H.F. _____ Section 1. Section 507B.4, Code 2009, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 19. Employer-owned life insurance 3 contracts. Issuing an employer-owned life insurance contract 4 on the life of an employee for which the employer is the named 5 beneficiary, unless an equivalent employer-owned life insurance 6 policy is issued at the same time on the life of the employee 7 with the employee’s dependents named as beneficiaries. If an 8 employer-owned life insurance contract is issued on the life 9 of an employee in violation of this subsection, the employee’s 10 dependents shall be treated as beneficiaries under the life 11 insurance contract by operation of law. 12 EXPLANATION 13 This bill creates new Code section 507B.4(19) which 14 establishes as an unfair or deceptive act or practice in the 15 business of insurance the purchase of certain employer-owned 16 life insurance contracts on the lives of employees. 17 The bill provides that it is an unfair or deceptive 18 act or practice for a life insurance company to issue an 19 employer-owned life insurance contract on the life of an 20 employee for which the employer is the named beneficiary unless 21 an equivalent employer-owned life insurance policy is issued at 22 the same time on the life of the employee with the employee’s 23 dependents named as beneficiaries. If an employer-owned life 24 insurance contract is issued on the life of an employee in 25 violation of the new provision, the employee’s dependents shall 26 be treated as beneficiaries under the employer-owned life 27 insurance contract by operation of law, regardless of who is 28 named as the beneficiary under the contract. 29 A person who violates the new provision may be subject to 30 cease and desist orders, license suspension or revocation, and 31 civil penalties. 32 -1- LSB 5545HC (3) 83 av/nh 1/ 1