheretoto such method of 5 16 competition or unfair or deceptive act or practice would beto5 17the interest ofin the public interest, the commissioner shall 5 18 issue and serve upon such person a statement of the charges in 5 19 that respect and a notice of a hearingthereonon such charges 5 20 to be held at a time and place fixed in the notice, which 5 21 shall not be less than ten days after the date of the service 5 22thereofof such notice. 5 23 Sec. 10. Section 507B.7, subsection 1, Code 2001, is 5 24 amended to read as follows: 5 25 1. If, after such hearing, the commissionershall5 26determinedetermines that the person charged has engaged in an 5 27 unfair method of competition or an unfair or deceptive act or 5 28 practice, the commissioner shall reduce the findings to 5 29 writing and shall issue and cause to be served upon the person 5 30 charged with the violation a copy of such findings, an order 5 31 requiring such person to cease and desist from engaging in 5 32 such method of competition, act or practice and if the act or 5 33 practice is a violation of section 507B.4, 507B.4A, or 507B.5, 5 34 the commissioner may at the commissioner's discretion order 5 35 any one or more of the following: 6 1 a. Payment of a civil penalty of not more than one 6 2 thousand dollars for each act or violation, but not to exceed 6 3 an aggregate of ten thousand dollars, unless the person knew 6 4 or reasonably should have known the person was in violation of 6 5 section 507B.4, 507B.4A, or 507B.5, in which case the penalty 6 6 shall be not more than five thousand dollars for each act or 6 7 violation, but not to exceed an aggregate penalty of fifty 6 8 thousand dollars in any one six-month period.The6 9commissioner shall, ifIf the commissioner findsthe6 10violationsthat a violation of section 507B.4, 507B.4A, or 6 11 507B.5werewas directed, encouraged, condoned, ignored, or 6 12 ratified by the employer of the person or by an insurer, the 6 13 commissioner shall also assess a fine to the employer or 6 14 insurer. 6 15 b. Suspension or revocation of the license of a person as 6 16 defined in section 507B.2, subsection 1, if the person knew or 6 17 reasonably should have known the person was in violation of 6 18 section 507B.4, 507B.4A, orsection507B.5. 6 19 c. Payment of interest at the rate of ten percent per 6 20 annum if the commissioner finds that the insurer failed to pay 6 21 interest as required under section 507B.4, subsection 10B. 6 22 Sec. 11. Section 507B.12, unnumbered paragraph 1, Code 6 23 2001, is amended to read as follows: 6 24 The commissioner may, after notice and hearing, promulgate 6 25 reasonable rules, as are necessary or proper to identify 6 26 specific methods of competition or acts or practices which are 6 27 prohibited by section 507B.4, 507B.4A, or 507B.5, but the 6 28 rules shall not enlarge upon or extend the provisions of such 6 29 sections. Such rules shall be subject to review in accordance 6 30 with chapter 17A. 6 31 Sec. 12. Section 511.4, Code 2001, is amended to read as 6 32 follows: 6 33 511.4 ADVERTISEMENTS – WHO DEEMED AGENT. 6 34 The provisions of sections515.122515.123 to 515.126 shall 6 35 apply to life insurance companies and associations. 7 1 Sec. 13. Section 513B.2, subsections 3 and 20, Code 2001, 7 2 are amended to read as follows: 7 3 3. "Basic health benefit plan" means a planwhich is7 4offeredestablished by the board of the small employer health 7 5 reinsurance program pursuant to section513B.14513B.13, 7 6 subsection 8, paragraph "a". 7 7 20. "Standard health benefit plan" means a planwhich is7 8offeredestablished by the board of the small employer health 7 9 reinsurance program pursuant to section513B.14513B.13, 7 10 subsection 8, paragraph "a". 7 11 Sec. 14. Section 513B.4, subsection 1, paragraphs d and e, 7 12 Code 2001, are amended by striking the paragraphs. 7 13 Sec. 15. Section 513B.4, subsection 2, Code 2001, is 7 14 amended by striking the subsection. 7 15 Sec. 16. Section 513B.10, subsection 1, paragraph a, Code 7 16 2001, is amended to read as follows: 7 17 a. A carrier or an organized delivery system that offers 7 18 health insurance coverage in the small group market shall 7 19 accept every small employer that applies for health insurance 7 20 coverage and shall accept for enrollment under such coverage 7 21 every eligible individual who applies for enrollment during 7 22 the period in which the individual first becomes eligible to 7 23 enroll under the terms of the health insurance coverage and 7 24 shall not place any restriction which is inconsistent with 7 25 eligibility rules established under this chapter.A carrier7 26or organized delivery system shall offer health insurance7 27coverage which constitutes a basic health benefit plan and7 28which constitutes a standard health benefit plan.7 29 Sec. 17. Section 513B.10, subsection 3, Code 2001, is 7 30 amended by striking the subsection. 7 31 Sec. 18. Section 513B.13, subsection 3, paragraph c, Code 7 32 2001, is amended by striking the paragraph. 7 33 Sec. 19. Section 513B.13, subsection 3, paragraph d, Code 7 34 2001, is amended to read as follows: 7 35 d.Subsequent membersMembers shall be appointed for terms 8 1 of three years. A board member's term shall continue until 8 2 the member's successor is appointed. 8 3 Sec. 20. Section 513B.13, subsections 4 and 5, Code 2001, 8 4 are amended to read as follows: 8 5 4. The board, within one hundred eighty days after the8 6initial appointments, shallmay submit a plan of operation to 8 7 the commissioner. The commissioner, after notice and hearing, 8 8 may approvethea plan of operation if the commissioner 8 9 determines that the plan is suitable to assure the fair, 8 10 reasonable, and equitable administration of the program, and 8 11 provides for the sharing of program gains and losses on an 8 12 equitable and proportionate basis in accordance with the 8 13 provisions of this section.TheA plan of operation is 8 14 effective upon written approval of the commissioner.After8 15the initial plan of operation is submitted and approved by the8 16commissioner, the8 17 5. The board may submit to the commissioner any amendments 8 18 to the plan necessary or suitable to assure the fair, 8 19 reasonable, and equitable administration of the program. The 8 20 amendments shall be effective upon the written approval of the 8 21 commissioner. 8 225. If the board fails to submit a plan of operation within8 23one hundred eighty days after the board's appointment, the8 24commissioner, after notice and hearing, shall establish and8 25adopt a temporary plan of operation. The commissioner shall8 26amend or rescind a plan adopted pursuant to this subsection at8 27the time a plan is submitted by the board and approved by the8 28commissioner.8 29 Sec. 21. Section 513B.13, subsection 8, paragraph a, Code 8 30 2001, is amended to read as follows: 8 31 a.With respect to a basic health benefit plan or a8 32standard health benefit plan, the program shall reinsure the8 33level of coverage provided and, with respect to other plans,8 34theThe program shall reinsure up to the level of coverage 8 35 provided in either a basic health benefit plan or standard 9 1 health benefit plan established by the board. 9 2 Sec. 22. Section 513B.13, subsection 13, Code 2001, is 9 3 amended by striking the subsection. 9 4 Sec. 23. Section 514E.1, subsection 15, paragraph a, Code 9 5 2001, is amended to read as follows: 9 6 a. "Health insurance coverage" means health insurance 9 7 coverage offered to individuals, but does not include short-9 8term limited duration insurance. 9 9 Sec. 24. NEW SECTION. 514J.3A NOTICE. 9 10 When a claim is denied in whole or in part based on medical 9 11 necessity, the carrier or organized delivery system shall 9 12 provide a notice in writing to the enrollee of the internal 9 13 appeal mechanism provided under the carrier or organized 9 14 delivery system's plan or policy. 9 15 At the time of a coverage decision, the carrier or 9 16 organized delivery system shall notify the enrollee in writing 9 17 of the right to have the coverage decision reviewed under the 9 18 external review process. 9 19 Sec. 25. Section 514J.4, subsection 1, Code 2001, is 9 20 amended by striking the subsection. 9 21 Sec. 26. Section 514J.5, Code 2001, is amended to read as 9 22 follows: 9 23 514J.5 CERTIFICATION OF REQUEST – ELIGIBILITY. 9 24 1. The commissioner shall have two business days from 9 25 receipt of a request for an external review to certify the 9 26 request. The commissioner shall certify the request if all of 9 27 the following criteria are satisfied: 9 28 a. The enrollee was covered by the carrier or organized 9 29 delivery system at the time the service or treatment was 9 30 proposed or received. 9 31 b. The enrollee has been denied coverage based on a 9 32 determination by the carrier or organized delivery system that 9 33 the proposed or received service or treatment does not meet 9 34 the definition of medical necessity as defined in the 9 35enrollee's evidence of coveragecarrier's or organized 10 1 delivery system's plan or policy. 10 2 c. The enrollee, or the enrollee's treating health care 10 3 provider acting on behalf of the enrollee, has exhausted all 10 4 internal appeal mechanisms provided under the carrier's or the 10 5 organized delivery system'scontractplan or policy. 10 6 d. The written request for external review was filed 10 7 within sixty days of receipt of the coverage decision. 10 8 2. The commissioner shall notify the enrollee, or the 10 9 enrollee's treating health care provider acting on behalf of 10 10 the enrollee, and the carrier or organized delivery system in 10 11 writing of thedecisioncertification. 10 12 3. The carrier or organized delivery system has three 10 13 business days to contestthe eligibility of the request for10 14external review with the commissionerthe commissioner's 10 15 certification decision. If the commissioner finds that the 10 16 request for external review is not eligible forfull review10 17 certification, the commissioner, within two business days, 10 18 shall notify the enrollee, or the enrollee's treating health 10 19 care provider acting on behalf of the enrollee, in writing of 10 20 the reasons that the request for external review is not 10 21 eligible forfull reviewcertification. 10 22 4. If the commissioner finds that the request for external 10 23 review is eligible for certification, notwithstanding the 10 24 contest by the carrier or organized delivery system, the 10 25 commissioner shall notify the carrier or organized delivery 10 26 system in writing of the reasons for upholding the 10 27 certification. 10 28 Sec. 27. Section 514J.7, Code 2001, is amended by striking 10 29 the section and inserting in lieu thereof the following: 10 30 514J.7 EXTERNAL REVIEW. 10 31 The external review process shall meet the following 10 32 criteria: 10 33 1. The carrier or organized delivery system, within three 10 34 business days of a receipt of an eligible request for an 10 35 external review from the commissioner, or within three 11 1 business days of receipt of the commissioner's denial of the 11 2 carrier's or organized delivery system's contest of the 11 3 certification of the request under section 514J.5, subsection 11 4 3, whichever is later, shall do all of the following: 11 5 a. Select an independent review entity from the list 11 6 certified by the commissioner. The independent review entity 11 7 shall be an expert in the treatment of the medical condition 11 8 under review. The independent review entity shall not be a 11 9 subsidiary of, or owned or controlled by, the carrier or 11 10 organized delivery system, or owned or controlled by a trade 11 11 association of carriers or organized delivery systems of which 11 12 the carrier or organized delivery system is a member. 11 13 b. Notify the enrollee, and the enrollee's treating health 11 14 care provider, of the name, address, and telephone number of 11 15 the independent review entity and of the enrollee's and 11 16 treating health care provider's right to submit additional 11 17 information. 11 18 c. Notify the selected independent review entity by 11 19 facsimile that the carrier or organized delivery system has 11 20 chosen it to do the independent review and provide sufficient 11 21 descriptive information to identify the type of experts needed 11 22 to conduct the review. 11 23 d. Provide to the commissioner by facsimile a copy of the 11 24 notices sent to the enrollee and to the selected independent 11 25 review entity. 11 26 2. The independent review entity, within three business 11 27 days of receipt of the notice, shall select a person to 11 28 perform the external review and shall provide notice to the 11 29 enrollee of a brief description of the person including the 11 30 reasons the person selected is an expert in the treatment of 11 31 the medical condition under review. The independent review 11 32 entity does not need to disclose the name of the person. A 11 33 copy of the notice shall be sent by facsimile to the 11 34 commissioner. If the independent review entity does not have 11 35 a person who is an expert in the treatment of the medical 12 1 condition under review and certified by the commissioner to 12 2 conduct an independent review, the independent review entity 12 3 may either decline the review request or may request from the 12 4 commissioner additional time to have such an expert certified. 12 5 The independent review entity shall notify the commissioner by 12 6 facsimile of its choice between these options within three 12 7 business days of receipt of the notice from the carrier or 12 8 organized delivery system. The commissioner shall provide a 12 9 notice to the enrollee and carrier or organized delivery 12 10 system of the independent review entity's decision and of the 12 11 commissioner's decision as to how to proceed with the external 12 12 review process within three business days of receipt of the 12 13 independent review entity's decision. 12 14 3. The enrollee, or the enrollee's treating health care 12 15 provider acting on behalf of the enrollee, may object to the 12 16 independent review entity selected by the carrier or organized 12 17 delivery system or to the person selected as the reviewer by 12 18 the independent review entity by notifying the commissioner 12 19 and carrier or organized delivery system within ten days of 12 20 the mailing of the notice by the independent review entity. 12 21 The commissioner shall have two business days from receipt of 12 22 the objection to consider the reasons set forth in support of 12 23 the objection to approve or deny the objection, to select an 12 24 independent review entity if necessary, and to provide notice 12 25 of the commissioner's decision to the enrollee, the enrollee's 12 26 treating health care provider, and the carrier or organized 12 27 delivery system. 12 28 4. The carrier or organized delivery system, within 12 29 fifteen days of the mailing of the notice by the independent 12 30 review entity, or within three business days of a receipt of 12 31 notice by the commissioner following an objection by the 12 32 enrollee, whichever is later, shall do all of the following: 12 33 a. Provide to the independent review entity any 12 34 information submitted to the carrier or organized delivery 12 35 system by the enrollee or the enrollee's treating health care 13 1 provider in support of the request for coverage of a service 13 2 or treatment under the carrier's or organized delivery 13 3 system's appeal procedures. 13 4 b. Provide to the independent review entity any other 13 5 relevant documents used by the carrier or organized delivery 13 6 system in determining whether the proposed service or 13 7 treatment should have been provided. 13 8 c. Provide to the commissioner a confirmation that the 13 9 information required in paragraphs "a" and "b" has been 13 10 provided to the independent review entity, including the date 13 11 the information was provided. 13 12 5. The enrollee, or the enrollee's treating health care 13 13 provider, may provide to the independent review entity any 13 14 information submitted under any internal appeal mechanisms 13 15 provided under the carrier's or organized delivery system's 13 16 evidence of coverage, and other newly discovered relevant 13 17 information. The enrollee shall have ten business days from 13 18 the mailing date of the notification of the person selected as 13 19 the reviewer by the independent review entity to provide this 13 20 information. The independent review entity may reasonably 13 21 decide whether to consider any information provided by the 13 22 enrollee or the enrollee's treating health care provider after 13 23 the ten-day period. 13 24 6. The independent review entity shall notify the enrollee 13 25 and the enrollee's treating health care provider of any 13 26 additional medical information required to conduct the review 13 27 within five business days of receipt of the documentation 13 28 required under subsection 4. The enrollee or the enrollee's 13 29 treating health care provider shall provide the requested 13 30 information to the independent review entity within five days 13 31 after receipt of the notification requesting additional 13 32 medical information. The independent review entity may 13 33 reasonably decide whether to consider any information provided 13 34 by the enrollee or the enrollee's treating health care 13 35 provider after the five-day period. The independent review 14 1 entity shall notify the commissioner and the carrier or 14 2 organized delivery system of this request. 14 3 7. The independent review entity shall submit its external 14 4 review decision as soon as possible, but not later than thirty 14 5 days from the date the independent review entity received the 14 6 information required under subsection 4 from the carrier or 14 7 organized delivery system. The independent review entity, for 14 8 good cause, may request an extension of time from the 14 9 commissioner. The independent review entity's external review 14 10 decision shall be mailed to the enrollee or the treating 14 11 health care provider acting on behalf of the enrollee, the 14 12 carrier or organized delivery system, and the commissioner. 14 13 8. The confidentiality of any medical records submitted 14 14 shall be maintained pursuant to applicable state and federal 14 15 laws. 14 16 Sec. 28. NEW SECTION. 514J.15 PENALTIES. 14 17 A carrier who fails to comply with this chapter or with 14 18 rules adopted pursuant to this chapter is subject to the 14 19 penalties provided under chapter 507B. 14 20 Sec. 29. Section 515.35, subsection 4, paragraph n, 14 21 subparagraph (1), Code 2001, is amended to read as follows: 14 22 (1) A company organized under this chapter may invest up 14 23 totwofive percent of its admitted assets in securities or 14 24 property of any kind, without restrictions or limitations 14 25 except those imposed on business corporations in general. 14 26 Sec. 30. Section 515.51, Code 2001, is amended to read as 14 27 follows: 14 28 515.51 POLICIES – EXECUTION – REQUIREMENTS. 14 29 All policies or contracts of insurance except surety bonds 14 30 made or entered into by the company may be made either with or 14 31 without the seal of the company, but shall be subscribed by 14 32 the president, or such other officer as may be designated by 14 33 the directors for that purpose, and be attested to by the 14 34 secretary or the secretary's designee of the company. A group 14 35 motor vehicle or group homeowners policy shall not be written 15 1 or delivered within this state unless such policy is an 15 2 individual policy or contract form. 15 3 Sec. 31. Section 515B.1, subsection 2, Code 2001, is 15 4 amended to read as follows: 15 5 2. Mortgage guaranty, financial guaranty, residual value, 15 6 or other forms of insurance offering protection against 15 7 investment risks. 15 8 Sec. 32. Section 515B.5, subsection 1, paragraph b, Code 15 9 2001, is amended to read as follows: 15 10 b. Be obligated to pay covered claims subject to a 15 11 limitation as established by the rights, duties, and 15 12 obligations under the policy of the insolvent insurer. 15 13 However, the association is not obligated to pay a claimant an 15 14 amount in excess of the obligation under the policy of the 15 15 insolvent insurer, regardless of whether such claim is based 15 16 on contract or tort. 15 17 Sec. 33. Section 515B.16, Code 2001, is amended by 15 18 striking the section and inserting in lieu thereof the 15 19 following: 15 20 515B.16 ACTIONS AGAINST THE ASSOCIATION. 15 21 Any action against the association shall be brought against 15 22 the association in the association's own name. The Polk 15 23 county district court shall have exclusive jurisdiction and 15 24 venue of such actions. Service of the original notice in 15 25 actions against the association may be made on any officer of 15 26 the association or upon the commissioner of insurance on 15 27 behalf of the association. The commissioner shall promptly 15 28 transmit any notice so served upon the commissioner to the 15 29 association. 15 30 Sec. 34. NEW SECTION. 515F.4A REASONABLENESS OF BENEFITS 15 31 IN RELATION TO PREMIUM CHARGED. 15 32 Benefits provided by credit personal property insurance 15 33 shall be reasonable in relation to the premium charged. This 15 34 requirement is satisfied if the premium rate charged develops 15 35 or may reasonably be expected to develop a loss ratio of not 16 1 less than fifty percent or such lower loss ratio as designated 16 2 by the commissioner to afford a reasonable allowance for 16 3 actual and expected loss experience including a reasonable 16 4 catastrophe provision, general and administrative expenses, 16 5 reasonable acquisition expenses, reasonable creditor 16 6 compensation, investment income, premium taxes, licenses, 16 7 fees, assessments, and reasonable insurer profit. 16 8 Sec. 35. Section 518.23, subsection 4, Code 2001, is 16 9 amended to read as follows: 16 10 4. NOTICE. Service of notice under subsection 2 or 3 may 16 11 bemade in person, or by mailing such notice by certified mail16 12deposited in the post office and directeddelivered in person 16 13 or mailed to the insured at the insured's post office address 16 14 as given in or upon the policy, or to such other address as 16 15 the insured shall have given to the association in writing. A 16 16 post office departmentreceipt of certified or registered mail16 17 certificate of mailing shall be deemed proof of receipt of 16 18 suchnoticemailing. If in either case the cash payments 16 19 exceed the amount properly chargeable, the excess shall be 16 20 refunded to the insured upon the surrender of the policy to 16 21 the association at its home office. 16 22 Sec. 36. Section 518A.29, subsection 4, Code 2001, is 16 23 amended to read as follows: 16 24 4. NOTICE. Service of notice under subsection 2 or 3 may 16 25 bemade in person, or by mailing such notice by certified mail16 26deposited in the post office and directeddelivered in person 16 27 or mailed to the insured at the insured's post office address 16 28 as given in or upon the policy, or to such other address as 16 29 the insured shall have given to the association in writing. A 16 30 post office departmentreceipt of certified or registered mail16 31 certificate of mailing shall be deemed proof of receipt of 16 32 suchnoticemailing. If in either case the cash payments 16 33 exceed the amount properly chargeable, the excess shall be 16 34 refunded upon the surrender of the policy to the association 16 35 at its home office. 17 1 Sec. 37. Section 515.122, Code 2001, is repealed. 17 2 Sec. 38. Sections 432.12, 513B.14, 513B.16, 513B.17A, 17 3 513B.18, and 513B.31 through 513B.43, Code 2001, are repealed. 17 4 Sec. 39. EFFECTIVE DATE. Sections 4, 7 through 11, 13 17 5 through 22, 34, and 38 of this Act take effect January 1, 17 6 2002. 17 7 17 8 17 9 17 10 MARY E. KRAMER 17 11 President of the Senate 17 12 17 13 17 14 17 15 BRENT SIEGRIST 17 16 Speaker of the House 17 17 17 18 I hereby certify that this bill originated in the Senate and 17 19 is known as Senate File 500, Seventy-ninth General Assembly. 17 20 17 21 17 22 17 23 MICHAEL E. MARSHALL 17 24 Secretary of the Senate 17 25 Approved , 2001 17 26 17 27 17 28 17 29 THOMAS J. VILSACK 17 30 Governor
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