House File 2334

                                       HOUSE FILE       
                                       BY  ALONS, BAUDLER, DE BOEF,
                                           CHAMBERS and MERTZ


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to the ownership of automobile repair facilities
  2    by persons engaged in the business of insurance and providing
  3    penalties.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 5405YH 80
  6 av/cf/24

PAG LIN

  1  1    Section 1.  Section 507B.4, Code 2003, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  15.  AUTOMOBILE REPAIR FACILITY OWNERSHIP.
  1  4 Ownership or receipt of any financial benefit by a person from
  1  5 an automobile repair facility or any other form of direct or
  1  6 indirect consideration from any individual or entity for
  1  7 referring insureds to that individual or entity or their
  1  8 designee for vehicle repairs covered under the automobile
  1  9 comprehensive coverage, property damage coverage, or
  1 10 automobile collision coverage of a commercial or noncommercial
  1 11 policy of automobile insurance issued by the person.  For the
  1 12 purposes of this subsection, "financial benefit" means
  1 13 receiving any commission or gratuity, discount on repair
  1 14 costs, free repairs, employment by a repair facility, or
  1 15 similar benefit.
  1 16                           EXPLANATION
  1 17    This bill provides that it is an unfair method of
  1 18 competition or a deceptive act or practice for a person
  1 19 engaged in the business of insurance to own or receive any
  1 20 financial benefit from an automobile repair facility or any
  1 21 other form of direct or indirect consideration from any
  1 22 individual or entity for referring an insured to that
  1 23 individual or entity or their designee for vehicle repairs
  1 24 covered under the automobile comprehensive coverage, property
  1 25 damage coverage, or automobile collision coverage of a
  1 26 commercial or noncommercial policy of automobile insurance
  1 27 issued by the person.  For the purposes of the bill, a
  1 28 "person" to whom this provision applies includes any
  1 29 individual, corporation, association, partnership, fraternal
  1 30 beneficiary association, and other legal entity engaged in the
  1 31 business of insurance in this state.  For the purposes of the
  1 32 bill, "financial benefit" means receiving any commission or
  1 33 gratuity, discount on repair costs, free repairs, employment
  1 34 by a repair facility, or similar benefit.
  1 35    A violation of the bill is punishable by a civil penalty of
  2  1 not more than $1,000 for each act or violation, but not to
  2  2 exceed an aggregate of $10,000, unless the person knew or
  2  3 reasonably should have known the person was in violation of
  2  4 the bill, in which case the penalty shall not exceed $5,000
  2  5 for each act or violation, and not be more than $50,000 in the
  2  6 aggregate.  A violation of the bill may also result in the
  2  7 suspension or revocation of the violator's license.
  2  8 LSB 5405YH 80
  2  9 av/cf/24