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PAG LIN 1 1 SENATE FILE 2279 1 2 1 3 AN ACT 1 4 RELATING TO THE REGULATED COMMERCIAL ACTIVITIES OF INSURANCE 1 5 AND SECURITY SALES, INCLUDING RATE ADJUSTMENTS FOR SMALL 1 6 GROUP COVERAGE, PROVISIONS PERTAINING TO STATE AND COUNTY 1 7 MUTUAL INSURANCE ASSOCIATIONS, TERMINATION DATES AND 1 8 LICENSED HEALTH CARE PROVIDERS FOR EMERGENCY MEDICAL 1 9 MALPRACTICE INSURANCE, SUSPENSION OF AN INSURER'S 1 10 CERTIFICATE OF AUTHORITY FOR DELINQUENCY, EXCEPTIONS TO 1 11 THE RIGHT OF A NOTICE OF INTENT NOT TO RENEW, COVERAGE 1 12 REQUIREMENTS IN A MEDICAL EXPENSE POLICY, TORT IMMUNITY 1 13 RELATED TO VIATICAL SETTLEMENT CONTRACTS, CONFIDENTIALITY 1 14 OF CERTAIN PERSONAL INFORMATION IN SECURITIES AND INSURANCE 1 15 FILINGS, POSTPONEMENT OR SUSPENSION OF REGISTRATION UNDER 1 16 THE BLUE SKY LAW, REPORTING RELATED TO PROFESSIONAL LIABILITY 1 17 INSURANCE, ANNUAL PERCENTAGE RATE USED IN CALCULATIONS OF THE 1 18 MINIMUM NONFORFEITURE AMOUNT RELATING TO INDIVIDUAL DEFERRED 1 19 ANNUITIES, AND PROVIDING FOR A FUTURE REPEAL. 1 20 1 21 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 22 1 23 Section 1. Section 272C.4, unnumbered paragraph 2, Code 1 24 Supplement 2001, is amended to read as follows: 1 25The commissioner of insurance shall by rule in consultation1 26with the licensing boards enumerated in section 272C.1,1 27require insuranceInsurance carriers which insure professional 1 28 and occupational licensees for acts or omissionswhichthat 1 29 constitute negligence, careless acts or omissions in the 1 30 practice of a profession or occupationtoshall file reports 1 31 with thecommissioner of insuranceappropriate licensing 1 32 board. The reports shall include information pertaining to 1 33incidents byclaims against a licensee which may affect the 1 34 licensee as defined by rule, involving an insured of the 1 35 insurer.The commissioner of insurance shall forward reports2 1pursuant to this section to the appropriate licensing board.2 2 Sec. 2. Section 502.102, subsection 19, Code Supplement 2 3 2001, is amended to read as follows: 2 4 19. "Security" means any note; stock; treasury stock; 2 5 bond; debenture; evidence of indebtedness; certificate of 2 6 interest or participation in a profit sharing agreement; 2 7 collateral trust certificate; preorganization certificate or 2 8 subscription; transferable share; investment contract; 2 9 viatical settlement investment contract, or any fractional or 2 10 pooled interest in such contract; voting trust certificate; 2 11 certificate of deposit for a security; fractional undivided 2 12 interest in an oil, gas, or other mineral lease or in payments 2 13 out of production under such a lease, right, or royalty; an 2 14 interest in a limited liability company or in a limited 2 15 liability partnership or any class or series of such interest, 2 16 including any fractional or other interest in such interest; 2 17 or, in general, any interest or instrument commonly known as a 2 18 "security", or any certificate of interest or participation 2 19 in, temporary or interim certificate for, receipt for, 2 20 guarantee of, or warrant or right to subscribe to or purchase, 2 21 any of the foregoing. "Security" does not include an 2 22 insurance or endowment policy or annuity contract under which 2 23 an insurance company promises to pay money either in a lump 2 24 sum or periodically for life or for some other specified 2 25 period. "Security" also does not include an interest in a 2 26 limited liability company or a limited liability partnership 2 27 if the person claiming that such an interest is not a security 2 28 proves that all of the members of the limited liability 2 29 company or limited liability partnership are actively engaged 2 30 in the management of the limited liability company or limited 2 31 liability partnership; provided that the evidence that members 2 32 vote or have the right to vote, or the right to information 2 33 concerning the business and affairs of the limited liability 2 34 company or limited liability partnership, or the right to 2 35 participate in management, shall not establish, without more, 3 1 that all members are actively engaged in the management of the 3 2 limited liability company or limited liability partnership. 3 3 "Security" is any of the foregoing as provided in this 3 4 subsection whether or not it is evidenced by a written 3 5 instrument. 3 6 Sec. 3. Section 502.102, subsection 21, Code Supplement 3 7 2001, is amended by striking the subsection and inserting in 3 8 lieu thereof the following: 3 9 21. "Viatical settlement investment contract" means a 3 10 contract entered into by a viatical settlement purchaser, to 3 11 which the viator is not a party, to purchase a life insurance 3 12 policy or an interest in the death benefits of a life 3 13 insurance policy, which contract is entered into for the 3 14 purpose of deriving economic benefit. 3 15 Sec. 4. Section 502.304, subsection 3, Code Supplement 3 16 2001, is amended to read as follows: 3 17 3. The administrator may by order summarily postpone or 3 18 suspend registration pending final determination of any 3 19 proceeding under this section. Upon the entry of the order, 3 20 the administrator shall promptly notify the applicant or 3 21 registrant, as well as the employer or prospective employer if 3 22 the applicant or registrant is an agent or investment adviser 3 23 representative, that it has been entered and of the reasons 3 24thereforfor the postponement or suspension and that within 3 25 fifteen days after the receipt of a written request the matter 3 26 will be set down for hearing. If no hearing is requested and 3 27 none is ordered by the administrator, the order will remain in 3 28 effect until it is modified or vacated by the administrator. 3 29 If a hearing is requested or ordered, the administrator, after 3 30 notice of and opportunity for hearing, may modify or vacate 3 31 the order or extend it until final determination. Section 3 32 17A.18A is inapplicable to a summary order issued under this 3 33 subsection. 3 34 Sec. 5. Section 502.608, subsection 2, Code 2001, is 3 35 amended to read as follows: 4 1 2. The administrator shall keep a register of all 4 2 applications for registration, notice filings, and 4 3 registration statementswhichthat are or have been effective 4 4 under this chapter and predecessor laws, and all censure, 4 5 denial, suspension, or revocation orderswhichthat have been 4 6 entered under this chapter and predecessor laws. All records 4 7 may be maintained in an electronic or microfilm format or any 4 8 other form of data storage. The register shall be open for 4 9 public inspection. However, notwithstanding chapter 22, the 4 10 administrator may keep confidential any social security 4 11 number, residence address, and residence telephone number that 4 12 is contained in these records if disclosure is not required in 4 13 the performance of any duty or is not otherwise required under 4 14 law. 4 15 Sec. 6. Section 505.8, Code Supplement 2001, is amended by 4 16 adding the following new subsection: 4 17 NEW SUBSECTION. 7. Notwithstanding chapter 22, the 4 18 commissioner may keep confidential any social security number, 4 19 residence address, and residence telephone number that is 4 20 contained in a record filed as part of a licensing, 4 21 registration, or filing process if disclosure is not required 4 22 in the performance of any duty or is not otherwise required 4 23 under law. 4 24 Sec. 7. NEW SECTION. 507C.60 SUSPENSION OF CERTIFICATE 4 25 OF AUTHORITY. 4 26 Without advance notice or a hearing, the commissioner may 4 27 suspend immediately the certificate of authority of any 4 28 insurer as to which proceedings for receivership, 4 29 conservatorship, rehabilitation, or other delinquency 4 30 proceedings have been commenced in any state by the public 4 31 insurance supervisory official of that state. 4 32 Sec. 8. Section 508.31A, subsection 2, paragraph a, Code 4 33 2001, is amended by adding the following new subparagraph: 4 34 NEW SUBPARAGRAPH. (3) A person other than a natural 4 35 person that has assets of at least twenty-five million 5 1 dollars. 5 2 Sec. 9. Section 507E.7, subsection 3, Code 2001, is 5 3 amended by striking the subsection. 5 4 Sec. 10. Section 508.38, subsection 3, paragraph a, 5 5 unnumbered paragraph 1, Code 2001, is amended to read as 5 6 follows: 5 7 With respect to contracts providing for flexible 5 8 considerations, the minimum nonforfeiture amount at any time 5 9 at or prior to the commencement of any annuity payments shall 5 10 be equal to an accumulation up to such time at a rate of 5 11 interest ofthreeone and one-half percent per annum of 5 12 percentages of the net considerations (as hereinafter defined) 5 13 paid prior to such time, decreased by the sum of (1) any prior 5 14 withdrawals from or partial surrenders of the contract 5 15 accumulated at a rate of interest ofthreeone and one-half 5 16 percent per annum and (2) the amount of any indebtedness to 5 17 the company on the contract, including interest due and 5 18 accrued; and increased by any existing additional amounts 5 19 credited by the company to the contract. 5 20 Sec. 11. NEW SECTION. 508E.3A IMMUNITY FROM LIABILITY. 5 21 1. A person acting without malice, fraudulent intent, or 5 22 bad faith is not liable civilly as a result of filing a 5 23 report, or otherwise furnishing, orally or in writing, other 5 24 information concerning alleged acts in violation of this 5 25 chapter, or the administrative rules that implement this 5 26 chapter, if the report or information is provided to or 5 27 received from any of the following: 5 28 a. Law enforcement officials, and their agents or 5 29 employees. 5 30 b. The national association of insurance commissioners, 5 31 the insurance division, a federal or state governmental agency 5 32 or bureau established to detect and prevent fraudulent 5 33 insurance or viatical settlement acts, or any other 5 34 organization established for such purpose, and their agents, 5 35 employees, or designees. 6 1 c. An authorized representative of the life insurer that 6 2 issued the insurance policy covering the life of the insured. 6 3 2. This section does not affect in any way any common law 6 4 or statutory privilege or immunity applicable to such person 6 5 or entity. 6 6 Sec. 12. Section 509.19, Code 2001, is amended to read as 6 7 follows: 6 8 509.19DISCLOSURE OF CLAIMS AND RELATED COSTSCLAIMS AND 6 9 PREMIUM DISCLOSURE TO POLICYHOLDERS. 6 10 1. a. A person issuing a policy or contract providing 6 11 group health benefit coverages to a group ofone hundred6 12 fifty-one or morepersonseligible employees as defined in 6 13 chapter 513B shall provide to the policyholder, contract 6 14 holder, or sponsor of the group health benefit plan, upon 6 15 request,once in a twelve-month period, all of the following6 16information:6 17a. Number of claims submitted to date.6 18b. Costs of claims submitted to date.6 19c. Average cost per claim, and average annual cost per6 20covered individualannually, but not more than three months 6 21 prior to the policy renewal date, the total amount of actual 6 22 claims identified as paid or incurred and paid, and the total 6 23 amount of premiums by line of coverage. 6 24 b. For purposes of this section, "line of coverage" 6 25 includes medical, prescription drug card program, dental, 6 26 vision, long-term disability, and short-term disability. 6 27 c. The information required by paragraph "a" shall be 6 28 provided separately for the current policy year-to-date and 6 29 for the prior policy year. 6 30 d. The informationshall be presented in the aggregate,6 31andrequired by paragraph "a" shall not disclose any 6 32 confidential information or otherwise disclose the identity of 6 33 an individual insured, subscriber, or enrollee, who has 6 34 submitted a claim within the time frame of the report. 6 35 2. For purposes of this section, "person issuing a policy 7 1 or contract providing group health benefit coverages" includes 7 2 all of the following: 7 3 a. A person issuing a group policy of accident or health 7 4 insurance pursuant to this chapter. 7 5 b. A person issuing a group contract of a nonprofit health 7 6 service corporation pursuant to chapter 514. 7 7 c. A person issuing a group contract of a health 7 8 maintenance organization pursuant to chapter 514B. 7 9 d. An organized delivery system authorized under 1993 Iowa 7 10 Acts, chapter 158, licensed by the director of public health. 7 11 e. A multiple employer welfare arrangement, as defined in 7 12 section 3 of the federal Employee Retirement Income Security 7 13 Act of 1974, 29 U.S.C. } 1002, paragraph 40, that meets the 7 14 requirements of section 507A.4, subsection 9, paragraph "a". 7 15 f. A plan for public employees established pursuant to 7 16 chapter 509A. 7 17 g. A person issuing or sponsoring an association group 7 18 policy under section 509.14. 7 19 Sec. 13. Section 513B.4, subsection 1, Code Supplement 7 20 2001, is amended by adding the following new paragraph: 7 21 NEW PARAGRAPH. d. Any adjustment in rates for claims 7 22 experience, health status, and duration of coverage shall not 7 23 be charged to individual employees or dependents. Any such 7 24 adjustment shall be applied uniformly to the rates charged for 7 25 all employees and dependents of the small employer. 7 26 Sec. 14. Section 513C.3, subsection 14, Code 2001, is 7 27 amended by adding the following new paragraph: 7 28 NEW PARAGRAPH. d. Loss of eligibility for the hawk-i 7 29 program authorized in chapter 514I. 7 30 Sec. 15. Section 514A.3, subsection 2, paragraph k, Code 7 31 Supplement 2001, is amended by striking the paragraph and 7 32 inserting in lieu thereof the following: 7 33 k. A provision as follows: 7 34 INTOXICANTS AND NARCOTICS: The insurer shall not be liable 7 35 for any loss sustained or contracted in consequence of the 8 1 insured's being intoxicated or under the influence of any 8 2 narcotic unless administered on the advice of a physician. 8 3 This provision shall not be used with respect to a medical 8 4 expense policy. For purposes of this provision, "medical 8 5 expense policy" means an accident and sickness insurance 8 6 policy that provides hospital, medical, and surgical expense 8 7 coverage. 8 8 Sec. 16. Section 514E.1, subsection 6, Code Supplement 8 9 2001, is amended by adding the following new paragraph: 8 10 NEW PARAGRAPH. l. The hawk-i program authorized by 8 11 chapter 514I. 8 12 Sec. 17. Section 515.80, Code 2001, is amended to read as 8 13 follows: 8 14 515.80 FORFEITURE OF POLICIES – NOTICE. 8 15 1. A policy or contract of insurance, unless otherwise 8 16 provided in section 515.81A or 515.81B, provided for in this 8 17 chapter shall not be forfeited, suspended, or canceled except 8 18 by notice to the insured as provided in this chapter. A 8 19 notice of cancellation is not effective unless mailed or 8 20 delivered by the insurer to the named insured at leasttwenty8 21 thirty days before the effective date of cancellation, or, 8 22 where cancellation is for nonpayment of a premium, assessment, 8 23 or installment provided for in the policy, or in a note or 8 24 contract for the payment thereof, at least ten days prior to 8 25 the date of cancellation. The notice may be made in person, 8 26 or by sending by mail a letter addressed to the insured at the 8 27 insured's address as given in or upon the policy, anything in 8 28 the policy, application, or a separate agreement to the 8 29 contrary notwithstanding. 8 30 2. An insurer shall not fail to renew a policy except by 8 31 notice to the insured as provided in this chapter. A notice 8 32 of intention not to renew is not effective unless mailed or 8 33 delivered by the insurer to the named insured at least thirty 8 34 days prior to the expiration date of the policy. A notice of 8 35 intention not to renew is not required if the insured is 9 1 transferred from an insurer to an affiliate for future 9 2 coverage as a result of a merger, acquisition, or company 9 3 restructuring and if the transfer results in the same or 9 4 broader coverage. 9 5 If the reason does not accompany the notice of cancellation 9 6 or nonrenewal, the insurer shall, upon receipt of a timely 9 7 request by the named insured, state in writing the reason for 9 8 cancellation or nonrenewal. 9 9 Sec. 18. Section 515.81B, Code 2001, is amended to read as 9 10 follows: 9 11 515.81B NONRENEWAL OF COMMERCIAL LINES POLICIES OR 9 12 CONTRACTS. 9 13 1. An insurer shall not fail to renew a commercial line 9 14 policy or contract of insurance except by notice to the 9 15 insured as provided in this section. Nonrenewal of a 9 16 commercial line policy or contract includes a decision by the 9 17 insurer not to renew the policy or contract, an increase in 9 18 the premium of twenty-five percent or more, an increase in the 9 19 deductible of twenty-five percent or more, or a material 9 20 reduction in the limits or coverage of the policy or contract. 9 21 However, a premium charge which is assessed after the 9 22 beginning date of the policy period for which the premium is 9 23 due shall not be deemed a premium increase for the purpose of 9 24 this section. 9 25 2. A notice of nonrenewal is not effective unless mailed 9 26 or delivered by the insurer to the named insured and any loss 9 27 payee at least forty-five days prior to the expiration date of 9 28 the policy. If the insurer fails to meet the notice 9 29 requirements of this section, the insured has the option of 9 30 continuing the policy for the remainder of the notice period 9 31 plus an additional thirty days at the premium rate of the 9 32 existing policy or contract. A post office department 9 33 certificate of mailing to the named insured at the address 9 34 shown in the policy or contract is proof of receipt of the 9 35 mailing. 10 1 3. This section applies to all forms of commercial 10 2 property and casualty insurance written pursuant to this 10 3 chapter. It does not apply if the insurer has offered to 10 4 renew or if the insured fails to pay a premium due or any 10 5 advance premium required by the insurer for renewal. A notice 10 6 of nonrenewal is not required if the insured is transferred 10 7 from an insurer to an affiliate for future coverage as a 10 8 result of a merger, acquisition, or company restructuring and 10 9 if the transfer results in the same or broader coverage. 10 10 Sec. 19. NEW SECTION. 515.125A LIMITATION ON TERMINATION 10 11 OF INDEPENDENT PRODUCERS. 10 12 An insurance company organized under this chapter or 10 13 authorized to do business in this state shall not terminate a 10 14 contract of an insurance producer who is an independent 10 15 contractor but who is not an exclusive insurance producer as 10 16 defined in section 522B.1 without at least one hundred eighty 10 17 days' notice, except for loss of license, fraud, nonpayment of 10 18 company premiums that are due and not in dispute by the 10 19 producer, or the withdrawal of operations in the state by the 10 20 insurance company. This section does not apply to insurance 10 21 producers or a business entity whose contract with an insurer 10 22 authorized to do business in this state contains a written 10 23 provision expressly reserving to the insurer all right, title, 10 24 and interest to the ownership or the use of insurance business 10 25 written by such an insurance producer or business entity. 10 26 Sec. 20. Section 515B.5, subsection 1, paragraph c, 10 27 unnumbered paragraph 2, Code Supplement 2001, is amended to 10 28 read as follows: 10 29 The association shall also have the right to pursue and 10 30 retain for its own account salvage and subrogation recoverable 10 31 on paid covered claim obligations. An obligation of the 10 32 association to defend an insured shall cease upon the 10 33 association's payment or tender to an excess insurer of an 10 34 amount equal to the lesser of the association's covered claim 10 35 obligation or the applicable policy limits. 11 1 Sec. 21. Section 515B.5, subsection 1, paragraph d, Code 11 2 Supplement 2001, is amended by striking the paragraph and 11 3 inserting in lieu thereof the following: 11 4 d. Investigate claims brought against the association and 11 5 adjust, compromise, settle, and pay covered claims to the 11 6 extent of the association's obligations on covered claims and 11 7 deny all other claims. The association may review 11 8 settlements, releases, and judgments to which the insolvent 11 9 insurer or its insureds were parties to determine the extent 11 10 to which settlements, releases, and judgments may properly be 11 11 contested, and, to that end, any uncontested or default 11 12 judgment against the insolvent insurer or its insured shall 11 13 not be binding on the association. The association shall have 11 14 the right to appoint or substitute legal counsel retained to 11 15 defend insureds on covered claims. 11 16 Sec. 22. Section 515D.4, Code 2001, is amended to read as 11 17 follows: 11 18 515D.4 NOTICE OF CANCELLATION – REASONS. 11 19 1. A policy shall not be canceled except by notice to the 11 20 insured as provided in this chapter. Notice of cancellation 11 21 of a policy is not effective unless it is based on one or more 11 22 of the following reasons: 11 23 a. Nonpayment of premium. 11 24 b. Nonpayment of dues to an association or organization 11 25 other than an insurance association or organization, where 11 26 payment of dues is a prerequisite to obtaining or continuing 11 27 insurance in force and the dues payment requirement was in 11 28 effect prior to January 1, 1969. 11 29 c. Fraud or material misrepresentation affecting the 11 30 policy or the presentation of a claim. 11 31 d. Violation of terms or conditions of the policy. 11 32 e. Any reason permitted in subsection 2 for exclusion of a 11 33 person from the policy. 11 34 2. A person shall not be excluded from the policy unless 11 35 the exclusion is based on one or more of the following 12 1 reasons, or is agreed upon by both the named insured and the 12 2 insurer: 12 3 a. The named insured or any operator who either resides in 12 4 the same household or customarily operates an automobile 12 5 insured under the policy has that person's driver's license 12 6 suspended or revoked during the policy term or, if the policy 12 7 is a renewal, during its term or the one hundred eighty days 12 8 immediately preceding its effective date. 12 9 b. The named insured or any operator who either resides in 12 10 the same household or customarily operates an automobile 12 11 insured under the policy has during the term of the policy 12 12 engaged in a competitive speed contest while operating an 12 13 automobile insured under the policy. 12 14 c. The named insured or any operator who either resides in 12 15 the same household or customarily operates an automobile 12 16 insured under the policy, during the thirty-six months 12 17 immediately preceding the notice of cancellation or 12 18 nonrenewal, has been convicted of or forfeited bail for any of 12 19 the following: 12 20 (1) Criminal negligence resulting in death, homicide, or 12 21 assault and arising out of the operation of a motor vehicle. 12 22 (2) Operating a motor vehicle while intoxicated or while 12 23 under the influence of a drug. 12 24 (3) A violation of section 321.261. 12 25 3. This section shall not apply to any policy or coverage 12 26 which has been in effect less than sixty days at the time 12 27 notice of cancellation is mailed or delivered by the insurer 12 28 unless it is a renewal policy. This section shall not apply 12 29 to the nonrenewal of a policy. 12 30 4. During the policy period, a modification of automobile 12 31 physical damage coverage, other than coverage for loss caused 12 32 by collision, where provision is made for the application of a 12 33 deductible amount not exceeding one hundred dollars, shall not 12 34 be deemed a cancellation of the coverage or of the policy. 12 35 Sec. 23. Section 515D.7, Code 2001, is amended to read as 13 1 follows: 13 2 515D.7 NOTICE OF INTENT. 13 3 1. Notwithstanding the provisions of sections 515.80 13 4 through 515.81B, an insurer shall not fail to renew a policy 13 5 except by notice to the insured as provided in this chapter. 13 6 A notice of intention not to renew shall not be effective 13 7 unless mailed or delivered by the insurer to the named insured 13 8 at least thirty days prior to the expiration date of the 13 9 policy. A post office department certificate of mailing to 13 10 the named insured at the address shown in the policy shall be 13 11 proof of receipt of such mailing. Unless the reason 13 12 accompanies the notice of intent not to renew, the notice 13 13 shall state that, upon written request of the named insured, 13 14 mailed or delivered to the insurer not less thantwentythirty 13 15 days prior to the expiration date of the policy, the insurer 13 16 will state the reason for nonrenewal. 13 17 2. When the reason does not accompany the notice of intent 13 18 not to renew, the insurer shall, upon receipt of a timely 13 19 request by the named insured, state in writing the reason for 13 20 nonrenewal, together with notification of the right to a 13 21 hearing before the commissioner within fifteen days as 13 22 provided herein. A statement of reason shall be mailed or 13 23 delivered to the named insured within ten days after receipt 13 24 of a request. 13 25 3. This section shall not apply: 13 261.a. If the insurer has manifested its willingness to 13 27 renew. 13 282.b. If the insured fails to pay any premium due or any 13 29 advance premium required by the insurer for renewal. 13 30 c. If the insured is transferred from an insurer to an 13 31 affiliate for future coverage as a result of a merger, 13 32 acquisition, or company restructuring and if the transfer 13 33 results in the same or broader coverage. 13 34 Sec. 24. Section 515F.3, subsection 6, Code 2001, is 13 35 amended to read as follows: 14 1 6. Insurance written by a county or state mutual insurance 14 2 association as provided in chapter 518 or 518A. 14 3 Sec. 25. NEW SECTION. 518.16A LIMITATION ON TERMINATION 14 4 OF INDEPENDENT PRODUCERS. 14 5 A county mutual insurance association authorized to do 14 6 business in this state shall not terminate a contract of an 14 7 insurance producer who is an independent contractor but who is 14 8 not an exclusive insurance producer as defined in section 14 9 522B.1 without at least one hundred eighty days' notice, 14 10 except for loss of license, fraud, nonpayment of association 14 11 premiums that are due and not in dispute by the producer, or 14 12 the withdrawal of operations in the state by the association. 14 13 Sec. 26. Section 518.17, unnumbered paragraph 2, Code 14 14 2001, is amended to read as follows: 14 15 Reinsurance sufficient to protect the financial stability 14 16 of the state mutual association is also required.Reinsurance14 17 In general, reinsurance coverage obtained by a county mutual 14 18 insurance association shall not expose the association to 14 19 losses from coverages written pursuant to this chapter of more 14 20 than fifteen percent from surplus in any calendar year. The 14 21 commissioner of insurance may require additional reinsurance 14 22 if necessary to protect the policyholders of the association. 14 23 Sec. 27. Section 518.25, Code 2001, is amended to read as 14 24 follows: 14 25 518.25 SURPLUS. 14 26 An association organized under this chapter shall at all 14 27 times maintain a surplus of not less than fifty thousand 14 28 dollars or one-tenth of one percent of the grosspropertyrisk 14 29 in force, whichever is greater. 14 30 Sec. 28. Section 518A.2, Code 2001, is amended to read as 14 31 follows: 14 32 518A.2 STATE MUTUAL ASSOCIATIONS. 14 33 Any association incorporated under the laws of this state 14 34 for the purpose of furnishing insurance as provided for in 14 35 this chaptermayis authorized to do businessthroughout the15 1statein the county in which its principal place of business 15 2 is located, the counties contiguous thereto, and the next tier 15 3 of contiguous counties and in other states where they are 15 4 legalized and authorized to do business. Each association 15 5 seeking to modify its authorized writing territory shall file 15 6 with the commissioner a plan for controlled expansion 15 7 demonstrating that provisions have been made adequately to 15 8 service and protect policyholders. The expansion plan shall 15 9 not be modified without the prior written approval of the 15 10 commissioner, which approval shall not be unreasonably 15 11 withheld. The words "mutual" and "association" shall be 15 12 incorporated in and become a part of their name. 15 13 Sec. 29. Section 518A.37, Code 2001, is amended to read as 15 14 follows: 15 15 518A.37 SURPLUS. 15 16 An association organized under this chapter shall at all 15 17 times maintain a surplus of not less than one hundred thousand 15 18 dollars, or one-tenth of one percent of the grossproperty15 19 risk in force, whichever is greater. 15 20 Sec. 30. NEW SECTION. 518A.42 LIMITATION ON TERMINATION 15 21 OF INDEPENDENT PRODUCERS. 15 22 A state mutual insurance association authorized to do 15 23 business in this state shall not terminate a contract of an 15 24 insurance producer who is an independent contractor but who is 15 25 not an exclusive insurance producer as defined in section 15 26 522B.1 without at least one hundred eighty days' notice, 15 27 except for loss of license, fraud, nonpayment of association 15 28 premiums that are due and not in dispute by the producer, or 15 29 the withdrawal of operations in the state by the association. 15 30 Sec. 31. Section 518A.44, unnumbered paragraph 2, Code 15 31 2001, is amended to read as follows: 15 32 Reinsurance sufficient to protect the financial stability 15 33 of the state mutual insurance association is required. 15 34ReinsuranceIn general, reinsurance coverage obtained by an 15 35 association shall not expose the association to losses from 16 1 coverages written pursuant to this chapter of more than 16 2 fifteen percent from surplus in any calendar year. The 16 3 commissioner of insurance may require additional reinsurance 16 4 if necessary to protect the policyholders of the association. 16 5 Sec. 32. Section 519A.2, subsection 3, Code 2001, is 16 6 amended to read as follows: 16 7 3. "Licensed health care provider" means and includes a 16 8 physician and surgeon, osteopath, osteopathic physician and 16 9 surgeon, dentist, podiatric physician, optometrist, 16 10 pharmacist, chiropractor or nurse licensed pursuant to chapter 16 11 147,and ahospital licensed pursuant to chapter 135B, and a 16 12 nursing facility licensed pursuant to chapter 135C. 16 13 Sec. 33. Section 519A.5, subsection 2, Code 2001, is 16 14 amended to read as follows: 16 15 2. All policies issued by the association shall provide 16 16 for a continuous period of coverage beginning with their 16 17 respective effective datesand terminating automatically at16 1812:01 a.m. on July 1, 1977, unless sooner terminated. All 16 19 policies shall terminate at 12:01 a.m. two years from the date 16 20 of finding of an emergency by the commissioner, or earlier in 16 21 accordance with sections 519A.2tothrough 519A.13,; orunless16 22terminatedbecause of failure of the policyholder to pay any 16 23 premium or stabilization reserve fund charge or portion of 16 24 either when due. All policies shall be issued subject to the 16 25 group retrospective rating plan and the stabilization reserve 16 26 fund authorized by this chapter. No policy form shall be used 16 27 by the association unless it has been filed with and approved 16 28 by the commissioner. 16 29 Sec. 34. Section 519A.9, subsection 2, unnumbered 16 30 paragraph 1, Code 2001, is amended to read as follows: 16 31Within fifteen days after July 1, 1975 theThe commissioner 16 32 shall designate a time and place for a meeting of the members 16 33 of the association at which the eight elected members serving 16 34 on thefirstboard shall be elected. The commissioner shall 16 35 appoint the appointive members of the board on or before the 17 1 date ofsuchthe meeting. 17 2 Sec. 35. Section 522B.1, Code Supplement 2001, is amended 17 3 by adding the following new subsection: 17 4 NEW SUBSECTION. 2A. "Exclusive insurance producer" means 17 5 a licensed insurance producer whose contract with an insurer 17 6 requires the insurance producer to act as an agent only for 17 7 that insurer or a group of insurers under common ownership or 17 8 control or other insurers authorized by that insurer. 17 9 Sec. 36. FUTURE REPEAL. The section of this Act amending 17 10 section 508.38, subsection 3, paragraph "a", is repealed July 17 11 1, 2004. Upon the effective date of the repeal, the Code 17 12 editor shall revise the applicable Code language to that 17 13 language that existed in the Code of Iowa 2001. Any 17 14 intervening amendments to the language in section 508.38, 17 15 subsection 3, paragraph "a", shall be stricken with the 17 16 repeal, unless a subsequent Act specifically provides 17 17 otherwise. 17 18 17 19 17 20 17 21 MARY E. KRAMER 17 22 President of the Senate 17 23 17 24 17 25 17 26 BRENT SIEGRIST 17 27 Speaker of the House 17 28 17 29 I hereby certify that this bill originated in the Senate and 17 30 is known as Senate File 2279, Seventy-ninth General Assembly. 17 31 17 32 17 33 17 34 MICHAEL E. MARSHALL 17 35 Secretary of the Senate 18 1 Approved , 2002 18 2 18 3 18 4 18 5 THOMAS J. VILSACK 18 6 Governor
Text: SF02278 Text: SF02280 Text: SF02200 - SF02299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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