Text: HF02488                           Text: HF02490
Text: HF02400 - HF02499                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index

House File 2489

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 272C.1, subsection 6, paragraph z, Code
  1  2 2003, is amended by striking the paragraph.
  1  3    Sec. 2.  Section 272C.3, subsection 2, paragraph a, Code
  1  4 Supplement 2003, is amended to read as follows:
  1  5    a.  Revoke a license, or suspend a license either until
  1  6 further order of the board or for a specified period, upon any
  1  7 of the grounds specified in section 147.55, 148.6, 148B.7,
  1  8 152.10, 153.34, 154A.24, 169.13, 455B.219, 542.10, 542B.21,
  1  9 543B.29, 544A.13, 544B.15, or 602.3203 or chapter 151, or 155,
  1 10 507B, or 522B, as applicable, or upon any other grounds
  1 11 specifically provided for in this chapter for revocation of
  1 12 the license of a licensee subject to the jurisdiction of that
  1 13 board, or upon failure of the licensee to comply with a
  1 14 decision of the board imposing licensee discipline;
  1 15    Sec. 3.  Section 272C.4, subsection 6, Code 2003, is
  1 16 amended to read as follows:
  1 17    6.  Define by rule acts or omissions which that are grounds
  1 18 for revocation or suspension of a license under section
  1 19 147.55, 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13,
  1 20 455B.219, 542.10, 542B.21, 543B.29, 544A.13, 544B.15, or
  1 21 602.3203 or chapter 151, or 155, 507B or 522B, as applicable,
  1 22 and to define by rule acts or omissions which that constitute
  1 23 negligence, careless acts, or omissions within the meaning of
  1 24 section 272C.3, subsection 2, paragraph "b", which licensees
  1 25 are required to report to the board pursuant to section
  1 26 272C.9, subsection 2;
  1 27    Sec. 4.  Section 432.5, Code Supplement 2003, is amended to
  1 28 read as follows:
  1 29    432.5  RISK RETENTION GROUPS.
  1 30    A risk retention group organized and operating pursuant to
  1 31 Pub. L. No. 99-563, also known as the risk retention
  1 32 amendments of 1986, shall pay as taxes to the director of
  1 33 revenue an amount equal to two percent the applicable percent,
  1 34 as provided in section 432.1, subsection 4, of the gross
  1 35 amount of the premiums received during the previous calendar
  2  1 year for risks placed in this state.  A resident or
  2  2 nonresident agent producer shall report and pay the taxes on
  2  3 the premiums for risks that the agent producer has placed in
  2  4 this state with or on behalf of a risk retention group.  The
  2  5 failure of a risk retention group to pay the tax imposed in
  2  6 this section shall result in the risk retention group being
  2  7 considered an unauthorized insurer under chapter 507A.
  2  8    Sec. 5.  NEW SECTION.  505.7A  CIVIL PENALTIES.
  2  9    Unless specifically provided for in this subtitle,
  2 10 penalties imposed under this subtitle by order of the
  2 11 commissioner of insurance after hearing shall not exceed one
  2 12 thousand dollars for each act or violation of this subtitle,
  2 13 up to an aggregate of ten thousand dollars, unless the person
  2 14 knew or reasonably should have known the person was in
  2 15 violation of this subtitle, in which case the penalty shall
  2 16 not exceed five thousand dollars for each act or violation, up
  2 17 to an aggregate of fifty thousand dollars in any one six-month
  2 18 period.
  2 19    Sec. 6.  Section 505A.1, article III, subsections 1 and 2,
  2 20 Code Supplement 2003, are amended to read as follows:
  2 21    1.  The compacting states hereby create and establish an
  2 22 entity a joint public agency known as the interstate insurance
  2 23 product regulation commission.  Pursuant to article IV, the
  2 24 commission has the power to develop uniform standards for
  2 25 product lines, receive and provide prompt review of products
  2 26 filed therewith, and give approval to those product filings
  2 27 satisfying applicable uniform standards, provided it is not
  2 28 intended for the commission to be the exclusive entity for
  2 29 receipt and review of insurance product filings.  Nothing
  2 30 herein shall prohibit any insurer from filing its product in
  2 31 any state wherein the insurer is licensed to conduct the
  2 32 business of insurance, and any such filing shall be subject to
  2 33 the laws of the state where filed.
  2 34    2.  The commission is a body corporate comprising each and
  2 35 politic, and an instrumentality of the compacting state.
  3  1    Sec. 7.  Section 505A.1, article III, subsection 3, Code
  3  2 Supplement 2003, is amended by striking the subsection.
  3  3    Sec. 8.  Section 505A.1, article V, subsection 1, paragraph
  3  4 c, subparagraphs (3) and (4), Code Supplement 2003, are
  3  5 amended to read as follows:
  3  6    (3)  Providing reasonable standards and procedures:
  3  7    (a)  For the establishment and meetings of other
  3  8 committees.
  3  9    (b)  Governing any general or specific delegation of any
  3 10 authority or function of the commission.
  3 11    (4)  Providing reasonable procedures for calling and
  3 12 conducting meetings of the commission, and that consists of a
  3 13 majority of commission members ensuring reasonable advance
  3 14 notice of each such meeting, and providing for the right of
  3 15 citizens to attend each such meeting with enumerated
  3 16 exceptions designed to protect the public's interest, the
  3 17 privacy of individuals, and insurers' proprietary information,
  3 18 including trade secrets.  The commission may meet in camera
  3 19 only after a majority of the entire membership votes to close
  3 20 a meeting en toto or in part.  As soon as practicable, the
  3 21 commission shall make public:
  3 22    (a)  A copy of the vote to close the meeting, revealing the
  3 23 vote of each member, with no proxy votes allowed.
  3 24    (b)  Votes taken during such meeting.
  3 25    Sec. 9.  Section 505A.1, article V, subsection 1, paragraph
  3 26 c, Code Supplement 2003, is amended by adding the following
  3 27 new subparagraph:
  3 28    NEW SUBPARAGRAPH.  (8)  Promulgating a code of ethics to
  3 29 address permissible and prohibited activities of commission
  3 30 members and employees.
  3 31    Sec. 10.  Section 505A.1, article V, subsection 1, Code
  3 32 Supplement 2003, is amended by adding the following new
  3 33 paragraph:
  3 34    NEW PARAGRAPH.  d.  The commission shall publish its bylaws
  3 35 in a convenient form and file a copy of the bylaws, along with
  4  1 any amendments, with the appropriate agency or officer in each
  4  2 of the compacting states.
  4  3    Sec. 11.  Section 505A.1, article VII, subsection 2, Code
  4  4 Supplement 2003, is amended to read as follows:
  4  5    2.  RULEMAKING PROCEDURE.  Rules and operating procedures
  4  6 shall be made pursuant to a rulemaking process that conforms
  4  7 to the model state administrative procedure act of 1981 as
  4  8 amended, as may be appropriate to the operations of the
  4  9 commission.  Before the commission adopts a uniform standard,
  4 10 the commission shall give written notice to the relevant state
  4 11 legislative committee or committees in each compacting state
  4 12 responsible for insurance issues of its intention to adopt the
  4 13 uniform standard.  The commission, in adopting a uniform
  4 14 standard, shall consider fully all submitted materials and
  4 15 issue a concise explanation of its decision.
  4 16    Sec. 12.  Section 505A.1, article VIII, subsection 1, Code
  4 17 Supplement 2003, is amended to read as follows:
  4 18    1.  The commission shall promulgate rules to establish
  4 19 establishing conditions and procedures under which the
  4 20 commission shall make its information and official records
  4 21 available to the public for inspection or copying for public
  4 22 inspection and copying of its information and official
  4 23 records, except such information and records involving the
  4 24 privacy of individuals and insurers' trade secrets.  The
  4 25 commission may promulgate additional rules under which it may
  4 26 make available to federal and state agencies, including law
  4 27 enforcement agencies, records, and information otherwise
  4 28 exempt from disclosure, and may enter into agreements with
  4 29 such agencies to receive or exchange information or records
  4 30 subject to nondisclosure and confidentiality provisions.
  4 31    Sec. 13.  Section 505A.1, article VIII, subsection 4,
  4 32 paragraphs a and b, Code Supplement 2003, are amended to read
  4 33 as follows:
  4 34    a.  With respect to the commissioner's market regulation of
  4 35 a product or advertisement that is approved or certified to
  5  1 the commission, no activity of an insurer the content of the
  5  2 product or advertisement shall not constitute a violation of
  5  3 the provisions, standards, or requirements of this compact
  5  4 except upon a final order of the commission, issued at the
  5  5 request of a commissioner after prior notice to the insurer
  5  6 and an opportunity for hearing before the commission.
  5  7    b.  Before a commissioner may bring an action for violation
  5  8 of any provision, standard, or requirement of this compact
  5  9 relating to the use content of an advertisement not approved
  5 10 or certified to the commission, the commission, or an
  5 11 authorized commission officer or employee, must authorize the
  5 12 action.  However, authorization pursuant to this paragraph
  5 13 does not require notice to the insurer, opportunity for
  5 14 hearing, or disclosure of requests for authorization or
  5 15 records of the commission's action on such requests.
  5 16    Sec. 14.  Section 505A.1, article XI, subsection 1, Code
  5 17 Supplement 2003, is amended to read as follows:
  5 18    1.  Not later than thirty days after the commission has
  5 19 given notice of a disapproved product or advertisement filed
  5 20 with the commission, the insurer or third-party filer whose
  5 21 filing was disapproved may appeal the determination to a
  5 22 review panel appointed by the commission.  The commission
  5 23 shall adopt rules to establish procedures for appointing such
  5 24 review panels and provide for notice and hearing.  The
  5 25 decision of the review panel shall be the final action of the
  5 26 commission and not subject to review by any court.
  5 27 Notwithstanding the foregoing, an An allegation that the
  5 28 commission, in disapproving a product or advertisement filed
  5 29 with the commission, acted arbitrarily, capriciously, or in a
  5 30 manner that is an abuse of discretion or otherwise not in
  5 31 accordance with the law, is subject to judicial review in
  5 32 accordance with article III, section 5.
  5 33    Sec. 15.  Section 505A.1, article XII, subsection 6, Code
  5 34 Supplement 2003, is amended to read as follows:
  5 35    6.  The commission shall keep complete and accurate
  6  1 accounts of all its internal receipts, including grants and
  6  2 donations, and disbursements of all funds under its control.
  6  3 The internal financial accounts of the commission shall be
  6  4 subject to the accounting procedures established under its
  6  5 bylaws.  The financial accounts and reports, including the
  6  6 system of internal controls and procedures of the commission,
  6  7 shall be audited annually by an independent certified public
  6  8 accountant.  Upon the determination of the commission, but no
  6  9 less frequently than every three years, the review of the
  6 10 independent auditor shall include a management and performance
  6 11 audit of the commission.  The commission shall make an annual
  6 12 report to the governor and legislature of the compacting
  6 13 states, which shall include a report of the independent audit.
  6 14 The commission's internal accounts, any work papers related to
  6 15 any internal audit, and any work papers related to the
  6 16 independent audit, shall not be confidential, provided that
  6 17 and such materials may be shared with the commissioner of any
  6 18 compacting state and shall remain confidential pursuant to
  6 19 article VII upon request; provided, however, that any work
  6 20 papers related to any internal or independent audit and any
  6 21 information regarding the privacy of the individuals and
  6 22 insurers' proprietary information, including trade secrets,
  6 23 shall remain confidential.
  6 24    Sec. 16.  Section 505A.1, article XVI, subsection 1,
  6 25 paragraph b, Code Supplement 2003, is amended to read as
  6 26 follows:
  6 27    b.  For any product approved or certified to the
  6 28 commission, the rules, uniform standards, and any other
  6 29 requirements of the commission shall constitute the exclusive
  6 30 provisions applicable to the content, approval, and
  6 31 certification of such products.  For advertisement that is
  6 32 subject to the commission's authority, any rule, uniform
  6 33 standard, or other requirement of the commission which governs
  6 34 the content of the advertisement shall constitute the
  6 35 exclusive provision that a commissioner may apply to the
  7  1 content of the advertisement.  Notwithstanding the foregoing,
  7  2 action taken by the commission shall not abrogate or restrict:
  7  3    (1)  The access of any person, including the attorney
  7  4 general, to state courts.
  7  5    (2)  Remedies available under state law related to breach
  7  6 of contract, tort, general consumer protection laws, or
  7  7 general consumer protection regulations that apply to the sale
  7  8 or advertisement of the product or other laws not specifically
  7  9 directed to the content of the product.
  7 10    (3)  State law relating to the construction of insurance
  7 11 contracts.
  7 12    (4)  The authority of the attorney general of the state,
  7 13 including but not limited to maintaining any actions or
  7 14 proceedings, as authorized by law.
  7 15    Sec. 17.  Section 507.14, Code 2003, is amended by adding
  7 16 the following new unnumbered paragraph:
  7 17    NEW UNNUMBERED PARAGRAPH.  Analysis notes, work papers, or
  7 18 other documents related to the analysis of an insurer are not
  7 19 public records under chapter 22.
  7 20    Sec. 18.  Section 507.16, Code 2003, is amended to read as
  7 21 follows:
  7 22    507.16  UNLAWFUL SOLICITATION OF BUSINESS.
  7 23    Any It shall be unlawful for any officer, manager, agent,
  7 24 or representative of any insurance company contemplated by
  7 25 this chapter, who, with knowledge that its certificate of
  7 26 authority has been suspended or revoked, or that it is
  7 27 insolvent, or is doing an unlawful or unauthorized business,
  7 28 solicits to solicit or receive applications for insurance for
  7 29 said the company, or receives applications therefor, or does
  7 30 to do any other act or thing toward receiving or procuring any
  7 31 new business for said the company, shall be deemed guilty of a
  7 32 serious misdemeanor, and the.  The provisions of sections
  7 33 511.16 and 511.17 are hereby extended to all companies
  7 34 contemplated by this chapter.
  7 35    Sec. 19.  Section 507A.10, Code 2003, is amended to read as
  8  1 follows:
  8  2    507A.10  CEASE AND DESIST ORDER ORDERS – CIVIL PENALTY AND
  8  3 CRIMINAL PENALTIES.
  8  4    1.  Upon a determination by the commissioner, after a
  8  5 hearing conducted pursuant to chapter 17A, that a person or
  8  6 insurer has violated a provision of this chapter, the
  8  7 commissioner shall reduce the findings of the hearing to
  8  8 writing and deliver a copy of the findings to the person or
  8  9 insurer, may issue an order requiring the person or insurer to
  8 10 cease and desist from engaging in the conduct resulting in the
  8 11 violation, and may assess a civil penalty of not more than
  8 12 fifty thousand dollars against the person or insurer.
  8 13    2.  a.  Upon a determination by the commissioner that a
  8 14 person or insurer has engaged, is engaging, or is about to
  8 15 engage in any act or practice constituting a violation of this
  8 16 chapter or a rule adopted or order issued under this chapter,
  8 17 the commissioner may issue a summary order, including a brief
  8 18 statement of findings of fact, conclusions of law, and policy
  8 19 reasons for the decision, and directing the person or insurer
  8 20 to cease and desist from engaging in the act or practice or to
  8 21 take other affirmative action as is in the judgment of the
  8 22 commissioner necessary to comply with the requirements of this
  8 23 chapter.
  8 24    b.  A person to whom a summary order has been issued under
  8 25 this subsection may contest the order by filing a request for
  8 26 a contested case proceeding and hearing as provided in chapter
  8 27 17A and in accordance with rules adopted by the commissioner.
  8 28 However, the person shall have at least thirty days from the
  8 29 date that the order is issued in order to file the request.
  8 30 Section 17A.18A is inapplicable to a summary order issued
  8 31 under this subsection.  If a hearing is not timely requested,
  8 32 the summary order becomes final by operation of law.  The
  8 33 order shall remain effective from the date of issuance until
  8 34 the date the order becomes final by operation of law or is
  8 35 overturned by a presiding officer or court following a request
  9  1 for hearing.
  9  2    c.  A person or insurer violating a summary order issued
  9  3 under this subsection shall be deemed in contempt of that
  9  4 order.  The commissioner may petition the district court to
  9  5 enforce the order as certified by the commissioner.  The
  9  6 district court shall find the person in contempt of the order
  9  7 if the court finds after hearing that the person or insurer is
  9  8 not in compliance with the order.  The court may assess a
  9  9 civil penalty against the person or insurer and may issue
  9 10 further orders as it deems appropriate.
  9 11    3.  A person acting as an insurance producer, as defined in
  9 12 chapter 522B, without proper licensure, or an insurer who
  9 13 willfully violates any provision of this chapter, or any rule
  9 14 adopted or order issued under this chapter, is guilty of a
  9 15 class "D" felony.
  9 16    4.  A person acting as an insurance producer, as defined in
  9 17 chapter 522B, without proper licensure, or an insurer who
  9 18 willfully violates any provision of this chapter, or any rule
  9 19 adopted or order issued under this chapter, and when such
  9 20 violation results in a loss of more than ten thousand dollars,
  9 21 is guilty of a class "C" felony.
  9 22    5.  The commissioner may refer such evidence as is
  9 23 available concerning violations of this chapter or of any rule
  9 24 adopted or order issued under this chapter, or of the failure
  9 25 of a person to comply with the licensing requirements of
  9 26 chapter 522B, to the attorney general or the proper county
  9 27 attorney who may, with or without such reference, institute
  9 28 the appropriate criminal proceedings under this chapter.
  9 29    6.  This chapter does not limit the power of the state to
  9 30 punish any person for any conduct that constitutes a crime
  9 31 under any other statute.
  9 32    Sec. 20.  Section 507B.2, subsection 1, Code 2003, is
  9 33 amended to read as follows:
  9 34    1.  "Person" shall mean any individual, corporation,
  9 35 association, partnership, reciprocal exchange, interinsurer,
 10  1 fraternal beneficiary association, and any other legal entity
 10  2 engaged in the business of insurance, including agents,
 10  3 brokers insurance producers and adjusters.  "Person" shall
 10  4 also mean any corporation operating under the provisions of
 10  5 chapter 514 and any benevolent association as defined and
 10  6 operated under chapter 512A.  For purposes of this chapter,
 10  7 corporations operating under the provisions of chapter 514 and
 10  8 chapter 512A shall be deemed to be engaged in the business of
 10  9 insurance.
 10 10    Sec. 21.  Section 507B.3, Code Supplement 2003, is amended
 10 11 by adding the following new subsection:
 10 12    NEW SUBSECTION.  3.  Information obtained by the
 10 13 commissioner in the course of investigating a consumer
 10 14 complaint may, in the discretion of the commissioner, be
 10 15 provided to the insurance company or insurance producer which
 10 16 is the subject of the complaint or to the consumer who filed
 10 17 the complaint or the individual insured who is the subject of
 10 18 the complaint without waiving the confidentiality afforded by
 10 19 this section to the commissioner or other persons.
 10 20    Sec. 22.  Section 507B.6, subsection 5, Code 2003, is
 10 21 amended to read as follows:
 10 22    5.  Statements of charges, notices, orders, subpoenas, and
 10 23 other processes of the commissioner under this chapter may be
 10 24 served by anyone duly authorized by the commissioner, either
 10 25 in the manner provided by law for service of process in civil
 10 26 actions, or by mailing a copy thereof by restricted certified
 10 27 mail to the person affected by such the statement, notice,
 10 28 order, subpoena, or other process at the person's residence or
 10 29 principal office or place of business.  The verified return by
 10 30 the person so serving such the statement, notice, order,
 10 31 subpoena, or other process, setting forth the manner of such
 10 32 service, shall be proof of the same service, and the return
 10 33 receipt for such the statement, notice, order, subpoena, or
 10 34 other process, and mailed by restricted certified mail as
 10 35 aforesaid, shall be proof of the service of the same.
 11  1    Sec. 23.  NEW SECTION.  507B.6A  SUMMARY CEASE AND DESIST
 11  2 ORDERS.
 11  3    1.  Upon a determination by the commissioner that a person
 11  4 or insurer has engaged, is engaging, or is about to engage in
 11  5 any act or practice constituting a violation of this chapter
 11  6 or a rule adopted or order issued under this chapter, the
 11  7 commissioner may issue a summary order, including a brief
 11  8 statement of findings of fact, conclusions of law, and policy
 11  9 reasons for the decision, and directing the person or insurer
 11 10 to cease and desist from engaging in the act or practice or to
 11 11 take other affirmative action as is in the judgment of the
 11 12 commissioner necessary to comply with the requirements of this
 11 13 chapter.
 11 14    2.  A person who has been issued a summary order under this
 11 15 section may contest the order by filing a request for a
 11 16 contested case proceeding and hearing as provided in chapter
 11 17 17A and in accordance with the rules adopted by the
 11 18 commissioner.  However, the person shall have at least thirty
 11 19 days from the date that the order is issued in order to file
 11 20 the request.  Section 17A.18A is inapplicable to a summary
 11 21 order issued under this section.  The order shall remain
 11 22 effective from the date of issuance unless overturned by a
 11 23 presiding officer or court following a request for hearing.
 11 24 If a hearing is not timely requested, the summary order
 11 25 becomes final by operation of law.
 11 26    3.  A person or insurer violating a summary order issued
 11 27 under this section shall be deemed in contempt of that order.
 11 28 The commissioner may petition the district court to enforce
 11 29 the order as certified by the commissioner.  The district
 11 30 court shall adjudge the person in contempt of the order if the
 11 31 court finds after hearing that the person or insurer is not in
 11 32 compliance with the order.  The court may assess a civil
 11 33 penalty against the person or insurer and may issue further
 11 34 orders as it deems appropriate.
 11 35    Sec. 24.  Section 507B.7, Code 2003, is amended to read as
 12  1 follows:
 12  2    507B.7  CEASE AND DESIST ORDERS AND MODIFICATIONS THEREOF
 12  3 PENALTIES.
 12  4    1.  If, after such hearing, the commissioner determines
 12  5 that the a person charged has engaged in an unfair method of
 12  6 competition or an unfair or deceptive act or practice, the
 12  7 commissioner shall reduce the findings to writing and shall
 12  8 issue and cause to be served upon the person charged with the
 12  9 violation a copy of such findings, an order requiring such
 12 10 person to cease and desist from engaging in such method of
 12 11 competition, act, or practice, and if the act or practice is a
 12 12 violation of section 507B.4, 507B.4A, or 507B.5, the
 12 13 commissioner may at the commissioner's discretion order any
 12 14 one or more of the following:
 12 15    a.  Payment of a civil penalty of not more than one
 12 16 thousand dollars for each act or violation of this subtitle,
 12 17 but not to exceed an aggregate of ten thousand dollars, unless
 12 18 the person knew or reasonably should have known the person was
 12 19 in violation of section 507B.4, 507B.4A, or 507B.5 this
 12 20 subtitle, in which case the penalty shall be not more than
 12 21 five thousand dollars for each act or violation, but not to
 12 22 exceed an aggregate penalty of fifty thousand dollars in any
 12 23 one six-month period.  If the commissioner finds that a
 12 24 violation of section 507B.4, 507B.4A, or 507B.5 this subtitle
 12 25 was directed, encouraged, condoned, ignored, or ratified by
 12 26 the employer of the person or by an insurer, the commissioner
 12 27 shall also assess a fine to the employer or insurer.
 12 28    b.  Suspension or revocation of the license of a person as
 12 29 defined in section 507B.2, subsection 1, if the person knew or
 12 30 reasonably should have known the person was in violation of
 12 31 section 507B.4, 507B.4A, or 507B.5 this subtitle.
 12 32    c.  Payment of interest at the rate of ten percent per
 12 33 annum if the commissioner finds that the insurer failed to pay
 12 34 interest as required under section 507B.4, subsection 12.
 12 35    2.  Until the expiration of the time allowed under section
 13  1 507B.8 for filing a petition for review if no such petition
 13  2 has been duly filed within such time, or, if a petition for
 13  3 review has been filed within such time, then until the
 13  4 transcript of the record in the proceeding has been filed in
 13  5 the district court, as hereinafter provided, the commissioner
 13  6 may at any time, upon such notice and in such manner as the
 13  7 commissioner may deem proper, modify or set aside in whole or
 13  8 in part any order issued by the commissioner under this
 13  9 section.
 13 10    3.  After the expiration of the time allowed for filing
 13 11 such a petition for review if no such petition has been duly
 13 12 filed within such time, the commissioner may at any time,
 13 13 after notice and opportunity for hearing, reopen and alter,
 13 14 modify, or set aside, in whole or in part, any order issued by
 13 15 the commissioner under this section, whenever in the
 13 16 commissioner's opinion conditions of fact or of law have so
 13 17 changed as to require such action, or if the public interest
 13 18 shall so require.
 13 19    4.  Any person who violates a cease and desist order of the
 13 20 commissioner, and while such order is in effect, may, after
 13 21 notice and hearing and upon order of the commissioner, be
 13 22 subject at the discretion of the commissioner to any one or
 13 23 more of the following:
 13 24    a.  A monetary penalty of not more than ten thousand
 13 25 dollars for each and every act or violation.
 13 26    b.  Suspension or revocation of such person's license.
 13 27    Sec. 25.  Section 507C.6, subsection 4, Code 2003, is
 13 28 amended by striking the subsection and inserting in lieu
 13 29 thereof the following:
 13 30    4.  It shall be unlawful for a person as defined in
 13 31 subsection 1 to fail to cooperate with the commissioner, or to
 13 32 obstruct or interfere with the commissioner in the conduct of
 13 33 a delinquency proceeding or an investigation preliminary or
 13 34 incidental to a delinquency proceeding, or to violate a valid
 13 35 order of the commissioner.
 14  1    Sec. 26.  Section 507C.11, unnumbered paragraph 1, Code
 14  2 2003, is amended to read as follows:
 14  3    Notwithstanding chapter 22, in all administrative
 14  4 proceedings pursuant to sections 507C.9 and 507C.10 all
 14  5 orders, records, and documents pertaining to or a part of the
 14  6 record of the proceedings are confidential except as is
 14  7 necessary to obtain compliance with a proceeding.  However,
 14  8 the records may be released if either of the following occurs:
 14  9    Sec. 27.  Section 509.18, Code 2003, is amended to read as
 14 10 follows:
 14 11    509.18  PROHIBITED DEPOSIT IN FINANCIAL INSTITUTION.
 14 12    A company or its agent licensed to sell a policy of credit
 14 13 life or credit accident and health insurance or certificate
 14 14 under a policy of group credit life or credit accident and
 14 15 health insurance shall not deposit or offer to deposit funds
 14 16 in a financial institution of this state in exchange for the
 14 17 privilege of selling such insurance to or on behalf of the
 14 18 financial institution.  Any person violating the provisions of
 14 19 this section shall be guilty of a simple misdemeanor.
 14 20    Sec. 28.  Section 511.8, subsection 1, Code Supplement
 14 21 2003, is amended to read as follows:
 14 22    1.  UNITED STATES GOVERNMENT OBLIGATIONS.
 14 23    a.  Bonds or other evidences of indebtedness issued,
 14 24 assumed, or guaranteed by the United States of America, or by
 14 25 any agency or instrumentality thereof of the United States of
 14 26 America.
 14 27    b.  Bonds or other evidences of indebtedness issued,
 14 28 assumed, or guaranteed by the United States of America, or by
 14 29 any agency or instrumentality of the United States of America
 14 30 include investments in an open-end management investment
 14 31 company registered with the federal securities and exchange
 14 32 commission under the federal Investment Company Act of 1940,
 14 33 15 U.S.C. } 80(a), and operated in accordance with 17 C.F.R. }
 14 34 270.2a-7, the portfolio of which is limited to the United
 14 35 States government obligations described in paragraph "a", and
 15  1 which are included in the national association of insurance
 15  2 commissioners' securities valuation office's United States
 15  3 direct obligations-full faith and credit exempt list.
 15  4    Sec. 29.  Section 511.8, subsection 19, unnumbered
 15  5 paragraph 1, Code Supplement 2003, is amended to read as
 15  6 follows:
 15  7    Bonds or other evidences of indebtedness, not to include
 15  8 currency, issued, assumed, or guaranteed by a foreign
 15  9 government other than Canada, or by a corporation incorporated
 15 10 under the laws of a foreign government other than Canada.
 15 11 Such governmental obligations must be valid, legally
 15 12 authorized and issued, and on the date of acquisition have
 15 13 predominantly investment qualities and characteristics as
 15 14 provided by rule.  Such corporate obligations must meet the
 15 15 qualifications established in subsection 5 for bonds and other
 15 16 evidences of indebtedness issued, assumed, or guaranteed by a
 15 17 corporation incorporated under the laws of the United States
 15 18 or Canada.  Foreign investments authorized by this subsection
 15 19 are not eligible in excess of ten twenty percent of the legal
 15 20 reserve of the life insurance company or association.
 15 21 Investments in obligations of a foreign government, other than
 15 22 Canada and the United Kingdom, are not eligible in excess of
 15 23 two percent of the legal reserve in the securities of foreign
 15 24 governments of any one foreign nation.  Investments in
 15 25 obligations of the United Kingdom are not eligible in excess
 15 26 of four percent of the legal reserve.  Investments in a
 15 27 corporation incorporated under the laws of a foreign
 15 28 government other than Canada are not eligible in excess of two
 15 29 percent of the legal reserve in the securities of any one
 15 30 foreign corporation.
 15 31    Sec. 30.  Section 511.8, subsection 22, paragraph e, Code
 15 32 Supplement 2003, is amended to read as follows:
 15 33    e.  Investments in financial instruments of foreign
 15 34 governments or foreign corporate obligations, other than
 15 35 Canada, used in hedging transactions are not eligible in
 16  1 excess of ten twenty percent of the legal reserve, less any
 16  2 foreign investment authorized by subsection 19 owned by the
 16  3 company or association and in which its legal reserve is
 16  4 invested, except insofar as the financial instruments are
 16  5 collateralized by cash or United States government obligations
 16  6 as authorized by subsection 1 deposited with a custodian bank
 16  7 as defined in subsection 21, and held under a written
 16  8 agreement with the custodian bank that complies with
 16  9 subsection 21 and provides for the proceeds of the collateral,
 16 10 subject to the terms and conditions of the applicable
 16 11 collateral or other credit support agreement, to be remitted
 16 12 to the legal reserve deposit of the company or association and
 16 13 to vest in the state in accordance with section 508.18
 16 14 whenever proceedings under that section are instituted.
 16 15    Sec. 31.  Section 511.8, Code Supplement 2003, is amended
 16 16 by adding the following new subsection:
 16 17    NEW SUBSECTION.  23.  SECURITY LOANS.
 16 18    a.  A life insurance company or association may loan
 16 19 securities held by it in its legal reserve to a broker-dealer
 16 20 registered under the Securities Exchange Act of 1934, a
 16 21 national bank, or a state bank, foreign bank, or trust company
 16 22 that is a member of the United States federal reserve system,
 16 23 and the loaned securities shall continue to be eligible for
 16 24 inclusion in the legal reserve of the life insurance company
 16 25 or association.
 16 26    b.  The loan shall be fully collateralized by cash, cash
 16 27 equivalents, or obligations issued or guaranteed by the United
 16 28 States or an agency or instrumentality of the United States.
 16 29 The life insurance company or association shall take delivery
 16 30 of the collateral either directly or through an authorized
 16 31 custodian.
 16 32    c.  If the loan is collateralized by cash or cash
 16 33 equivalents, the cash or cash equivalent collateral may be
 16 34 reinvested by the life insurance company or association in
 16 35 either individual securities which are eligible for inclusion
 17  1 in the legal reserve of the life insurance company or
 17  2 association or in repurchase agreements fully collateralized
 17  3 by such securities if the life insurance company or
 17  4 association takes delivery of the collateral either directly
 17  5 or through an authorized custodian or pooled fund comprised of
 17  6 individual securities which are eligible for inclusion in the
 17  7 legal reserve of the life insurance company or association.
 17  8 If such reinvestment is made in individual securities or in
 17  9 repurchase agreements, the individual securities or the
 17 10 securities which collateralize the repurchase agreements shall
 17 11 mature in less than two hundred seventy days.  If such
 17 12 reinvestment is made in a pooled fund, the average maturity of
 17 13 the securities comprising such pooled fund must be less than
 17 14 two hundred seventy days.  Individual securities and
 17 15 securities comprising the pooled fund shall be investment
 17 16 grade.
 17 17    d.  The loan shall be evidenced by a written agreement
 17 18 which provides all of the following:
 17 19    (1)  That the loan will be fully collateralized at all
 17 20 times during the term of the loan, and that the collateral
 17 21 will be adjusted as necessary each business day during the
 17 22 term of the loan to maintain the required collateralization in
 17 23 the event of market value changes in the loaned securities or
 17 24 collateral.
 17 25    (2)  If the loan is fully collateralized by cash or cash
 17 26 equivalents, the cash or cash equivalent may be reinvested by
 17 27 the life insurance company or association as provided in
 17 28 paragraph "c".
 17 29    (3)  That the loan may be terminated by the life insurance
 17 30 company or association at any time, and that the borrower
 17 31 shall return the loaned stocks or obligations or equivalent
 17 32 stocks or obligations within five business days after
 17 33 termination.
 17 34    (4)  That the life insurance company or association has the
 17 35 right to retain the collateral or use the collateral to
 18  1 purchase investments equivalent to the loaned securities if
 18  2 the borrower defaults under the terms of the agreement, and
 18  3 that the borrower remains liable for any losses and expenses
 18  4 incurred by the life insurance company or association due to
 18  5 default that are not covered by the collateral.
 18  6    e.  Securities loaned pursuant to this subsection are not
 18  7 eligible for inclusion in the legal reserve of the life
 18  8 insurance company or association in excess of twenty percent
 18  9 of the legal reserve.
 18 10    Sec. 32.  Section 511.16, Code 2003, is amended to read as
 18 11 follows:
 18 12    511.16  ILLEGAL BUSINESS.
 18 13    Any It shall be unlawful for any officer, manager, or agent
 18 14 of any life insurance company or association who, with
 18 15 knowledge that it is doing business in an unlawful manner or
 18 16 is insolvent, solicits to solicit or receive applications for
 18 17 insurance with said the company or association, or receives
 18 18 applications therefor, or does to do any other act or thing
 18 19 towards toward procuring or receiving any new business for
 18 20 such the company or association, shall be guilty of an
 18 21 aggravated misdemeanor.
 18 22    Sec. 33.  Section 512A.8, Code 2003, is amended to read as
 18 23 follows:
 18 24    512A.8  PENALTIES VIOLATION.
 18 25    Except as otherwise provided by law, it shall be unlawful
 18 26 for any person or corporation to operate a benevolent
 18 27 association in this state except as provided for in this
 18 28 chapter.  Any person violating the provisions of this chapter
 18 29 shall be guilty of a serious misdemeanor.
 18 30    Sec. 34.  Section 512B.35, Code 2003, is amended to read as
 18 31 follows:
 18 32    512B.35  PENALTIES FALSE OR FRAUDULENT STATEMENTS.
 18 33    1.  A person who It shall be unlawful for a person
 18 34 knowingly makes to make a false or fraudulent statement or
 18 35 representation in or relating to an application for membership
 19  1 or for the purpose of obtaining money from or a benefit in a
 19  2 society, is guilty of a fraudulent practice.
 19  3    2.  A person who willfully makes It shall be unlawful for a
 19  4 person to willfully make a false or fraudulent statement in a
 19  5 verified report or declaration under oath required or
 19  6 authorized by this chapter, or of a material fact or thing
 19  7 contained in a sworn statement concerning the death or
 19  8 disability of an insured for the purpose of procuring payment
 19  9 of a benefit named in the certificate, is guilty of perjury.
 19 10    3.  A person who solicits It shall be unlawful for a person
 19 11 to solicit membership for, or in any manner assists to assist
 19 12 in procuring membership in, a society not licensed to do
 19 13 business in this state, is guilty of a serious misdemeanor.
 19 14    4.  A person guilty of a willful violation of, or neglect
 19 15 or refusal to comply with, a provision of this chapter for
 19 16 which a penalty is not otherwise prescribed, is guilty of a
 19 17 simple misdemeanor.
 19 18    Sec. 35.  Section 513C.3, subsection 15, Code Supplement
 19 19 2003, is amended by adding the following new unnumbered
 19 20 paragraph:
 19 21    NEW UNNUMBERED PARAGRAPH.  For purposes of this subsection,
 19 22 an association policy under chapter 514E is not considered
 19 23 "qualifying existing coverage" or "qualifying previous
 19 24 coverage".
 19 25    Sec. 36.  Section 513C.8, Code 2003, is amended to read as
 19 26 follows:
 19 27    513C.8  HEALTH BENEFIT PLAN STANDARDS.
 19 28    The commissioner board of directors of the Iowa
 19 29 comprehensive health insurance association, with the approval
 19 30 of the commissioner, shall adopt by rule the form and level of
 19 31 coverage of the basic health benefit plan and the standard
 19 32 health benefit plan for the individual market which shall
 19 33 provide benefits substantially similar to those as provided
 19 34 for under chapter 513B with respect to small group coverage,
 19 35 but which shall be appropriately adjusted at least every three
 20  1 years to reflect the current state of the individual market.
 20  2    Sec. 37.  Section 513C.10, subsection 1, paragraph a, Code
 20  3 Supplement 2003, is amended to read as follows:
 20  4    a.  All persons that provide health benefit plans in this
 20  5 state including insurers providing accident and sickness
 20  6 insurance under chapter 509, 514, or 514A, whether on an
 20  7 individual or group basis; fraternal benefit societies
 20  8 providing hospital, medical, or nursing benefits under chapter
 20  9 512B; and health maintenance organizations, organized delivery
 20 10 systems, and all other entities providing health insurance or
 20 11 health benefits subject to state insurance regulation, and all
 20 12 other insurers as designated by the board of directors of the
 20 13 Iowa comprehensive health insurance association with the
 20 14 approval of the commissioner shall be members of the
 20 15 association.
 20 16    Sec. 38.  Section 513C.10, subsection 4, Code Supplement
 20 17 2003, is amended to read as follows:
 20 18    4.  The board shall develop procedures and assessment
 20 19 mechanisms and make assessments and distributions as required
 20 20 to equalize the individual carrier and organized delivery
 20 21 system gains or losses so that each carrier or organized
 20 22 delivery system receives the same ratio of paid claims to
 20 23 ninety percent of earned premiums as the aggregate of all
 20 24 basic and standard plans insured by all carriers and organized
 20 25 delivery systems in the state.
 20 26    Sec. 39.  NEW SECTION.  514A.3A  REFUND OF UNEARNED PREMIUM
 20 27 UPON DEATH OF INSURED.
 20 28    In the event of the death of the insured of any policy
 20 29 covered by this chapter, the insurer, upon receipt of notice
 20 30 of the insured's death supported by a certified copy of a
 20 31 valid death certificate and a request for a pro rata refund by
 20 32 a party entitled to claim such a refund, shall refund the
 20 33 unearned premium prorated to the month of the insured's death.
 20 34 Refund of the premium and termination of the coverage shall be
 20 35 without prejudice to any claim originating prior to the date
 21  1 of the insured's death.  The commissioner of insurance shall
 21  2 adopt by rule the minimum amount required for issuance of a
 21  3 refund.
 21  4    Sec. 40.  Section 514E.1, subsection 2, Code Supplement
 21  5 2003, is amended to read as follows:
 21  6    2.  "Association policy" means an individual or group
 21  7 policy issued by the association that provides the coverage
 21  8 specified in section 514E.4 as set forth in the benefit plans
 21  9 adopted by the association's board of directors and approved
 21 10 by the commissioner.
 21 11    Sec. 41.  Section 514E.1, subsections 7, 8, and 12, Code
 21 12 Supplement 2003, are amended by striking the subsections.
 21 13    Sec. 42.  Section 514E.1, subsection 9, Code Supplement
 21 14 2003, is amended by adding the following new paragraph:
 21 15    NEW PARAGRAPH.  f.  Who has been confirmed eligible under
 21 16 the federal Trade Adjustment Act of 2002, Pub. L. No. 107-210,
 21 17 as a recipient under that Act, by the department of workforce
 21 18 development and the federal internal revenue service.
 21 19    Sec. 43.  Section 514E.1, subsection 13, Code Supplement
 21 20 2003, is amended to read as follows:
 21 21    13.  "Health care services" means services, the coverage of
 21 22 which is authorized under chapter 509, chapter 514, chapter
 21 23 514A, or chapter 514B as limited by sections 514E.4 and 514E.5
 21 24 benefit plans established by the association's board of
 21 25 directors, with the approval of the commissioner and includes
 21 26 services for the purposes of preventing, alleviating, curing,
 21 27 or healing human illness, injury or physical disability.
 21 28    Sec. 44.  Section 514E.2, subsection 1, unnumbered
 21 29 paragraph 1, Code Supplement 2003, is amended to read as
 21 30 follows:
 21 31    The Iowa comprehensive health insurance association is
 21 32 established as a nonprofit corporation.  The association shall
 21 33 assure that health insurance, as limited by sections 514E.4
 21 34 and 514E.5, is benefit plans as authorized in section 514E.1,
 21 35 subsection 2, for an association policy, are made available to
 22  1 each eligible Iowa resident and each federally eligible
 22  2 individual applying to the association for coverage.  The
 22  3 association shall also be responsible for administering the
 22  4 Iowa individual health benefit reinsurance association
 22  5 pursuant to all of the terms and conditions contained in
 22  6 chapter 513C.
 22  7    Sec. 45.  Section 514E.2, subsection 1, paragraph a, Code
 22  8 Supplement 2003, is amended to read as follows:
 22  9    a.  All carriers as defined in section 514E.1, subsection
 22 10 3, and all organized delivery systems licensed by the director
 22 11 of public health providing health insurance or health care
 22 12 services in Iowa and all other insurers designated by the
 22 13 association's board of directors and approved by the
 22 14 commissioner shall be members of the association.
 22 15    Sec. 46.  Section 514E.2, subsection 6, Code Supplement
 22 16 2003, is amended by striking the subsection and inserting in
 22 17 lieu thereof the following:
 22 18    6.  Rates for coverages issued by the association shall
 22 19 reflect rating characteristics used in the individual
 22 20 insurance market.  The rates for a given classification shall
 22 21 not be more than one hundred fifty percent of the average
 22 22 premium or payment rate for the classification charged by the
 22 23 five carriers with the largest health insurance premium or
 22 24 payment volume in the state during the preceding calendar
 22 25 year.  In determining the average rate of the five largest
 22 26 carriers, the rates or payments charged by the carriers shall
 22 27 be actuarially adjusted to determine the rate or payment that
 22 28 would have been charged for benefits similar to those issued
 22 29 by the association.
 22 30    Sec. 47.  Section 514E.4, Code 2003, is amended by striking
 22 31 the section and inserting in lieu thereof the following:
 22 32    514E.4  ASSOCIATION POLICY – COVERAGE AND BENEFIT
 22 33 REQUIREMENTS – DEDUCTIBLES – COINSURANCE.
 22 34    The association policy shall pay for medically necessary
 22 35 eligible health care services as established in the benefit
 23  1 plans adopted by the association's board of directors and
 23  2 approved by the commissioner.  The plans shall provide
 23  3 benefits, deductibles, and coinsurance that reflect the
 23  4 current state of the individual insurance market.  The board
 23  5 may modify the benefits provided under the plans to reflect
 23  6 the current state of the individual insurance market with the
 23  7 approval of the commissioner.
 23  8    Sec. 48.  Section 514E.7, subsection 1, Code 2003, is
 23  9 amended by adding the following new unnumbered paragraph:
 23 10    NEW UNNUMBERED PARAGRAPH.  The association shall rescind
 23 11 coverage for an individual who no longer resides in the state.
 23 12    Sec. 49.  Section 514E.7, subsection 5, Code 2003, is
 23 13 amended by adding the following new paragraph:
 23 14    NEW PARAGRAPH.  f.  The individual is eligible for Medicare
 23 15 based upon age.
 23 16    Sec. 50.  Section 514E.8, subsection 1, Code 2003, is
 23 17 amended to read as follows:
 23 18    1.  An association policy shall contain provisions under
 23 19 which the association is obligated to renew the contract
 23 20 coverage for an individual until the day on which the
 23 21 individual in whose name the contract is issued first becomes
 23 22 eligible for Medicare coverage, except that in a family policy
 23 23 covering both husband and wife, the age of the younger spouse
 23 24 shall be used as the basis for meeting the durational
 23 25 requirements of this subsection.  However, when the individual
 23 26 in whose name the contract is issued becomes eligible for
 23 27 Medicare coverage, the person shall be eligible for the
 23 28 Medicare supplement plan offered by the association based on
 23 29 age.
 23 30    Sec. 51.  Section 514E.11, Code 2003, is amended to read as
 23 31 follows:
 23 32    514E.11  NOTICE OF ASSOCIATION POLICY.
 23 33    Every carrier, including a health maintenance organization
 23 34 subject to chapter 514B and an organized delivery system,
 23 35 authorized to provide health care insurance or coverage for
 24  1 health care services in Iowa, shall provide a notice of the
 24  2 availability of coverage by the association to any person who
 24  3 receives a rejection of coverage for health insurance or
 24  4 health care services, or a notice to any person who is
 24  5 informed that a rate for health insurance or coverage for
 24  6 health care services that will exceed the rate of an
 24  7 association policy, and that person is eligible to apply for
 24  8 health insurance provided by the association.  Application for
 24  9 the health insurance shall be on forms prescribed by the
 24 10 association's board of directors and made available to the
 24 11 carriers and organized delivery systems and other entities
 24 12 providing health care insurance or coverage for health care
 24 13 services regulated by the commissioner.
 24 14    Sec. 52.  Section 515.35, subsection 3, paragraph a,
 24 15 subparagraph (2), Code Supplement 2003, is amended by striking
 24 16 the subparagraph and inserting in lieu thereof the following:
 24 17    (2)  A company may loan securities held by it to a broker-
 24 18 dealer registered under the Securities Exchange Act of 1934, a
 24 19 national bank, or a state bank, foreign bank, or trust company
 24 20 that is a member of the United States federal reserve system,
 24 21 and the loaned securities shall continue to be allowable
 24 22 investments of the company.
 24 23    (a)  The loan shall be fully collateralized by cash, cash
 24 24 equivalents, or obligations issued or guaranteed by the United
 24 25 States or an agency or instrumentality of the United States.
 24 26 The company shall take delivery of the collateral either
 24 27 directly or through an authorized custodian.
 24 28    (b)  If the loan is collateralized by cash or cash
 24 29 equivalents, the cash or cash equivalent collateral may be
 24 30 reinvested by the company in either individual securities
 24 31 which are allowable investments of the company or in
 24 32 repurchase agreements fully collateralized by such securities
 24 33 if the company takes delivery of the collateral either
 24 34 directly or through an authorized custodian or a pooled fund
 24 35 comprised of individual securities which are allowable
 25  1 investments of the company.  If such reinvestment is made in
 25  2 individual securities or in repurchase agreements, the
 25  3 individual securities or the securities which collateralize
 25  4 the repurchase agreements shall mature in less than two
 25  5 hundred seventy days.  If such reinvestment is made in a
 25  6 pooled fund, the average maturity of the securities comprising
 25  7 such pooled fund must be less than two hundred seventy days.
 25  8 Individual securities and securities comprising the pooled
 25  9 fund shall be investment grade.
 25 10    (c)  The loan shall be evidenced by a written agreement
 25 11 which provides all of the following:
 25 12    (i)  That the loan will be fully collateralized at all
 25 13 times during the term of the loan, and that the collateral
 25 14 will be adjusted as necessary each business day during the
 25 15 term of the loan to maintain the required collateralization in
 25 16 the event of market value changes in the loaned securities or
 25 17 collateral.
 25 18    (ii)  If the loan is fully collateralized by cash or cash
 25 19 equivalents, the cash or cash equivalent collateral may be
 25 20 reinvested by the company as provided in subparagraph
 25 21 subdivision (b).
 25 22    (iii)  That the loan may be terminated by the company at
 25 23 any time, and that the borrower shall return the loaned stocks
 25 24 and obligations or equivalent stocks or obligations within
 25 25 five business days after termination.
 25 26    (iv)  That the company has the right to retain the
 25 27 collateral or use the collateral to purchase investments
 25 28 equivalent to the loaned securities if the borrower defaults
 25 29 under the terms of the agreement, and that the borrower
 25 30 remains liable for any losses and expenses incurred by the
 25 31 company due to default that are not covered by the collateral.
 25 32    (d)  Securities loaned pursuant to this subparagraph (2)
 25 33 are not eligible for investment of the company in excess of
 25 34 twenty percent of admitted assets.
 25 35    Sec. 53.  Section 515.35, subsection 4, paragraph a, Code
 26  1 Supplement 2003, is amended by adding the following new
 26  2 unnumbered paragraph:
 26  3    NEW UNNUMBERED PARAGRAPH.  Bonds or other evidences of
 26  4 indebtedness issued, assumed, or guaranteed by the United
 26  5 States of America, or by any agency or instrumentality of the
 26  6 United States of America include investments in an open-end
 26  7 management investment company registered with the federal
 26  8 securities and exchange commission under the federal
 26  9 Investment Company Act of 1940, 15 U.S.C. } 80(a) and operated
 26 10 in accordance with 17 C.F.R. } 270.2a-7, the portfolio of
 26 11 which is limited to the United States government obligations
 26 12 described in this paragraph "a", and which are included in the
 26 13 national association of insurance commissioners' securities
 26 14 valuation office's United States direct obligation-full faith
 26 15 and credit list.
 26 16    Sec. 54.  Section 515.35, subsection 4, paragraph i,
 26 17 subparagraphs (3) and (4), Code Supplement 2003, are amended
 26 18 to read as follows:
 26 19    (3)  A company may invest in the obligations of a foreign
 26 20 government other than Canada or of a corporation incorporated
 26 21 under the laws of a foreign government other than Canada.  Any
 26 22 such governmental obligation must be valid, legally authorized
 26 23 and issued, and on the date of acquisition have predominantly
 26 24 investment qualities and characteristics as provided by rule.
 26 25 Any such corporate obligation must on the date of acquisition
 26 26 have investment qualities and characteristics, and must not
 26 27 have speculative elements which are predominant, as provided
 26 28 by rule.  A company shall not invest more than two percent of
 26 29 its admitted assets in the obligations of a foreign government
 26 30 other than Canada and the United Kingdom.  Investments in
 26 31 obligations of the United Kingdom are not eligible in excess
 26 32 of four percent of admitted assets.  A company shall not
 26 33 invest more than two percent of its admitted assets in the
 26 34 obligations of a corporation incorporated under the laws of a
 26 35 foreign government other than a corporation incorporated under
 27  1 the laws of Canada.
 27  2    (4)  A company shall not invest more than ten twenty
 27  3 percent of its admitted assets in foreign investments pursuant
 27  4 to this paragraph.
 27  5    Sec. 55.  Section 515.120, Code 2003, is amended to read as
 27  6 follows:
 27  7    515.120  VIOLATIONS.
 27  8    Any It shall be unlawful for any officer, manager, or agent
 27  9 of any insurance company or association who, with knowledge
 27 10 that it is doing business in an unlawful manner, or is
 27 11 insolvent, solicits to solicit or receive applications for
 27 12 insurance with said the company or association, or receives
 27 13 applications therefor, or does to do any other act or thing
 27 14 towards toward procuring or receiving any new business for
 27 15 such company or association, shall be guilty of a serious
 27 16 misdemeanor.
 27 17    Sec. 56.  Section 515.121, Code 2003, is amended to read as
 27 18 follows:
 27 19    515.121  OFFICERS PUNISHED.
 27 20    Any It shall be unlawful for any of the following to fail
 27 21 to comply with or to violate any of the requirements of this
 27 22 chapter:
 27 23    1.  The president, secretary, or other officer of any
 27 24 company organized under the laws of this state, or any.
 27 25    2.  Any officer or person doing or attempting to do
 27 26 business in this state for any insurance company organized
 27 27 either within or without this state, failing to comply with
 27 28 any of the requirements of this chapter, or violating any of
 27 29 the provisions thereof, shall be guilty of a simple
 27 30 misdemeanor.
 27 31    Sec. 57.  Section 515.140, Code 2003, is amended to read as
 27 32 follows:
 27 33    515.140  VIOLATIONS – STATUS OF POLICY.
 27 34    Any It shall be unlawful for any insurance company, its
 27 35 officers or agents, or either of them, violating to violate
 28  1 any of the provisions of section 515.138, by issuing,
 28  2 delivering, or offering to issue or deliver any policy of fire
 28  3 insurance on property in this state other or different from
 28  4 than the standard form, herein as provided for, shall be
 28  5 guilty of a simple misdemeanor in statute, but any policy so
 28  6 issued or delivered shall, nevertheless, be binding upon the
 28  7 company issuing or delivering the same, and such policy.  The
 28  8 company shall, until the payment of such fine a penalty
 28  9 assessed by order after hearing, be disqualified from doing
 28 10 any insurance business in this state; but any policy so issued
 28 11 or delivered shall, nevertheless, be binding upon the company
 28 12 issuing or delivering the same.
 28 13    Sec. 58.  Section 518A.41, Code 2003, is amended to read as
 28 14 follows:
 28 15    518A.41  INSURANCE PRODUCERS TO BE LICENSED.
 28 16    No A person or corporation shall not solicit any an
 28 17 application for insurance for any association in this state
 28 18 without having procured from the commissioner of insurance a
 28 19 license authorizing the person or corporation to act as an
 28 20 insurance producer.  Violation of this provision shall
 28 21 constitute a serious misdemeanor.
 28 22    Sec. 59.  Section 520.14, Code 2003, is amended to read as
 28 23 follows:
 28 24    520.14  VIOLATIONS – EXCEPTIONS.
 28 25    Any It shall be unlawful for an attorney who shall to
 28 26 exchange any contracts of insurance of the kind and character
 28 27 specified in this chapter, or any for an attorney or
 28 28 representative of such the attorney, who shall to solicit or
 28 29 negotiate any applications for the same without the attorney
 28 30 having first complied with the foregoing provisions, shall be
 28 31 deemed guilty of a simple misdemeanor. For the purpose of
 28 32 organization and upon issuance of permit by the commissioner
 28 33 of insurance, powers of attorney and applications for such
 28 34 contracts may be solicited without compliance with the
 28 35 provisions of this chapter, but no an attorney, agent, or
 29  1 other person shall not make any such contracts of indemnity
 29  2 until all of the provisions of this chapter shall have been
 29  3 complied with.
 29  4    Sec. 60.  Section 522B.11, subsection 1, Code 2003, is
 29  5 amended by adding the following new paragraph:
 29  6    NEW PARAGRAPH.  q.  Is the subject of an order of the
 29  7 securities administrator of this state or any other state,
 29  8 province, district, or territory, denying, suspending,
 29  9 revoking, or otherwise taking action against a registration as
 29 10 a broker-dealer, agent, investment adviser, or investment
 29 11 adviser representative.
 29 12    Sec. 61.  Section 522B.11, subsection 5, Code 2003, is
 29 13 amended to read as follows:
 29 14    5.  The commissioner may conduct an investigation of any
 29 15 suspected violation of this chapter pursuant to section 507B.6
 29 16 and may enforce the provisions and impose any penalty or
 29 17 remedy authorized by this chapter and chapter 507B against any
 29 18 person who is under investigation for, or charged with, a
 29 19 violation of either chapter even if the person's license has
 29 20 been surrendered or has lapsed by operation of law.
 29 21    Sec. 62.  Section 522B.11, Code 2003, is amended by adding
 29 22 the following new subsection:
 29 23    NEW SUBSECTION.  6.  a.  In order to assure a free flow of
 29 24 information for accomplishing the purposes of this section,
 29 25 all complaint files, investigation files, other investigation
 29 26 reports, and other investigative information in the possession
 29 27 of the commissioner or the commissioner's employees or agents
 29 28 that relates to licensee discipline are privileged and
 29 29 confidential, and are not subject to discovery, subpoena, or
 29 30 other means of legal compulsion for their release to a person
 29 31 other than the licensee, and are not admissible in evidence in
 29 32 a judicial or administrative proceeding other than the
 29 33 proceeding involving licensee discipline.  A final written
 29 34 decision of the commissioner in a disciplinary proceeding is a
 29 35 public record.
 30  1    b.  Investigative information in the possession of the
 30  2 commissioner or the commissioner's employees or agents that
 30  3 relates to licensee discipline may be disclosed, in the
 30  4 commissioner's discretion, to appropriate licensing
 30  5 authorities within this state, the appropriate licensing
 30  6 authority in another state, the District of Columbia, or a
 30  7 territory or country in which the licensee is licensed or has
 30  8 applied for a license.
 30  9    c.  If the investigative information in the possession of
 30 10 the commissioner or the commissioner's employees or agents
 30 11 indicates a crime has been committed, the information shall be
 30 12 reported to the proper law enforcement agency.
 30 13    d.  Pursuant to the provisions of section 17A.19,
 30 14 subsection 6, upon an appeal by the licensee, the commissioner
 30 15 shall transmit the entire record of the contested case to the
 30 16 reviewing court.
 30 17    e.  Notwithstanding the provisions of section 17A.19,
 30 18 subsection 6, if a waiver of privilege has been involuntary
 30 19 and evidence has been received at a disciplinary hearing, the
 30 20 court shall issue an order to withhold the identity of the
 30 21 individual whose privilege was waived.
 30 22    Sec. 63.  NEW SECTION.  522B.16A  DUTIES OF LICENSEES.
 30 23    1.  An insurance producer has a continuing duty and
 30 24 obligation to keep, at the insurance producer's place of
 30 25 business, usual and customary records pertaining to
 30 26 transactions undertaken by the insurance producer.  All such
 30 27 records shall be kept available and open for inspection by the
 30 28 commissioner or the commissioner's representative at any time
 30 29 during regular business hours, provided that the commissioner
 30 30 or the commissioner's representative is not entitled to
 30 31 inspect any records prepared in anticipation of litigation or
 30 32 that are subject to any privilege recognized in chapter 622.
 30 33 Such records shall be maintained for a minimum of three years
 30 34 following the completion of an insurance transaction.
 30 35    2.  An insurance producer who willfully fails to comply
 31  1 with this section commits a violation of this chapter and is
 31  2 subject to sanctions under section 522B.11.
 31  3    Sec. 64.  Section 523A.401, subsection 6, paragraph c, Code
 31  4 2003, is amended to read as follows:
 31  5    c.  The insurance policy shall not allow for contesting
 31  6 coverage, be contestable, or limit death benefits in the case
 31  7 of suicide, with respect to that portion of the face amount of
 31  8 the policy that is required by paragraph "b".  The policy
 31  9 shall not refer to physical examination, or otherwise operate
 31 10 as an exclusion, limitation, or condition other than requiring
 31 11 submission of proof of death or surrender of policy at the
 31 12 time the prepaid purchase agreement is funded, matures, or is
 31 13 canceled, as the case may be.
 31 14    Sec. 65.  Section 523A.402, subsection 6, paragraph c, Code
 31 15 2003, is amended to read as follows:
 31 16    c.  The annuity shall not allow for contesting coverage, be
 31 17 contestable, or limit death benefits in the case of suicide,
 31 18 with respect to that portion of the face amount of the annuity
 31 19 which is required by paragraph "b".  The annuity shall refer
 31 20 to physical examination, or otherwise operate as an exclusion,
 31 21 limitation, or condition other than requiring submission of
 31 22 proof of death or surrender of the annuity at the time the
 31 23 prepaid purchase agreement is funded, matures, or is canceled,
 31 24 as the case may be.
 31 25    Sec. 66.  Section 523A.501, subsection 6, Code 2003, is
 31 26 amended to read as follows:
 31 27    6.  If no denial order is in effect and no proceeding is
 31 28 pending under section 523A.503, the application becomes
 31 29 effective at noon of the thirtieth day after a completed
 31 30 application or an amendment completing the application is
 31 31 filed, unless waived by the applicant.  The commissioner may
 31 32 specify an earlier effective date.  Automatic effectiveness
 31 33 under this subsection shall not be deemed approval of the
 31 34 application.  If the commissioner does not grant the permit,
 31 35 the commissioner shall notify the person in writing of the
 32  1 reasons for the denial.  The permit shall disclose on its face
 32  2 the permit holder's employer or the establishment on whose
 32  3 behalf the applicant will be making or attempting to make
 32  4 sales, the permit number, and the expiration date.
 32  5    Sec. 67.  Section 523A.502, subsection 7, Code 2003, is
 32  6 amended to read as follows:
 32  7    7.  A sales permit is not assignable or transferable.  A
 32  8 permit holder selling all or part of a business shall cancel
 32  9 the permit establishment's sales permits and the purchaser
 32 10 shall apply for a new permit sales permits in the purchaser's
 32 11 name within thirty days of the sale.
 32 12    Sec. 68.  Section 523A.503, subsection 1, unnumbered
 32 13 paragraph 1, Code 2003, is amended to read as follows:
 32 14    The commissioner may, pursuant to chapter 17A, deny any
 32 15 permit application, or immediately suspend, or revoke, or
 32 16 otherwise impose disciplinary action related to any permit
 32 17 issued under this chapter for several reasons, including but
 32 18 not limited to:
 32 19    Sec. 69.  Section 523A.503, subsection 3, Code 2003, is
 32 20 amended to read as follows:
 32 21    3.  Except as provided in subsection 2, a permit shall not
 32 22 be revoked, or suspended, or otherwise be the subject of
 32 23 disciplinary action except after notice and hearing under
 32 24 chapter 17A.
 32 25    Sec. 70.  Section 523A.503, Code 2003, is amended by adding
 32 26 the following new subsection:
 32 27    NEW SUBSECTION.  6.  The commissioner may impose a civil
 32 28 penalty in an amount not exceeding ten thousand dollars per
 32 29 violation against any person violating this chapter.  Each day
 32 30 of a continuing violation constitutes a separate offense.
 32 31    Sec. 71.  Sections 506.7, 507B.11, 508.27, 511.18, 514.6,
 32 32 514A.9, 514B.29, 515.132, 515.145, and 521.15, Code 2003, are
 32 33 repealed.
 32 34    Sec. 72.  Sections 514.6, 514E.5, and 514E.6, Code 2003,
 32 35 are repealed.  
 33  1 HF 2489
 33  2 av/es/25
     
Text: HF02488                           Text: HF02490
Text: HF02400 - HF02499                 Text: HF Index
Bills and Amendments: General Index     Bill History: General Index

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