Senate File 2017 - Introduced
SENATE FILE
BY COURTNEY
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act prohibiting inducements to purchase certain insurance
2 contracts, providing penalties, and providing an applicability
3 date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 507B.4, subsection 8, paragraph a, Code
1 2 2005, is amended to read as follows:
1 3 a. Except as otherwise expressly provided by law,
1 4 knowingly permitting or offering to make or making any
1 5 contract of life insurance, life annuity or accident and
1 6 health insurance, or agreement as to such contract other than
1 7 as plainly expressed in the contract issued thereon, or paying
1 8 or allowing, or giving or offering to pay, allow, or give,
1 9 directly or indirectly, as inducement to such insurance, or
1 10 annuity, any rebate of premiums payable on the contract, or
1 11 any special favor or advantage in the dividends or other
1 12 benefits thereon, or any valuable consideration or inducement
1 13 whatever not specified in the contract whatsoever; or giving,
1 14 or selling, or purchasing or offering to give, sell, or
1 15 purchase as inducement to such insurance or annuity or in
1 16 connection therewith, any stocks, bonds, or other securities
1 17 of any insurance company or other corporation, association, or
1 18 partnership, or any dividends or profits accrued thereon, or
1 19 any thing of value whatsoever not specified in the contract.
1 20 Sec. 2. Section 507B.4, subsection 8, paragraph b, Code
1 21 2005, is amended by adding the following new subparagraph:
1 22 NEW SUBPARAGRAPH. (4) In the case of any contract of
1 23 group health insurance offered by an insurance company or
1 24 organized delivery system establishing premium discounts or
1 25 rebates or modifying otherwise applicable copayments or
1 26 deductibles in return for adherence to programs of health
1 27 promotion and disease prevention.
1 28 Sec. 3. APPLICABILITY. The bill applies to contracts of
1 29 life insurance, life annuity, and accident and health
1 30 insurance delivered, issued for delivery, continued, or
1 31 renewed in this state on or after July 1, 2006.
1 32 EXPLANATION
1 33 This bill prohibits insurance carriers who offer life
1 34 insurance, life annuities, or accident and health insurance
1 35 from offering anything of value or valuable consideration as
2 1 an inducement to purchase the insurance. Currently, such
2 2 inducements can be offered if they are specified in the
2 3 insurance contract or, in the case of insurance other than
2 4 life, provided for in an applicable filing with the
2 5 commissioner of insurance.
2 6 The bill does not prohibit an insurance company or
2 7 organized delivery system offering group health insurance
2 8 coverage from establishing premium discounts or rebates or
2 9 modifying otherwise applicable copayments or deductibles in
2 10 return for adherence to programs of health promotion and
2 11 disease prevention.
2 12 The penalty for a violation of the bill is a cease and
2 13 desist order served upon the violator and may include civil
2 14 penalties of not more than $1,000 per act up to an aggregate
2 15 of $10,000, or not more than $5,000 per act up to an aggregate
2 16 of $50,000 in a six=month period, where the violator knew or
2 17 should have known of the violation. A violation may also
2 18 result in suspension of the violator's license and in a
2 19 separate assessment of fines to the employer of the violator
2 20 or the insurer.
2 21 The bill is applicable to contracts of life insurance, life
2 22 annuity, and accident and health insurance delivered, issued
2 23 for delivery, continued, or renewed in this state on or after
2 24 July 1, 2006.
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