House File 2555 - Enrolled

PAG LIN



  1  1                                             HOUSE FILE 2555
  1  2
  1  3                             AN ACT
  1  4 RELATING TO VARIOUS MATTERS UNDER THE PURVIEW OF THE INSURANCE
  1  5    DIVISION OF THE DEPARTMENT OF COMMERCE INCLUDING UNIFORM
  1  6    SECURITIES; DUTIES OF THE INSURANCE DIVISION INCLUDING A
  1  7    CONSUMER ADVOCATE AND RATE REVIEWS; CONFIDENTIAL INFORMA-
  1  8    TION; EXAMINATIONS; INSURANCE TRADE PRACTICES; INSURANCE
  1  9    FRAUD; THE IOWA LIFE AND HEALTH INSURANCE GUARANTY ASSOCI-
  1 10    ATION; VIATICAL SETTLEMENT CONTRACTS; GENERAL AGENTS AND
  1 11    THIRD=PARTY ADMINISTRATORS; LIFE INSURANCE COMPANIES;
  1 12    HEALTH MAINTENANCE ORGANIZATIONS; UTILIZATION AND COST
  1 13    CONTROL; THE IOWA COMPREHENSIVE HEALTH INSURANCE
  1 14    ASSOCIATION; WORKERS' COMPENSATION LIABILITY INSURANCE;
  1 15    CONSOLIDATION, MERGER, AND REINSURANCE; LICENSING OF
  1 16    INSURANCE PRODUCERS; CEMETERY AND FUNERAL MERCHANDISE AND
  1 17    FUNERAL SERVICES; AND CEMETERIES, MAKING APPROPRIATIONS,
  1 18    AND PROVIDING AN EFFECTIVE DATE.
  1 19
  1 20 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1 21
  1 22    Section 1.  Section 502.201, subsection 9E, Code 2007, is
  1 23 amended to read as follows:
  1 24    9E.  VIATICAL SETTLEMENT INVESTMENT CONTRACTS.  A viatical
  1 25 settlement investment contract, or fractional or pooled
  1 26 interest in such contract, provided any of the following
  1 27 conditions are satisfied:
  1 28    a.  The assignment, transfer, sale, devise, or bequest of a
  1 29 death benefit of a life insurance policy or contract is made
  1 30 by the viator to an insurance company as provided under Title
  1 31 XIII, subtitle 1.
  1 32    b.  The assignment, transfer, sale, devise, or bequest of a
  1 33 life insurance policy or contract, for any value less than the
  1 34 expected death benefit, is made by the viator to a family
  1 35 member or other person who enters into no more than one such
  2  1 agreement in a calendar year.
  2  2    c.  A life insurance policy or contract is assigned to a
  2  3 bank, savings bank, savings and loan association, credit
  2  4 union, or other licensed lending institution as collateral for
  2  5 a loan.
  2  6    d.  Accelerated benefits are exercised as provided in the
  2  7 life insurance policy or contract and consistent with
  2  8 applicable law.
  2  9    e.  The assignment, transfer, sale, devise, or bequest of
  2 10 the death benefit or ownership of a life insurance policy or
  2 11 contract made by the policyholder or contract owner to a
  2 12 viatical settlement provider, if the viatical settlement
  2 13 transaction complies with chapter 508E, including rules
  2 14 adopted pursuant to that chapter.
  2 15    Sec. 2.  Section 502.202, subsection 9, Code 2007, is
  2 16 amended to read as follows:
  2 17    9.  SPECIFIED EXCHANGE TRANSACTIONS.  A transaction in a
  2 18 security, whether or not the security or transaction is
  2 19 otherwise exempt, in exchange for one or more bona fide
  2 20 outstanding securities, claims, or property interests, or
  2 21 partly in such exchange and partly for cash, if the terms and
  2 22 conditions of the issuance and exchange or the delivery and
  2 23 exchange and the fairness of the terms and conditions have
  2 24 been approved by the administrator after a hearing by a court;
  2 25 by an official or agency of the United States; by a state
  2 26 securities, banking, or insurance agency; or by any other
  2 27 government authority expressly authorized by law to grant such
  2 28 approvals.
  2 29    Sec. 3.  Section 502.402, subsection 2, paragraph a, Code
  2 30 2007, is amended to read as follows:
  2 31    a.  An individual who represents a broker=dealer in
  2 32 effecting transactions in this state limited to those
  2 33 described in section 15(h)(2) of the Securities Exchange Act
  2 34 of 1934, 15 U.S.C. } 78(o)(2) 78(h)(2).
  2 35    Sec. 4.  Section 502.410, subsection 2, Code 2007, is
  3  1 amended to read as follows:
  3  2    2.  AGENTS.  The fee for an individual is thirty forty
  3  3 dollars when filing an application for registration as an
  3  4 agent, a fee of thirty forty dollars when filing a renewal of
  3  5 registration as an agent, and a fee of thirty forty dollars
  3  6 when filing for a change of registration as an agent.  Of each
  3  7 forty=dollar fee collected, ten dollars is appropriated to the
  3  8 securities investor education and financial literacy training
  3  9 fund established under section 502.601, subsection 5.  If the
  3 10 filing results in a denial or withdrawal, the administrator
  3 11 shall retain the fee.
  3 12    Sec. 5.  Section 502.601, subsection 4, Code 2007, is
  3 13 amended to read as follows:
  3 14    4.  INVESTOR EDUCATION AND FINANCIAL LITERACY.  The
  3 15 administrator may develop and implement investor education and
  3 16 financial literacy initiatives to inform the public about
  3 17 investing in securities, with particular emphasis on the
  3 18 prevention and detection of securities fraud.  In developing
  3 19 and implementing these initiatives, the administrator may
  3 20 collaborate with public and nonprofit organizations with an
  3 21 interest in investor education and financial literacy.  The
  3 22 administrator may accept a grant or donation from a person
  3 23 that who is not affiliated with the securities industry or
  3 24 from a nonprofit organization, regardless of whether the
  3 25 organization is affiliated with the securities industry, to
  3 26 develop and implement investor education and financial
  3 27 literacy initiatives.  This subsection does not authorize the
  3 28 administrator to require participation or monetary
  3 29 contributions of a registrant in an investor education or
  3 30 financial literacy program.
  3 31    Sec. 6.  Section 502.601, subsection 5, Code 2007, is
  3 32 amended to read as follows:
  3 33    5.  THE SECURITIES INVESTOR EDUCATION AND FINANCIAL
  3 34 LITERACY TRAINING FUND.  A securities investor education and
  3 35 financial literacy training fund is created in the state
  4  1 treasury under the control of the administrator to provide
  4  2 moneys for the purposes specified in subsection 4.  All moneys
  4  3 received by the state by reason of civil penalties pursuant to
  4  4 this chapter and the moneys appropriated to the fund pursuant
  4  5 to section 502.410, subsection 2, shall be deposited in the
  4  6 securities investor education and financial literacy training
  4  7 fund.  Notwithstanding section 12C.7, interest or earnings on
  4  8 moneys deposited into the fund shall be credited to the fund.
  4  9 Notwithstanding section 8.33, unencumbered or unobligated
  4 10 moneys remaining in the fund shall not revert but shall be
  4 11 available for expenditure for the following fiscal year.
  4 12 However, if, on June 30, unencumbered or unobligated moneys
  4 13 remaining in the fund exceed two five hundred thousand
  4 14 dollars, moneys in excess of that amount shall revert to the
  4 15 general fund of the state in the same manner as provided in
  4 16 section 8.33.
  4 17    Sec. 7.  Section 505.8, Code Supplement 2007, is amended by
  4 18 adding the following new subsection:
  4 19    NEW SUBSECTION.  5A.  a.  The commissioner shall establish
  4 20 a bureau, to be known as the "consumer advocate bureau", which
  4 21 shall be responsible for ensuring fair treatment of consumers
  4 22 by persons in the business of insurance and for preventing
  4 23 unfair or deceptive trade practices in the insurance
  4 24 marketplace.
  4 25    b.  The commissioner, with the advice of the governor,
  4 26 shall appoint a consumer advocate who shall be knowledgeable
  4 27 in the area of insurance and particularly in the area of
  4 28 consumer protection.
  4 29    c.  The consumer advocate bureau shall receive and may
  4 30 investigate consumer complaints and inquiries from the public,
  4 31 and shall conduct investigations to determine whether any
  4 32 person has violated any provision of the insurance code,
  4 33 including chapters 507B and 522B, and any provisions related
  4 34 to the establishment of insurance rates.
  4 35    d.  When necessary or appropriate to protect the public
  5  1 interest or consumers, the consumer advocate may request that
  5  2 the commissioner conduct administrative hearings as provided
  5  3 in section 505.29.
  5  4    e.  The consumer advocate bureau shall perform other
  5  5 functions as may be assigned to it by the commissioner related
  5  6 to consumer advocacy.
  5  7    f.  The consumer advocate bureau shall work in conjunction
  5  8 with other areas of the insurance division on matters of
  5  9 mutual interest.  The insurance division shall cooperate with
  5 10 the consumer advocate in fulfilling the duties of the consumer
  5 11 advocate bureau.  The consumer advocate may also seek
  5 12 assistance from other federal or state agencies or private
  5 13 entities for the purpose of assisting consumers.
  5 14    g.  The commissioner, in cooperation with the consumer
  5 15 advocate, shall prepare and deliver a report to the general
  5 16 assembly by January 15 of each year that contains findings and
  5 17 recommendations regarding the activities of the consumer
  5 18 advocate bureau including but not limited to all of the
  5 19 following:
  5 20    (1)  An overview of the functions of the bureau.
  5 21    (2)  The structure of the bureau including the number and
  5 22 type of staff positions.
  5 23    (3)  Statistics showing the number of complaints handled by
  5 24 the bureau, the nature of the complaints including the line of
  5 25 business involved and their disposition, and the disposition
  5 26 of similar issues in other states.
  5 27    (4)  Actions commenced by the consumer advocate.
  5 28    (5)  Studies performed by the consumer advocate.
  5 29    (6)  Educational and outreach efforts of the consumer
  5 30 advocate bureau.
  5 31    (7)  Recommendations from the commissioner and the consumer
  5 32 advocate about additional consumer protection functions that
  5 33 would be appropriate and useful for the bureau or the
  5 34 insurance division to fulfill based on observations and
  5 35 analysis of trends in complaints and information derived from
  6  1 national or other sources.
  6  2    (8)  Recommendations from the commissioner and the consumer
  6  3 advocate about any needs for additional funding, staffing,
  6  4 legislation, or administrative rules.
  6  5    Sec. 8.  Section 505.8, subsection 6, Code Supplement 2007,
  6  6 is amended to read as follows:
  6  7    6.  a.  Notwithstanding chapter 22, the commissioner shall
  6  8 keep confidential the information submitted to the insurance
  6  9 division or obtained by the insurance division in the course
  6 10 of an investigation or inquiry pursuant to subsection 5A,
  6 11 including all notes, work papers, or other documents related
  6 12 to the investigation.  Information obtained by the
  6 13 commissioner in the course of investigating a complaint or
  6 14 inquiry may, in the discretion of the commissioner, be
  6 15 provided to the insurance company or insurance producer that
  6 16 is the subject of the complaint or inquiry, to the consumer
  6 17 who filed the complaint or inquiry, and to the individual
  6 18 insured who is the subject of the complaint or inquiry,
  6 19 without waiving the confidentiality afforded to the
  6 20 commissioner or to other persons by this subsection.  The
  6 21 commissioner may disclose or release information that is
  6 22 otherwise confidential under this subsection, in the course of
  6 23 an administrative or judicial proceeding.
  6 24    a.  b.  Notwithstanding chapter 22, the commissioner shall
  6 25 keep confidential both information obtained in the course of
  6 26 an investigation and information by or submitted to the
  6 27 insurance division pursuant to chapters 514J and 515D.
  6 28    b.  c.  The commissioner shall adopt rules protecting the
  6 29 privacy of information held by an insurer or an agent
  6 30 consistent with the federal Gramm=Leach=Bliley Act, Pub. L.
  6 31 No. 106=102.
  6 32    c.  d.  However, notwithstanding Notwithstanding paragraphs
  6 33 "a", and "b", and "c", if the commissioner determines that it
  6 34 is necessary or appropriate in the public interest or for the
  6 35 protection of the public, the commissioner may share
  7  1 information with other regulatory authorities or governmental
  7  2 agencies or may publish information concerning a violation of
  7  3 this chapter or a rule or order under this chapter.  Such
  7  4 information may be redacted so that personally identifiable
  7  5 information is not made available.
  7  6    d.  e.  The commissioner may adopt rules protecting the
  7  7 privacy of information submitted to the insurance division
  7  8 consistent with this section.
  7  9    Sec. 9.  Section 505.8, subsection 10, Code Supplement
  7 10 2007, is amended to read as follows:
  7 11    10.  For the purpose of an investigation made under any
  7 12 chapter of this subtitle, the commissioner or the
  7 13 commissioner's designee may administer oaths and affirmations,
  7 14 subpoena witnesses, seek compulsory attendance, take evidence,
  7 15 require the filing of statements, and require the production
  7 16 of any records that the commissioner considers relevant or
  7 17 material to the investigation, pursuant to rules adopted under
  7 18 chapter 17A.  The confidentiality provisions of subsection 6,
  7 19 shall apply to information and material obtained pursuant to
  7 20 this subsection.
  7 21    Sec. 10.  Section 505.15, Code 2007, is amended to read as
  7 22 follows:
  7 23    505.15  ACTUARIAL, PROFESSIONAL, AND SPECIALIST STAFF.
  7 24    1.  The commissioner may appoint a staff of actuaries as
  7 25 necessary to carry out the duties of the division.  The
  7 26 actuarial staff shall do all of the following:
  7 27    1.  a.  Perform analyses of rate filings.
  7 28    2.  b.  Perform audits of submitted loss data.
  7 29    3.  c.  Conduct rate hearings and serve as expert
  7 30 witnesses.
  7 31    4.  d.  Prepare, review, and dispense data on the insurance
  7 32 business.
  7 33    5.  e.  Assist in public education concerning the insurance
  7 34 business.
  7 35    6.  f.  Identify any impending problem areas in the
  8  1 insurance business.
  8  2    7.  g.  Assist in examinations of insurance companies.
  8  3    2.  The commissioner may retain attorneys, appraisers,
  8  4 independent actuaries, independent certified public
  8  5 accountants, or other professionals or specialists to assist
  8  6 the division in carrying out its duties in regard to rate
  8  7 filing reviews.  The reasonable cost of retaining such
  8  8 professionals and specialists shall be borne by the insurer
  8  9 which is the subject of the rate filing review.
  8 10    Sec. 11.  Section 507.4, Code 2007, is amended to read as
  8 11 follows:
  8 12    507.4  EXAMINERS == SALARIES.
  8 13    1.  The commissioner of insurance is hereby authorized to
  8 14 may appoint insurance examiners, at least one of whom shall be
  8 15 an experienced actuary, and at least one of whom shall be an
  8 16 experienced and competent fire insurance accountant, and who,
  8 17 while conducting examinations, shall possess all the powers
  8 18 conferred upon the commissioner of insurance for such
  8 19 purposes.  The entire time of the examiners shall be under the
  8 20 control of the said commissioner, and shall be employed as the
  8 21 commissioner may direct.
  8 22    2.  The said commissioner may, when in the commissioner's
  8 23 judgment it is advisable, appoint assistants to aid in making
  8 24 conducting examinations.  Said examiners shall be compensated
  8 25 on the basis of the normal workweek of the insurance division
  8 26 at a salary to be fixed by the commissioner subject, however,
  8 27 to the provisions of section 505.14.  The commissioner shall
  8 28 employ rates of compensation consistent with current standards
  8 29 in the industry for certified public accountants, attorneys,
  8 30 and skilled insurance examiners.  The commissioner may use
  8 31 compensation rates suggested by the national association of
  8 32 insurance commissioners.  Insurance examiners employed under
  8 33 this section shall be exempt from the merit system provisions
  8 34 of chapter 8A, subchapter IV, under section 8A.412, subsection
  8 35 17.  Said compensation Compensation shall be paid from
  9  1 appropriations for such purposes upon certification of the
  9  2 commissioner, which shall be reimbursed as provided in
  9  3 sections 507.8 and 507.9.
  9  4    Sec. 12.  Section 507B.3, Code 2007, is amended to read as
  9  5 follows:
  9  6    507B.3  UNFAIR COMPETITION OR UNFAIR AND DECEPTIVE ACTS OR
  9  7 PRACTICES PROHIBITED.
  9  8    1.  A person shall not engage in this state in any trade
  9  9 practice which is defined in this chapter as, or determined
  9 10 pursuant to section 507B.6 to be, an unfair method of
  9 11 competition, or an unfair or deceptive act or practice in the
  9 12 business of insurance.  The issuance of a qualified charitable
  9 13 gift annuity as provided in chapter 508F does not constitute a
  9 14 trade practice in violation of this chapter.
  9 15    2.  The commissioner shall have power to examine and
  9 16 investigate into the affairs of every person engaged in the
  9 17 business of insurance in this state in order to determine
  9 18 whether such person has been or is engaged in any unfair
  9 19 method of competition or in any unfair or deceptive act or
  9 20 practice prohibited by this section.  The commissioner shall
  9 21 keep confidential the information submitted to the insurance
  9 22 division, or obtained by the insurance division in the course
  9 23 of an investigation pursuant to section 505.8, subsection 6.
  9 24    3.  Information obtained by the commissioner in the course
  9 25 of investigating a consumer complaint may, in the discretion
  9 26 of the commissioner, be provided to the insurance company or
  9 27 insurance producer which is the subject of the complaint or to
  9 28 the consumer who filed the complaint or the individual insured
  9 29 who is the subject of the complaint without waiving the
  9 30 confidentiality afforded by this section to the commissioner
  9 31 or other persons.
  9 32    Sec. 13.  Section 507E.6, Code 2007, is amended to read as
  9 33 follows:
  9 34    507E.6  DUTIES OF INSURER.
  9 35    An insurer which believes that a claim or application for
 10  1 insurance coverage is being made which is a violation of
 10  2 section 507E.3 shall provide, within sixty days of the receipt
 10  3 of such claim or application, written notification to the
 10  4 bureau of the claim or application on a form prescribed by the
 10  5 bureau, including any additional information requested by the
 10  6 bureau related to the claim or application or the party making
 10  7 the claim or application.  The fraud bureau shall review each
 10  8 notification and determine whether further investigation is
 10  9 warranted.  If the bureau determines that further
 10 10 investigation is warranted, the bureau shall conduct an
 10 11 independent investigation of the facts surrounding the claim
 10 12 or application for insurance coverage to determine the extent,
 10 13 if any, to which fraud occurred in the submission of the claim
 10 14 or application.  The bureau shall report any alleged violation
 10 15 of law disclosed by the investigation to the appropriate
 10 16 licensing agency or prosecuting authority having jurisdiction
 10 17 with respect to such violation.
 10 18    Sec. 14.  Section 508C.3, subsection 2, Code 2007, is
 10 19 amended to read as follows:
 10 20    2.  This chapter shall provide coverage to the persons
 10 21 specified in subsection 1 under direct life insurance
 10 22 policies, health insurance policies including long=term care
 10 23 insurance and disability insurance policies, annuity
 10 24 contracts, supplemental contracts, certificates under group
 10 25 policies or contracts, and unallocated annuity contracts
 10 26 issued by member insurers.
 10 27    Sec. 15.  Section 508C.6, subsection 1, paragraphs c and d,
 10 28 Code 2007, are amended to read as follows:
 10 29    c.  An annuity account.  A plan established under section
 10 30 401, 403(b), or 457 of the United States Internal Revenue Code
 10 31 shall be covered by the annuity account.
 10 32    d.  An unallocated annuity contract account, excluding
 10 33 plans established under section 401, 403(b), or 457 of the
 10 34 United States Internal Revenue Code.
 10 35    Sec. 16.  Section 508C.8, subsection 8, Code 2007, is
 11  1 amended by striking the subsection and inserting in lieu
 11  2 thereof the following:
 11  3    8.  a.  The benefits that the association may become
 11  4 obligated to cover shall in no event exceed the lesser of
 11  5 either of the following:
 11  6    (1)  The contractual obligations for which the insurer is
 11  7 liable or would have been liable if it were not an impaired or
 11  8 insolvent insurer.
 11  9    (2)  Any of the following:
 11 10    (a)  With respect to one life, regardless of the number of
 11 11 policies or contracts:
 11 12    (i)  Three hundred thousand dollars in life insurance death
 11 13 benefits, but not more than one hundred thousand dollars in
 11 14 net cash surrender and net cash withdrawal values for life
 11 15 insurance, or three hundred fifty thousand dollars in the
 11 16 aggregate.
 11 17    (ii)  Three hundred thousand dollars for health insurance
 11 18 benefits including any net cash surrender and net cash
 11 19 withdrawal values.
 11 20    (iii)  Two hundred fifty thousand dollars in the present
 11 21 value of annuity benefits, including net cash surrender and
 11 22 net cash withdrawal values.
 11 23    (b)  (i)  With respect to each individual benefit plan
 11 24 established under section 401, 403(b), or 457 of the United
 11 25 States Internal Revenue Code, or each unallocated annuity
 11 26 contract account, excluding a plan established under section
 11 27 401, 403(b), or 457 of the United States Internal Revenue
 11 28 Code, not more than two hundred fifty thousand dollars in the
 11 29 aggregate, in present value annuity benefits, including net
 11 30 cash surrender and net cash withdrawal values for the
 11 31 beneficiaries of the deceased individual.
 11 32    (ii)  However, the association shall not in any event be
 11 33 obligated to cover more than an aggregate of three hundred
 11 34 fifty thousand dollars in benefits with respect to any one
 11 35 life under subparagraph subdivision (a) and this subparagraph
 12  1 subdivision (b), or more than five million dollars in benefits
 12  2 to one owner of multiple nongroup policies of life insurance
 12  3 regardless of whether the policy owner is an individual, firm,
 12  4 corporation, or other person, and whether the persons insured
 12  5 are officers, managers, employees, or other persons, and
 12  6 regardless of the number of policies and contracts held by the
 12  7 owner.
 12  8    (c)  With respect to a plan sponsor whose plan owns,
 12  9 directly or in trust, one or more unallocated annuity
 12 10 contracts not included under subparagraph subdivision (b), not
 12 11 more than five million dollars in benefits, regardless of the
 12 12 number of contracts held by the plan sponsor.  However, where
 12 13 one or more such unallocated annuity contracts are covered
 12 14 contracts under this chapter and are owned by a trust or other
 12 15 entity for the benefit of two or more plan sponsors, the
 12 16 association shall provide coverage if the largest interest in
 12 17 the trust or entity owning the contract is held by a plan
 12 18 sponsor whose principal place of business is in the state but
 12 19 in no event shall the association be obligated to cover more
 12 20 than five million dollars in benefits in the aggregate with
 12 21 respect to all such unallocated contracts.
 12 22    b.  The limitations on the association's obligation to
 12 23 cover benefits that are set forth under this subsection do not
 12 24 take into account the association's subrogation and assignment
 12 25 rights or the extent to which such benefits could be provided
 12 26 out of the assets of the impaired or insolvent insurer that
 12 27 are attributable to covered policies.  The association's
 12 28 obligations under this chapter may be met by the use of assets
 12 29 attributable to covered policies or reimbursed to the
 12 30 association pursuant to the association's subrogation and
 12 31 assignment rights.
 12 32    Sec. 17.  Section 508C.8, subsection 9, Code 2007, is
 12 33 amended to read as follows:
 12 34    9.  The association has no obligation for either of the
 12 35 following:
 13  1    a.  To continue coverage, or to pay a claim for benefits to
 13  2 any person under an individual accident, health, or disability
 13  3 policy accruing more than three years following the date the
 13  4 member insurer is adjudicated to be insolvent.
 13  5    b.  To to issue a group conversion policy of any nature to
 13  6 a person or to continue a group coverage in force for more
 13  7 than sixty days following the date the member insurer was
 13  8 adjudicated to be insolvent.
 13  9    Sec. 18.  NEW SECTION.  508E.5  PUBLIC RECORDS.
 13 10    All information filed with the commissioner pursuant to the
 13 11 requirements of this chapter and its implementing rules shall
 13 12 constitute a public record that is open for public inspection.
 13 13    Sec. 19.  Section 510.5, subsection 1, paragraph d, Code
 13 14 2007, is amended to read as follows:
 13 15    d.  Separate records of business written by a managing
 13 16 general agent shall be maintained.  An insurer shall have
 13 17 access and a right to copy all accounts and records related to
 13 18 the insurer's business in a form usable by the insurer and the
 13 19 commissioner shall have access to all books, bank accounts,
 13 20 and records of a managing general agent in a form usable by
 13 21 the commissioner.  Such records shall be retained at least
 13 22 until after completion by the insurance division of the next
 13 23 triennial examination of the insurer.
 13 24    Sec. 20.  Section 511.8, subsection 6, paragraph a,
 13 25 subparagraph (2), unnumbered paragraph 1, Code 2007, is
 13 26 amended to read as follows:
 13 27    The net earnings available for fixed charges and preferred
 13 28 dividends of the issuing corporation shall have been, for each
 13 29 of the five fiscal years immediately preceding the date of
 13 30 acquisition, not less than one and one=half times the sum of
 13 31 the annual fixed charges and contingent interest, if any, and
 13 32 the annual preferred dividend requirements as of the date of
 13 33 acquisition; or at the date of acquisition the preferred stock
 13 34 has investment qualities and characteristics wherein
 13 35 speculative elements are not predominant.
 14  1    Sec. 21.  Section 511.8, subsection 9, paragraphs a, b, c,
 14  2 e, and g, Code 2007, are amended to read as follows:
 14  3    a.  (1)  Bonds, notes, obligations, or other evidences of
 14  4 indebtedness secured by mortgages or deeds of trust which are
 14  5 a first or second lien upon otherwise unencumbered real
 14  6 property and appurtenances thereto within the United States of
 14  7 America, or any insular or territorial possession of the
 14  8 United States, or the Dominion of Canada, and upon leasehold
 14  9 estates in real property where fifty years or more of the term
 14 10 including renewals is unexpired, provided that at the date of
 14 11 acquisition the total indebtedness secured by the first or
 14 12 second lien shall not exceed ninety percent of the value of
 14 13 the property upon which it is a lien.  However, a company or
 14 14 organization shall not acquire an indebtedness secured by a
 14 15 first or second lien upon a single parcel of real property, or
 14 16 upon a leasehold interest in a single parcel of real property,
 14 17 in excess of two percent of its legal reserve.  These
 14 18 limitations do not apply to obligations described in
 14 19 paragraphs "b", "c", "d", "e", and "f", and "g" of this
 14 20 subsection.
 14 21    (2)  Improvements and appurtenances to real property shall
 14 22 not be considered in estimating the value of the property
 14 23 unless the owner contracts to keep the property adequately
 14 24 insured during the life of the loan in some reliable fire
 14 25 insurance companies, or associations, the insurance to be made
 14 26 payable in case of loss to the mortgagee, trustee, or assignee
 14 27 as its interest appears at the time of the loss.
 14 28    (3)  For the purpose of this subsection a mortgage or deed
 14 29 of trust is not other than a first or second lien upon
 14 30 property by reason of the existence of taxes or assessments
 14 31 that are not delinquent, instruments creating or reserving
 14 32 mineral, oil, or timber rights, rights of way, joint
 14 33 driveways, sewer rights, rights in walls or by reason of
 14 34 building restrictions or other like restrictive covenants, or
 14 35 when the real estate is subject to lease in whole or in part
 15  1 whereby rents or profits are reserved to the owner.
 15  2    b.  Bonds, notes, or other evidences of indebtedness
 15  3 representing loans and advances of credit that have been
 15  4 issued, guaranteed, or insured, in accordance with the terms
 15  5 and provisions of an Act of Congress of the United States of
 15  6 America approved June 27, 1934, entitled the "National Housing
 15  7 Act", 48 Stat. 1246, 12 U.S.C. } 1701, et seq., as heretofore
 15  8 and hereafter amended to and including January 1, 2008, or of
 15  9 an Act of Congress of the United States of America approved
 15 10 July 24, 1970, entitled the "Federal Home Loan Mortgage
 15 11 Corporation Act", 84 Stat. 451, 12 U.S.C. } 1451, et seq., as
 15 12 amended to and including January 1, 2008.
 15 13    c.  Bonds, notes, or other evidences of indebtedness
 15 14 representing loans and advances of credit that have been
 15 15 issued or guaranteed, in whole or in part, in accordance with
 15 16 the terms and provisions of Title III of an Act of Congress of
 15 17 the United States of America approved June 22, 1944, known as
 15 18 Public Law 346, Pub. L. No. 78=268, cited as the "Servicemen's
 15 19 Readjustment Act of 1944", 58 Stat. 284, recodified at 72
 15 20 Stat. 1105, 1273, 38 U.S.C. } 3701, et seq., as heretofore and
 15 21 hereafter amended to and including January 1, 2008.
 15 22    e.  Bonds, notes, or other evidences of indebtedness
 15 23 representing loans and advances of credit that have been
 15 24 issued or guaranteed, in whole or in part, in accordance with
 15 25 Title I of the Bankhead=Jones Farm Tenant Act, an Act of the
 15 26 Congress of the United States, cited as the "Farmers Home
 15 27 Administration Act of 1946", 60 Stat. 1062, as heretofore or
 15 28 hereafter amended to and including the effective date or dates
 15 29 of its repeal as set forth in 76 Stat. 318, or with Title III
 15 30 of an Act of Congress of the United States of America approved
 15 31 August 8, 1961, entitled the "Consolidated Farm and Rural
 15 32 Development Act", 75 Stat. 307, 7 U.S.C. } 1921, et seq., as
 15 33 amended to and including January 1, 2008.
 15 34    g.  Bonds, notes or other evidences of indebtedness
 15 35 representing loans and advances of credit that have been
 16  1 issued, guaranteed, or insured, in accordance with the terms
 16  2 and provisions of an Act of the federal Parliament of the
 16  3 Dominion of Canada approved March 18, 1954, cited as the
 16  4 "National Housing Act, 1954" Act", R.S.C. 1985, c. N=11 as
 16  5 heretofore and hereafter amended to and including January 1,
 16  6 2008.
 16  7    Sec. 22.  Section 511.8, subsection 22, paragraph a, Code
 16  8 2007, is amended by adding the following new subparagraph:
 16  9    NEW SUBPARAGRAPH.  (4)  "United States government=sponsored
 16 10 enterprise" means the federal national mortgage corporation
 16 11 under 12 U.S.C. } 1716=23i of the National Housing Act and the
 16 12 federal home loan marketing association under the Federal Home
 16 13 Loan Mortgage Act, 12 U.S.C. } 1451=59.
 16 14    Sec. 23.  Section 511.8, subsection 22, paragraphs c, d,
 16 15 and e, Code 2007, are amended to read as follows:
 16 16    c.  Investments in financial instruments used in hedging
 16 17 transactions are not eligible in excess of two percent of the
 16 18 legal reserve in the financial instruments of any one
 16 19 corporation, less any securities of that corporation owned by
 16 20 the company or association and in which its legal reserve is
 16 21 invested, except insofar as the financial instruments are
 16 22 collateralized by cash, or United States government
 16 23 obligations as authorized by subsection 1, or obligations of
 16 24 or guaranteed by a United States government=sponsored
 16 25 enterprise which on the date they are pledged as collateral
 16 26 are adequately secured and have investment qualities and
 16 27 characteristics wherein the speculative elements are not
 16 28 predominant, which are deposited with a custodian bank as
 16 29 defined in subsection 21, and held under a written agreement
 16 30 with the custodian bank that complies with subsection 21 and
 16 31 provides for the proceeds of the collateral, subject to the
 16 32 terms and conditions of the applicable collateral or other
 16 33 credit support agreement, to be remitted to the legal reserve
 16 34 deposit of the company or association and to vest in the state
 16 35 in accordance with section 508.18 whenever proceedings under
 17  1 that section are instituted.
 17  2    d.  Investments in financial instruments used in hedging
 17  3 transactions are not eligible in excess of ten percent of the
 17  4 legal reserve, except insofar as the financial instruments are
 17  5 collateralized by cash, or United States government
 17  6 obligations as authorized by subsection 1, or obligations of
 17  7 or guaranteed by a United States government=sponsored
 17  8 enterprise which on the date they are pledged as collateral
 17  9 are adequately secured and have investment qualities and
 17 10 characteristics wherein the speculative elements are not
 17 11 predominant, which are deposited with a custodian bank as
 17 12 defined in subsection 21, and held under a written agreement
 17 13 with the custodian bank that complies with subsection 21 and
 17 14 provides for the proceeds of the collateral, subject to the
 17 15 terms and conditions of the applicable collateral or other
 17 16 credit support agreement, to be remitted to the legal reserve
 17 17 deposit of the company or association and to vest in the state
 17 18 in accordance with section 508.18 whenever proceedings under
 17 19 that section are instituted.
 17 20    e.  (1)  Investments in financial instruments of foreign
 17 21 governments or foreign corporate obligations, other than
 17 22 Canada, used in hedging transactions shall be included in the
 17 23 limitation contained in subsection 19 that allows only twenty
 17 24 percent of the legal reserve of the company or association to
 17 25 be invested in such foreign investments, except insofar as the
 17 26 financial instruments are collateralized by cash, or United
 17 27 States government obligations as authorized by subsection 1,
 17 28 or obligations of or guaranteed by a United States
 17 29 government=sponsored enterprise which on the date they are
 17 30 pledged as collateral are adequately secured and have
 17 31 investment qualities and characteristics wherein the
 17 32 speculative elements are not predominant, which are deposited
 17 33 with a custodian bank as defined in subsection 21, and held
 17 34 under a written agreement with the custodian bank that
 17 35 complies with subsection 21 and provides for the proceeds of
 18  1 the collateral, subject to the terms and conditions of the
 18  2 applicable collateral or other credit support agreement, to be
 18  3 remitted to the legal reserve deposit of the company or
 18  4 association and to vest in the state in accordance with
 18  5 section 508.18 whenever proceedings under that section are
 18  6 instituted.
 18  7    (2)  This paragraph "e" does not authorize the inclusion of
 18  8 financial instruments used in hedging transactions in an
 18  9 insurer's legal reserve that are in excess of the eligibility
 18 10 limitation provided in paragraph "d" unless the financial
 18 11 instruments are collateralized as provided in this paragraph
 18 12 "e".
 18 13    Sec. 24.  NEW SECTION.  514B.17A  RECISION.
 18 14    1.  A health maintenance organization may rescind an
 18 15 enrollee's membership in the health maintenance organization
 18 16 if the enrollee makes a material false statement or
 18 17 misrepresentation in the enrollee's application for
 18 18 membership.  A written notice of recision shall be sent to the
 18 19 enrollee by certified mail addressed to the enrollee and sent
 18 20 to the enrollee's last address known to the health maintenance
 18 21 organization and shall state the reason for the recision.  The
 18 22 enrollee may appeal the recision to the commissioner as
 18 23 provided by the commissioner by rules adopted under chapter
 18 24 17A.
 18 25    2.  An enrollee's membership in a health maintenance
 18 26 organization shall not be rescinded as provided in subsection
 18 27 1 more than two years after the date of the enrollee's
 18 28 enrollment in the health maintenance organization.
 18 29    Sec. 25.  Section 514E.1, subsection 12, paragraph a, Code
 18 30 2007, is amended to read as follows:
 18 31    a.  "Health insurance coverage" means health insurance
 18 32 coverage offered to individuals, including group conversion
 18 33 coverage.
 18 34    Sec. 26.  Section 514E.1, subsection 14, Code 2007, is
 18 35 amended to read as follows:
 19  1    14.  "Involuntary termination" includes, but is not limited
 19  2 to, termination of group conversion coverage when a conversion
 19  3 policy is not available or where benefits under a state or
 19  4 federal law providing for continuation of coverage upon
 19  5 termination of employment will cease or have ceased.
 19  6    Sec. 27.  Section 514E.7, subsection 4, paragraph c,
 19  7 subparagraph (2), Code 2007, is amended to read as follows:
 19  8    (2)  The applicant is not eligible for continuation or
 19  9 conversion rights that would provide coverage substantially
 19 10 similar to plan coverage.
 19 11    Sec. 28.  NEW SECTION.  514F.6  CREDENTIALING ==
 19 12 RETROSPECTIVE PAYMENT.
 19 13    The commissioner shall adopt rules to provide for the
 19 14 retrospective payment of clean claims for covered services
 19 15 provided by a physician during the credentialing period, once
 19 16 the physician is credentialed.  For purposes of this section,
 19 17 "physician" means a licensed doctor of medicine and surgery or
 19 18 a licensed doctor of osteopathic medicine and surgery, and
 19 19 "credentialing period" means the time period between the
 19 20 health insurer's receipt of a physician's application for
 19 21 credentialing and approval of that application by the health
 19 22 insurer.  "Credentialing" means a process through which a
 19 23 health insurer makes a determination based on criteria
 19 24 established by the health insurer concerning whether a
 19 25 physician is eligible to provide health care services to an
 19 26 insured and to receive reimbursement for the health care
 19 27 services provided under an agreement entered into between the
 19 28 physician and the health insurer.  "Clean claim" means the
 19 29 same as defined in section 507B.4A, subsection 2, paragraph
 19 30 "b".
 19 31    Sec. 29.  Section 515A.2, subsection 1, Code 2007, is
 19 32 amended by adding the following new paragraph:
 19 33    NEW PARAGRAPH.  g.  "Schedule rating plan" means a rating
 19 34 plan by which an insurer increases or decreases workers'
 19 35 compensation rates to reflect the individual risk
 20  1 characteristics of the subject of the insurance.
 20  2    Sec. 30.  Section 515A.3, subsection 1, paragraph b, Code
 20  3 2007, is amended to read as follows:
 20  4    b.  Due consideration shall be given to past and
 20  5 prospective loss experience within and outside this state, to
 20  6 the conflagration and catastrophe hazards, to a reasonable
 20  7 margin for underwriting profit and contingencies, to
 20  8 dividends, savings, or unabsorbed premium deposits allowed or
 20  9 returned by insurers to their policyholders, members or
 20 10 subscribers, to past and prospective expenses both countrywide
 20 11 and those specially applicable to this state, and to all other
 20 12 relevant factors within and outside this state; and in the
 20 13 case of fire insurance rates consideration shall be given to
 20 14 the experience of the fire insurance business during a period
 20 15 of not less than the most recent five=year period for which
 20 16 such experience is available.
 20 17    Sec. 31.  Section 515A.4, Code 2007, is amended to read as
 20 18 follows:
 20 19    515A.4  RATE FILINGS.
 20 20    1.  a.  Every insurer shall file with the commissioner,
 20 21 except as to inland marine risks which by general custom of
 20 22 the business are not written according to manual rates or
 20 23 rating plans, every manual, minimum, class rate, rating
 20 24 schedule or rating plan and every other rating rule, and every
 20 25 modification of any of the foregoing which it proposes to use.
 20 26 Every such filing shall state the proposed effective date
 20 27 thereof, and shall indicate the character and extent of the
 20 28 coverage contemplated.
 20 29    b.  When a filing is not accompanied by the information
 20 30 upon which the insurer supports such filing, and the
 20 31 commissioner does not have sufficient information to determine
 20 32 whether such filing meets the requirements of this chapter,
 20 33 the commissioner shall require such insurer to furnish the
 20 34 information upon which it supports such filing and in such
 20 35 event the waiting period shall commence as of the date such
 21  1 information is furnished.  Until the required information is
 21  2 furnished, the filing shall not be deemed complete or
 21  3 available for use by the insurer.
 21  4    c.  The information furnished in support of a filing may
 21  5 include the experience or judgment of the insurer or rating
 21  6 organization making the filing, its interpretation of any
 21  7 statistical data it relies upon, the experience of other
 21  8 insurers or rating organizations, or any other relevant
 21  9 factors.  A When a filing is deemed complete, the filing and
 21 10 any supporting information shall be open to public inspection
 21 11 upon filing.  Specific inland marine rates on risks specially
 21 12 rated, made by a rating organization, shall be filed with the
 21 13 commissioner.
 21 14    2.  An insurer may satisfy its obligation to make such
 21 15 filings by becoming a member of, or a subscriber to, a
 21 16 licensed rating organization which makes such filings, and by
 21 17 authorizing the commissioner to accept such filings on its
 21 18 behalf; provided that nothing contained in this chapter shall
 21 19 be construed as requiring any insurer to become a member of or
 21 20 a subscriber to any rating organization.
 21 21    3.  The commissioner shall review filings as soon as
 21 22 reasonably possible after they have been made in order to
 21 23 determine whether they meet the requirements of this chapter.
 21 24    4.  Subject to the exception specified in subsection 5 of
 21 25 this section, each Each complete filing shall be on file for a
 21 26 waiting period of thirty days before it becomes effective,
 21 27 which period may be extended by the commissioner for an
 21 28 additional period not to exceed fifteen days if the
 21 29 commissioner gives written notice within the waiting period to
 21 30 the insurer or rating organization which made the filing that
 21 31 the commissioner needs additional time for the consideration
 21 32 of the filing.  Upon written application by the insurer or
 21 33 rating organization, the commissioner may authorize a filing
 21 34 which the commissioner has reviewed to become effective before
 21 35 the expiration of the waiting period or any extension of the
 22  1 period.  A filing shall be deemed to meet the requirements of
 22  2 this chapter unless disapproved by the commissioner within
 22  3 thirty days of receipt by the commissioner before the
 22  4 expiration of the waiting period or an extension of the
 22  5 waiting period.
 22  6    5.  Specific inland marine rates on risks specially rated
 22  7 by a rating organization, or any specific filing with respect
 22  8 to a surety or guaranty bond required by law or by court or
 22  9 executive order, rule or regulation of a public body and not
 22 10 covered by a previous filing, shall become effective when
 22 11 filed and shall be deemed to meet the requirements of this
 22 12 chapter until such time as the commissioner reviews the filing
 22 13 and so long thereafter as the filing remains in effect.
 22 14    6.  5.  Under such rules and regulations as the
 22 15 commissioner shall adopt the commissioner may, by written
 22 16 order, suspend or modify the requirement of filing as to any
 22 17 kind of insurance, subdivision or combination thereof, or as
 22 18 to classes of risks, the rates for which cannot practicably be
 22 19 filed before they are used.  Such order, rules and regulations
 22 20 shall be made known to insurers and rating organizations
 22 21 affected thereby.  The commissioner may make such examination
 22 22 as the commissioner may deem advisable to ascertain whether
 22 23 any rates affected by such order meet the standards set forth
 22 24 in paragraph "b" of subsection 1 of section 515A.3.
 22 25    7.  6.  Upon the written application of the insured,
 22 26 stating the insured's reasons therefor, filed with and
 22 27 approved by the commissioner a rate in excess of that provided
 22 28 by a filing otherwise applicable may be used on any specific
 22 29 risk.
 22 30    8.  7.  No insurer shall make or issue a contract or policy
 22 31 except in accordance with the filings which are in effect for
 22 32 said the insurer as provided in this chapter or in accordance
 22 33 with subsections 6 subsection 5 or 7 of this section 6.  This
 22 34 subsection shall not apply to contracts or policies for inland
 22 35 marine risks as to which filings are not required.
 23  1    9.  8.  If a hearing is requested pursuant to section
 23  2 515A.6, subsection 7, a filing shall not take effect until
 23  3 thirty days after formal approval is given by the
 23  4 commissioner.
 23  5    Sec. 32.  Section 515A.5, Code 2007, is amended to read as
 23  6 follows:
 23  7    515A.5  DISAPPROVAL OF FILINGS.
 23  8    1.  If within the waiting period or any extension thereof
 23  9 as provided in subsection 4 of section 515A.4, the
 23 10 commissioner finds that a filing does not meet the
 23 11 requirements of this chapter, the commissioner shall send to
 23 12 the insurer or rating organization which made such filing,
 23 13 written notice in a printed or electronic format of
 23 14 disapproval of such filing specifying therein in what respects
 23 15 the commissioner finds such filing fails to meet the
 23 16 requirements of this chapter and stating that such filing
 23 17 shall not become effective.
 23 18    2.  If within thirty days after a specific inland marine
 23 19 rate on a risk especially rated by a rating organization
 23 20 subject to subsection 5 of section 515A.4 has become effective
 23 21 or, if within thirty days after a special surety or guaranty
 23 22 filing subject to subsection 5 of section 515A.4 has become
 23 23 effective, the commissioner finds that such filing does not
 23 24 meet the requirements of this chapter, the commissioner shall
 23 25 send to the rating organization or insurer which made such
 23 26 filing written notice of disapproval of such filing specifying
 23 27 therein in what respects the commissioner finds that such
 23 28 filing fails to meet the requirements of this chapter and
 23 29 stating when, within a reasonable period thereafter, such
 23 30 filing shall be deemed no longer effective.  Said disapproval
 23 31 shall not affect any contract made or issued prior to the
 23 32 expiration of the period set forth in said notice.
 23 33    3.  2.  If at At any time subsequent to the applicable
 23 34 review period provided for in subsection 1 or 2 of this
 23 35 section, the commissioner finds that a filing does not meet
 24  1 the requirements of this chapter, the may hold a hearing to
 24  2 determine whether a filing meets the requirements of this
 24  3 chapter.  The commissioner shall, after provide notice of a
 24  4 hearing held upon not less than ten days' written notice,
 24  5 specifying the matters to be considered at such hearing, days
 24  6 prior to the hearing to every insurer and rating organization
 24  7 which made such the filing, specifying the matters to be
 24  8 considered at the hearing.  If the commissioner finds that a
 24  9 filing does not meet the requirements of this chapter, the
 24 10 commissioner shall issue an order specifying in what respects
 24 11 the commissioner finds that such the filing fails to meet the
 24 12 requirements of this chapter, and stating when, within a
 24 13 reasonable period thereafter, such the filing shall be deemed
 24 14 no longer effective.  Copies of said the order shall be sent
 24 15 to every such insurer and rating organization which made the
 24 16 filing.  Said The order shall not affect any contract or
 24 17 policy made or issued prior to the expiration of the period
 24 18 set forth in said the order.
 24 19    4.  3.  a.  Any person or organization aggrieved with
 24 20 respect to any filing which is in effect may make written
 24 21 application to the commissioner for a hearing thereon,
 24 22 provided, however, that the insurer or rating organization
 24 23 that made or uses the filing shall not be authorized to
 24 24 proceed under this subsection.  Such application shall specify
 24 25 the grounds to be relied upon by the applicant and such
 24 26 application must show that the person or organization making
 24 27 such application has a specific economic interest affected by
 24 28 the filing.  If the commissioner shall find finds that the
 24 29 application is made in good faith, that the applicant has a
 24 30 specific economic interest, that the applicant would be so
 24 31 aggrieved if the applicant's grounds are established, and that
 24 32 such grounds otherwise justify holding such a hearing, the
 24 33 commissioner shall within thirty days after receipt of such
 24 34 application hold a hearing, upon not less than ten days'
 24 35 written notice to the applicant and to every insurer and
 25  1 rating organization which made such the filing.  No rating or
 25  2 advisory organization shall have any status under this chapter
 25  3 to make application for a hearing on any filing made by an
 25  4 insurer with the commissioner.
 25  5    b.  If, after such hearing, the commissioner finds that the
 25  6 filing does not meet the requirements of this chapter, the
 25  7 commissioner shall issue an order specifying in what respects
 25  8 the commissioner finds that such filing fails to meet the
 25  9 requirements of this chapter, and stating when, within a
 25 10 reasonable period thereafter, such filing shall be deemed no
 25 11 longer effective.  Copies of said the order shall be sent to
 25 12 the applicant and to every such insurer and rating
 25 13 organization.  Said The order shall not affect any contract or
 25 14 policy made or issued prior to the expiration of the period
 25 15 set forth in said the order.
 25 16    5.  4.  No filing shall be disapproved if the rates thereby
 25 17 produced meet the requirements of this chapter.
 25 18    Sec. 33.  Section 515A.6, subsection 1, paragraph c, Code
 25 19 Supplement 2007, is amended to read as follows:
 25 20    c.  Licenses issued pursuant to this section shall remain
 25 21 in effect for three years unless sooner suspended or revoked
 25 22 by the commissioner.  The fee for said the license shall be
 25 23 twenty=five one hundred dollars.
 25 24    Sec. 34.  Section 515A.6, subsection 7, paragraph a, Code
 25 25 Supplement 2007, is amended to read as follows:
 25 26    a.  The commissioner shall provide notice of the filing of
 25 27 the proposed rates at least thirty days before the effective
 25 28 date of the proposed rates by publishing a notice in the Iowa
 25 29 administrative bulletin on the internet web site of the
 25 30 insurance division of the department of commerce.
 25 31    Sec. 35.  Section 515A.6, subsection 7, Code Supplement
 25 32 2007, is amended by adding the following new paragraphs:
 25 33    NEW PARAGRAPH.  g.  Absent a request for a hearing as
 25 34 provided in paragraph "b", the commissioner shall issue an
 25 35 order approving or disapproving the proposed rates.
 26  1    NEW PARAGRAPH.  h.  The waiting period for a workers'
 26  2 compensation insurance rate filing shall commence no earlier
 26  3 than the date that notice of the insurance rate filing is
 26  4 published.
 26  5    Sec. 36.  Section 515A.7, Code 2007, is amended to read as
 26  6 follows:
 26  7    515A.7  UNIFORM RATING PLANS AND DEVIATIONS.
 26  8    1.  a.  Every member of or subscriber to a rating
 26  9 organization insurer shall adhere to the filings made on its
 26 10 behalf by such a rating organization except that any such
 26 11 insurer may make written application to the commissioner to
 26 12 file a deviation from the class rates, schedules, rating
 26 13 plans, or rules respecting any kind of insurance, or class of
 26 14 risk within a kind of insurance, or a combination thereof for
 26 15 approval by the commissioner.  Such application The deviation
 26 16 filed shall specify the basis for the modification and a copy
 26 17 shall also be sent simultaneously to such rating organization.
 26 18 In considering the application to file such deviation filed,
 26 19 the commissioner shall give consideration to the available
 26 20 statistics and the principles for rate making as provided in
 26 21 section 515A.3.  The commissioner shall issue an order
 26 22 permitting approve the deviation filed for such insurer to be
 26 23 filed if the commissioner finds it to be justified and it
 26 24 shall thereupon become effective.  The commissioner shall
 26 25 issue an order denying such application disapprove the
 26 26 deviation filed if the commissioner finds that the deviation
 26 27 applied for does not meet the requirements of this chapter.
 26 28    Each deviation permitted to be filed shall remain in effect
 26 29 for a period of not less than one year from the effective date
 26 30 unless sooner withdrawn by the insurer with the approval of
 26 31 the commissioner or until terminated in accordance with the
 26 32 provisions of section 515A.5.
 26 33    b.  A deviation may be filed for approval by the
 26 34 commissioner as follows:
 26 35    (1)  An insurer may file for approval by the commissioner
 27  1 of a uniform percentage rate deviation to be applied to the
 27  2 class rates of the rating organization's filing subject to
 27  3 limitations as set forth by the commissioner by rule.  A rate
 27  4 deviation from the approved class rates of a rating
 27  5 organization shall not cause the rate charged a policyholder
 27  6 to exceed the approved assigned risk rates.
 27  7    (2)  A rating organization or insurer may offer
 27  8 retrospective plans in policies which generate at least one
 27  9 hundred thousand dollars in annual countrywide premiums on
 27 10 workers' compensation liability insurance.
 27 11    (3)  An insurer may offer large deductible programs on
 27 12 policies which generate at least one hundred thousand dollars
 27 13 in annual countrywide premiums on workers' compensation
 27 14 liability insurance.  The minimum large deductible which may
 27 15 be offered is twenty=five thousand dollars, which may be
 27 16 applied to indemnity and medical losses.
 27 17    (4)  An insurer may offer small deductible programs with
 27 18 deductibles in a range of up to ten thousand dollars and which
 27 19 apply only to medical losses.  Losses shall be reported on a
 27 20 net basis in accordance with the statistical plan filed by a
 27 21 rating organization.
 27 22    (5)  An insurer may adopt a scheduled or rating plan
 27 23 providing for credits or debits in an amount not exceeding the
 27 24 maximum modification allowed as set forth by the commissioner
 27 25 by rule.  This amount shall be in addition to the permitted
 27 26 deviations set forth in subparagraphs (1) through (4).
 27 27    (6)  The commissioner may authorize other types of
 27 28 deviations by rule when there is no approved rate, schedule,
 27 29 rating plan, or rule applicable to the deviation filed, on
 27 30 file with the insurance division for a rating organization.
 27 31    2.  The commissioner may adopt rules pursuant to chapter
 27 32 17A to limit deviations and maximum schedule or rating plan
 27 33 modifications.
 27 34    3.  All dividends shall be paid based upon loss
 27 35 sensitivity.  Dividends are deemed a return of profit to
 28  1 insureds.  Accordingly, dividends shall not be guaranteed by
 28  2 an insurer without regard to profits.  Dividends may be
 28  3 offered in conjunction with deviated rates or with scheduled
 28  4 rates or in combination therewith.  For the purposes of this
 28  5 subsection, "loss sensitivity" means the profitability of the
 28  6 policyholder individually or as a member of a homogenous
 28  7 group.
 28  8    Sec. 37.  Section 515A.8, Code 2007, is amended to read as
 28  9 follows:
 28 10    515A.8  APPEAL BY MINORITY MEMBER OR SUBSCRIBER.
 28 11    1.  Any member or subscriber to a rating organization may
 28 12 appeal to the commissioner from the action or decision of such
 28 13 rating organization in approving or rejecting any proposed
 28 14 change in or addition to the filings of such rating
 28 15 organization and the commissioner shall, after a hearing held
 28 16 upon not less than ten days' written notice to the appellant,
 28 17 and to such rating organization, issue an order approving the
 28 18 action or decision of such rating organization or directing it
 28 19 to give further consideration to such proposal, or, if such
 28 20 appeal is from the action or decision of the rating
 28 21 organization in rejecting a proposed addition to its filings,
 28 22 the commissioner may, in the event the commissioner finds that
 28 23 such action or decision was unreasonable, issue an order
 28 24 directing the rating organization to make an addition to its
 28 25 filings, on behalf of its members and subscribers, in a manner
 28 26 consistent with the findings, within a reasonable time after
 28 27 the issuance of such order.
 28 28    2.  If such appeal is based upon the failure of the rating
 28 29 organization to make a filing on behalf of such member or
 28 30 subscriber, which is based on a system of expense provisions
 28 31 which differs, in accordance with the right granted in
 28 32 paragraph "c" of subsection 1 of section 515A.3, from the
 28 33 system of expense provisions included in a filing made by the
 28 34 rating organization, the commissioner shall, if the
 28 35 commissioner grants the appeal, order the rating organization
 29  1 to make the requested filing for use by the appellant.  In
 29  2 deciding such appeal the commissioner shall apply the
 29  3 standards set forth in section 515A.3.
 29  4    Sec. 38.  Section 515A.13, Code 2007, is amended to read as
 29  5 follows:
 29  6    515A.13  RATE ADMINISTRATION.
 29  7    1.  RECORDING AND REPORTING OF LOSS AND EXPENSE EXPERIENCE.
 29  8 The commissioner shall promulgate reasonable rules and
 29  9 statistical plans, reasonably adapted to each of the rating
 29 10 systems on file with the commissioner, which may be modified
 29 11 from time to time and which shall be used thereafter by each
 29 12 insurer in the recording and reporting of its loss and
 29 13 countrywide expense experience, in order that the experience
 29 14 of all insurers may be made available at least annually in
 29 15 such form and detail as may be necessary to aid the
 29 16 commissioner in determining whether rating systems comply with
 29 17 the standards set forth in section 515A.3.  Such rules and
 29 18 plans may also provide for the recording and reporting of
 29 19 expense experience items which are specially applicable to
 29 20 this state and are not susceptible of determination by a
 29 21 prorating of countywide expense experience.  In promulgating
 29 22 such rules and plans, the commissioner shall give due
 29 23 consideration to the rating systems on file and, in order that
 29 24 such rules and plans may be as uniform as is practicable among
 29 25 the several states, to the rules and to the form of the plans
 29 26 used for such rating systems in other states.  No insurer
 29 27 shall be required to record or report its loss experience on a
 29 28 classification basis that is inconsistent with the rating
 29 29 system filed by it.  The commissioner may designate one or
 29 30 more rating organizations or other agencies to assist in
 29 31 gathering such experience and making compilations thereof, and
 29 32 such compilations shall be made available, subject to
 29 33 reasonable rules promulgated by the commissioner, to insurers
 29 34 and rating organizations.
 29 35    2.  INTERCHANGE OF RATING PLAN DATA.  Reasonable rules and
 30  1 plans may be promulgated by the commissioner for the
 30  2 interchange of data necessary for the application of rating
 30  3 plans.
 30  4    3.  CONSULTATION WITH OTHER STATES.  In order to further
 30  5 uniform administration of rate regulatory laws, the
 30  6 commissioner and every insurer and rating organization may
 30  7 exchange information and experience data with insurance
 30  8 supervisory officials, insurers and rating organizations in
 30  9 other states and may consult with them with respect to rate
 30 10 making and the application of rating systems.
 30 11    4.  RULES AND REGULATIONS.  The commissioner may make
 30 12 reasonable rules necessary to effect the purposes of this
 30 13 chapter.
 30 14    5.  PROHIBITED RELEASE.  A person other than the
 30 15 commissioner or the commissioner's designee shall not release
 30 16 to another person, other than to the servicing insurer of the
 30 17 policy or to the commissioner or the commissioner's designee,
 30 18 experience, payroll, loss data, expiration date of a policy,
 30 19 or classification information without the prior written
 30 20 approval of the policyholder.  A violation of this section
 30 21 shall be considered an unfair trade practice pursuant to
 30 22 chapter 507B.
 30 23    Sec. 39.  Section 515A.17, Code 2007, is amended to read as
 30 24 follows:
 30 25    515A.17  PENALTIES.
 30 26    1.  The commissioner may, if the commissioner finds that
 30 27 any person or organization has violated any provision of this
 30 28 chapter, impose a penalty of not more than fifty one thousand
 30 29 dollars for each such violation, but if the commissioner finds
 30 30 such violation to be willful the commissioner may impose a
 30 31 penalty of not more than five hundred thousand dollars for
 30 32 each such violation.  Such penalties may be in addition to any
 30 33 other penalty provided by law.
 30 34    2.  The commissioner may suspend the license of any rating
 30 35 organization or insurer which fails to comply with an order of
 31  1 the commissioner within the time limited by such order, or any
 31  2 extension thereof which the commissioner may grant.  The
 31  3 commissioner shall not suspend the license of any rating
 31  4 organization or insurer for failure to comply with an order
 31  5 until the time prescribed for an appeal therefrom has expired
 31  6 or if an appeal has been taken, until such order has been
 31  7 affirmed.  The commissioner may determine when a suspension of
 31  8 license shall become effective and it shall remain in effect
 31  9 for the period fixed by the commissioner, unless the
 31 10 commissioner modifies or rescinds such suspension, or until
 31 11 the order upon which such suspension is based is modified,
 31 12 rescinded, or reversed.
 31 13    3.  No A penalty shall not be imposed and no a license
 31 14 shall not be suspended or revoked except upon a written order
 31 15 of the commissioner, stating the commissioner's findings, made
 31 16 after a hearing held upon not less than ten days' written
 31 17 notice to such person or organization specifying the alleged
 31 18 violation.
 31 19    Sec. 40.  NEW SECTION.  515A.19A  RULES.
 31 20    The commissioner may adopt rules pursuant to chapter 17A as
 31 21 necessary and convenient to administer this chapter.
 31 22    Sec. 41.  Section 521.16, Code 2007, is amended to read as
 31 23 follows:
 31 24    521.16  APPLICABILITY OF SECTION 521A.3.
 31 25    The For an insurer subject to chapter 521A, the provisions
 31 26 of section 521A.3 shall also be applicable to a merger or
 31 27 consolidation subject to this chapter.  As used in this
 31 28 section, "insurer" means the same as defined in section
 31 29 521A.1.
 31 30    Sec. 42.  Section 522B.11, subsection 1, Code 2007, is
 31 31 amended by adding the following new paragraph:
 31 32    NEW PARAGRAPH.  r.  Using an insurance producer's license
 31 33 for the principal purpose of procuring, receiving, or
 31 34 forwarding applications for insurance of any kind, or placing,
 31 35 or effecting such insurance directly or indirectly upon or in
 32  1 connection with the property of the licensee or the property
 32  2 of a relative, employer, or employee of the licensee, or upon
 32  3 or in connection with property for which the licensee or a
 32  4 relative, employer, or employee of the licensee is an agent,
 32  5 custodian, vendor, bailee, trustee, or payee.
 32  6    Sec. 43.  Section 523A.206, subsection 5, paragraphs a and
 32  7 b, Code Supplement 2007, are amended to read as follows:
 32  8    a.  The refusal of a seller, by its officers, directors,
 32  9 employees, or agents, to submit to an examination or to comply
 32 10 with a reasonable written request of an examiner shall
 32 11 constitute grounds for the suspension, revocation, or
 32 12 nonrenewal of denial of an application to renew any license
 32 13 held by the seller to engage in business subject to the
 32 14 commissioner's jurisdiction.
 32 15    b.  If a seller declines or refuses to submit to an
 32 16 examination as provided in this chapter, the commissioner
 32 17 shall immediately suspend, revoke, or nonrenew deny an
 32 18 application to renew any license held by the seller or
 32 19 business to engage in business subject to the commissioner's
 32 20 jurisdiction, and shall report the commissioner's action to
 32 21 the attorney general, who shall immediately apply to the
 32 22 district court for the appointment of a receiver to administer
 32 23 the final affairs of the seller.
 32 24    Sec. 44.  Section 523A.401, subsection 7, Code Supplement
 32 25 2007, is amended to read as follows:
 32 26    7.  The seller of a purchase agreement subject to this
 32 27 chapter which is to be funded by insurance proceeds shall
 32 28 obtain all permits licenses required to be obtained and comply
 32 29 with all reporting requirements under this chapter.  A parent
 32 30 company, provider, or seller shall not pledge, borrow from, or
 32 31 otherwise encumber an insurance policy funding a purchase
 32 32 agreement.
 32 33    Sec. 45.  Section 523A.402, subsection 7, Code Supplement
 32 34 2007, is amended to read as follows:
 32 35    7.  The seller of a purchase agreement subject to this
 33  1 chapter which is to be funded by annuity proceeds shall obtain
 33  2 all permits licenses required to be obtained and comply with
 33  3 all reporting requirements under this chapter.  A parent
 33  4 company, provider, or seller shall not pledge, borrow from, or
 33  5 otherwise encumber an annuity funding a purchase agreement.
 33  6    Sec. 46.  Section 523A.405, subsection 8, Code Supplement
 33  7 2007, is amended to read as follows:
 33  8    8.  The amount of the surety bond shall equal eighty
 33  9 percent of the payments received pursuant to purchase
 33 10 agreements, or the applicable portion thereof, for cemetery
 33 11 merchandise, funeral merchandise, funeral services, or a
 33 12 combination thereof and the amount needed to adjust the amount
 33 13 of the surety bond for inflation as set by the commissioner
 33 14 based on the consumer price index.  The seller shall review
 33 15 the amount of the surety bond no less than annually and shall
 33 16 increase the bond as necessary to reflect additional payments.
 33 17 The amount needed to adjust for inflation shall be added
 33 18 annually to the surety bond during the first quarter of the
 33 19 establishment's seller's fiscal year.
 33 20    Sec. 47.  Section 523A.501, subsection 3, paragraphs a and
 33 21 b, Code Supplement 2007, are amended to read as follows:
 33 22    a.  The commissioner shall request and obtain,
 33 23 notwithstanding section 692.2, subsection 5, criminal history
 33 24 data for any applicant for an initial license issued pursuant
 33 25 to this section, any applicant for reinstatement of a license
 33 26 issued pursuant to this section, or any licensee who is being
 33 27 monitored as a result of a commission order an order of the
 33 28 commissioner or agreement resolving an administrative
 33 29 disciplinary action, for the purpose of evaluating the
 33 30 applicant's or licensee's eligibility for licensure or
 33 31 suitability for continued practice as a preneed seller.  The
 33 32 commissioner shall adopt rules pursuant to chapter 17A to
 33 33 implement this section.  The commissioner shall inform the
 33 34 applicant or licensee of the criminal history requirement and
 33 35 obtain a signed waiver from the applicant or licensee prior to
 34  1 submitting a criminal history data request.
 34  2    b.  A request for criminal history data shall be submitted
 34  3 to the department of public safety, division of criminal
 34  4 investigation, pursuant to section 692.2, subsection 1.  The
 34  5 commissioner may also require such applicants or licensees to
 34  6 provide a full set of fingerprints, in a form and manner
 34  7 prescribed by the commission commissioner.  Such fingerprints
 34  8 may be submitted to the federal bureau of investigation
 34  9 through the state criminal history repository for a national
 34 10 criminal history check.  The commissioner may authorize
 34 11 alternate methods or sources for obtaining criminal history
 34 12 record information.  The commissioner may, in addition to any
 34 13 other fees, charge and collect such amounts as may be incurred
 34 14 by the commissioner, the department of public safety, or the
 34 15 federal bureau of investigation in obtaining criminal history
 34 16 information.  Amounts collected shall be considered repayment
 34 17 receipts as defined in section 8.2.
 34 18    Sec. 48.  Section 523A.501, subsection 4, Code Supplement
 34 19 2007, is amended to read as follows:
 34 20    4.  The commissioner shall request and obtain a financial
 34 21 history for any applicant for an initial license issued
 34 22 pursuant to this section, any applicant for reinstatement of a
 34 23 license issued pursuant to this section, or any licensee who
 34 24 is being monitored as a result of a commission order an order
 34 25 of the commissioner or agreement resolving an administrative
 34 26 disciplinary action, for the purpose of evaluating the
 34 27 applicant's or licensee's eligibility for licensure or
 34 28 suitability for continued practice as a preneed seller.
 34 29 "Financial history" means the record of a person's current
 34 30 loans, the date of a person's loans, the amount of the loans,
 34 31 the person's payment record on the loans, current liens
 34 32 against the person's property, and the person's most recent
 34 33 financial statement setting forth the assets, liabilities, and
 34 34 the net worth of the person.
 34 35    Sec. 49.  Section 523A.502, subsection 4, paragraphs a and
 35  1 b, Code Supplement 2007, are amended to read as follows:
 35  2    a.  The commissioner shall request and obtain,
 35  3 notwithstanding section 692.2, subsection 5, criminal history
 35  4 data for any applicant for an initial license issued pursuant
 35  5 to this section, any applicant for reinstatement of a license
 35  6 issued pursuant to this section, or any licensee who is being
 35  7 monitored as a result of a commission order an order of the
 35  8 commissioner or agreement resolving an administrative
 35  9 disciplinary action, for the purpose of evaluating the
 35 10 applicant's or licensee's eligibility for licensure or
 35 11 suitability for continued practice as a sales agent.  The
 35 12 commissioner shall adopt rules pursuant to chapter 17A to
 35 13 implement this section.  The commissioner shall inform the
 35 14 applicant or licensee of the criminal history requirement and
 35 15 obtain a signed waiver from the applicant or licensee prior to
 35 16 submitting a criminal history data request.
 35 17    b.  A request for criminal history data shall be submitted
 35 18 to the department of public safety, division of criminal
 35 19 investigation, pursuant to section 692.2, subsection 1.  The
 35 20 commissioner may also require such applicants or licensees, to
 35 21 provide a full set of fingerprints, in a form and manner
 35 22 prescribed by the commission commissioner.  Such fingerprints
 35 23 may be submitted to the federal bureau of investigation
 35 24 through the state criminal history repository for a national
 35 25 criminal history check.  The commissioner may authorize
 35 26 alternate methods or sources for obtaining criminal history
 35 27 record information.  The commissioner may, in addition to any
 35 28 other fees, charge and collect such amounts as may be incurred
 35 29 by the commissioner, the department of public safety, or the
 35 30 federal bureau of investigation in obtaining criminal history
 35 31 information.  Amounts collected shall be considered repayment
 35 32 receipts as defined in section 8.2.
 35 33    Sec. 50.  Section 523A.502, subsection 5, Code Supplement
 35 34 2007, is amended to read as follows:
 35 35    5.  The A sales license shall be renewed every four years
 36  1 by filing the form prescribed by the commissioner under
 36  2 subsection 3, accompanied by a renewal fee in an amount set by
 36  3 the commissioner by rule.
 36  4    Sec. 51.  Section 523A.603, subsection 2, Code Supplement
 36  5 2007, is amended to read as follows:
 36  6    2.  If a purchase agreement is funded by a surety bond, the
 36  7 purchaser shall receive a notice from the surety company that
 36  8 evidences coverage under the bond, the name of the purchaser
 36  9 or beneficiary, and the amount of coverage.  If the purchase
 36 10 agreement is paid with a single payment, the purchaser shall
 36 11 receive notice of the surety bond within sixty days of making
 36 12 the payment.  If the purchase agreement is being paid with
 36 13 multiple, periodic payments, the purchaser shall receive
 36 14 notice of the surety bond within sixty days of making the
 36 15 first payment and within sixty days of making the last
 36 16 payment.  Compliance with this notice requirement does not
 36 17 require a seller to purchase individual surety bonds for each
 36 18 purchaser and beneficiary.  A seller may file a single bond
 36 19 with the commissioner.
 36 20    Sec. 52.  Section 523A.807, subsection 3, paragraph a, Code
 36 21 Supplement 2007, is amended to read as follows:
 36 22    a.  Payment of a civil penalty of not more than one
 36 23 thousand dollars for each violation, but not exceeding an
 36 24 aggregate of ten thousand dollars during any six=month period,
 36 25 except that if the commissioner finds that the person knew or
 36 26 reasonably should have known that the person was in violation
 36 27 of such provisions or rules adopted pursuant thereto, the
 36 28 penalty shall be not more than five thousand dollars for each
 36 29 violation, but not exceeding an aggregate of fifty thousand
 36 30 dollars during any six=month period.  The commissioner shall
 36 31 assess the penalty on the employer of an individual and not on
 36 32 the individual, if the commissioner finds that the violations
 36 33 committed by the individual were directed, encouraged,
 36 34 condoned, ignored, or ratified by the individual's employer.
 36 35    Sec. 53.  Section 523A.901, subsection 9, paragraph a,
 37  1 subparagraph (2), subparagraph subdivision (d), Code
 37  2 Supplement 2007, is amended to read as follows:
 37  3    (d)  The creditor receiving the transfer was an officer, or
 37  4 an employee, attorney, or other person who was in fact in a
 37  5 position of comparable influence in the business of the seller
 37  6 to an officer whether or not the person held the position of
 37  7 an officer, owner, or other person, firm, corporation,
 37  8 association, or aggregation of persons with whom the seller
 37  9 did not deal at arm's length.
 37 10    Sec. 54.  Section 523I.102, subsection 8, Code Supplement
 37 11 2007, is amended to read as follows:
 37 12    8.  "Commissioner" means the commissioner of insurance or
 37 13 the commissioner's designee authorized in section 523A.801.
 37 14    Sec. 55.  Section 523I.201, subsection 1, Code Supplement
 37 15 2007, is amended to read as follows:
 37 16    1.  This chapter shall be administered by the commissioner.
 37 17 The commissioner shall may employ officers, attorneys,
 37 18 accountants, and other employees as needed for administering
 37 19 this chapter.
 37 20    Sec. 56.  Section 508.30, Code 2007, is repealed.
 37 21    Sec. 57.  EFFECTIVE DATE.  The section of this Act amending
 37 22 section 515A.7, Code 2007, being deemed of immediate
 37 23 importance, takes effect upon enactment.
 37 24
 37 25
 37 26                                                             
 37 27                               PATRICK J. MURPHY
 37 28                               Speaker of the House
 37 29
 37 30
 37 31                                                             
 37 32                               JOHN P. KIBBIE
 37 33                               President of the Senate
 37 34
 37 35    I hereby certify that this bill originated in the House and
 38  1 is known as House File 2555, Eighty=second General Assembly.
 38  2
 38  3
 38  4                                                             
 38  5                               MARK BRANDSGARD
 38  6                               Chief Clerk of the House
 38  7 Approved                , 2008
 38  8
 38  9
 38 10                            
 38 11 CHESTER J. CULVER
 38 12 Governor