Text: HSB00195                          Text: HSB00197
Text: HSB00100 - HSB00199               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

House Study Bill 196

Bill Text

PAG LIN
  1  1                           DIVISION I
  1  2    Section 1.  Section 505.8, subsection 6, Code 2003, is
  1  3 amended to read as follows:
  1  4    6.  a.  Notwithstanding chapter 22, the commissioner shall
  1  5 keep confidential both information obtained in the course of
  1  6 an investigation and information submitted to the insurance
  1  7 division pursuant to chapters 514J and 515D.
  1  8    b.  The commissioner shall adopt rules protecting the
  1  9 privacy of information held by an insurer or an agent
  1 10 consistent with the federal Gramm-Leach-Bliley Act, Pub. L.
  1 11 No. 106-102.
  1 12    c.  However, notwithstanding paragraphs "a" and "b", if the
  1 13 commissioner determines that it is necessary or appropriate in
  1 14 the public interest or for the protection of the public, the
  1 15 commissioner may share information with other regulatory
  1 16 authorities or governmental agencies or may publish
  1 17 information concerning a violation of this chapter or a rule
  1 18 or order under this chapter.  Such information may be redacted
  1 19 so that personally identifiable information is not made
  1 20 available.
  1 21    d.  The commissioner may adopt rules protecting the privacy
  1 22 of information submitted to the insurance division consistent
  1 23 with this section.
  1 24    Sec. 2.  NEW SECTION.  505.24  SALE OF POLICY TERM
  1 25 INFORMATION BY CONSUMER REPORTING AGENCY.
  1 26    1.  For purposes of this section, unless the context
  1 27 otherwise requires, "consumer reporting agency" means any
  1 28 person that for monetary fees, dues, or on a cooperative
  1 29 nonprofit basis regularly engages in whole or in part in the
  1 30 practice of assembling or evaluating consumer credit
  1 31 information or other information on consumers for the purpose
  1 32 of furnishing consumer reports to third parties and that uses
  1 33 any means or facility of interstate commerce for the purpose
  1 34 of preparing or furnishing consumer reports.
  1 35    2.  A consumer reporting agency shall not provide or sell
  2  1 data or lists that include any information that in whole or in
  2  2 part was submitted in conjunction with an insurance inquiry
  2  3 about a consumer's credit information or a request for a
  2  4 credit report or insurance score.  Information submitted in
  2  5 conjunction with an insurance inquiry about a consumer
  2  6 includes, but is not limited to, the expiration dates of an
  2  7 insurance policy or any other information that may identify
  2  8 time periods during which a consumer's insurance may expire
  2  9 and the terms and conditions of the consumer's insurance
  2 10 coverage.
  2 11    3.  The restrictions provided in subsection 2 do not apply
  2 12 to data or lists supplied by a consumer reporting agency to an
  2 13 insurance producer from whom information was received, the
  2 14 insurer on whose behalf such producer acted, or such insurer's
  2 15 affiliates or holding companies.
  2 16    4.  This section shall not be construed to restrict any
  2 17 insurer from being able to obtain a claims history report or a
  2 18 motor vehicle report.
  2 19    Sec. 3.  Section 507A.4, subsection 9, Code 2003, is
  2 20 amended by adding the following new paragraph:
  2 21    NEW PARAGRAPH.  e.  When not otherwise provided, a foreign
  2 22 or domestic multiple employee welfare arrangement doing
  2 23 business in this state shall pay to the commissioner of
  2 24 insurance the fees as required in section 511.24.
  2 25    Sec. 4.  Section 507B.3, Code 2003, is amended to read as
  2 26 follows:
  2 27    507B.3  UNFAIR COMPETITION OR UNFAIR AND DECEPTIVE ACTS OR
  2 28 PRACTICES PROHIBITED.
  2 29    1.  A person shall not engage in this state in any trade
  2 30 practice which is defined in this chapter as, or determined
  2 31 pursuant to section 507B.6 to be, an unfair method of
  2 32 competition, or an unfair or deceptive act or practice in the
  2 33 business of insurance.  The issuance of a qualified charitable
  2 34 gift annuity as provided in chapter 508F does not constitute a
  2 35 trade practice in violation of this chapter.
  3  1    2.  The commissioner shall have power to examine and
  3  2 investigate into the affairs of every person engaged in the
  3  3 business of insurance in this state in order to determine
  3  4 whether such person has been or is engaged in any unfair
  3  5 method of competition or in any unfair or deceptive act or
  3  6 practice prohibited by this section.  The commissioner shall
  3  7 keep confidential the information submitted to the insurance
  3  8 division, or obtained by the insurance division in the course
  3  9 of an investigation pursuant to section 505.8, subsection 6.
  3 10    Sec. 5.  Section 508.11, unnumbered paragraph 1, Code 2003,
  3 11 is amended to read as follows:
  3 12    The president or vice president and secretary or actuary,
  3 13 or a majority of the directors of each company organized under
  3 14 this chapter, shall annually, by on or before the first day of
  3 15 March, prepare under oath and file in the office of the
  3 16 commissioner of insurance or a depository designated by the
  3 17 commissioner a statement of its affairs for the year
  3 18 terminating on the thirty-first day of December preceding,
  3 19 showing:
  3 20    Sec. 6.  Section 508.31A, Code 2003, is amended to read as
  3 21 follows:
  3 22    508.31A  FUNDING AGREEMENTS.
  3 23    1.  A life insurance company organized under this chapter
  3 24 may issue funding agreements.  The issuance of a funding
  3 25 agreement under this section is deemed to be doing insurance
  3 26 business.  For purposes of this section, "funding agreement"
  3 27 means an agreement for an insurer to accept and accumulate
  3 28 funds and to make one or more payments at future dates in
  3 29 amounts that are not based on mortality or morbidity
  3 30 contingencies of the person to whom the funding agreement is
  3 31 issued.  A funding agreement does not constitute life
  3 32 insurance, an annuity, or other insurance authorized by
  3 33 section 508.29, and does not constitute a security as defined
  3 34 in section 502.102.
  3 35    2.  a.  Funding agreements may be issued to the following:
  4  1    (1)  A person authorized by a state or foreign country to
  4  2 engage in an insurance business or a subsidiary of such
  4  3 business.
  4  4    (2)  A person for the purpose of funding any of the
  4  5 following:
  4  6    (a)  Benefits under an employee benefit plan as defined in
  4  7 the federal Employee Retirement Income Security Act of 1974,
  4  8 29 U.S.C. } 1001 et seq., maintained in the United States or
  4  9 in a foreign country.
  4 10    (b)  Activities of an organization exempt from taxation
  4 11 pursuant to section 501c of the Internal Revenue Code, or any
  4 12 similar organization in any foreign country.
  4 13    (c)  A program of the United States government, another
  4 14 state government or political subdivision of such state, or of
  4 15 a foreign country, or any agency or instrumentality of any
  4 16 such government, political subdivision, or foreign country.
  4 17    (d)  An agreement providing for periodic payments in
  4 18 satisfaction of a claim.
  4 19    (e)  A program of an institution which has assets in excess
  4 20 of twenty-five million dollars.
  4 21    (3)  A person other than a natural person that has assets
  4 22 of at least twenty-five million dollars.
  4 23    (4)  A person other than a natural person for the purpose
  4 24 of providing collateral security for securities issued by such
  4 25 person and registered with the federal securities and exchange
  4 26 commission.
  4 27    b.  A funding agreement issued pursuant to subparagraph
  4 28 (1), (2), or (3) shall be for a total amount of not less than
  4 29 one million dollars.
  4 30    c.  An amount under a funding agreement shall not be
  4 31 guaranteed or credited except upon reasonable assumptions as
  4 32 to investment income and expenses and on a basis equitable to
  4 33 all holders of funding agreements of a given class.  Such
  4 34 funding agreements shall not provide for payments to or by the
  4 35 insurer based on mortality or morbidity contingencies.
  5  1    d.  Amounts paid to the insurer pursuant to a funding
  5  2 agreement, and proceeds applied under optional modes of
  5  3 settlement, may be allocated by the insurer to one or more
  5  4 separate accounts pursuant to section 508A.1.
  5  5    3.  A funding agreement is a class 2 claim under section
  5  6 507C.42, subsection 2.
  5  7    4.  The commissioner may adopt rules to implement funding
  5  8 agreements.
  5  9    Sec. 7.  Section 509A.15, subsection 4, Code 2003, is
  5 10 amended by striking the subsection and inserting in lieu
  5 11 thereof the following:
  5 12    4.  One or more political subdivisions of the state or one
  5 13 or more school corporations maintaining self-insured plans
  5 14 with yearly claims that do not exceed one percent of each
  5 15 entity's general fund budget shall be exempt from the
  5 16 requirements of this section where the plan insures employees
  5 17 for all or part of a deductible, coinsurance payments, drug
  5 18 costs, short-term disability benefits, vision benefits, or
  5 19 dental benefits.
  5 20    The yearly claim amount shall be determined annually on the
  5 21 policy renewal date, or an alternative date established by
  5 22 rule, by a plan administrator or political subdivision or
  5 23 school corporation employee to be designated by the plan
  5 24 administrator.  The exemption shall not apply for the year
  5 25 following a year in which yearly claims are determined to
  5 26 exceed one percent of the political subdivision's or school
  5 27 corporation's general fund budget.
  5 28    Sec. 8.  Section 510A.2, subsections 3, 4, and 5, Code
  5 29 2003, are amended to read as follows:
  5 30    3.  "Controlled insurer" means a licensed insurer which
  5 31 that is controlled, directly or indirectly, by a an insurance
  5 32 producer.
  5 33    4.  "Controlling producer" means a an insurance producer
  5 34 who, directly or indirectly, controls an insurer.
  5 35    5.  "Independent casualty actuary" means a casualty actuary
  6  1 who is a member of the American academy of actuaries and who
  6  2 is not an employee, principal, the direct or indirect owner
  6  3 of, affiliated with, or in any way controlled by the insurer
  6  4 or insurance producer.
  6  5    Sec. 9.  Section 510A.2, Code 2003, is amended by adding
  6  6 the following new subsection:
  6  7    NEW SUBSECTION.  5A.  "Insurance producer" means a person
  6  8 required to be licensed under the laws of this state to sell,
  6  9 solicit, or negotiate insurance.
  6 10    Sec. 10.  Section 510A.2, subsection 7, Code 2003, is
  6 11 amended by striking the subsection.
  6 12    Sec. 11.  Section 510A.4, subsection 1, paragraph b,
  6 13 subparagraph (2), Code 2003 is amended to read as follows:
  6 14    (2)  The controlled insurer, except for insurance business
  6 15 written through a residual market facility, accepts insurance
  6 16 business only from the controlling producer, a producer
  6 17 controlled by the controlled insurer, or a an insurance
  6 18 producer that is a subsidiary of the controlled insurer.
  6 19    Sec. 12.  Section 510A.4, subsection 2, paragraph g, Code
  6 20 2003, is amended to read as follows:
  6 21    g.  The controlled insurer shall provide the controlling
  6 22 producer with its underwriting standards, rules, and
  6 23 procedures manuals setting forth the rates to be charged, and
  6 24 the conditions for the acceptance or rejection of risks.  The
  6 25 controlling producer shall adhere to the standards, rules,
  6 26 procedures, rates, and conditions.  The standards, rules,
  6 27 procedures, rates, and conditions shall be the same as those
  6 28 applicable to comparable business placed with the controlled
  6 29 insurer by a an insurance producer other than the controlling
  6 30 producer.
  6 31    Sec. 13.  Section 510A.4, subsection 4, Code 2003, is
  6 32 amended to read as follows:
  6 33    4.  REPORTING REQUIREMENTS.
  6 34    a.  In addition to any other required loss reserve
  6 35 certification, the controlled insurer shall annually, on April
  7  1 1 of each year, file with the commissioner an opinion of an
  7  2 independent casualty actuary, or another independent loss
  7  3 reserve specialist acceptable to the commissioner, reporting
  7  4 loss ratios for each line of business written and attesting to
  7  5 the adequacy of loss reserves established for losses incurred
  7  6 and outstanding as of year-end on business placed by the
  7  7 insurance producer, including incurred but not reported
  7  8 losses.
  7  9    b.  The controlled insurer shall annually report to the
  7 10 commissioner the amount of commissions paid to the insurance
  7 11 producer, the percentage such amount represents of the net
  7 12 premiums written, and comparable amounts and percentage paid
  7 13 to noncontrolling producers for placements of the same kinds
  7 14 of insurance.
  7 15    Sec. 14.  Section 510A.5, Code 2003, is amended to read as
  7 16 follows:
  7 17    510A.5  DISCLOSURE.
  7 18    The insurance producer, prior to the effective date of the
  7 19 policy, shall deliver written notice to the prospective
  7 20 insured disclosing the relationship between the insurance
  7 21 producer and the controlled insurer; except that, if the
  7 22 business is placed through a subproducer who is not a
  7 23 controlling producer, the controlling producer shall retain in
  7 24 the producer's records a signed commitment from the
  7 25 subproducer that the subproducer is aware of the relationship
  7 26 between the insurer and the insurance producer and that the
  7 27 subproducer has notified or will notify the insured.
  7 28    Sec. 15.  Section 511.8, subsection 20, Code 2003, is
  7 29 amended by adding the following new unnumbered paragraph:
  7 30    NEW UNNUMBERED PARAGRAPH.  "Venture capital fund" includes
  7 31 an equity interest in the Iowa fund of funds as defined in
  7 32 section 15E.62.
  7 33    Sec. 16.  Section 511.27, Code 2003, is amended to read as
  7 34 follows:
  7 35    511.27  COMMISSIONER AS PROCESS AGENT.
  8  1    Every life insurance company and association organized
  8  2 under the laws of another state or country shall, before
  8  3 receiving a certificate to do business in this state or any
  8  4 renewal thereof of a certificate to do business in this state,
  8  5 file in the office of the commissioner of insurance a power of
  8  6 attorney and an agreement in writing that thereafter service
  8  7 of notice or process of any kind may be made on the
  8  8 commissioner, and when so made that shall be as valid,
  8  9 binding, and effective for all purposes as if served upon the
  8 10 company according to the laws of this or any other state, and
  8 11 waiving all claim or right of error by reason of such
  8 12 acknowledgment of service due to the filing of the power of
  8 13 attorney and the agreement regarding service of notice or
  8 14 process.
  8 15    Sec. 17.  NEW SECTION.  511.40  EMPLOYER – INSURABLE
  8 16 INTEREST.
  8 17    1.  As used in this section, "employees" includes officers,
  8 18 managers, and directors of an employer, and the shareholders,
  8 19 partners, members, proprietors, or other owners of the
  8 20 employer.
  8 21    2.  An employer and a trust established by the employer for
  8 22 the benefit of the employer or for the benefit of the
  8 23 employer's active or retired employees has an insurable
  8 24 interest in each of the lives of the employer's active or
  8 25 retired employees and may insure their lives on an individual
  8 26 or group basis.
  8 27    3.  The amount of coverage on the lives of nonmanagement or
  8 28 nonkey employees shall be reasonably related to the benefit
  8 29 provided to the employees.
  8 30    4.  On and after July 1, 2003, an employer or trust shall
  8 31 obtain the written consent of each employee being insured by
  8 32 an employer and trust pursuant to this section before insuring
  8 33 the employee's life.  The consent shall include an
  8 34 acknowledgment by the employee that the employer or trust may
  8 35 maintain the life insurance after the employee is no longer
  9  1 employed by the employer.  An employer shall not retaliate in
  9  2 any manner against an employee who refuses to consent.
  9  3    Sec. 18.  Section 512B.33, Code 2003, is amended to read as
  9  4 follows:
  9  5    512B.33  SERVICE OF PROCESS.
  9  6    1.  A foreign or alien society authorized to do business in
  9  7 this state shall appoint in writing file in the office of the
  9  8 commissioner to be its true and lawful a power of attorney
  9  9 upon whom all lawful and an agreement in writing that service
  9 10 of process in any action or proceeding against it shall be
  9 11 served, and shall agree in the written consent to process that
  9 12 any lawful process against it which is the society may be
  9 13 served on the commissioner and shall be of the same legal
  9 14 force and validity as if served upon the society, and that the
  9 15 authority shall continue in force so long as any liability
  9 16 remains outstanding in this state.  Copies of the appointment
  9 17 power of attorney, certified by the commissioner, shall be
  9 18 deemed sufficient evidence of the appointment and shall be
  9 19 admitted in evidence with the same force and effect as the
  9 20 original may be admitted.
  9 21    2.  Service of process shall only be made upon the
  9 22 commissioner, or if absent, upon the person in charge of the
  9 23 commissioner's office.  Service shall be made in duplicate
  9 24 triplicate and shall constitute sufficient service upon the
  9 25 society.  When legal process against a society is served upon
  9 26 the commissioner, the commissioner shall forthwith promptly
  9 27 forward one of the duplicate copies by registered mail,
  9 28 prepaid, directed to the secretary or corresponding officer of
  9 29 the society.  Service shall not require a A society shall not
  9 30 be required to file its answer, pleading, or defense in less
  9 31 than thirty days from the date of mailing the copy of the
  9 32 service to a society.  Legal process shall not be served upon
  9 33 a society except in the manner provided in this section.
  9 34    Sec. 19.  Section 513C.7, subsection 4, paragraph b, Code
  9 35 2003, is amended to read as follows:
 10  1    b.  A carrier or an organized delivery system shall waive
 10  2 any time period applicable to a preexisting condition
 10  3 exclusion or limitation period with respect to particular
 10  4 services in an individual health benefit plan for the period
 10  5 of time an individual was previously covered by qualifying
 10  6 previous coverage that provided benefits with respect to such
 10  7 services, provided that the qualifying previous coverage was
 10  8 continuous to a date not more than sixty-three days prior to
 10  9 the effective date of the new coverage.  For purposes of this
 10 10 section, periods of coverage under medical assistance provided
 10 11 pursuant to chapter 249A or 514I, or Medicare coverage
 10 12 provided pursuant to Title XVIII of the federal Social
 10 13 Security Act shall not be counted with respect to the sixty-
 10 14 three day requirement.
 10 15    Sec. 20.  Section 513C.10, subsection 1, paragraph a, Code
 10 16 2003, is amended to read as follows:
 10 17    a.  All persons that provide health benefit plans in this
 10 18 state including insurers providing accident and sickness
 10 19 insurance under chapter 509, 514, or 514A, whether on an
 10 20 individual or group basis; fraternal benefit societies
 10 21 providing hospital, medical, or nursing benefits under chapter
 10 22 512B; and health maintenance organizations, organized delivery
 10 23 systems, and all other entities providing health insurance or
 10 24 health benefits subject to state insurance regulation shall be
 10 25 members of the association.
 10 26    Sec. 21.  Section 513C.10, subsection 6, Code 2003, is
 10 27 amended to read as follows:
 10 28    6.  The assessable loss plus necessary operating expenses
 10 29 for the association, plus any additional expenses as provided
 10 30 by law, shall be assessed by the association to all members in
 10 31 proportion to their respective shares of total health
 10 32 insurance premiums or payments for subscriber contracts
 10 33 received in Iowa during the second preceding calendar year, or
 10 34 with paid losses in the year, coinciding with or ending during
 10 35 the calendar year, or on any other equitable basis as provided
 11  1 in the plan of operation.  In sharing losses, the association
 11  2 may abate or defer any part of the assessment of a member, if,
 11  3 in the opinion of the board, payment of the assessment would
 11  4 endanger the ability of the member to fulfill its contractual
 11  5 obligations.  The association may also provide for an initial
 11  6 or interim assessment against the members of the association
 11  7 to meet the operating expenses of the association until the
 11  8 next calendar year is completed.  For purposes of this
 11  9 subsection, "total health insurance premiums" and "payments
 11 10 for subscriber contracts" include, without limitation,
 11 11 premiums or other amounts paid to or received by a member for
 11 12 individual and group health plan care coverage provided under
 11 13 any chapter of the Code or Acts, and "paid losses" includes,
 11 14 without limitation, claims paid by a member operating on a
 11 15 self-funded basis for individual and group health plan care
 11 16 coverage provided under any chapter of the Code or Acts.  For
 11 17 purposes of calculating and conducting the assessment, the
 11 18 association shall have the express authority to require
 11 19 members to report on an annual basis each member's total
 11 20 health insurance premiums and payments for subscriber
 11 21 contracts.  A member is liable for its share of the assessment
 11 22 calculated in accordance with this section regardless of
 11 23 whether it participates in the individual insurance market.
 11 24    Sec. 22.  NEW SECTION.  514.2A  SERVICE OF PROCESS.
 11 25    A nonprofit health service corporation authorized to do
 11 26 business in this state shall file in the office of the
 11 27 commissioner a power of attorney and an agreement in writing
 11 28 that service of process in any action or proceeding against
 11 29 the corporation may be served on the commissioner and shall be
 11 30 of the same legal force and validity as if served upon the
 11 31 corporation, and that the authority shall continue in force so
 11 32 long as any liability remains outstanding in this state.
 11 33 Copies of the power of attorney, certified by the
 11 34 commissioner, shall be deemed sufficient evidence of the
 11 35 appointment and shall be admitted in evidence with the same
 12  1 force and effect as the original.
 12  2    Sec. 23.  Section 514B.3, subsection 10, Code 2003, is
 12  3 amended to read as follows:
 12  4    10.  A power of attorney executed by any applicant who is
 12  5 not domiciled in this state appointing the commissioner, the
 12  6 commissioner's successors in office, and deputies as the true
 12  7 and lawful attorney of the applicant for this state upon whom
 12  8 all lawful to receive process in any legal action or
 12  9 proceeding against the health maintenance organization on a
 12 10 cause of action arising in this state may be served.
 12 11    Sec. 24.  Section 514B.12, unnumbered paragraph 1, Code
 12 12 2003, is amended to read as follows:
 12 13    A health maintenance organization shall annually on or
 12 14 before the first day of March file with the commissioner or a
 12 15 depository designated by the commissioner a report verified by
 12 16 at least two of its principal officers and covering the
 12 17 preceding calendar year.  The report shall be on forms
 12 18 prescribed by the commissioner and shall include:
 12 19    Sec. 25.  Section 514B.33, Code 2003, is amended by adding
 12 20 the following new subsection:
 12 21    NEW SUBSECTION.  1A.  When not otherwise provided, a
 12 22 foreign or domestic limited service organization doing
 12 23 business in this state shall pay the commissioner the fees as
 12 24 required in section 511.24.
 12 25    Sec. 26.  Section 514J.7, subsection 8, Code 2003, is
 12 26 amended to read as follows:
 12 27    8.  The confidentiality of any medical records submitted
 12 28 shall be maintained pursuant to applicable state and federal
 12 29 laws.  Other than the sharing of information required by this
 12 30 chapter and the rules adopted pursuant to this chapter, the
 12 31 commissioner shall keep confidential the information obtained
 12 32 in the external review process pursuant to section 505.8,
 12 33 subsection 6.
 12 34    Sec. 27.  Section 514J.10, Code 2003, is amended to read as
 12 35 follows:
 13  1    514J.10  REPORTING.
 13  2    Each carrier and organized delivery system shall file The
 13  3 commissioner shall prepare an annual report with the
 13  4 commissioner containing all of the following:
 13  5    1.  The number of external reviews requested.
 13  6    2.  The number of the external reviews certified by the
 13  7 commissioner.
 13  8    3.  The number of coverage decisions which were upheld by
 13  9 an independent review entity.
 13 10    The commissioner shall prepare a the report by January 31
 13 11 of each year.
 13 12    Sec. 28.  Section 514J.13, Code 2003, is amended to read as
 13 13 follows:
 13 14    514J.13  EFFECT OF EXTERNAL REVIEW DECISION.
 13 15    1.  The review decision by the independent review entity
 13 16 conducting the review is binding upon the carrier or organized
 13 17 delivery system.
 13 18    2.  The enrollee or the enrollee's treating health care
 13 19 provider acting on behalf of the enrollee may appeal the
 13 20 review decision by the independent review entity conducting
 13 21 the review by filing a petition for judicial review either in
 13 22 Polk county district court or in the district court in the
 13 23 county in which the enrollee resides.  The petition for
 13 24 judicial review must be filed within fifteen business days
 13 25 after the issuance of the review decision.  The commissioner
 13 26 shall not be named as a defendant in a petition for judicial
 13 27 review of an independent review decision, unless the
 13 28 petitioner alleges that the commissioner's actions in the
 13 29 external review process fall within those actions permitted by
 13 30 section 17A.19, subsection 10.  Allegations against the
 13 31 commissioner under section 17A.19, subsection 10, must be
 13 32 stated with particularity.  The findings of fact by the
 13 33 independent review entity conducting the review are conclusive
 13 34 and binding on appeal.
 13 35    3.  The carrier or organized delivery system shall follow
 14  1 and comply with the review decision of the independent review
 14  2 entity conducting the review, or the decision of the court on
 14  3 appeal.  The carrier or organized delivery system and the
 14  4 enrollee's treating health care provider shall not be subject
 14  5 to any penalties, sanctions, or award of damages for following
 14  6 and complying in good faith with the review decision of the
 14  7 independent review entity conducting the review or decision of
 14  8 the court on appeal.
 14  9    4.  The enrollee or the enrollee's treating health care
 14 10 provider may bring an action in Polk county district court or
 14 11 in the district court in the county in which the enrollee
 14 12 resides to enforce the review decision of the independent
 14 13 review entity conducting the review or the decision of the
 14 14 court on appeal.
 14 15    Sec. 29.  Section 515.35, subsection 4, paragraph m, Code
 14 16 2003, is amended by adding the following new unnumbered
 14 17 paragraph:
 14 18    NEW UNNUMBERED PARAGRAPH.  "Venture capital fund" includes
 14 19 an equity interest in the Iowa fund of funds as defined in
 14 20 section 15E.62.
 14 21    Sec. 30.  Section 515.63, unnumbered paragraph 1, Code
 14 22 2003, is amended to read as follows:
 14 23    The president or the vice president and secretary of each
 14 24 company organized or authorized to do business in the state
 14 25 shall annually on or before the first day of March of each
 14 26 year prepare under oath and file with the commissioner of
 14 27 insurance or a depository designated by the commissioner a
 14 28 full, true, and complete statement of the condition of such
 14 29 company on the last day of the preceding year, which shall
 14 30 exhibit the following items and facts:
 14 31    Sec. 31.  Section 515.73, Code 2003, is amended to read as
 14 32 follows:
 14 33    515.73  COMMISSIONER AS PROCESS AGENT.
 14 34    Any foreign company desiring to transact the business of
 14 35 insurance under this chapter, by an agent or agents in the
 15  1 state, shall file with the commissioner of insurance a power
 15  2 of attorney and a signed written instrument, duly signed and
 15  3 sealed, authorizing such the commissioner to acknowledge
 15  4 accept service of notice or process for and in on behalf of
 15  5 such company in this state, and consenting that service of
 15  6 notice or process may be made upon the said commissioner, and
 15  7 when so made that shall be taken and held as valid as if
 15  8 served upon the company according to the laws of this or any
 15  9 other state, and waiving all claim, or right, of error, by
 15 10 reason of such acknowledgment of service due to the filing of
 15 11 the power of attorney and the agreement regarding service of
 15 12 notice or process.
 15 13    Sec. 32.  Section 515.92, Code 2003, is amended to read as
 15 14 follows:
 15 15    515.92  STATEMENT OF CAPITAL AND SURPLUS.
 15 16    1.  Every advertisement or public announcement, and every
 15 17 sign, circular, or card issued or published by a foreign
 15 18 company transacting the business of casualty insurance in the
 15 19 state, or by an officer, agent, or representative thereof,
 15 20 that purports to disclose the company's financial standing,
 15 21 shall exhibit the capital actually paid in in cash, and the
 15 22 amount of net surplus of assets over all its liabilities
 15 23 actually held and available for the payment of losses by fire
 15 24 and for the protection of holders of fire policies, and shall
 15 25 also exhibit the amount of net surplus of assets over all
 15 26 liabilities in the United States actually available for the
 15 27 payment of losses by fire and held in the United States for
 15 28 the protection of holders of fire policies in the United
 15 29 States, including in such liabilities the fund reserved for
 15 30 reinsurance of outstanding risks, and the same.  The amounts
 15 31 stated for capital and net surplus shall correspond with the
 15 32 latest verified statement made by the company or association
 15 33 to the commissioner of insurance.
 15 34    2.  The company shall not write, place, or cause to be
 15 35 written or placed, a policy or contract for insurance upon
 16  1 property situated or located in this state except through its
 16  2 resident agent or agents a licensed producer authorized to do
 16  3 business in this state.
 16  4    Sec. 33.  Section 515.133, Code 2003, is amended to read as
 16  5 follows:
 16  6    515.133  EXAMINATION OF OFFICERS AND EMPLOYEES.
 16  7    1.  The commissioner of insurance is authorized to summon
 16  8 before the commissioner, issue a subpoena for examination
 16  9 under oath, any officer, agent, or employee of any such
 16 10 company suspected of violating any of the provisions of
 16 11 section 515.131, and, on.
 16 12    2.  Upon the filing of a written, verified complaint to
 16 13 with the commissioner in writing by two or more residents of
 16 14 this state charging such alleging that a company under oath
 16 15 upon their knowledge or belief with violating the provisions
 16 16 of said has violated section 515.131, the commissioner shall
 16 17 summon issue a subpoena for examination under oath to any
 16 18 officer, agent, or employee of said the company before the
 16 19 commissioner for examination under oath.
 16 20    Sec. 34.  Section 515.134, Code 2003, is amended to read as
 16 21 follows:
 16 22    515.134  REVOCATION OF AUTHORITY.
 16 23    If upon such examination, and that of any other witness
 16 24 produced and examined, the commissioner shall determine
 16 25 determines that such a company is guilty of a violation of any
 16 26 of the provisions of has violated section 515.131, or if any
 16 27 such officer, agent, or employee after being duly summoned
 16 28 shall fail fails to appear or submit to examination after
 16 29 receiving a subpoena, the commissioner shall forthwith
 16 30 promptly issue an order revoking the authority of such the
 16 31 company to transact business within this state, and it the
 16 32 company shall not thereafter be permitted to do the business
 16 33 of fire insurance in this state at any time within for one
 16 34 year therefrom.
 16 35    Sec. 35.  Section 515B.2, subsection 2, Code 2003, is
 17  1 amended to read as follows:
 17  2    2.  "Claimant" means an insured making a first party claim
 17  3 or any person instituting a liability claim against the
 17  4 insured of an insolvent insurer.  "Claimant" does not include
 17  5 a person who is an affiliate of an insolvent insurer.
 17  6    Sec. 36.  Section 515B.8, subsection 1, Code 2003, is
 17  7 amended to read as follows:
 17  8    1.  Any person recovering under this chapter shall be
 17  9 deemed to have assigned the person's rights under the policy
 17 10 to the association to the extent of the person's recovery from
 17 11 the association.  Every insured or claimant seeking the
 17 12 protection of this chapter shall co-operate with the
 17 13 association to the same extent as such person would have been
 17 14 required to co-operate with the insolvent insurer.  The
 17 15 association shall have no cause of action against the insured
 17 16 of the insolvent insurer for any sums it has paid out except
 17 17 causes of action the insolvent insurer would have had if the
 17 18 sums had been paid by the insolvent insurer.
 17 19    Sec. 37.  Section 515B.9, subsection 1, Code 2003, is
 17 20 amended by striking the subsection and inserting in lieu
 17 21 thereof the following:
 17 22    1.  Any person having a claim under an insurance policy,
 17 23 and the claim under such other policy alleges the same damages
 17 24 or arises from the same facts, injury, or loss that gives rise
 17 25 to a covered claim against the association, shall be required
 17 26 to first exhaust all coverage provided by that policy, whether
 17 27 such coverage is on a primary, excess, or pro rata basis and
 17 28 any obligation of the association shall not be considered
 17 29 other insurance.
 17 30    Any amount payable on a covered claim shall be reduced by
 17 31 the full applicable limits of such other insurance policy and
 17 32 the association shall receive full credit for such limits or
 17 33 where there are no applicable limits, the claim shall be
 17 34 reduced by the total recovery.
 17 35    a.  A policy providing liability coverage to a person who
 18  1 may be jointly and severally liable with, or a joint
 18  2 tortfeasor with, the person covered under the policy of the
 18  3 insolvent insurer shall be first exhausted before any claim is
 18  4 made against the association and the association shall receive
 18  5 credit for the same as provided above.
 18  6    b.  For purposes of this section, an insurance policy means
 18  7 a policy issued by an insurance company, whether or not a
 18  8 member insurer, which policy insures any of the types of risks
 18  9 insured by an insurance company authorized to write insurance
 18 10 under chapter 515, 516A, or 520, or comparable statutes of
 18 11 another state, except those types of risks set forth in
 18 12 chapters 508 and 514.
 18 13    Sec. 38.  Section 515B.16, Code 2003, is amended to read as
 18 14 follows:
 18 15    515B.16  ACTIONS AGAINST THE ASSOCIATION.
 18 16    Any action against the association shall be brought against
 18 17 the association in the association's own name.  The Polk
 18 18 county district court shall have exclusive jurisdiction and
 18 19 venue of such actions.  Service of the original notice in
 18 20 actions against the association may be made on any officer of
 18 21 the association or upon the commissioner of insurance on
 18 22 behalf of the association.  The commissioner shall promptly
 18 23 transmit any notice so served upon the commissioner to the
 18 24 association.  Any action against the association shall be
 18 25 commenced within three years after the date of the order of
 18 26 liquidation.
 18 27    Sec. 39.  Section 515D.5, subsection 1, unnumbered
 18 28 paragraph 1, Code 2003, is amended to read as follows:
 18 29    Notwithstanding the provisions of sections 515.80 through
 18 30 515.81A, a notice of cancellation of a policy shall not be
 18 31 effective unless mailed or delivered by the insurer to the
 18 32 named insured at least twenty thirty days prior to the
 18 33 effective date of cancellation, or, where the cancellation is
 18 34 for nonpayment of premium notwithstanding the provisions of
 18 35 sections 515.80 and 515.81A at least ten days prior to the
 19  1 date of cancellation.  A post office department certificate of
 19  2 mailing to the named insured at the address shown in the
 19  3 policy shall be proof of receipt of such mailing.  Unless the
 19  4 reason accompanies the notice of cancellation, the notice
 19  5 shall state that, upon written request of the named insured,
 19  6 mailed or delivered to the insurer not less than fifteen days
 19  7 prior to the date of cancellation, the insurer will state the
 19  8 reason for cancellation, together with notification of the
 19  9 right to a hearing before the commissioner within fifteen days
 19 10 as provided in this chapter.
 19 11    Sec. 40.  Section 515D.10, Code 2003, is amended to read as
 19 12 follows:
 19 13    515D.10  HEARING BEFORE COMMISSIONER.
 19 14    Any named insured who has received a statement of reason
 19 15 for cancellation, or of reason for an insurer's intent not to
 19 16 renew a policy, may, within fifteen days of the receipt or
 19 17 delivery of a statement of reason, request a hearing before
 19 18 the commissioner of insurance.  The purpose of this hearing
 19 19 shall be limited to establishing the existence of the proof or
 19 20 evidence used by the insurer in its reason for cancellation or
 19 21 intent not to renew.  The burden of proof of the reason for
 19 22 cancellation or intent not to renew shall be upon the insurer.
 19 23 Other than the sharing of information required by this chapter
 19 24 and the rules adopted pursuant to the provisions of this
 19 25 chapter, the commissioner shall keep confidential the
 19 26 information obtained from the insured or in the hearing
 19 27 process, pursuant to section 505.8, subsection 6.  The
 19 28 commissioner of insurance shall adopt rules for carrying out
 19 29 the provisions of this section.
 19 30    Sec. 41.  Section 515E.3, Code 2003, is amended by adding
 19 31 the following new unnumbered paragraph:
 19 32    NEW UNNUMBERED PARAGRAPH.  A risk retention group organized
 19 33 in this state shall file in the office of the commissioner a
 19 34 power of attorney and an agreement in writing that service of
 19 35 process in any action or proceeding against the society may be
 20  1 served on the commissioner and shall be of the same legal
 20  2 force and validity as if served upon the society, and that the
 20  3 authority shall continue in force so long as any liability
 20  4 remains outstanding in this state.  Copies of the power of
 20  5 attorney, certified by the commissioner, shall be deemed
 20  6 sufficient evidence of the appointment and shall be admitted
 20  7 in evidence with the same force and effect as the original.
 20  8    Sec. 42.  Section 518.15, unnumbered paragraph 1, Code
 20  9 2003, is amended to read as follows:
 20 10    The president or the vice president and secretary of each
 20 11 association authorized to do business under this chapter shall
 20 12 annually on or before the first day of March prepare under
 20 13 oath and file with the commissioner of insurance or a
 20 14 depository designated by the commissioner a full, true and
 20 15 complete statement of the condition of such association on the
 20 16 last day of the preceding year.  The commissioner of insurance
 20 17 shall prescribe the report forms and shall determine the
 20 18 information and data to be reported.
 20 19    Sec. 43.  Section 518.23, subsection 2, paragraph a, Code
 20 20 2003, is amended to read as follows:
 20 21    a.  Except as provided in paragraph "b", notice of
 20 22 cancellation is not effective unless mailed or delivered by
 20 23 the association to the named insured at least twenty thirty
 20 24 days before the effective date of cancellation.
 20 25    Sec. 44.  Section 518A.29, subsection 2, paragraph a, Code
 20 26 2003, is amended to read as follows:
 20 27    a.  Except as provided in paragraph "b", notice of
 20 28 cancellation is not effective unless mailed or delivered by
 20 29 the association to the named insured at least twenty thirty
 20 30 days before the effective date of cancellation.
 20 31    Sec. 45.  Section 521C.3, subsection 4, paragraph b, Code
 20 32 2003, is amended to read as follows:
 20 33    b.  If the applicant for a A reinsurance intermediary
 20 34 license is a nonresident, such applicant, as a condition
 20 35 precedent to receiving or holding a license, shall designate
 21  1 the commissioner as agent for service of process, and also
 21  2 shall furnish the commissioner with the name and address of a
 21  3 resident of this state upon whom notices or orders of the
 21  4 commissioner or process affecting such nonresident reinsurance
 21  5 intermediary may be served.  The licensee shall promptly
 21  6 notify the commissioner in writing of a change of the
 21  7 designated agent for service of process, and the change
 21  8 becomes effective upon acknowledgment by the commissioner.
 21  9    Sec. 46.  Section 523.7, Code 2003, is amended to read as
 21 10 follows:
 21 11    523.7  STATEMENT OF STOCK OWNERSHIP FILED WITH
 21 12 COMMISSIONER.
 21 13    1.  Every person who is directly or indirectly the
 21 14 beneficial owner of more than ten percent of any class of any
 21 15 equity security of a domestic stock insurance company, or who
 21 16 is a director or an officer of such company, shall file in the
 21 17 office of the commissioner of insurance within ten days after
 21 18 the person becomes such beneficial owner, director or officer
 21 19 as prescribed by rule a statement, in such a form as the
 21 20 commissioner may prescribe, of the amount of all equity
 21 21 securities of such the company of which the person is the
 21 22 beneficial owner., and within ten days after the close of each
 21 23 calendar month thereafter
 21 24    2.  Within the time frame prescribed by rule, if there has
 21 25 been a change in such the ownership during such month a time
 21 26 period prescribed by rule, a person who is directly or
 21 27 indirectly the beneficial owner of more than ten percent of
 21 28 any class of any equity security of a domestic stock insurance
 21 29 company, or who is a director or an officer of such company,
 21 30 shall file in the office of the commissioner a statement, in
 21 31 such a form as the commissioner may prescribe, indicating the
 21 32 person's ownership at the close of the calendar month time
 21 33 period prescribed by rule and such any changes in the person's
 21 34 ownership as have occurred during such calendar month the time
 21 35 period prescribed by rule.
 22  1    Sec. 47.  Sections 511.30, 515.78, and 518A.43, Code 2003,
 22  2 are repealed.
 22  3    Sec. 48.  EFFECTIVE DATE AND RETROACTIVE APPLICABILITY.
 22  4 This section and the sections of this Act amending sections
 22  5 513C.10, subsection 1, paragraph "a", and subsection 6, being
 22  6 deemed of immediate importance, take effect upon enactment,
 22  7 and apply retroactively to July 1, 1995.  
 22  8                           DIVISION II
 22  9    Sec. 49.  NEW SECTION.  505A.1  INTERSTATE INSURANCE
 22 10 PRODUCT REGULATION COMPACT.
 22 11    The interstate insurance product regulation compact is
 22 12 hereby entered into and enacted into law with all
 22 13 jurisdictions legally joining therein, in the form
 22 14 substantially as follows:  
 22 15                      ARTICLE I – PURPOSES
 22 16    The purposes of this compact are, through means of joint
 22 17 and cooperative action among the compacting states:
 22 18    1.  To promote and protect the interest of consumers of
 22 19 individual and group annuity, life insurance, disability
 22 20 income and long-term care insurance products.
 22 21    2.  To develop uniform standards for insurance products
 22 22 covered under this compact.
 22 23    3.  To establish a central clearinghouse to receive and
 22 24 provide prompt review of insurance products covered under the
 22 25 compact and, in certain cases, advertisements related thereto,
 22 26 submitted by insurers authorized to do business in one or more
 22 27 compacting states.
 22 28    4.  To give appropriate regulatory approval to those
 22 29 product filings and advertisements satisfying the applicable
 22 30 uniform standard.
 22 31    5.  To improve coordination of regulatory resources and
 22 32 expertise between state insurance departments regarding the
 22 33 setting of uniform standards and review of insurance products
 22 34 covered under this compact.
 22 35    6.  To create the interstate insurance product regulation
 23  1 commission.
 23  2    7.  To perform these and such other related functions as
 23  3 may be consistent with the state regulation of the business of
 23  4 insurance.  
 23  5                    ARTICLE II – DEFINITIONS
 23  6    For purposes of this compact, unless the context otherwise
 23  7 requires:
 23  8    1.  "Advertisement" means any material designed to create
 23  9 public interest in a product, or induce the public to
 23 10 purchase, increase, modify, reinstate, borrow on, surrender,
 23 11 replace or retain a policy, as more specifically defined in
 23 12 the rules and operating procedures of the commission.
 23 13    2.  "Bylaws" means those bylaws established by the
 23 14 commission for its governance, or for directing or controlling
 23 15 the commission's actions or conduct.
 23 16    3.  "Commission" means the interstate insurance product
 23 17 regulation commission established by this compact.
 23 18    4.  "Commissioner" means the chief insurance regulatory
 23 19 official of a state including, but not limited to,
 23 20 commissioner, superintendent, director, or administrator.
 23 21    5.  "Compacting state" means any state that has enacted
 23 22 this compact legislation and that has not withdrawn pursuant
 23 23 to article XIV, section 1, or been terminated pursuant to
 23 24 article XIV, section 2.
 23 25    6.  "Domiciliary state" means the state in which an insurer
 23 26 is incorporated or organized, or, in the case of an alien
 23 27 insurer, its state of entry.
 23 28    7.  "Insurer" means any entity licensed by a state to issue
 23 29 contracts of insurance for any of the lines of insurance
 23 30 covered by this compact.
 23 31    8.  "Member" means the person chosen by a compacting state
 23 32 as its representative to the commission, or the person's
 23 33 designee.
 23 34    9.  "Noncompacting state" means any state which is not at
 23 35 the time a compacting state.
 24  1    10.  "Operating procedures" means procedures promulgated by
 24  2 the commission implementing a rule, uniform standard, or a
 24  3 provision of this compact.
 24  4    11.  "Product" means the form of a policy or contract,
 24  5 including any application, endorsement, or related form which
 24  6 is attached to and made a part of the policy or contract, and
 24  7 any evidence of coverage or certificate, for an individual or
 24  8 group annuity, life insurance, disability income, or long-term
 24  9 care insurance product that an insurer is authorized to issue.
 24 10    12.  "Rule" means a statement of general or particular
 24 11 applicability and future effect promulgated by the commission,
 24 12 including a uniform standard developed pursuant to article
 24 13 VII, designed to implement, interpret, or prescribe law or
 24 14 policy, or describing the organization, procedure, or practice
 24 15 requirements of the commission, which shall have the force and
 24 16 effect of law in the compacting states.
 24 17    13.  "State" means any state, district, or territory of the
 24 18 United States of America.
 24 19    14.  "Third-party filer" means an entity that submits a
 24 20 product filing to the commission on behalf of an insurer.
 24 21    15.  "Uniform standard" means a standard adopted by the
 24 22 commission for a product line, pursuant to article VII, and
 24 23 shall include all of the product requirements in aggregate,
 24 24 provided that each uniform standard shall be construed,
 24 25 whether express or implied, to prohibit the use of any
 24 26 inconsistent, misleading, or ambiguous provisions in a
 24 27 product, and the form of the product made available to the
 24 28 public shall not be unfair, inequitable, or against public
 24 29 policy as determined by the commission.  
 24 30    ARTICLE III – ESTABLISHMENT OF THE COMMISSION AND VENUE
 24 31    1.  The compacting states hereby create and establish an
 24 32 entity known as the interstate insurance product regulation
 24 33 commission.  Pursuant to article IV, the commission has the
 24 34 power to develop uniform standards for product lines, receive
 24 35 and provide prompt review of products filed therewith, and
 25  1 give approval to those product filings satisfying applicable
 25  2 uniform standards, provided it is not intended for the
 25  3 commission to be the exclusive entity for receipt and review
 25  4 of insurance product filings.  Nothing herein shall prohibit
 25  5 any insurer from filing its product in any state wherein the
 25  6 insurer is licensed to conduct the business of insurance, and
 25  7 any such filing shall be subject to the laws of the state
 25  8 where filed.
 25  9    2.  The commission is a body corporate comprising each
 25 10 compacting state.
 25 11    3.  The commission is a not-for-profit entity, separate and
 25 12 distinct from the individual compacting states.
 25 13    4.  The commission is solely responsible for its
 25 14 liabilities except as otherwise specifically provided in this
 25 15 compact.
 25 16    5.  Venue is proper and judicial proceedings by or against
 25 17 the commission shall be brought solely and exclusively in a
 25 18 court of competent jurisdiction where the principal office of
 25 19 the commission is located.  
 25 20             ARTICLE IV – POWERS OF THE COMMISSION
 25 21    The commission shall have the following powers:
 25 22    1.  To promulgate rules, pursuant to article VII, which
 25 23 shall have the force and effect of law and shall be binding in
 25 24 the compacting states to the extent and in the manner provided
 25 25 in this compact.
 25 26    2.  To exercise its rulemaking authority and establish
 25 27 reasonable uniform standards for products covered under this
 25 28 compact, and advertisement related thereto, which shall have
 25 29 the force and effect of law and shall be binding in the
 25 30 compacting states, but only for those products filed with the
 25 31 commission, provided that a compacting state shall have the
 25 32 right to opt out of such uniform standard pursuant to article
 25 33 VII, to the extent and in the manner provided in this compact,
 25 34 and, provided further, that any uniform standard established
 25 35 by the commission for long-term care insurance products may
 26  1 provide the same or greater protections for consumers as, but
 26  2 shall not provide less than, those protections set forth in
 26  3 the national association of insurance commissioners' long-term
 26  4 care insurance model act and long-term care insurance model
 26  5 regulation, respectively, adopted as of 2001.  The commission
 26  6 shall consider whether any subsequent amendments to the long-
 26  7 term care insurance model act or long-term care insurance
 26  8 model regulation adopted by the national association of
 26  9 insurance commissioners require amending of the uniform
 26 10 standards established by the commission for long-term care
 26 11 insurance products.
 26 12    3.  To receive and review in an expeditious manner products
 26 13 filed with the commission, and rate filings for disability
 26 14 income and long-term care insurance products, and give
 26 15 approval of those products and rate filings that satisfy the
 26 16 applicable uniform standard, where such approval shall have
 26 17 the force and effect of law, and be binding on the compacting
 26 18 states to the extent and in the manner provided in the
 26 19 compact.
 26 20    4.  To receive and review in an expeditious manner
 26 21 advertisement relating to long-term care insurance products
 26 22 for which uniform standards have been adopted by the
 26 23 commission, and give approval to all advertisement that
 26 24 satisfies the applicable uniform standard.  For any product
 26 25 covered under this compact, other than long-term care
 26 26 insurance products, the commission shall have the authority to
 26 27 require an insurer to submit all or any part of its
 26 28 advertisement with respect to that product for review or
 26 29 approval prior to use, if the commission determines that the
 26 30 nature of the product is such that an advertisement of the
 26 31 product could have the capacity or tendency to mislead the
 26 32 public.  The actions of the commission as provided in this
 26 33 article shall have the force and effect of law and shall be
 26 34 binding in the compacting states to the extent and in the
 26 35 manner provided in this compact.
 27  1    5.  To exercise its rulemaking authority and designate
 27  2 products and advertisement that may be subject to a self-
 27  3 certification process without the need for prior approval by
 27  4 the commission.
 27  5    6.  To promulgate operating procedures, pursuant to article
 27  6 VII, which shall be binding in the compacting states to the
 27  7 extent and in the manner provided in this compact.
 27  8    7.  To bring and prosecute legal proceedings or actions in
 27  9 its name as the commission, provided that the standing of any
 27 10 state insurance department to sue or be sued under applicable
 27 11 law shall not be affected.
 27 12    8.  To issue subpoenas requiring the attendance and
 27 13 testimony of witnesses and the production of evidence.
 27 14    9.  To establish and maintain offices.
 27 15    10.  To purchase and maintain insurance and bonds.
 27 16    11.  To borrow, accept, or contract for services of
 27 17 personnel, including, but not limited to, employees of a
 27 18 compacting state.
 27 19    12.  To hire employees, professionals, or specialists, and
 27 20 elect or appoint officers, and to fix their compensation,
 27 21 define their duties, and give them appropriate authority to
 27 22 carry out the purposes of this compact, and determine their
 27 23 qualifications, and to establish the commission's personnel
 27 24 policies and programs relating to, among other things,
 27 25 conflicts of interest, rates of compensation, and
 27 26 qualifications of personnel.
 27 27    13.  To accept any and all appropriate donations and grants
 27 28 of money, equipment, supplies, materials, and services, and to
 27 29 receive, utilize, and dispose of the same, provided that at
 27 30 all times the commission shall strive to avoid any appearance
 27 31 of impropriety.
 27 32    14.  To lease, purchase, accept appropriate gifts or
 27 33 donations of, or otherwise to own, hold, improve, or use, any
 27 34 property, real, personal, or mixed, provided that at all times
 27 35 the commission shall strive to avoid any appearance of
 28  1 impropriety.
 28  2    15.  To sell, convey, mortgage, pledge, lease, exchange,
 28  3 abandon, or otherwise dispose of any property, real, personal,
 28  4 or mixed.
 28  5    16.  To remit filing fees to compacting states as may be
 28  6 set forth in the bylaws, rules, or operating procedures.
 28  7    17.  To enforce compliance by compacting states with rules,
 28  8 uniform standards, operating procedures, and bylaws.
 28  9    18.  To provide for dispute resolution among compacting
 28 10 states.
 28 11    19.  To advise compacting states on issues relating to
 28 12 insurers domiciled or doing business in noncompacting
 28 13 jurisdictions, consistent with the purposes of this compact.
 28 14    20.  To provide advice and training to those personnel in
 28 15 state insurance departments responsible for product review,
 28 16 and to be a resource for state insurance departments.
 28 17    21.  To establish a budget and make expenditures.
 28 18    22.  To borrow money.
 28 19    23.  To appoint committees, including advisory committees
 28 20 comprising members, state insurance regulators, state
 28 21 legislators or their representatives, insurance industry and
 28 22 consumer representatives, and such other interested persons as
 28 23 may be designated in the bylaws.
 28 24    24.  To provide and receive information from, and to
 28 25 cooperate with, law enforcement agencies.
 28 26    25.  To adopt and use a corporate seal.
 28 27    26.  To perform such other functions as may be necessary or
 28 28 appropriate to achieve the purposes of this compact consistent
 28 29 with the state regulation of the business of insurance.  
 28 30           ARTICLE V – ORGANIZATION OF THE COMMISSION
 28 31    1.  MEMBERSHIP, VOTING, AND BYLAWS.
 28 32    a.  Each compacting state shall have and be limited to one
 28 33 member.  Each member shall be qualified to serve in that
 28 34 capacity pursuant to applicable law of the compacting state.
 28 35 Any member may be removed or suspended from office as provided
 29  1 by the law of the state from which the member is appointed.
 29  2 Any vacancy occurring in the commission shall be filled in
 29  3 accordance with the laws of the compacting state wherein the
 29  4 vacancy exists.  Nothing herein shall be construed to affect
 29  5 the manner in which a compacting state determines the election
 29  6 or appointment and qualification of its own commissioner.
 29  7    b.  Each member shall be entitled to one vote and shall
 29  8 have an opportunity to participate in the governance of the
 29  9 commission in accordance with the bylaws.  Notwithstanding any
 29 10 provision herein to the contrary, no action of the commission
 29 11 with respect to the promulgation of a uniform standard shall
 29 12 be effective unless two-thirds of the members vote in favor
 29 13 thereof.
 29 14    c.  The commission shall, by a majority of the members,
 29 15 prescribe bylaws to govern its conduct as may be necessary or
 29 16 appropriate to carry out the purposes, and exercise the
 29 17 powers, of the compact, including, but not limited to:
 29 18    (1)  Establishing the fiscal year of the commission.
 29 19    (2)  Providing reasonable procedures for appointing and
 29 20 electing members, as well as holding meetings, of the
 29 21 management committee.
 29 22    (3)  Providing reasonable standards and procedures:
 29 23    (a)  For the establishment of other committees.
 29 24    (b)  Governing any general or specific delegation of any
 29 25 authority or function of the commission.
 29 26    (4)  Providing reasonable procedures for calling and
 29 27 conducting meetings of the commission, and ensuring reasonable
 29 28 notice of each such meeting.
 29 29    (5)  Establishing the titles, duties, and authority, and
 29 30 reasonable procedures for the election of the officers of the
 29 31 commission.
 29 32    (6)  Providing reasonable standards and procedures for the
 29 33 establishment of the personnel policies and programs of the
 29 34 commission.  Notwithstanding any civil service or other
 29 35 similar laws of any compacting state, the bylaws shall
 30  1 exclusively govern the personnel policies and programs of the
 30  2 commission.
 30  3    (7)  Providing a mechanism for winding up the operations of
 30  4 the commission and the equitable disposition of any surplus
 30  5 funds that may exist after the termination of this compact
 30  6 after the payment or reserving of all of its debts and
 30  7 obligations.
 30  8    2.  MANAGEMENT COMMITTEE, OFFICERS, AND PERSONNEL.
 30  9    a.  A management committee comprising no more than fourteen
 30 10 members shall be established as follows:
 30 11    (1)  One member from each of the six compacting states with
 30 12 the largest premium volume for individual and group annuities,
 30 13 life, disability income, and long-term care insurance
 30 14 products, determined from the records of the national
 30 15 association of insurance commissioners for the prior year.
 30 16    (2)  Four members from those compacting states with at
 30 17 least two percent of the market based on the premium volume
 30 18 described in subparagraph (1), other than the six compacting
 30 19 states with the largest premium volume, selected on a rotating
 30 20 basis as provided in the bylaws.
 30 21    (3)  Four members from those compacting states with less
 30 22 than two percent of the market, based on the premium volume
 30 23 described subparagraph (1), with one selected from each of the
 30 24 four zone regions of the national association of insurance
 30 25 commissioners as provided in the bylaws.
 30 26    b.  The management committee shall have such authority and
 30 27 duties as may be set forth in the bylaws, including but not
 30 28 limited to:
 30 29    (1)  Managing the affairs of the commission in a manner
 30 30 consistent with the bylaws and purposes of the commission.
 30 31    (2)  Establishing and overseeing an organizational
 30 32 structure within, and appropriate procedures for, the
 30 33 commission to provide for the creation of uniform standards
 30 34 and other rules, receipt and review of product filings,
 30 35 administrative and technical support functions, review of
 31  1 decisions regarding the disapproval of a product filing, and
 31  2 the review of elections made by a compacting state to opt out
 31  3 of a uniform standard, provided that a uniform standard shall
 31  4 not be submitted to the compacting states for adoption unless
 31  5 approved by two-thirds of the members of the management
 31  6 committee.
 31  7    (3)  Overseeing the offices of the commission.
 31  8    (4)  Planning, implementing, and coordinating
 31  9 communications and activities with other state, federal, and
 31 10 local government organizations in order to advance the goals
 31 11 of the commission.
 31 12    c.  The commission shall elect annually officers from the
 31 13 management committee, with each having such authority and
 31 14 duties, as may be specified in the bylaws.
 31 15    d.  The management committee may, subject to the approval
 31 16 of the commission, appoint or retain an executive director for
 31 17 such period, upon such terms and conditions and for such
 31 18 compensation as the commission may deem appropriate.  The
 31 19 executive director shall serve as secretary to the commission,
 31 20 but shall not be a member of the commission.  The executive
 31 21 director shall hire and supervise such other staff as may be
 31 22 authorized by the commission.
 31 23    3.  LEGISLATIVE AND ADVISORY COMMITTEES.
 31 24    a.  A legislative committee comprising state legislators or
 31 25 their designees shall be established to monitor the operations
 31 26 of, and make recommendations to, the commission, including the
 31 27 management committee, provided that the manner of selection
 31 28 and term of any legislative committee member shall be as set
 31 29 forth in the bylaws.  Prior to the adoption by the commission
 31 30 of any uniform standard, revision to the bylaws, annual
 31 31 budget, or other significant matter as may be provided in the
 31 32 bylaws, the management committee shall consult with and report
 31 33 to the legislative committee.
 31 34    b.  The commission shall establish two advisory committees,
 31 35 one of which shall comprise consumer representatives
 32  1 independent of the insurance industry, and the other
 32  2 comprising insurance industry representatives.
 32  3    c.  The commission may establish additional advisory
 32  4 committees as its bylaws may provide for the carrying out of
 32  5 its functions.
 32  6    4.  CORPORATE RECORDS OF THE COMMISSION.  The commission
 32  7 shall maintain its corporate books and records in accordance
 32  8 with the bylaws.
 32  9    5.  QUALIFIED IMMUNITY, DEFENSE, AND INDEMNIFICATION.
 32 10    a.  The members, officers, executive director, employees,
 32 11 and representatives of the commission shall be immune from
 32 12 suit and liability, either personally or in their official
 32 13 capacity, for any claim for damage to, or loss of, property,
 32 14 personal injury, or other civil liability caused by or arising
 32 15 out of any actual or alleged act, error, or omission that
 32 16 occurred, or that the person against whom the claim is made
 32 17 had a reasonable basis for believing occurred, within the
 32 18 scope of commission employment, duties, or responsibilities,
 32 19 provided that nothing in this paragraph shall be construed to
 32 20 protect any such person from suit or liability for any damage,
 32 21 loss, injury, or liability caused by the intentional or
 32 22 willful and wanton misconduct of that person.
 32 23    b.  The commission shall defend any member, officer,
 32 24 executive director, employee, or representative of the
 32 25 commission in any civil action seeking to impose liability
 32 26 arising out of any actual or alleged act, error, or omission
 32 27 that occurred within the scope of commission employment,
 32 28 duties, or responsibilities, or that the person against whom
 32 29 the claim is made had a reasonable basis for believing
 32 30 occurred within the scope of commission employment, duties, or
 32 31 responsibilities, provided that nothing herein shall be
 32 32 construed to prohibit that person from retaining the person's
 32 33 own counsel; and, provided further, that the actual or alleged
 32 34 act, error, or omission did not result from that person's
 32 35 intentional or willful and wanton misconduct.
 33  1    c.  The commission shall indemnify and hold harmless any
 33  2 member, officer, executive director, employee, or
 33  3 representative of the commission for the amount of any
 33  4 settlement or judgment obtained against that person arising
 33  5 out of any actual or alleged act, error, or omission that
 33  6 occurred within the scope of commission employment, duties, or
 33  7 responsibilities, or that such person had a reasonable basis
 33  8 for believing occurred within the scope of commission
 33  9 employment, duties, or responsibilities, provided that the
 33 10 actual or alleged act, error, or omission did not result from
 33 11 the intentional or willful and wanton misconduct of that
 33 12 person.  
 33 13        ARTICLE VI – MEETINGS AND ACTS OF THE COMMISSION
 33 14    1.  The commission shall meet and take such actions as are
 33 15 consistent with the provisions of this compact and the bylaws.
 33 16    2.  Each member of the commission shall have the right and
 33 17 power to cast a vote to which that compacting state is
 33 18 entitled and to participate in the business and affairs of the
 33 19 commission.  A member shall vote in person or by such other
 33 20 means as provided in the bylaws.  The bylaws may provide for
 33 21 members' participation in meetings by telephone or other means
 33 22 of communication.
 33 23    3.  The commission shall meet at least once during each
 33 24 calendar year.  Additional meetings shall be held as set forth
 33 25 in the bylaws.  
 33 26        ARTICLE VII – RULES AND OPERATING PROCEDURES – 
 33 27           RULEMAKING FUNCTIONS OF THE COMMISSION AND
 33 28                 OPTING OUT OF UNIFORM STANDARDS
 33 29    1.  RULEMAKING AUTHORITY.  The commission shall promulgate
 33 30 reasonable rules, including uniform standards and operating
 33 31 procedures, in order to effectively and efficiently achieve
 33 32 the purposes of this compact.  Notwithstanding the foregoing,
 33 33 in the event the commission exercises its rulemaking authority
 33 34 in a manner that is beyond the scope of the purposes of this
 33 35 compact, or the powers granted hereunder, such an action by
 34  1 the commission shall be invalid and have no force and effect.
 34  2    2.  RULEMAKING PROCEDURE.  Rules and operating procedures
 34  3 shall be made pursuant to a rulemaking process that conforms
 34  4 to the model state administrative procedure act, as may be
 34  5 appropriate to the operations of the commission.  Before the
 34  6 commission adopts a uniform standard, the commission shall
 34  7 give written notice to the relevant state legislative
 34  8 committee or committees in each compacting state responsible
 34  9 for insurance issues of its intention to adopt the uniform
 34 10 standard.
 34 11    3.  EFFECTIVE DATE AND OPT OUT OF A UNIFORM STANDARD.  A
 34 12 uniform standard shall become effective ninety days after its
 34 13 promulgation by the commission or such later date as the
 34 14 commission may determine, provided, however, that a compacting
 34 15 state may opt out of a uniform standard as provided in this
 34 16 article.  "Opt out" means any action by a compacting state to
 34 17 decline to adopt or participate in a promulgated uniform
 34 18 standard.  All other rules and operating procedures, and
 34 19 amendments thereto, shall become effective as of the date
 34 20 specified in each rule, operating procedure, or amendment.
 34 21    4.  OPT-OUT PROCEDURE.  A compacting state may opt out of a
 34 22 uniform standard, either by legislation or regulation duly
 34 23 promulgated by the insurance department under the compacting
 34 24 state's administrative procedure act.  If a compacting state
 34 25 elects to opt out of a uniform standard by regulation, it must
 34 26 do all of the following:
 34 27    a.  Give written notice to the commission no later than ten
 34 28 business days after the uniform standard is promulgated, or at
 34 29 the time the state becomes a compacting state.
 34 30    b.  Find that the uniform standard does not provide
 34 31 reasonable protections to the citizens of the state, given the
 34 32 conditions in the state.
 34 33    The commissioner shall make specific findings of fact and
 34 34 conclusions of law, based on a preponderance of the evidence,
 34 35 detailing the conditions in the state which warrant a
 35  1 departure from the uniform standard and determining that the
 35  2 uniform standard would not reasonably protect the citizens of
 35  3 the state.  The commissioner must consider and balance the
 35  4 following factors and find that the conditions in the state
 35  5 and needs of the citizens of the state outweigh both of the
 35  6 following:
 35  7    (1)  The intent of the legislature to participate in, and
 35  8 the benefits of, an interstate agreement to establish national
 35  9 uniform consumer protections for the products subject to this
 35 10 compact.
 35 11    (2)  The presumption that a uniform standard adopted by the
 35 12 commission provides reasonable protections to consumers of the
 35 13 relevant product.
 35 14    Notwithstanding the foregoing, a compacting state may, at
 35 15 the time of its enactment of this compact, prospectively opt
 35 16 out of all uniform standards involving long-term care
 35 17 insurance products by expressly providing for such opt out in
 35 18 the enacted compact, and such an opt out shall not be treated
 35 19 as a material variance in the offer or acceptance of any state
 35 20 to participate in this compact.  Such an opt out shall be
 35 21 effective at the time of enactment of this compact by the
 35 22 compacting state and shall apply to all existing uniform
 35 23 standards involving long-term care insurance products and
 35 24 those subsequently promulgated.
 35 25    5.  EFFECT OF OPT OUT.  If a compacting state elects to opt
 35 26 out of a uniform standard, the uniform standard shall remain
 35 27 applicable in the compacting state electing to opt out until
 35 28 such time the opt-out legislation is enacted into law or the
 35 29 regulation opting out becomes effective.
 35 30    Once the opt out of a uniform standard by a compacting
 35 31 state becomes effective, as provided under the laws of that
 35 32 state, the uniform standard shall have no further force and
 35 33 effect in that state unless and until the legislation or
 35 34 regulation implementing the opt out is repealed or otherwise
 35 35 becomes ineffective under the laws of the state.  If a
 36  1 compacting state opts out of a uniform standard after the
 36  2 uniform standard has been made effective in that state, the
 36  3 opt out shall have the same prospective effect as provided
 36  4 under article XIV for withdrawals.  
 36  5       ARTICLE VIII – COMMISSION RECORDS AND ENFORCEMENT
 36  6    1.  The commission shall promulgate rules to establish
 36  7 conditions and procedures under which the commission shall
 36  8 make its information and official records available to the
 36  9 public for inspection or copying.  The commission may
 36 10 promulgate additional rules under which it may make available
 36 11 to federal and state agencies, including law enforcement
 36 12 agencies, records, and information otherwise exempt from
 36 13 disclosure, and may enter into agreements with such agencies
 36 14 to receive or exchange information or records subject to
 36 15 nondisclosure and confidentiality provisions.
 36 16    2.  Except as to privileged records, data, and information,
 36 17 the laws of any compacting state pertaining to confidentiality
 36 18 or nondisclosure shall not relieve any compacting state
 36 19 commissioner of the duty to disclose any relevant records,
 36 20 data, or information to the commission, provided that
 36 21 disclosure to the commission shall not be deemed to waive or
 36 22 otherwise affect any confidentiality requirement, and further
 36 23 provided that, except as otherwise expressly provided in this
 36 24 compact, the commission shall not be subject to the compacting
 36 25 state's laws pertaining to confidentiality and nondisclosure
 36 26 with respect to records, data, and information in its
 36 27 possession.  Confidential information of the commission shall
 36 28 remain confidential after such information is provided to any
 36 29 commissioner.
 36 30    3.  The commission shall monitor compacting states for
 36 31 compliance with duly adopted bylaws, rules, including uniform
 36 32 standards, and operating procedures.  The commission shall
 36 33 notify any noncomplying compacting state in writing of its
 36 34 noncompliance with commission bylaws, rules, or operating
 36 35 procedures.  If a noncomplying compacting state fails to
 37  1 remedy its noncompliance within the time specified in the
 37  2 notice of noncompliance, the compacting state shall be deemed
 37  3 to be in default as set forth in article XIV.
 37  4    4.  The commissioner of any state in which an insurer is
 37  5 authorized to do business, or is conducting the business of
 37  6 insurance, shall continue to exercise the commissioner's
 37  7 authority to oversee the market regulation of the activities
 37  8 of the insurer in accordance with the provisions of the
 37  9 state's law.  The commissioner's enforcement of compliance
 37 10 with the compact is governed by the following provisions:
 37 11    a.  With respect to the commissioner's market regulation of
 37 12 a product or advertisement that is approved or certified to
 37 13 the commission, no activity of an insurer shall constitute a
 37 14 violation of the provisions, standards, or requirements of
 37 15 this compact except upon a final order of the commission,
 37 16 issued at the request of a commissioner after prior notice to
 37 17 the insurer and an opportunity for hearing before the
 37 18 commission.
 37 19    b.  Before a commissioner may bring an action for violation
 37 20 of any provision, standard, or requirement of this compact
 37 21 relating to the use of an advertisement not approved or
 37 22 certified to the commission, the commission, or an authorized
 37 23 commission officer or employee, must authorize the action.
 37 24 However, authorization pursuant to this paragraph does not
 37 25 require notice to the insurer, opportunity for hearing, or
 37 26 disclosure of requests for authorization or records of the
 37 27 commission's action on such requests.
 37 28    5.  STAY OF UNIFORM STANDARD.  If a compacting state has
 37 29 formally initiated the process of opting out of a uniform
 37 30 standard by regulation, and while the regulatory opt out is
 37 31 pending, the compacting state may petition the commission, at
 37 32 least fifteen days before the effective date of the uniform
 37 33 standard, to stay the effectiveness of the uniform standard in
 37 34 that state.  The commission may grant a stay if it determines
 37 35 the regulatory opt out is being pursued in a reasonable manner
 38  1 and there is a likelihood of success.  If a stay is granted or
 38  2 extended by the commission, the stay or extension thereof may
 38  3 postpone the effective date by up to ninety days, unless
 38  4 affirmatively extended by the commission, provided a stay may
 38  5 not be permitted to remain in effect for more than one year
 38  6 unless the compacting state can show extraordinary
 38  7 circumstances which warrant a continuance of the stay,
 38  8 including, but not limited to, the existence of a legal
 38  9 challenge which prevents the compacting state from opting out.
 38 10 A stay may be terminated by the commission upon notice that
 38 11 the rulemaking process has been terminated.
 38 12    6.  Not later than thirty days after a rule or operating
 38 13 procedure is adopted, any person may file a petition for
 38 14 judicial review of the rule or operating procedure, provided
 38 15 that the filing of such a petition shall not stay or otherwise
 38 16 prevent the rule or operating procedure from becoming
 38 17 effective unless the court finds that the petitioner has a
 38 18 substantial likelihood of success.  The court shall give
 38 19 deference to the actions of the commission consistent with
 38 20 applicable law and shall not find the rule or operating
 38 21 procedure to be unlawful if the rule or operating procedure
 38 22 represents a reasonable exercise of the commission's
 38 23 authority.  
 38 24                ARTICLE IX – DISPUTE RESOLUTION
 38 25    The commission shall attempt, upon the request of a member,
 38 26 to resolve any disputes or other issues which are subject to
 38 27 this compact and which may arise between two or more
 38 28 compacting states, or between compacting states and
 38 29 noncompacting states, and the commission shall promulgate an
 38 30 operating procedure providing for resolution of such disputes.  
 38 31            ARTICLE X – PRODUCT FILING AND APPROVAL
 38 32    1.  Insurers and third-party filers seeking to have a
 38 33 product approved by the commission shall file the product
 38 34 with, and pay applicable filing fees to, the commission.
 38 35 Nothing in this compact shall be construed to restrict or
 39  1 otherwise prevent an insurer from filing its product with the
 39  2 insurance department in any state wherein the insurer is
 39  3 licensed to conduct the business of insurance, and such filing
 39  4 shall be subject to the laws of the states where filed.
 39  5    2.  The commission shall establish appropriate filing and
 39  6 review processes and procedures pursuant to commission rules
 39  7 and operating procedures.  Notwithstanding any provision
 39  8 herein to the contrary, the commission shall promulgate rules
 39  9 to establish conditions and procedures under which the
 39 10 commission will provide public access to product filing
 39 11 information.  In establishing such rules, the commission shall
 39 12 consider the interests of the public in having access to such
 39 13 information, as well as protection of personal medical and
 39 14 financial information and trade secrets, that may be contained
 39 15 in a product filing or supporting information.
 39 16    3.  Any product approved by the commission may be sold or
 39 17 otherwise issued in those compacting states in which the
 39 18 insurer is legally authorized to do business.  
 39 19          ARTICLE XI – REVIEW OF COMMISSION DECISIONS
 39 20                        REGARDING FILINGS
 39 21    1.  Not later than thirty days after the commission has
 39 22 given notice of a disapproved product or advertisement filed
 39 23 with the commission, the insurer or third-party filer whose
 39 24 filing was disapproved may appeal the determination to a
 39 25 review panel appointed by the commission.  The commission
 39 26 shall adopt rules to establish procedures for appointing such
 39 27 review panels and provide for notice and hearing.  The
 39 28 decision of the review panel shall be the final action of the
 39 29 commission and not subject to review by any court.
 39 30 Notwithstanding the foregoing, an allegation that the
 39 31 commission, in disapproving a product or advertisement filed
 39 32 with the commission, acted arbitrarily, capriciously, or in a
 39 33 manner that is an abuse of discretion or otherwise not in
 39 34 accordance with the law, is subject to judicial review in
 39 35 accordance with article III, section 5.
 40  1    2.  The commission shall have authority to monitor, review,
 40  2 and reconsider products and advertisement subsequent to their
 40  3 filing or approval upon a finding that the product does not
 40  4 meet the relevant uniform standard.  Where appropriate, the
 40  5 commission may withdraw or modify its approval after proper
 40  6 notice and hearing, subject to the appeal process in section
 40  7 1.  
 40  8                     ARTICLE XII – FINANCE
 40  9    1.  The commission shall pay or provide for the payment of
 40 10 the reasonable expenses of its establishment and organization.
 40 11 To fund the cost of its initial operations, the commission may
 40 12 accept contributions and other forms of funding from the
 40 13 national association of insurance commissioners, compacting
 40 14 states, and other sources.  Contributions and other forms of
 40 15 funding from other sources shall be of such a nature that the
 40 16 independence of the commission concerning the performance of
 40 17 its duties shall not be compromised.
 40 18    2.  The commission shall collect a filing fee from each
 40 19 insurer and third-party filer filing a product with the
 40 20 commission to cover the cost of the operations and activities
 40 21 of the commission and its staff in a total amount sufficient
 40 22 to cover the commission's annual budget.
 40 23    3.  The commission's budget for a fiscal year shall not be
 40 24 approved until it has been subject to notice and comment as
 40 25 set forth in article VII.
 40 26    4.  The commission shall be exempt from all taxation in and
 40 27 by the compacting states.
 40 28    5.  The commission shall not pledge the credit of any
 40 29 compacting state, except by and with the appropriate legal
 40 30 authority of that compacting state.
 40 31    6.  The commission shall keep complete and accurate
 40 32 accounts of all its internal receipts, including grants and
 40 33 donations, and disbursements of all funds under its control.
 40 34 The internal financial accounts of the commission shall be
 40 35 subject to the accounting procedures established under its
 41  1 bylaws.  The financial accounts and reports, including the
 41  2 system of internal controls and procedures of the commission,
 41  3 shall be audited annually by an independent certified public
 41  4 accountant.  Upon the determination of the commission, but no
 41  5 less frequently than every three years, the review of the
 41  6 independent auditor shall include a management and performance
 41  7 audit of the commission.  The commission shall make an annual
 41  8 report to the governor and legislature of the compacting
 41  9 states, which shall include a report of the independent audit.
 41 10 The commission's internal accounts, any work papers related to
 41 11 any internal audit, and any work papers related to the
 41 12 independent audit, shall be confidential, provided that such
 41 13 materials may be shared with the commissioner of any
 41 14 compacting state and shall remain confidential pursuant to
 41 15 article VII.
 41 16    7.  A compacting state shall not have any claim to or
 41 17 ownership of any property held by or vested in the commission
 41 18 or to any commission funds held pursuant to the provisions of
 41 19 this compact.  
 41 20               ARTICLE XIII – COMPACTING STATES,
 41 21                  EFFECTIVE DATE, AND AMENDMENT
 41 22    1.  Any state is eligible to become a compacting state.
 41 23    2.  This compact shall become effective and binding upon
 41 24 legislative enactment of this compact into law by two
 41 25 compacting states, provided the commission shall become
 41 26 effective for purposes of adopting uniform standards for
 41 27 reviewing, and giving approval or disapproval of, products
 41 28 filed with the commission that satisfy applicable uniform
 41 29 standards only after twenty-six states are compacting states
 41 30 or, alternatively, by states representing greater than forty
 41 31 percent of the premium volume for life insurance, annuity,
 41 32 disability income, and long-term care insurance products,
 41 33 based on records of the national association of insurance
 41 34 commissioners for the prior year.  Thereafter, it shall become
 41 35 effective and binding as to any other compacting state upon
 42  1 enactment of this compact into law by that state.
 42  2    3.  Amendments to this compact may be proposed by the
 42  3 commission for enactment by the compacting states.  An
 42  4 amendment shall not become effective and binding upon the
 42  5 commission and the compacting states unless and until all
 42  6 compacting states enact the amendment into law.  
 42  7       ARTICLE XIV – WITHDRAWAL, DEFAULT, AND TERMINATION
 42  8    1.  WITHDRAWAL.
 42  9    a.  Once effective, this compact shall continue in force
 42 10 and remain binding upon each and every compacting state,
 42 11 provided that a compacting state may withdraw from this
 42 12 compact by enacting a statute specifically repealing the
 42 13 statute which enacted the compact into law.
 42 14    b.  The effective date of withdrawal is the effective date
 42 15 of the repealing statute.  However, the withdrawal shall not
 42 16 apply to any product filings approved or self-certified, or
 42 17 any advertisement of such products, on the date the repealing
 42 18 statute becomes effective, except by mutual agreement of the
 42 19 commission and the withdrawing state unless the approval is
 42 20 rescinded by the withdrawing state as provided in paragraph
 42 21 "e".
 42 22    c.  The commissioner of the withdrawing state shall
 42 23 immediately notify the management committee in writing upon
 42 24 the introduction of legislation repealing this compact in the
 42 25 withdrawing state.
 42 26    d.  The commission shall notify the other compacting states
 42 27 of the introduction of such legislation within ten days after
 42 28 its receipt of notice.
 42 29    e.  The withdrawing state is responsible for all
 42 30 obligations, duties, and liabilities incurred through the
 42 31 effective date of withdrawal, including any obligations, the
 42 32 performance of which extend beyond the effective date of
 42 33 withdrawal, except to the extent those obligations may have
 42 34 been released or relinquished by mutual agreement of the
 42 35 commission and the withdrawing state.  The commission's
 43  1 approval of products and advertisement prior to the effective
 43  2 date of withdrawal shall continue to be effective and be given
 43  3 full force and effect in the withdrawing state, unless
 43  4 formally rescinded by the withdrawing state in the same manner
 43  5 as provided by the laws of the withdrawing state for the
 43  6 prospective disapproval of products or advertisement
 43  7 previously approved under state law.
 43  8    f.  Reinstatement following withdrawal of any compacting
 43  9 state shall occur upon the effective date of the withdrawing
 43 10 state reenacting the compact.
 43 11    2.  DEFAULT.
 43 12    a.  If the commission determines that any compacting state
 43 13 has at any time defaulted in the performance of any of its
 43 14 obligations or responsibilities under this compact, the bylaws
 43 15 or duly promulgated rules or operating procedures, then, after
 43 16 notice and hearing as set forth in the bylaws, all rights,
 43 17 privileges, and benefits conferred by this compact on the
 43 18 defaulting state shall be suspended from the effective date of
 43 19 default as fixed by the commission.  The grounds for default
 43 20 include, but are not limited to, failure of a compacting state
 43 21 to perform its obligations or responsibilities, and any other
 43 22 grounds designated in commission rules.  The commission shall
 43 23 immediately notify the defaulting state in writing of the
 43 24 defaulting state's suspension, pending a cure of the default.
 43 25 The commission shall stipulate the conditions and the time
 43 26 period within which the defaulting state must cure its
 43 27 default.  If the defaulting state fails to cure the default
 43 28 within the time period specified by the commission, the
 43 29 defaulting state shall be terminated from this compact and all
 43 30 rights, privileges, and benefits conferred by this compact
 43 31 shall be terminated from the effective date of termination.
 43 32    b.  Product approvals by the commission or product self-
 43 33 certifications, or any advertisement in connection with such
 43 34 product, that are in force on the effective date of
 43 35 termination shall remain in force in the defaulting state in
 44  1 the same manner as if the defaulting state had withdrawn
 44  2 voluntarily pursuant to section 1.
 44  3    c.  Reinstatement following termination of any compacting
 44  4 state requires a reenactment of this compact.
 44  5    3.  DISSOLUTION OF COMPACT.
 44  6    a.  This compact dissolves effective upon the date of the
 44  7 withdrawal or default of the compacting state which reduces
 44  8 membership in this compact to one compacting state.
 44  9    b.  Upon the dissolution of this compact, this compact
 44 10 becomes null and void and shall be of no further force or
 44 11 effect, and the business and affairs of the commission shall
 44 12 be wound up and any surplus funds shall be distributed in
 44 13 accordance with the bylaws.  
 44 14           ARTICLE XV – SEVERABILITY AND CONSTRUCTION
 44 15    1.  The provisions of this compact shall be severable, and
 44 16 if any phrase, clause, sentence, or provision is deemed
 44 17 unenforceable, the remaining provisions of this compact shall
 44 18 be enforceable.
 44 19    2.  The provisions of this compact shall be liberally
 44 20 construed to effectuate its purposes.  
 44 21     ARTICLE XVI – BINDING EFFECT OF COMPACT AND OTHER LAWS
 44 22    1.  OTHER LAWS.
 44 23    a.  Nothing herein prevents the enforcement of any other
 44 24 law of a compacting state, except as provided in paragraph
 44 25 "b".
 44 26    b.  For any product approved or certified to the
 44 27 commission, the rules, uniform standards, and any other
 44 28 requirements of the commission shall constitute the exclusive
 44 29 provisions applicable to the content, approval, and
 44 30 certification of such products.  For advertisement that is
 44 31 subject to the commission's authority, any rule, uniform
 44 32 standard, or other requirement of the commission which governs
 44 33 the content of the advertisement shall constitute the
 44 34 exclusive provision that a commissioner may apply to the
 44 35 content of the advertisement.  Notwithstanding the foregoing,
 45  1 action taken by the commission shall not abrogate or restrict:
 45  2    (1)  The access of any person, including the attorney
 45  3 general, to state courts.
 45  4    (2)  Remedies available under state law related to breach
 45  5 of contract, tort, or other laws not specifically directed to
 45  6 the content of the product.
 45  7    (3)  State law relating to the construction of insurance
 45  8 contracts.
 45  9    c.  All insurance products filed with individual states
 45 10 shall be subject to the laws of those states.
 45 11    2.  BINDING EFFECT OF THIS COMPACT.
 45 12    a.  All lawful actions of the commission, including all
 45 13 rules and operating procedures adopted by the commission, are
 45 14 binding upon the compacting states.
 45 15    b.  All agreements between the commission and the
 45 16 compacting states are binding in accordance with their terms.
 45 17    c.  Upon the request of a party to a conflict over the
 45 18 meaning or interpretation of commission actions, and upon a
 45 19 majority vote of the compacting states, the commission may
 45 20 issue advisory opinions regarding the meaning or
 45 21 interpretation in dispute.
 45 22    d.  In the event any provision of this compact exceeds the
 45 23 constitutional limits imposed on the legislature of any
 45 24 compacting state, the obligations, duties, powers, or
 45 25 jurisdiction sought to be conferred by that provision upon the
 45 26 commission shall be ineffective as to that compacting state,
 45 27 and those obligations, duties, powers, or jurisdiction shall
 45 28 remain in the compacting state and shall be exercised by the
 45 29 agency thereof to which those obligations, duties, powers, or
 45 30 jurisdiction are delegated by law in effect at the time this
 45 31 compact becomes effective.  
 45 32                           EXPLANATION
 45 33    This bill makes numerous changes throughout the various
 45 34 Code chapters that comprise the insurance code.
 45 35    The bill amends Code sections 505.8, 507B.3, 514J.7, and
 46  1 515D.10 to require the commissioner to keep information
 46  2 obtained through investigations and hearings confidential.
 46  3 However, Code section 505.8 permits the commissioner to share
 46  4 information with other regulatory or governmental agencies, or
 46  5 to publish information regarding statutory, rule, or order
 46  6 violations.  The commissioner may also adopt rules to protect
 46  7 the privacy of information submitted to the insurance
 46  8 division.
 46  9    The bill adds new Code section 505.24 to restrict certain
 46 10 actions by a consumer reporting agency regarding the reuse or
 46 11 sale of information about a consumer the agency has obtained
 46 12 in the course of an insurance inquiry about the consumer.
 46 13    New paragraphs are added to Code sections 507A.4 and
 46 14 514B.33 to provide that foreign or domestic multiple employee
 46 15 welfare arrangements, more commonly known as MEWAs and limited
 46 16 service organizations doing business in Iowa shall pay fees
 46 17 under the schedule in Code section 511.24.
 46 18    Code language regarding annual filing requirements for
 46 19 financial statements in Code sections 508.11, 514B.12, 515.63,
 46 20 and 518.15 is amended to provide that the filing is due on or
 46 21 before the first day of March, rather than by the first day of
 46 22 March, and also allows the commissioner to designate a
 46 23 depository for filing other than the commissioner's office.
 46 24    The bill adds a new provision to Code section 508.31A
 46 25 regarding funding agreements for payments to be made at future
 46 26 dates.  Specifically, the new provision permits such
 46 27 agreements to be issued to a person other than a natural
 46 28 person for the purpose of providing collateral security for
 46 29 registered securities issued by that person.
 46 30    A new subsection is added to Code section 509A.15 that
 46 31 grants an exemption from the requirements of that Code section
 46 32 to certain self-insured plans by political subdivisions or
 46 33 school corporations.
 46 34    Code section 510A.2, regarding the definitions for the Code
 46 35 chapter for property and casualty insurance, is amended by
 47  1 striking the definition of "producer" and adding a definition
 47  2 of "insurance producer".  Related changes are made in other
 47  3 sections of Code chapter 510A.
 47  4    New paragraphs are added to Code section 511.8, subsection
 47  5 20, and section 515.35, subsection 4, paragraph "m", to refer
 47  6 to the definition of "venture capital fund" in Code chapter
 47  7 15E.
 47  8    Code sections 511.27, 512B.33, 514B.3, 515.73, 515E.3, and
 47  9 521C.3 are amended pertaining to agreements to the
 47 10 commissioner's status as the registered agent for service of
 47 11 process for various foreign and domestic companies doing
 47 12 insurance business in the state.  Code section 514.2A adds a
 47 13 new section requiring such an agreement for nonprofit health
 47 14 service corporations.  In some instances, the changes expand
 47 15 the scope of the Code language to require such agreements by
 47 16 domestic entities as well as foreign entities.  In most
 47 17 instances, the changes also update existing Code language.
 47 18    New Code section 511.40 creates an insurable interest in
 47 19 the lives of active or retired employees for an employer and a
 47 20 trust established by the employer for the benefit of the
 47 21 employer or for the benefit of the active and retired
 47 22 employees.  The employees may be insured on an individual or
 47 23 group basis.  An employer must obtain consent from the
 47 24 employee prior to obtaining insurance, including an
 47 25 acknowledgement that the coverage may continue even after the
 47 26 employee is no longer employed by the employer.  "Employee"
 47 27 includes officers, managers, directors, shareholders,
 47 28 partners, members, proprietors, or other owners, but for the
 47 29 nonmanagement employees, the amount of coverage must be
 47 30 reasonably related to the benefit provided.
 47 31    The bill amends Code section 513C.7 to reference expressly
 47 32 medical assistance provided under Code chapter 514I.
 47 33    The bill amends Code section 513C.10 regarding calculation
 47 34 of assessments for the Iowa individual health benefit
 47 35 reinsurance association, and also addresses which insurers are
 48  1 members of the association.
 48  2    The bill revises Code section 514J.10, relating to external
 48  3 review of health care decisions, to provide that the
 48  4 commissioner shall prepare an annual report with summary
 48  5 information, rather than requiring each carrier to file a
 48  6 report.
 48  7    The bill provides, in Code section 514J.13, that the
 48  8 commissioner shall not be named as a defendant in petitions
 48  9 filed for judicial review of an independent review decision
 48 10 unless the petition alleges the actions in the external review
 48 11 process fall within those permitted by Code section 17A.19,
 48 12 subsection 10.  The bill also divides the existing language in
 48 13 Code section 514J.13 into subsections.
 48 14    The bill provides, in Code section 515.92, that a company
 48 15 may only write or place a policy or contract for insurance
 48 16 upon property located in this state through a licensed
 48 17 producer authorized to do business in this state.  The bill
 48 18 also makes grammatical changes, and divides the existing
 48 19 language in Code section 515.92 into subsections.
 48 20    The bill updates existing Code language in Code sections
 48 21 515.133 and 515.134, makes grammatical changes, and divides
 48 22 the existing language in Code section 515.133 into
 48 23 subsections.
 48 24    The bill amends the definition of "claimant" in Code
 48 25 section 515B.2 to include the claims against the insured of an
 48 26 insolvent insurer.
 48 27    An exception is added to Code section 515B.8 regarding
 48 28 certain causes of action the insolvent insurer would have had.
 48 29    Code section 515B.9, regarding nonduplication of recovery
 48 30 in claims covered by the insurance guaranty association, is
 48 31 rewritten to exclude consideration of any obligation of the
 48 32 insurance guaranty association as other insurance, when a
 48 33 claim under another policy alleges the same damages.  The Code
 48 34 section now also expressly addresses policies that provide
 48 35 coverage for joint and several liability.
 49  1    A three-year statute of limitations following the date of
 49  2 the order of liquidation is added to Code section 515B.16
 49  3 regarding claims brought against the insurance guaranty
 49  4 association.
 49  5    Twenty-day notice provisions regarding mailings prior to an
 49  6 effective date of cancellation are changed to 30 days in Code
 49  7 sections 515D.5, 518.23, and 518A.29.
 49  8    A filing requirement in Code section 523.7 for beneficial
 49  9 ownership is replaced with the commissioner's authority to
 49 10 prescribe the filing requirements by rule.  Grammatical
 49 11 changes are also made to the existing Code language, and it is
 49 12 also divided into subsections.
 49 13    In division II, the bill adds the interstate insurance
 49 14 product regulation compact as new Code chapter 505A.  The
 49 15 compact is intended, in part, to create the nonprofit
 49 16 interstate insurance product regulation commission and to
 49 17 develop uniform standards for certain insurance products.
 49 18 Each compacting state is entitled to one member on the
 49 19 commission.  Procedures are set forth for filing insurance
 49 20 products with the commission and obtaining commission
 49 21 approval.  The compact becomes effective and binding upon
 49 22 legislative enactment by two states; the approval process for
 49 23 insurance products, however, requires 26 compacting states as
 49 24 members representing greater than 40 percent of the premium
 49 25 volume for life insurance, annuity, disability income, and
 49 26 long-term care insurance products.
 49 27    The bill repeals Code sections 511.30, 515.78, and 518A.43.
 49 28 Code section 511.30 relates to the use of intoxication as a
 49 29 defense in an action on an insurance policy.  Code section
 49 30 515.78 relates to an agent's certificate of authority.  Code
 49 31 section 518A.43 relates to the cancellation of an insurance
 49 32 producer's license.
 49 33    The bill contains a provision regarding retroactive
 49 34 applicability to July 1, 1995, with respect to the amendments
 49 35 to Code section 513C.10, regarding the Iowa individual health
 50  1 benefit reinsurance association.  Those provisions and the
 50  2 retroactive applicability provision are also subject to an
 50  3 immediate effective date provision.  
 50  4 LSB 1046DP 80
 50  5 jj/sh/8.1
     

Text: HSB00195                          Text: HSB00197
Text: HSB00100 - HSB00199               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

© 2003 Cornell College and League of Women Voters of Iowa

Comments about this site or page? webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.

Last update: Wed Feb 26 02:30:23 CST 2003
URL: /DOCS/GA/80GA/Legislation/HSB/00100/HSB00196/030225.html
jhf