CHAPTER 507B
INSURANCE TRADE PRACTICES

  507B.1  Declaration of purpose.
  The purpose of this chapter is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945, Pub. L. No. 79-15, 59 Stat. 33, codified at 15 U.S.C. §  1011 – 1015, by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.1]
2006 Acts, ch 1010, §135

  507B.2  Definitions.
  When used in this chapter:
  1.  “Person” shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, fraternal beneficiary association, and any other legal entity engaged in the business of insurance, including insurance producers and adjusters. “Person” shall also mean any corporation operating under the provisions of chapter 514 and any benevolent association as defined and operated under chapter 512A. For purposes of this chapter, corporations operating under the provisions of chapter 514 and chapter 512A shall be deemed to be engaged in the business of insurance.
  2.  “Commissioner” shall mean the commissioner of insurance of this state.
  3.  “Insurance policy” or “insurance contract” shall mean any contract of insurance, indemnity, subscription, membership, suretyship, or annuity issued, proposed for issuance, or intended for issuance by any person.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.2]
2004 Acts, ch 1110, §20

  507B.3  Unfair competition or unfair and deceptive acts or practices prohibited.
  A person shall not engage in this state in any trade practice which is defined in this chapter as, or determined pursuant to section 507B.6 to be, an unfair method of competition, or an unfair or deceptive act or practice in the business of insurance.
  1.  A person who violates a provision in chapter 508E shall be deemed to have committed an unfair trade practice under this chapter.
  2.  The issuance of a qualified charitable gift annuity as provided in chapter 508F does not constitute a trade practice in violation of this chapter.
[C58, 62, 66, 71, §507B.3, 507B.5; C73, 75, 77, 79, 81, §507B.3]
2001 Acts, ch 28, §1; 2003 Acts, ch 91, §5; 2004 Acts, ch 1110, §21; 2008 Acts, ch 1123, §12; 2008 Acts, ch 1155, §20

  507B.4  Unfair methods of competition and unfair or deceptive acts or practices defined.
  1.  For purposes of subsection 3, paragraph “p”, “insurer” means an entity providing a plan of health insurance, health care benefits, or health care services, or an entity subject to the jurisdiction of the commissioner performing utilization review, including an insurance company offering sickness and accident plans, a health maintenance organization, an organized delivery system authorized under 1993 Iowa Acts, ch. 158, and licensed by the department of public health, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services. However, “insurer” does not include an entity that sells disability income or long-term care insurance.
  2.  For purposes of subsection 3, paragraphs “k”, “l”, and “m”, “personal lines property and casualty insurance” means insurance sold to individuals and families primarily for noncommercial purposes as provided in chapter 522B.
  3.  The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:
  a.  Misrepresentations and false advertising of insurance policies.  Making, issuing, circulating, or causing to be made, issued or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which does any of the following:
  (1)  Misrepresents the benefits, advantages, conditions, or terms of any insurance policy.
  (2)  Misrepresents the dividends or share of the surplus to be received on any insurance policy.
  (3)  Makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy.
  (4)  Is misleading or is a misrepresentation as to the financial condition of any person, or as to the legal reserve system upon which any life insurer operates.
  (5)  Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof.
  (6)  Is a misrepresentation for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.
  (7)  Is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy.
  (8)  Misrepresents any insurance policy as being shares of stock.
  (9)  Misrepresents any insurance policy to consumers by using the terms “burial insurance”, “funeral insurance”, “burial plan”, or “funeral plan” in its names or titles, unless the policy is made with a funeral provider as beneficiary who specifies and fixes a price under contract with an insurance company. This subparagraph does not prevent insurers from stating or advertising that insurance benefits may provide cash for funeral or burial expenses.
  (10)  Is a misrepresentation, including any intentional misquote of premium rate, for the purpose of inducing or tending to induce the purchase of an insurance policy.
  b.  False information and advertising.
  (1)  Generally.  Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of the person’s insurance business, which is untrue, deceptive, or misleading.
  (2)  False statement of assets.  In the case of a company transacting the business of fire insurance within the state, stating or representing by advertisement in any newspaper, magazine, or periodical, or by any sign, circular, card, policy of insurance, or renewal certificate thereof or otherwise, that any funds or assets are in its possession and held available for the protection of holders of its policies unless so held, except the policy of insurance or certificate of renewal thereof may state, as a single item, the amount of capital set forth in the charter, or articles of incorporation, or association, or deed of settlement under which it is authorized to transact business.
  (3)  Statement of capital and surplus.  In the case of a foreign company transacting the business of casualty insurance in the state, or an officer, producer, or representative of such a company, issuing or publishing an advertisement, public announcement, sign, circular, or card that purports to disclose the company’s financial standing and fails to exhibit:  the capital actually paid in cash, and the amount of net surplus of assets over all the company’s liabilities actually held and available for the payment of losses by fire and for the protection of holders of fire policies; and the amount of net surplus of assets over all liabilities in the United States actually available for the payment of losses by fire and held in the United States for the protection of holders of fire policies in the United States, including in such liabilities the fund reserved for reinsurance of outstanding risks. The amounts stated for capital and net surplus shall correspond with the latest verified statement made by the company or association to the commissioner of insurance.
  c.  Defamation.  Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory to the financial condition of any person, and which is calculated to injure such person.
  d.  Boycott, coercion and intimidation.  Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.
  e.  False statements and entries.
  (1)  Knowingly filing with any supervisory or other public official, or knowingly making, publishing, disseminating, circulating or delivering to any person, or placing before the public, or knowingly causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement of fact as to the financial condition of a person.
  (2)  Knowingly making any false entry of a material fact in any book, report or statement of any person or knowingly omitting to make a true entry of any material fact pertaining to the business of such person in any book, report or statement of such person.
  f.  Stock operations and advisory board contracts.  Issuing or delivering or permitting agents, officers or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance.
  g.  Unfair discrimination.
  (1)  Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.
  (2)  Making or permitting any unfair discrimination between insureds of the same class for essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of insurance other than life or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever.
  (3)  Making or permitting any discrimination in the sale of insurance solely on the basis of domestic abuse as defined in section 236.2.
  h.  Release or use of genetic information.  Failure of a person to comply with section 729.6, subsection 4.
  i.  Rebates.
  (1)  Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any contract of life insurance, life annuity or accident and health insurance, or agreement as to such contract other than as plainly expressed in the contract issued thereon, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract; or giving, or selling, or purchasing or offering to give, sell, or purchase as inducement to such insurance or annuity or in connection therewith, any stocks, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or any thing of value whatsoever not specified in the contract.
  (2)  Nothing in paragraph “g” or subparagraph (1) of this paragraph “i” shall be construed as including within the definition of discrimination or rebates any of the following practices:
  (a)  In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise rebating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or rebatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders.
  (b)  In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expenses.
  (c)  Readjustment of the rate of premium for a group insurance policy based on the loss or expense experienced thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year.
  (3)  (a)  Paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as an inducement to purchase or acquire insurance other than life insurance, life annuity, or accident and health insurance, or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue on the policy, or any valuable consideration or inducement, not specified in the policy, except to the extent provided for in an applicable filing. An insured named in a policy, or an employee of the insured, shall not knowingly receive or accept, directly or indirectly, any rebate, discount, abatement, credit, or reduction of premium, or any such special favor or advantage or valuable consideration or inducement.
  (b)  This subparagraph (3) shall not be construed to prohibit the payment of commissions or other compensation to duly licensed producers, or to prohibit any insurer from allowing or returning to its participating policyholders, members, or subscribers, dividends, savings, or unabsorbed premium deposits. As used in this subparagraph (3), “insurance” includes suretyship and “policy” includes bond.
  j.  Unfair claim settlement practices.  Committing or performing with such frequency as to indicate a general business practice any of the following:
  (1)  Misrepresenting pertinent facts or insurance policy provisions relating to coverages of issue.
  (2)  Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.
  (3)  Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.
  (4)  Refusing to pay claims without conducting a reasonable investigation based upon all available information.
  (5)  Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.
  (6)  Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear, or failing to include interest on the payment of claims when required under paragraph “p” or section 511.38.
  (7)  Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.
  (8)  Attempting to settle a claim for less than the amount to which a reasonable person would have believed the person was entitled by reference to written or printed advertising material accompanying or made part of an application.
  (9)  Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured.
  (10)  Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made.
  (11)  Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.
  (12)  Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information.
  (13)  Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
  (14)  Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
  (15)  Failing to comply with the procedures for auditing claims submitted by health care providers as set forth by rule of the commissioner. However, this subparagraph shall have no applicability to liability insurance, workers’ compensation or similar insurance, automobile or homeowners’ medical payment insurance, disability income, or long-term care insurance.
  k.  Use of inquiries.  Considering either of the following events for purposes of surcharging, declining, nonrenewing, or canceling personal lines property and casualty insurance coverage or a binder for personal lines property and casualty insurance coverage:
  (1)  An applicant’s or insured’s inquiry into the type or level of coverage of a policy, or an inquiry into whether a policy will cover a loss.
  (2)  An insured’s inquiry regarding coverage of a policy for a loss if the insured does not file a claim.
  l.  History of a property.  Declining to insure a property not previously owned by an applicant for personal lines property and casualty insurance, based solely on the loss history of a previous owner of the property, unless the insurer can provide evidence that the previous owner did not repair damage to the property.
  m.  Disclosure of use of claims history.  Failing to inform an applicant at the time that an application for personal lines property and casualty insurance is made, in writing or in the same medium as the application is made, that the insurer will consider the applicant’s or insured’s claims history in determining whether to decline, cancel, nonrenew, or surcharge such a policy, and that a claim made by an insured will be reported to an insurance support organization.
  n.  Misrepresentation in insurance applications.  Making false or fraudulent statements or representations on or relative to an application for an insurance policy, for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual.
  o.  Omission from insurance application.  Failing to designate on an insurance policy application the licensee who has solicited and written the policy.
  p.  Payment of interest.  Failure of an insurer to pay interest at the rate of ten percent per annum on all health insurance claims that the insurer fails to timely accept and pay pursuant to section 507B.4A, subsection 2, paragraph “d”. Interest shall accrue commencing on the thirty-first day after receipt of all properly completed proof of loss forms.
  q.  Rating organizations.  Any violation of section 515F.16.
  r.  Minor traffic violations.  Failure of a person to comply with section 516B.3.
  s.  Information.  Failing or refusing to furnish any policyholder or applicant, upon reasonable request, information to which that individual is entitled.
[C97, §1782; S13, §1782, 1820-b; SS15, §1758-f; C24, 27, 31, 35, 39, §8666, 8759, 9022; C46, 50, 54, §508.23, 511.20, 515.144; C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.4]
85 Acts, ch 229, §1; 87 Acts, ch 65, §2; 87 Acts, ch 120, §7; 89 Acts, ch 321, §32; 90 Acts, ch 1234, §64; 92 Acts, ch 1162, §3; 93 Acts, ch 88, §4; 95 Acts, ch 185, §6; 2001 Acts, ch 69, §5 – 7, 39; 2001 Acts, ch 118, §15, 56; 2006 Acts, ch 1117, §23, 24; 2007 Acts, ch 152, §53, 54; 2008 Acts, ch 1074, §1; 2010 Acts, ch 1153, §1; 2012 Acts, ch 1023, §101

Section amended

  507B.4A  Duty to respond to inquiries and prompt payment of claim.
  1.  A person shall promptly respond to inquiries from the commissioner.
  a.  A person’s actions are deemed untimely under this subsection if the person fails to respond to an inquiry from the commissioner within thirty days of the receipt of the inquiry, unless good cause exists for delay.
  b.  Failure to respond to inquiries from the commissioner pursuant to this subsection with such frequency as to indicate a general business practice shall subject the person to penalty under this chapter.
  2.  a.  An insurer providing accident and sickness insurance under chapter 509, 514, or 514A; a health maintenance organization; an organized delivery system authorized under 1993 Iowa Acts, ch. 158, and licensed by the department of public health; or another entity providing health insurance or health benefits subject to state insurance regulation shall either accept and pay or deny a clean claim.
  b.  For purposes of this subsection, “clean claim” means a properly completed paper or electronic billing instrument containing all reasonably necessary information, that does not involve coordination of benefits for third-party liability, preexisting condition investigations, or subrogation, and that does not involve the existence of particular circumstances requiring special treatment that prevents a prompt payment from being made.
  c.  The commissioner shall adopt rules establishing processes for timely adjudication and payment of claims by insurers for health care benefits. The rules shall be consistent with the time frames and other procedural standards for claims decisions by group health plans established by the United States department of labor pursuant to 29 C.F.R. pt. 2560 in effect on January 1, 2002.
  d.  Payment of a clean claim shall include interest at the rate of ten percent per annum when an insurer or other entity as defined in this subsection that administers or processes claims on behalf of the insurer or other entity fails to timely pay a claim.
  e.  This subsection shall not apply to liability insurance, workers’ compensation or similar insurance, automobile or homeowners’ medical payment insurance, disability income, or long-term care insurance.
2001 Acts, ch 69, §8, 39; 2001 Acts, ch 176, §71

  507B.4B  Suitability.
  1.  A person shall not recommend to any individual the purchase, sale, or exchange of any annuity contract, or any rider, endorsement, or amendment thereto, unless the person has reasonable grounds to believe that the recommendation is suitable for the individual based on a reasonable inquiry into the individual’s financial status, investment objectives, and other relevant information.
  2.  A person engaged in the business of annuities shall establish and maintain a system to monitor recommendations made that is reasonably designed to achieve compliance with subsection 1.
  3.  The commissioner shall adopt rules pursuant to chapter 17A establishing procedures and standards for implementation of the suitability requirements of subsection 1.
2006 Acts, ch 1117, §25

  507B.5  Favored agent or insurer — coercion of debtors.
  1.  No person may do any of the following:
  a.  Require, as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom such money or credit is extended or whose obligation the creditor is to acquire or finance, negotiate any policy or contract of insurance through a particular insurer or group of insurers or agent or broker or group of agents or brokers.
  b.  Unreasonably disapprove the insurance policy provided by a borrower for the protection of the property securing the credit or lien.
  c.  Require directly or indirectly that any borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge, in connection with the handling of any insurance policy required as security for a loan on real estate, or pay a separate charge to substitute the insurance policy of one insurer for that of another.
  d.  Use or disclose information resulting from a requirement that a borrower, mortgagor or purchaser furnish insurance of any kind on real property being conveyed or used as collateral security to a loan, when such information is to the advantage of the mortgagee, vendor, or lender, or is to the detriment of the borrower, mortgagor, purchaser, insurer, or the agent or broker complying with such a requirement.
  2.  Subsection 1, paragraph “c” of this section does not include the interest which may be charged on premium loans or premium advancements in accordance with the security instrument.
  3.  For purposes of subsection 1, paragraph “b” of this section, such disapproval shall be deemed unreasonable if it is not based solely on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for the disapproval of an insurance policy because such policy contains coverage in addition to that required.
  4.  If a violation of this section is found, the person in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this chapter.
  5.  For purposes of this section, “person” includes any individual, corporation, association, partnership, or other legal entity.
[C73, 75, 77, 79, 81, §507B.5]

  507B.6  Hearings, witnesses appearances, production of books and service of process.
  1.  Whenever the commissioner believes that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice whether or not defined in section 507B.4, 507B.4A, or 507B.5 and that a proceeding by the commissioner in respect to such method of competition or unfair or deceptive act or practice would be in the public interest, the commissioner shall issue and serve upon such person a statement of the charges in that respect and a notice of a hearing on such charges to be held at a time and place fixed in the notice, which shall not be less than ten days after the date of the service of such notice.
  2.  At the time and place fixed for such hearing, such person shall have an opportunity to be heard and to show cause why an order should not be made by the commissioner requiring such person to cease and desist from the acts, methods or practices so complained of. Upon good cause shown, the commissioner shall permit any person to intervene, appear and be heard at such hearing by counsel or in person.
  3.  Nothing contained in this chapter shall require the observance at any such hearing of formal rules of pleading or evidence.
  4.  The commissioner, upon such hearing, may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, or other documents which the commissioner deems relevant to the inquiry. The commissioner, upon such hearing, may, and upon the request of any party shall, cause to be made a stenographic record of all the evidence and all the proceedings had at such hearing. If no stenographic record is made and if a judicial review is sought, the commissioner shall prepare a statement of the evidence and proceeding for use on review. In case of a refusal of any person to comply with any subpoena issued hereunder or to testify with respect to any matter concerning which the person may be lawfully interrogated, the district court of Polk county or the county where such party resides, on application of the commissioner, may issue an order requiring such person to comply with such subpoena and to testify; and any failure to obey any such order of the court may be punished by the court as a contempt thereof.
  5.  Statements of charges, notices, orders, subpoenas, and other processes of the commissioner under this chapter may be served by anyone authorized by the commissioner, either in the manner provided by law for service of process in civil actions, or by mailing a copy by restricted certified mail to the person affected by the statement, notice, order, subpoena, or other process at the person’s residence or principal office or place of business. The verified return by the person serving the statement, notice, order, subpoena, or other process, setting forth the manner of such service, shall be proof of service, and the return receipt for the statement, notice, order, subpoena, or other process, mailed by restricted certified mail, shall be proof of the service.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.6]
2001 Acts, ch 69, §9, 39; 2004 Acts, ch 1110, §22

  507B.6A  Summary cease and desist orders.
  1.  Upon a determination by the commissioner that a person or insurer has engaged, is engaging, or is about to engage in any act or practice constituting a violation of this chapter or a rule adopted or order issued under this chapter, the commissioner may issue a summary order, including a brief statement of findings of fact, conclusions of law, and policy reasons for the decision, and directing the person or insurer to cease and desist from engaging in the act or practice or to take other affirmative action as is in the judgment of the commissioner necessary to comply with the requirements of this chapter.
  2.  A person who has been issued a summary order under this section may contest the order by filing a request for a contested case proceeding and hearing as provided in chapter 17A and in accordance with the rules adopted by the commissioner. However, the person shall have at least thirty days from the date that the order is issued in order to file the request. Section 17A.18A is inapplicable to a summary order issued under this section. The order shall remain effective from the date of issuance unless overturned by a presiding officer or court following a request for hearing. If a hearing is not timely requested, the summary order becomes final by operation of law.
  3.  A person or insurer violating a summary order issued under this section shall be deemed in contempt of that order. The commissioner may petition the district court to enforce the order as certified by the commissioner. The district court shall adjudge the person in contempt of the order if the court finds after hearing that the person or insurer is not in compliance with the order. The court may assess a civil penalty against the person or insurer and may issue further orders as it deems appropriate.
2004 Acts, ch 1110, §23

  507B.7  Cease and desist orders and penalties.
  1.  If, after hearing, the commissioner determines that a person has engaged in an unfair method of competition or an unfair or deceptive act or practice, the commissioner shall reduce the findings to writing and shall issue and cause to be served upon the person charged with the violation a copy of such findings, an order requiring such person to cease and desist from engaging in such method of competition, act, or practice, and the commissioner may at the commissioner’s discretion order any one or more of the following:
  a.  Payment of a civil penalty of not more than one thousand dollars for each act or violation of this subtitle, but not to exceed an aggregate of ten thousand dollars, unless the person knew or reasonably should have known the person was in violation of this subtitle, in which case the penalty shall be not more than five thousand dollars for each act or violation, but not to exceed an aggregate penalty of fifty thousand dollars in any one six-month period. If the commissioner finds that a violation of this subtitle was directed, encouraged, condoned, ignored, or ratified by the employer of the person or by an insurer, the commissioner shall also assess a penalty to the employer or insurer.
  b.  Suspension or revocation of the license of a person as defined in section 507B.2, subsection 1, if the person knew or reasonably should have known the person was in violation of this subtitle.
  c.  Payment of interest at the rate of ten percent per annum if the commissioner finds that the insurer failed to pay interest as required under section 507B.4, subsection 3, paragraph “p”.
  2.  Until the expiration of the time allowed under section 507B.8 for filing a petition for review if no such petition has been duly filed within such time, or, if a petition for review has been filed within such time, then until the transcript of the record in the proceeding has been filed in the district court, as hereinafter provided, the commissioner may at any time, upon such notice and in such manner as the commissioner may deem proper, modify or set aside in whole or in part any order issued by the commissioner under this section.
  3.  After the expiration of the time allowed for filing such a petition for review if no such petition has been duly filed within such time, the commissioner may at any time, after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any order issued by the commissioner under this section, whenever in the commissioner’s opinion conditions of fact or of law have so changed as to require such action, or if the public interest shall so require.
  4.  Any person who violates a cease and desist order of the commissioner, and while such order is in effect, may, after notice and hearing and upon order of the commissioner, be subject at the discretion of the commissioner to any one or more of the following:
  a.  A monetary penalty of not more than ten thousand dollars for each and every act or violation. A penalty collected under this lettered paragraph shall be deposited as provided in section 505.7.
  b.  Suspension or revocation of such person’s license.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.7; 81 Acts, ch 165, §3]
2001 Acts, ch 69, §10, 39; 2004 Acts, ch 1110, §24; 2009 Acts, ch 181, §65; 2012 Acts, ch 1021, §97; 2012 Acts, ch 1023, §152

Subsection 1, paragraphs a and c amended

  507B.7A  Administrative hearings.
  Section 505.29 is applicable to hearings required by sections 507B.6, 507B.6A, and 507B.7.
2006 Acts, ch 1117, §26

  507B.8  Judicial review of cease and desist orders.
  Judicial review of the actions of the commissioner may be sought in accordance with the terms of the Iowa administrative procedure Act, chapter 17A. To the extent that an order of the commissioner is affirmed in any judicial review proceeding, the court shall thereupon issue its own order commanding obedience to the terms of such order of the commissioner.
  After the period for judicial review of an order of the commissioner has expired and no petition for judicial review has been filed, the attorney general upon request of the commissioner of insurance shall proceed in the Iowa district court to enforce an order of the commissioner. The court shall enter its order commanding obedience to the terms of the commissioner’s order.
  No order of the commissioner under this chapter or order of a court to enforce the same shall in any way relieve or absolve any person affected by such order from any liability under any other laws of this state.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.8; 82 Acts, ch 1003, §3]
2003 Acts, ch 44, §114

  507B.9  Sale of duplicate coverage prohibited.
  1.  A person shall not knowingly engage in the sale of duplicate Medicare supplement insurance coverage, as defined by rule of the commissioner.
  2.  The commissioner of insurance shall adopt rules pursuant to chapter 17A which define the sale of duplicate Medicare supplement insurance coverage.
[C81, §507B.9]
  507B.10  Repealed by 74 Acts, ch 1090, §  211. 

  507B.11  Penalty.  Repealed by 2004 Acts, ch 1110, §  71. 

  507B.12  Rules.
  The commissioner may, after notice and hearing, promulgate reasonable rules, as are necessary or proper to identify specific methods of competition or acts or practices which are prohibited by section 507B.4, 507B.4A, or 507B.5, but the rules shall not enlarge upon or extend the provisions of such sections. Such rules shall be subject to review in accordance with chapter 17A.
  The powers vested in the commissioner by this chapter shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices hereby declared to be unfair or deceptive.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.12]
2001 Acts, ch 69, §11, 39

  507B.13  Immunity from prosecution.
  If any person shall ask to be excused from attending and testifying or from producing any books, papers, records, correspondence or other documents at any hearing on the ground that the testimony or evidence required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture, and shall notwithstanding be directed to give such testimony or produce such evidence, the person must nonetheless comply with such direction, but the person shall not thereafter be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which the person may testify or produce evidence pursuant thereto, and no testimony so given or evidence produced shall be received against the person upon any criminal action, investigation or proceeding, provided, however, that no such individual so testifying shall be exempt from prosecution or punishment for any perjury committed by the individual while so testifying and the testimony or evidence so given or produced shall be admissible against the individual upon any criminal action, investigation or proceeding concerning such perjury, nor shall the individual be exempt from the refusal, revocation or suspension of any license, permission or authority conferred, or to be conferred, pursuant to the insurance law of this state. Any such individual may execute, acknowledge and file in the office of the commissioner a statement expressly waiving such immunity or privilege in respect to any transaction, matter or thing specified in such statement and thereupon the testimony of such person or such evidence in relation to such transaction, matter or thing may be received or produced before any judge or justice, court, tribunal, grand jury or otherwise, and if so received or produced such individual shall not be entitled to any immunity or privilege on account of any testimony the individual may so give or evidence so produced.
[C58, 62, 66, 71, 73, 75, 77, 79, 81, §507B.13]

  507B.14  Transfer of insurance stock.
  When a controlling interest in two or more corporations, at least one of which is an insurance company domiciled in this state, is held by any person, group of persons, firm, or corporation, no exchange of stock, transfer or sale of securities, or loan based upon securities of any such corporation shall take place between such corporations, or between such person, group of persons, firm or corporation and such corporations, without first securing the approval of the insurance commissioner. If, in the opinion of the insurance commissioner, such sale, transfer, exchange, or loan would be improper and would work to the detriment of any such insurance company, the commissioner shall have the power to prohibit the transaction. A person, firm, or corporate officer or director shall not aid such transaction without approval of the insurance commissioner. A person, firm, or other corporate officer or director who willfully violates this provision is guilty of a class “D” felony. A person, firm, or corporate officer or director who willfully violates this provision, and when such violation results in a loss of more than ten thousand dollars, is guilty of a class “C” felony.
  For purposes of this section, controlling interest means actual control or the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a firm, partnership, corporation, association, or trust, whether through the ownership of voting securities, by contract, or otherwise.
[C66, 71, 73, 75, 77, 79, 81, §507B.14]
2004 Acts, ch 1161, §66, 68