House File 2383 - Enrolled

PAG LIN



  1  1                                             HOUSE FILE 2383
  1  2
  1  3                             AN ACT
  1  4 MAKING NONSUBSTANTIVE CORRECTIONS TO CERTAIN PROVISIONS
  1  5    RELATING TO INSURANCE AND MAKING REPEALS.
  1  6
  1  7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1  8
  1  9    Section 1.  Section 507B.4, subsection 2, paragraph c, Code
  1 10 Supplement 2007, is amended to read as follows:
  1 11    c.  STATEMENT OF CAPITAL AND SURPLUS.  In the case of a
  1 12 foreign company transacting the business of casualty insurance
  1 13 in the state, or an officer, producer, or representative of
  1 14 such a company, issuing or publishing an advertisement, public
  1 15 announcement, sign, circular, or card that purports to
  1 16 disclose the company's financial standing and fails to
  1 17 exhibit:  the capital actually paid in cash, and the amount of
  1 18 net surplus of assets over all the company's liabilities
  1 19 actually held and available for the payment of losses by fire
  1 20 and for the protection of holders of fire policies; and the
  1 21 amount of net surplus of assets over all liabilities in the
  1 22 United States actually available for the payment of losses by
  1 23 fire and held in the United States for the protection of
  1 24 holders of fire policies in the United States, including in
  1 25 such liabilities the fund reserved for reinsurance of
  1 26 outstanding risks.  The amounts stated for capital and net
  1 27 surplus shall correspond with the latest verified statement
  1 28 made by the company or association to the commissioner of
  1 29 insurance.  Such a company shall not write, place, or cause to
  1 30 be written or placed, a policy or contract for insurance on
  1 31 property situated or located in this state except through a
  1 32 licensed producer authorized to do business in this state.
  1 33    Sec. 2.  Section 510.21, unnumbered paragraph 2, Code
  1 34 Supplement 2007, is amended to read as follows:
  1 35    An application for registration shall be accompanied by a
  2  1 filing fee of one hundred dollars.  After notice and hearing,
  2  2 the commissioner may impose any or all of the sanctions set
  2  3 out in section 507B.7, upon finding that either the
  2  4 third=party administrator violated any of the requirements of
  2  5 section 515.145 and sections 510.1A 510.12 through 510.20 and
  2  6 this section, or the third=party administrator is not
  2  7 competent, trustworthy, financially responsible, or of good
  2  8 personal and business reputation.
  2  9    Sec. 3.  Section 515.1, Code 2007, is amended to read as
  2 10 follows:
  2 11    515.1  APPLICABILITY.
  2 12    Corporations formed for the purpose of insurance, other
  2 13 than life insurance, shall be governed by the provisions of
  2 14 chapter 490, chapter 491, or chapter 504, except as modified
  2 15 by the provisions of this chapter.  The provisions of this
  2 16 chapter relative to insurance companies shall apply to all
  2 17 such companies, partnerships, associations, or individuals,
  2 18 except those associations governed by the provisions of
  2 19 chapter 518 or 518A, companies governed by the provisions of
  2 20 chapter 508 or 514, societies governed by the provisions of
  2 21 chapter 512B, and organizations governed by the provisions of
  2 22 chapter 514B, whether incorporated or not.
  2 23    Sec. 4.  NEW SECTION.  515.11A  TRANSFER OF STOCK.
  2 24    Transfers of stock made by any stockholder or the
  2 25 stockholder's legal representative shall be subject to the
  2 26 provisions of chapters 491 and 492 relative to transfer of
  2 27 shares, and to such restrictions as the directors shall
  2 28 establish in their bylaws, except as hereinafter provided.
  2 29    Sec. 5.  Section 515.73, Code Supplement 2007, is amended
  2 30 to read as follows:
  2 31    515.73  ADDITIONAL STATEMENTS == IMPAIRED CAPITAL.
  2 32    Such Any company desiring to transact the business of
  2 33 insurance under this chapter shall also file with the
  2 34 commissioner a certified copy of its charter or deed of
  2 35 settlement, together with a statement under oath of the
  3  1 president or vice president or other chief officer and the
  3  2 secretary of the company for which they may act, stating the
  3  3 name of the company, the place where located, the amount of
  3  4 its capital, with a detailed statement of the facts and items
  3  5 required from companies organized under the laws of this
  3  6 state, and a copy of the last annual report, if any, made
  3  7 under any law of the state by which such company was
  3  8 incorporated; and no agent shall be allowed to transact
  3  9 business for any company whose capital is impaired by
  3 10 liabilities as specified in this chapter to the extent of
  3 11 twenty percent thereof, while such deficiency shall continue.
  3 12    Sec. 6.  Section 515.120, Code Supplement 2007, is amended
  3 13 to read as follows:
  3 14    515.120  BUSINESS WITH NONADMITTED INSURERS.
  3 15    This chapter does not prevent a licensed resident or
  3 16 nonresident agent producer of this state, qualified to write
  3 17 excess and surplus lines insurance, from procuring insurance
  3 18 in certain nonadmitted insurers if such insurance is
  3 19 restricted to the type and kind of insurance authorized by
  3 20 this chapter, excluding insurance authorized under section
  3 21 515.48, subsection 5, paragraph "a", and the agent producer
  3 22 makes oath to the commissioner of insurance in the form
  3 23 prescribed by the commissioner that the agent producer has
  3 24 made diligent effort to place the insurance in authorized
  3 25 insurers and has either exhausted the capacity of all
  3 26 authorized insurers or has been unable to obtain the desired
  3 27 insurance in insurers licensed to transact business in this
  3 28 state.  The procuring of a contract of insurance in a
  3 29 nonadmitted insurer makes the insurer liable for, and the
  3 30 agent producer shall pay, the taxes on the premiums as if the
  3 31 insurer were duly authorized to transact business in the
  3 32 state.  A sworn report of all business transacted by agents
  3 33 producers of this state in nonadmitted insurers shall be made
  3 34 to the commissioner of insurance on or before March 1 of each
  3 35 year for the preceding calendar year, on the form required by
  4  1 the commissioner of insurance.  The report shall be
  4  2 accompanied by a remittance to cover the taxes on the
  4  3 premiums.  An agent A producer who makes the oath, pays the
  4  4 taxes on the premiums, and files the report has not written
  4  5 such contracts of insurance unlawfully, and is not personally
  4  6 liable for the contracts.
  4  7    Sec. 7.  Section 515.121, Code Supplement 2007, is amended
  4  8 to read as follows:
  4  9    515.121  ADMINISTRATIVE PENALTY.
  4 10    1.  An excess and surplus lines insurance agent that
  4 11 producer who fails to timely file the report required in
  4 12 section 515.120 is in violation of this section and shall pay
  4 13 an administrative penalty of five hundred dollars to the
  4 14 treasurer of state for deposit in the general fund of the
  4 15 state as provided in section 505.7.
  4 16    2.  The commissioner shall refuse to renew the license of
  4 17 an agent that a producer who fails to comply with the
  4 18 provisions of section 515.120 and this section and the agent's
  4 19 producer's right to transact new business in this state shall
  4 20 immediately cease until the agent producer has so complied.
  4 21    3.  The commissioner may give notice to an agent a producer
  4 22 that the agent producer has not timely filed the report
  4 23 required under section 515.120 and is in violation of this
  4 24 section.  If the agent producer fails to file the required
  4 25 report within ten days of the date of the notice, the agent
  4 26 producer shall pay an additional administrative penalty of one
  4 27 hundred dollars for each day that the failure continues to the
  4 28 treasurer of state for deposit in the general fund of the
  4 29 state as provided in section 505.7.
  4 30    Sec. 8.  Section 515.122, subsection 1, Code Supplement
  4 31 2007, is amended to read as follows:
  4 32    1.  An insurance producer shall not knowingly place
  4 33 insurance, either directly or through an intermediary broker,
  4 34 in with insurers who are insolvent or unsound financially; and
  4 35 shall not place or renew insurance with nonadmitted insurers
  5  1 found by the commissioner of insurance to have failed or
  5  2 refused to furnish, in the manner provided in subsection 2,
  5  3 information reasonably showing the ability or willingness of
  5  4 the insurers to satisfy obligations undertaken with respect to
  5  5 insurance issued by them.
  5  6    Sec. 9.  Section 515.125, Code Supplement 2007, is amended
  5  7 to read as follows:
  5  8    515.125  FORFEITURE OF POLICIES == NOTICE.
  5  9    1.  A policy or contract of insurance, unless Unless
  5 10 otherwise provided in section 515.127 or 515.128, a policy or
  5 11 contract of insurance provided for in this chapter shall not
  5 12 be forfeited, suspended, or canceled except by notice to the
  5 13 insured as provided in this chapter.  A notice of cancellation
  5 14 is not effective unless mailed or delivered by the insurer to
  5 15 the named insured at least thirty days before the effective
  5 16 date of cancellation, or, where cancellation is for nonpayment
  5 17 of a premium, assessment, or installment provided for in the
  5 18 policy, or in a note or contract for the payment thereof, at
  5 19 least ten days prior to the date of cancellation.  The notice
  5 20 may be made in person, or by sending by mail a letter
  5 21 addressed to the insured at the insured's address as given in
  5 22 or upon the policy, anything in the policy, application, or a
  5 23 separate agreement to the contrary notwithstanding.
  5 24    2.  An insurer shall not fail to renew a policy except by
  5 25 notice to the insured as provided in this chapter.  A notice
  5 26 of intention not to renew is not effective unless mailed or
  5 27 delivered by the insurer to the named insured at least thirty
  5 28 days prior to the expiration date of the policy.  A notice of
  5 29 intention not to renew is not required if the insured is
  5 30 transferred from an insurer to an affiliate for future
  5 31 coverage as a result of a merger, acquisition, or company
  5 32 restructuring and if the transfer results in the same or
  5 33 broader coverage.
  5 34    3.  If the reason does not accompany the notice of
  5 35 cancellation or nonrenewal, the insurer shall, upon receipt of
  6  1 a timely request by the named insured, state in writing the
  6  2 reason for cancellation or nonrenewal.
  6  3    Sec. 10.  Section 515.129, subsection 3, unnumbered
  6  4 paragraph 1, Code Supplement 2007, is amended to read as
  6  5 follows:
  6  6    An umbrella or excess insurance policy which has been
  6  7 renewed or which has been in effect for sixty or more days
  6  8 shall not be canceled by the insurer, except as provided in
  6  9 section 515.127, subsections 2 and 3, except by unless notice
  6 10 has been mailed or delivered to the insured as required by
  6 11 this section or unless at least one of the following
  6 12 conditions occurs:
  6 13    Sec. 11.  Section 515.130, Code Supplement 2007, is amended
  6 14 to read as follows:
  6 15    515.130  SHORT RATES.
  6 16    The commissioner of insurance shall prepare and promulgate
  6 17 tables of the short rates provided for in sections 515.125 and
  6 18 515.126 section 515.132, for the various kinds and classes of
  6 19 insurance governed by the provisions of this chapter, which,
  6 20 when promulgated, shall be for the guidance of all companies
  6 21 covered in this chapter and shall be the rate to be given in
  6 22 any notice therein required.  No company shall discriminate
  6 23 unfairly between like assureds in the rate or rates so
  6 24 provided.
  6 25    Sec. 12.  Section 515.138, Code Supplement 2007, is amended
  6 26 to read as follows:
  6 27    515.138  NOTICE OF LOSS OF PERSONAL PROPERTY BY HAIL.
  6 28    In case of loss or damage to growing crops by hail, notice
  6 29 of such loss or damage must be given to the company by the
  6 30 insured by mailing a certified mail letter within ten days
  6 31 from the time such loss or damage occurs.
  6 32    Sec. 13.  Section 515.141, subsection 1, Code Supplement
  6 33 2007, is amended to read as follows:
  6 34    1.  The commissioner of insurance is authorized to issue a
  6 35 subpoena for examination under oath, to any officer, agent, or
  7  1 employee of any company suspected of violating any of the
  7  2 provisions of section 515.140.
  7  3    Sec. 14.  Section 515.142, Code Supplement 2007, is amended
  7  4 to read as follows:
  7  5    515.142  TRANSFERS PENDING INVESTIGATION.
  7  6    Any transfer of the stock of any company organized under
  7  7 this chapter, made pending any investigation above required,
  7  8 shall not release the party making the transfer from any
  7  9 liability for losses which may have accrued previous to such
  7 10 transfer.
  7 11    Sec. 15.  Section 515.145, Code Supplement 2007, is amended
  7 12 to read as follows:
  7 13    515.145  REVOCATION OF AUTHORITY.
  7 14    If upon any examination, and that of or upon information
  7 15 obtained from any other witness produced and or examined, the
  7 16 commissioner determines that a company has violated section
  7 17 515.140, or if any officer, agent, or employee fails to appear
  7 18 or submit to examination after receiving a subpoena, the
  7 19 commissioner shall promptly issue an order revoking the
  7 20 authority of the company to transact business within this
  7 21 state, and the company shall not be permitted to do the
  7 22 business of insurance in this state for one year.
  7 23    Sec. 16.  Section 515.146, Code Supplement 2007, is amended
  7 24 to read as follows:
  7 25    515.146  CERTIFICATE REFUSED == ADMINISTRATIVE PENALTY.
  7 26    The commissioner of insurance shall withhold the
  7 27 commissioner's certificate or permission of authority to do
  7 28 business from a company neglecting or failing to comply with
  7 29 this chapter.  In addition, a company organized or authorized
  7 30 under this chapter which fails to file the annual statement
  7 31 referred to in section 515.63 in the time required shall pay
  7 32 and forfeit an administrative penalty in an amount of five
  7 33 hundred dollars to be collected in the name of the state for
  7 34 deposit in the general fund of the state as provided in
  7 35 section 505.7.  The company's right to transact further new
  8  1 business in this state shall immediately cease until the
  8  2 company has fully complied with this chapter.  The
  8  3 commissioner may give notice to a company which has failed to
  8  4 file within the time required that the company is in violation
  8  5 of this section and, if the company fails to file the evidence
  8  6 of investment and statement within ten days of the date of the
  8  7 notice, the company shall forfeit and pay the additional sum
  8  8 of one hundred dollars for each day the failure continues, to
  8  9 be paid to the treasurer of state for deposit in the general
  8 10 fund of the state as provided in section 505.7.
  8 11    Sec. 17.  Section 515.153, Code Supplement 2007, is amended
  8 12 to read as follows:
  8 13    515.153  INCRIMINATION.
  8 14    The statements and declarations made or testimony given by
  8 15 any such officer, agent, or employee in the investigation
  8 16 before the commissioner of insurance, or upon the hearing on
  8 17 the petition for judicial review, as provided in sections
  8 18 515.141, 515.145, and 515.152, shall not be used against the
  8 19 person making the same in any criminal prosecution against the
  8 20 person.
  8 21    Sec. 18.  Sections 515.62 and 515.64, Code 2007, are
  8 22 repealed.
  8 23    Sec. 19.  Section 515.107, Code Supplement 2007, is
  8 24 repealed.
  8 25
  8 26
  8 27                                                             
  8 28                               PATRICK J. MURPHY
  8 29                               Speaker of the House
  8 30
  8 31
  8 32                                                             
  8 33                               JOHN P. KIBBIE
  8 34                               President of the Senate
  8 35
  9  1    I hereby certify that this bill originated in the House and
  9  2 is known as House File 2383, Eighty=second General Assembly.
  9  3
  9  4
  9  5                                                             
  9  6                               MARK BRANDSGARD
  9  7                               Chief Clerk of the House
  9  8 Approved                , 2008
  9  9
  9 10
  9 11                            
  9 12 CHESTER J. CULVER
  9 13 Governor