Senate
Study
Bill
3090
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
COMMERCE/INSURANCE
DIVISION
BILL)
A
BILL
FOR
An
Act
relating
to
various
matters
under
the
purview
of
the
1
insurance
division
of
the
department
of
commerce
including
2
the
Iowa
grain
indemnity
fund
board,
uniform
securities
Act,
3
examination
of
insurance
companies,
life
insurance
companies
4
and
associations,
external
review
of
health
care
coverage
5
decisions,
insurance
other
than
life,
mortgage
guaranty
6
insurance,
cemetery
and
funeral
merchandise
and
funeral
7
services,
and
regulation
of
cemeteries
and
making
penalties
8
applicable.
9
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
10
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Section
1.
Section
20.4,
Code
Supplement
2009,
is
amended
by
1
adding
the
following
new
subsection:
2
NEW
SUBSECTION
.
13.
Full-time
nonclerical
employees
of
3
the
company
regulation
bureau
of
the
insurance
division
of
the
4
department
of
commerce.
5
Sec.
2.
Section
22.7,
Code
Supplement
2009,
is
amended
by
6
adding
the
following
new
subsection:
7
NEW
SUBSECTION
.
65.
Information
obtained
by
the
8
commissioner
of
insurance
in
the
course
of
an
examination
of
a
9
cemetery
as
provided
in
section
523I.213A,
subsection
7.
10
Sec.
3.
Section
203D.4,
subsection
1,
Code
2009,
is
amended
11
to
read
as
follows:
12
1.
The
Iowa
grain
indemnity
fund
board
is
established
13
to
advise
the
department
on
matters
relating
to
the
fund
14
and
to
perform
the
duties
provided
it
in
this
chapter.
The
15
board
is
composed
of
the
secretary
of
agriculture
or
a
16
designee
who
shall
serve
as
president;
the
commissioner
of
17
insurance
or
a
designee
who
shall
serve
as
secretary;
the
18
state
treasurer
or
a
designee
who
shall
serve
as
treasurer;
19
and
four
representatives
of
the
grain
industry
appointed
by
20
the
governor,
subject
to
confirmation
by
the
senate,
two
of
21
whom
shall
be
representatives
of
producers
and
who
shall
22
be
actively
participating
producers,
and
two
of
whom
shall
23
be
representatives
of
licensed
grain
dealers
and
licensed
24
warehouse
operators
and
who
shall
be
actively
participating
25
licensed
grain
dealers
and
licensed
warehouse
operators,
each
26
of
whom
shall
be
selected
from
a
list
of
three
nominations
27
made
by
the
secretary
of
agriculture.
The
term
of
membership
28
of
the
grain
industry
representatives
is
three
years,
and
the
29
representatives
are
eligible
for
reappointment.
However,
30
only
actively
participating
producers,
and
grain
dealers
and
31
warehouse
operators
are
eligible
for
reappointment.
The
32
grain
industry
representatives
are
entitled
to
a
per
diem
as
33
specified
in
section
7E.6
for
each
day
spent
in
the
performance
34
of
the
duties
of
the
board,
plus
actual
expenses
incurred
in
35
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the
performance
of
those
duties.
Four
members
of
the
board
1
constitute
a
quorum,
and
the
affirmative
vote
of
four
members
2
is
necessary
for
any
action
taken
by
the
board,
except
that
3
a
lesser
number
may
adjourn
a
meeting.
A
vacancy
in
the
4
membership
of
the
board
does
not
impair
the
rights
of
a
quorum
5
to
exercise
all
the
rights
and
perform
all
the
duties
of
the
6
board.
7
Sec.
4.
Section
502.305,
subsection
2,
Code
Supplement
8
2009,
is
amended
to
read
as
follows:
9
2.
Filing.
Except
as
provided
in
subsection
10
and
section
10
502.304A,
subsection
3,
paragraph
“g”
,
a
person
who
files
a
11
registration
statement
or
a
notice
filing
shall
pay
a
filing
12
fee
of
one-tenth
of
one
percent
of
the
proposed
aggregate
13
sales
price
of
the
securities
to
be
offered
to
persons
in
14
this
state
pursuant
to
the
registration
statement
or
notice
15
filing.
However,
except
as
provided
in
subsection
10,
section
16
502.302,
subsection
1,
paragraph
“a”
,
and
section
502.304A,
17
subsection
3,
paragraph
“g”
,
the
annual
filing
fee
shall
not
18
be
less
than
fifty
dollars
or
more
than
one
thousand
dollars.
19
The
administrator
shall
retain
the
filing
fee
even
if
the
20
notice
filing
is
withdrawn
or
the
registration
is
withdrawn,
21
denied,
suspended,
revoked,
or
abandoned.
The
fees
collected
22
under
this
subsection
shall
be
deposited
as
provided
in
section
23
505.7.
The
administrator
may
adopt
rules
requiring
a
filing
24
to
be
made
electronically.
The
rules
may
provide
for
such
25
electronic
filing
either
directly
with
the
administrator
or
26
with
a
designee
of
the
administrator.
The
rules
may
require
27
that
the
filer
pay
any
reasonable
costs
charged
by
the
designee
28
of
the
administrator
for
processing
the
filings
and
that
the
29
filer
submit
any
fees
paid
through
the
designee.
30
Sec.
5.
Section
507.4,
subsection
2,
Code
2009,
is
amended
31
to
read
as
follows:
32
2.
The
commissioner
may,
when
in
the
commissioner’s
33
judgment
it
is
advisable,
appoint
assistants
to
aid
in
34
conducting
examinations.
The
commissioner
shall
employ
35
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rates
of
compensation
consistent
with
current
standards
in
1
the
industry
for
certified
public
accountants,
attorneys,
2
and
skilled
insurance
examiners.
The
commissioner
may
use
3
compensation
rates
suggested
by
the
national
association
of
4
insurance
commissioners.
Insurance
examiners
employed
under
5
this
section
shall
be
exempt
from
the
merit
system
provisions
6
of
chapter
8A,
subchapter
IV,
under
section
8A.412,
subsection
7
17.
Pay
plans
which
are
substantially
equivalent
to
those
8
for
examiners
under
section
524.208
shall
be
established
for
9
exempt
company
regulation
bureau
employees
who
examine
the
10
accounts
and
affairs
of
companies
subject
to
the
supervision
11
and
regulation
of
the
commissioner.
Compensation
shall
be
paid
12
from
appropriations
for
such
purposes
upon
certification
of
the
13
commissioner,
which
shall
be
reimbursed
as
provided
in
sections
14
507.8
and
507.9.
15
Sec.
6.
NEW
SECTION
.
508.33A
Limited
purpose
subsidiary
16
life
insurance
companies.
17
1.
As
used
in
this
section
unless
the
context
otherwise
18
requires:
19
a.
“Affiliated
company”
means
a
domestic
life
insurance
20
company
that
is
a
directly
or
indirectly
wholly
owned
21
subsidiary
of
the
same
parent.
22
b.
“Parent”
means
a
person
as
defined
in
section
521A.1
23
who
directly
or
indirectly
through
one
or
more
intermediaries
24
wholly
owns
the
organizing
life
insurance
company.
25
c.
“Risks”
means
risks
associated
with
the
life
insurance
26
policies
and
contracts
written
by
the
ceding
domestic
life
27
insurance
company
or
assumed
by
the
ceding
domestic
life
28
insurance
company
from
an
affiliated
company,
which
were
29
written
by
the
affiliated
company
and
for
which
the
ceding
30
domestic
life
insurance
company
holds
direct
statutory
reserves
31
for
those
policies
and
contracts
as
required
by
section
508.36.
32
2.
a.
A
domestic
life
insurance
company
organized
pursuant
33
to
the
provisions
of
this
chapter
may
organize
a
domestic
34
limited
purpose
subsidiary
life
insurance
company
pursuant
35
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to
the
provisions
of
this
chapter
that
is
wholly
owned
by
1
the
organizing
life
insurance
company.
The
limited
purpose
2
subsidiary
life
insurance
company
may
reinsure
risks
of
the
3
organizing
life
insurance
company,
reinsure
risks
of
affiliated
4
companies,
and
access
alternative
forms
of
financing.
5
b.
A
limited
purpose
subsidiary
life
insurance
company
6
shall
submit
a
plan
of
operation
to
the
commissioner,
and
the
7
commissioner
shall
approve
the
plan
of
operation
with
such
8
amendments
as
the
commissioner
requires,
before
the
limited
9
purpose
subsidiary
life
insurance
company
assumes
any
risks
10
under
a
reinsurance
contract.
The
plan
of
operation
and
any
11
records,
books,
documents,
reports,
or
other
information
that
12
the
commissioner
requires
a
limited
purpose
subsidiary
life
13
insurance
company
to
produce
or
disclose
pursuant
to
rules
14
adopted
under
subsection
6
or
pursuant
to
an
order
of
the
15
commissioner
shall
be
treated
the
same
as
information
obtained
16
by
or
disclosed
to
the
commissioner
pursuant
to
section
521A.6
17
and
the
commissioner
shall
have
the
powers
enumerated
in
18
section
521A.6
as
to
that
insurer.
19
3.
The
organizing
life
insurance
company
may
invest
funds
20
from
its
surplus
in
a
limited
purpose
subsidiary
life
insurance
21
company
organized
pursuant
to
this
section.
22
4.
The
organizing
life
insurance
company’s
officers
and
23
directors
may
serve
as
officers
and
directors
of
a
limited
24
purpose
subsidiary
life
insurance
company
organized
pursuant
to
25
this
section.
26
5.
A
limited
purpose
subsidiary
life
insurance
company
27
organized
pursuant
to
this
section
shall
be
deemed
to
be
28
licensed
to
transact
the
business
of
reinsurance
for
the
29
purposes
of
section
521B.2,
subsection
1,
but
may
only
30
reinsure
risks
of
its
organizing
life
insurance
company
and
31
of
affiliated
companies.
A
limited
purpose
subsidiary
life
32
insurance
company
organized
pursuant
to
this
section
may,
upon
33
approval
of
the
commissioner,
purchase
reinsurance
to
cede
the
34
reinsurance
risks
assumed
by
the
limited
purpose
subsidiary
35
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life
insurance
company.
1
6.
The
commissioner
shall
adopt
rules
pursuant
to
chapter
2
17A
concerning
limited
purpose
subsidiary
life
insurance
3
companies,
including
but
not
limited
to
the
organization,
plans
4
of
operation,
capital
requirements
including
risk-based
capital
5
requirements,
reserves,
authorized
investments,
reinsurance
6
assumed,
material
transaction
restrictions
and
requirements,
7
dividends
and
distributions,
operations,
and
the
conditions,
8
forms,
and
approval
of
financing
of
limited
purpose
subsidiary
9
life
insurance
companies
organized
pursuant
to
this
section.
10
7.
Admitted
assets
of
a
limited
purpose
subsidiary
11
life
insurance
company
shall
include
assets
approved
by
12
the
commissioner
which
shall
be
deemed
to
be,
and
reported
13
as,
admitted
assets
of
the
limited
purpose
subsidiary
life
14
insurance
company.
15
8.
The
provisions
of
sections
508.5,
508.6,
and
511.8,
16
section
521.2,
subsection
4,
sections
521A.4
and
521A.5,
and
17
chapter
521E
shall
not
be
applicable
to
a
limited
purpose
18
subsidiary
life
insurance
company
organized
pursuant
to
this
19
section.
20
9.
A
limited
purpose
subsidiary
life
insurance
company
21
shall
not
be
organized
pursuant
to
this
section
prior
to
the
22
effective
date
of
rules
adopted
by
the
commissioner
regulating
23
the
organization
and
operation
of
limited
purpose
subsidiary
24
life
insurance
companies
as
provided
in
subsection
6.
25
Sec.
7.
Section
511.8,
subsection
5,
Code
Supplement
2009,
26
is
amended
to
read
as
follows:
27
5.
Corporate
obligations.
Subject
to
the
restrictions
28
contained
in
subsection
8
hereof
,
bonds
or
other
evidences
of
29
indebtedness
issued,
assumed,
or
guaranteed
by
a
corporation
30
incorporated
under
the
laws
of
the
United
States
of
America,
or
31
of
any
state,
district,
or
insular
or
territorial
possession
32
thereof;
or
of
the
Dominion
of
Canada,
or
any
province
thereof;
33
and
which
meet
the
following
qualifications:
34
a.
(1)
If
fixed
interest-bearing
obligations,
the
net
35
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earnings
of
the
issuing,
assuming
,
or
guaranteeing
corporation
1
available
for
its
fixed
charges
for
a
period
of
five
fiscal
2
years
next
preceding
the
date
of
acquisition
of
the
obligations
3
by
such
insurance
company
shall
have
averaged
per
year
not
4
less
than
one
and
one-half
times
such
average
annual
fixed
5
charges
of
the
issuing,
assuming
,
or
guaranteeing
corporation
6
applicable
to
such
period,
and,
during
at
least
one
of
the
last
7
two
years
of
such
period,
its
net
earnings
shall
have
been
8
not
less
than
one
and
one-half
times
its
fixed
charges
for
9
such
year;
or
if,
at
the
date
of
acquisition,
the
obligations
10
are
adequately
secured
and
have
investment
qualities
and
11
characteristics
wherein
the
speculative
elements
are
not
12
predominant.
13
(2)
However,
with
respect
to
fixed
interest-bearing
14
obligations
which
are
issued,
assumed
,
or
guaranteed
by
a
15
financial
company,
the
net
earnings
by
the
financial
company
16
available
for
its
fixed
charges
for
the
period
of
five
fiscal
17
years
preceding
the
date
of
acquisition
of
the
obligations
by
18
the
insurance
company
shall
have
averaged
per
year
not
less
19
than
one
and
one-fourth
times
such
average
annual
fixed
charges
20
of
the
issuing,
assuming
,
or
guaranteeing
financial
company
21
applicable
to
such
period,
and,
during
at
least
one
of
the
last
22
two
years
of
the
period,
its
net
earnings
shall
have
been
not
23
less
than
one
and
one-fourth
times
its
fixed
charges
for
such
24
year;
or
if,
at
the
date
of
acquisition,
the
obligations
are
25
adequately
secured
and
speculative
elements
are
not
predominant
26
in
their
investment
qualities
and
characteristics.
As
used
27
in
this
paragraph
subparagraph
(2)
,
“financial
company”
means
28
a
corporation
which
on
the
average
over
its
last
five
fiscal
29
years
preceding
the
date
of
acquisition
of
its
obligations
30
by
the
insurer,
has
had
at
least
fifty
percent
of
its
net
31
income,
including
income
derived
from
subsidiaries,
derived
32
from
the
business
of
wholesale,
retail,
installment,
mortgage,
33
commercial,
industrial
or
consumer
financing,
or
from
banking
34
or
factoring,
or
from
similar
or
related
lines
of
business.
35
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b.
If
adjustment,
income
,
or
other
contingent
interest
1
obligations,
the
net
earnings
of
the
issuing,
assuming
,
or
2
guaranteeing
corporation
available
for
its
fixed
charges
3
for
a
period
of
five
fiscal
years
next
preceding
the
date
4
of
acquisition
of
the
obligations
by
such
insurance
company
5
shall
have
averaged
per
year
not
less
than
one
and
one-half
6
times
such
average
annual
fixed
charges
of
the
issuing,
7
assuming
,
or
guaranteeing
corporation
and
its
average
annual
8
maximum
contingent
interest
applicable
to
such
period
and,
9
during
at
least
one
of
the
last
two
years
of
such
period,
its
10
net
earnings
shall
have
been
not
less
than
one
and
one-half
11
times
the
sum
of
its
fixed
charges
and
maximum
contingent
12
interest
for
such
year,
or
if,
at
the
date
of
acquisition,
13
the
obligations
are
adequately
secure
and
have
investment
14
qualities
and
characteristics
and
speculative
elements
are
not
15
predominant.
16
c.
Are
securities
that
at
the
date
of
acquisition
are
17
rated
three
by
the
securities
valuation
office
of
the
18
national
association
of
insurance
commissioners
or
have
the
19
equivalent
rating
by
a
rating
organization
that
is
approved
20
by
the
national
association
of
insurance
commissioners
as
an
21
acceptable
rating
organization
and
are
listed
or
admitted
to
22
trading
on
a
securities
exchange
in
the
United
States
or
are
23
publicly
held
and
actively
traded
in
the
over-the-counter
24
market
and
market
quotations
are
readily
available.
If
25
a
security
acquired
under
this
paragraph
is
subsequently
26
downgraded
from
a
three
rating
by
the
securities
valuation
27
office
of
the
national
association
of
insurance
commissioners
28
or
the
equivalent
by
a
national
association
of
insurance
29
commissioners’
acceptable
rating
organization,
the
security
no
30
longer
qualifies
as
a
legal
reserve
investment.
31
d.
The
term
“net
earnings
available
for
fixed
charges”
as
32
used
herein
shall
mean
in
this
section
means
the
net
income
33
after
deducting
all
operating
and
maintenance
expenses,
taxes
34
other
than
any
income
taxes,
depreciation
,
and
depletion,
but
35
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S.F.
_____
H.F.
_____
nonrecurring
items
of
income
or
expense
may
be
excluded.
1
e.
The
term
“fixed
charges”
as
used
herein
shall
include
in
2
this
section
includes
interest
on
unfunded
debt
and
funded
debt
3
on
a
parity
with
or
having
a
priority
to
the
obligation
under
4
consideration.
5
f.
The
term
“corporation”
as
used
in
this
chapter
includes
6
a
joint
stock
association,
a
limited
liability
company,
a
7
partnership,
or
a
trust.
8
g.
The
securities,
real
estate,
and
mortgages
described
in
9
this
section
include
participations,
which
means
instruments
10
evidencing
partial
or
undivided
collective
interests
in
such
11
securities,
real
estate,
and
mortgages.
12
Sec.
8.
Section
511.8,
subsection
8,
Code
Supplement
2009,
13
is
amended
by
adding
the
following
new
paragraph:
14
NEW
PARAGRAPH
.
d.
In
addition
to
the
restrictions
contained
15
in
paragraphs
“a”
and
“b”
,
the
investments
of
any
company
16
or
association
in
securities
included
under
subsection
5,
17
paragraph
“c”
,
are
not
eligible
in
excess
of
two
percent
of
the
18
legal
reserve,
but
not
more
than
one-eighth
of
one
percent
of
19
the
legal
reserve
shall
be
invested
in
the
securities
of
any
20
one
corporation.
21
Sec.
9.
Section
511.8,
subsection
16,
Code
Supplement
2009,
22
is
amended
to
read
as
follows:
23
16.
Deposit
of
securities.
24
a.
Securities
in
an
amount
not
less
than
the
legal
reserve
25
as
defined
in
this
section
shall
be
deposited
and
the
deposit
26
maintained
with
the
commissioner
of
insurance
or
at
such
places
27
as
the
commissioner
may
designate
as
will
properly
safeguard
28
them.
There
may
be
included
in
the
deposit
an
amount
of
cash
29
on
hand
not
in
excess
of
five
percent
of
the
deposit
required,
30
that
deposit
to
be
evidenced
by
a
certified
check,
certificate
31
of
deposit,
or
other
evidence
satisfactory
to
the
commissioner
32
of
insurance.
Deposits
of
securities
may
be
made
in
excess
33
of
the
amounts
required
by
this
section.
A
stock
company
34
organized
under
the
laws
of
this
state
shall
not
be
required
to
35
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_____
H.F.
_____
make
a
deposit
until
the
legal
reserve,
as
ascertained
by
the
1
commissioner,
exceeds
the
amount
deposited
by
it
as
capital.
2
Real
estate
may
be
made
a
part
of
the
deposit
by
furnishing
3
evidence
of
ownership
satisfactory
to
the
commissioner
and
4
by
conveying
the
real
estate
to
the
commissioner
or
the
5
commissioner’s
successors
in
office
by
warranty
deed.
The
6
commissioner
and
the
successors
in
office
shall
hold
the
real
7
estate
in
trust
for
the
benefit
of
the
policyholders
of
the
8
company
or
members
of
the
association.
Real
estate
mortgage
9
loans
and
policy
loans
may
be
made
a
part
of
the
deposit
by
10
filing
a
verified
statement
of
the
loans
with
the
commissioner,
11
which
statement
is
subject
to
check
at
the
discretion
of
the
12
commissioner.
13
b.
The
securities
comprising
the
deposit
of
a
company
14
or
association
against
which
proceedings
are
pending
under
15
section
508.18
shall
vest
in
the
state
for
the
benefit
of
all
16
policyholders
of
the
company
or
association.
17
c.
Securities
or
title
to
real
estate
on
deposit
may
be
18
withdrawn
at
any
time
and
other
eligible
securities
may
be
19
substituted,
provided
the
amount
maintained
on
deposit
is
20
equal
to
the
sum
of
the
legal
reserve
and
twenty-five
thousand
21
dollars.
In
the
case
of
real
estate
the
commissioner
shall
22
execute
and
deliver
to
the
company
or
association
a
quitclaim
23
deed
to
the
real
estate.
Any
company
or
association
shall,
24
if
requested
by
the
commissioner,
at
the
time
of
withdrawing
25
any
securities
on
deposit,
designate
for
what
purpose
the
26
same
securities
are
being
withdrawn.
27
d.
Companies
or
associations
having
securities
or
title
28
to
real
estate
on
deposit
with
the
commissioner
of
insurance
29
shall
have
the
right
to
collect
all
dividends,
interest,
rent,
30
or
other
income
from
the
deposit
unless
proceedings
against
31
the
company
or
association
are
pending
under
section
508.18,
32
in
which
event
the
commissioner
shall
collect
such
interest,
33
dividends,
rent,
or
other
income
and
add
the
same
to
the
34
deposit.
35
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_____
H.F.
_____
e.
Any
company
or
association
receiving
payments
or
partial
1
payments
of
principal
on
any
securities
deposited
with
the
2
commissioner
of
insurance
shall
notify
the
commissioner
of
such
3
fact
at
such
times
and
in
such
manner
as
the
commissioner
may
4
prescribe,
giving
the
amount
and
date
of
payment.
5
f.
The
commissioner
of
insurance
may
receive
on
deposit
6
securities
or
title
to
real
estate
of
alien
companies
7
authorized
to
do
business
in
the
state
of
Iowa,
for
the
purpose
8
of
securing
its
policyholders
in
the
state
of
Iowa
and
the
9
United
States.
The
provisions
hereof
of
this
subsection
not
10
inconsistent
with
the
deposit
agreement
shall
apply
to
the
11
deposits
of
such
alien
companies.
12
g.
Common
stocks
or
shares
issued
by
any
federal
home
13
loan
bank
eligible
for
inclusion
in
the
legal
reserve
under
14
subsection
18,
paragraph
“c”
,
may
be
made
a
part
of
a
deposit
15
by
filing
a
verified
statement
of
the
common
stocks
or
shares
16
issued
by
a
federal
home
loan
bank
that
are
held
in
the
legal
17
reserve.
Attached
to
the
statement
shall
be
the
annual
capital
18
stock
statement
of
the
respective
federal
home
loan
bank
19
showing
membership
stock
balance
and
activity-based
stock
20
balance.
21
Sec.
10.
Section
511.8,
subsection
23,
paragraphs
c
and
e,
22
Code
Supplement
2009,
are
amended
to
read
as
follows:
23
c.
If
the
loan
is
collateralized
by
cash
or
cash
24
equivalents,
the
cash
or
cash
equivalent
collateral
may
be
25
reinvested
by
the
life
insurance
company
or
association
in
26
either
class
one
money
market
funds
as
defined
in
subsection
27
24,
individual
securities
which
are
eligible
for
inclusion
28
in
the
legal
reserve
of
the
life
insurance
company
or
29
association
,
or
in
repurchase
agreements
fully
collateralized
30
by
such
securities
if
the
life
insurance
company
or
association
31
takes
delivery
of
the
collateral
either
directly
or
through
an
32
authorized
custodian
or
pooled
fund
comprised
of
individual
33
securities
which
are
eligible
for
inclusion
in
the
legal
34
reserve
of
the
life
insurance
company
or
association.
If
such
35
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_____
H.F.
_____
reinvestment
is
made
in
individual
securities
or
in
repurchase
1
agreements,
the
individual
securities
or
the
securities
which
2
collateralize
the
repurchase
agreements
shall
mature
in
less
3
than
two
hundred
seventy
days.
If
such
reinvestment
is
made
4
in
a
pooled
fund,
the
average
maturity
of
the
securities
5
comprising
such
pooled
fund
must
be
less
than
two
hundred
6
seventy
one
hundred
eighty
days
or
less
and
the
individual
7
maturities
of
the
securities
comprising
such
pooled
fund
8
must
be
three
hundred
ninety-seven
days
or
less
.
Individual
9
securities
and
securities
comprising
the
pooled
fund
shall
be
10
investment
grade.
As
used
in
this
paragraph,
“maturity”
means
11
the
earlier
of
the
fixed
date
on
which
the
holder
of
the
12
security
is
unconditionally
entitled
to
receive
principal
13
and
interest
in
full
or
the
date
on
which
the
holder
of
the
14
security
is
unconditionally
entitled
upon
demand
to
receive
15
principal
and
interest
in
full.
16
e.
Securities
loaned
pursuant
to
this
subsection
17
are
not
eligible
for
inclusion
in
the
legal
reserve
of
18
the
life
insurance
company
or
association
in
excess
of
19
twenty
ten
percent
of
the
legal
reserve.
20
Sec.
11.
Section
511.8,
subsection
23,
Code
Supplement
21
2009,
is
amended
by
adding
the
following
new
paragraph:
22
NEW
PARAGRAPH
.
f.
A
life
insurance
company
or
association
23
may
continue
to
hold
in
the
legal
reserve
of
the
life
insurance
24
company
or
association
securities
which
are
the
subject
of
a
25
reverse
repurchase
agreement.
If
such
securities
are
held
in
26
the
legal
reserve
of
a
life
insurance
company
or
association,
27
the
securities
shall
be
subject
to
the
limitations
of
paragraph
28
“e”
as
if
they
were
securities
loaned
pursuant
to
this
29
subsection.
30
Sec.
12.
Section
514J.7,
subsection
2,
Code
2009,
is
amended
31
to
read
as
follows:
32
2.
The
independent
review
entity,
within
three
business
33
days
of
receipt
of
the
notice,
shall
select
a
person
to
perform
34
the
external
review
and
shall
provide
notice
to
the
enrollee
35
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_____
H.F.
_____
and
the
carrier
containing
a
brief
description
of
the
person
1
including
the
reasons
the
person
selected
is
an
expert
in
2
the
treatment
of
the
medical
condition
under
review.
The
3
independent
review
entity
does
not
need
to
shall,
upon
request
4
from
the
enrollee
or
the
enrollee’s
treating
health
care
5
provider,
disclose
the
name
of
the
person.
A
copy
of
the
6
notice
shall
be
sent
by
facsimile
to
the
commissioner.
If
the
7
independent
review
entity
does
not
have
a
person
who
is
an
8
expert
in
the
treatment
of
the
medical
condition
under
review
9
and
certified
by
the
commissioner
to
conduct
an
independent
10
review,
the
independent
review
entity
may
either
decline
the
11
review
request
or
may
request
from
the
commissioner
additional
12
time
to
have
such
an
expert
certified.
The
independent
review
13
entity
shall
notify
the
commissioner
by
facsimile
of
its
choice
14
between
these
options
within
three
business
days
of
receipt
of
15
the
notice
from
the
carrier
or
organized
delivery
system.
The
16
commissioner
shall
provide
a
notice
to
the
enrollee
and
carrier
17
or
organized
delivery
system
of
the
independent
review
entity’s
18
decision
and
of
the
commissioner’s
decision
as
to
how
to
19
proceed
with
the
external
review
process
within
three
business
20
days
of
receipt
of
the
independent
review
entity’s
decision.
21
Sec.
13.
Section
515.125,
subsection
1,
Code
2009,
is
22
amended
to
read
as
follows:
23
1.
Unless
otherwise
provided
in
section
515.127
,
or
24
515.128,
515.129A,
515.129B,
or
515.129C,
a
policy
or
contract
25
of
insurance
provided
for
in
this
chapter
shall
not
be
26
forfeited,
suspended,
or
canceled
except
by
notice
to
the
27
insured
as
provided
in
this
chapter.
A
notice
of
cancellation
28
is
not
effective
unless
mailed
or
delivered
by
the
insurer
to
29
the
named
insured
at
least
thirty
days
before
the
effective
30
date
of
cancellation,
or,
where
cancellation
is
for
nonpayment
31
of
a
premium,
assessment,
or
installment
provided
for
in
the
32
policy,
or
in
a
note
or
contract
for
the
payment
thereof,
at
33
least
ten
days
prior
to
the
date
of
cancellation.
The
notice
34
may
be
made
in
person,
or
by
sending
by
mail
a
letter
addressed
35
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_____
H.F.
_____
to
the
insured
at
the
insured’s
address
as
given
in
or
upon
1
the
policy,
anything
in
the
policy,
application,
or
a
separate
2
agreement
to
the
contrary
notwithstanding.
3
Sec.
14.
NEW
SECTION
.
515.129A
Cancellation
of
personal
4
lines
policies
or
contracts.
5
1.
A
personal
lines
policy
or
contract
of
insurance
which
6
has
been
in
effect
for
more
than
sixty
days
shall
not
be
7
canceled
except
by
notice
to
the
insured
as
provided
in
this
8
chapter.
9
2.
Notice
of
cancellation
of
a
personal
lines
policy
or
10
contract
of
insurance
is
not
effective
unless
the
cancellation
11
is
based
on
one
or
more
of
the
following
reasons:
12
a.
Nonpayment
of
premium.
13
b.
Failure
to
pay
dues
or
fees
where
payment
of
dues
or
fees
14
is
a
prerequisite
to
obtaining
or
continuing
insurance
coverage
15
in
force.
16
c.
Discovery
of
fraud
or
material
misrepresentation
made
17
by
or
with
the
knowledge
of
the
named
insured
in
obtaining,
18
continuing,
or
presenting
a
claim
under
the
policy.
19
d.
Actions
by
the
insured
which
substantially
change
or
20
increase
the
risk
insured.
21
e.
The
insured
has
acted
in
a
manner
which
the
insured
knew
22
or
should
have
known
was
in
violation
or
breach
of
a
term
or
23
condition
of
the
insurance
policy
or
contract.
24
f.
The
occurrence
of
a
change
in
the
risk
that
substantially
25
increases
a
hazard
insured
against
after
insurance
coverage
has
26
been
issued
or
renewed.
27
Sec.
15.
NEW
SECTION
.
515.129B
Nonrenewal
of
personal
lines
28
policies
or
contracts.
29
1.
An
insurer
shall
not
refuse
to
renew
a
personal
lines
30
policy
or
contract
of
insurance
unless
at
least
thirty
days
31
before
the
end
of
the
policy
or
contract
period
the
insurer
32
delivers
or
mails
to
the
first
named
insured,
at
the
last
known
33
address
of
the
first
named
insured,
written
notice
of
the
34
insurer’s
intention
not
to
renew
the
policy
or
contract
upon
35
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expiration
of
the
current
policy
or
contract
period
as
provided
1
in
section
515.129C.
2
2.
The
notice
of
intention
not
to
renew
shall
include
or
be
3
accompanied
by
a
written
explanation
of
the
insurer’s
specific
4
reason
or
reasons
for
the
nonrenewal.
5
Sec.
16.
NEW
SECTION
.
515.129C
Notice
of
renewal
or
6
nonrenewal
of
personal
lines
policies
of
contracts.
7
1.
At
least
thirty
days
before
the
end
of
the
policy
or
8
contract
term,
an
insurer
shall
mail
or
deliver
to
the
last
9
known
address
of
the
first
named
insured
a
renewal
policy
or
10
contract,
an
offer
to
renew
the
current
policy
or
contract,
or
11
a
notice
of
nonrenewal
of
the
policy
or
contract.
Information
12
concerning
the
renewal
policy
or
contract,
the
offer
to
13
renew
the
policy
or
contract,
or
the
notice
of
nonrenewal
of
14
the
policy
or
contract
shall
also
be
mailed,
delivered,
or
15
transmitted
electronically
to
the
last
known
address
of
the
16
producer
of
record
of
the
policy
or
contract.
Proof
of
such
17
mailing
or
delivery
to
the
first
named
insured’s
last
known
18
address
shall
be
maintained
by
the
insurer.
19
a.
An
offer
to
renew
the
policy
or
contract
shall
state
20
the
renewal
premium
and
the
date
that
the
premium
is
due.
The
21
renewal
premium
shall
be
based
on
the
known
exposure
as
of
the
22
date
of
the
offer
to
renew.
23
b.
If
the
renewal
premium
is
not
received
by
the
due
date
24
or
the
policy
or
contract
expiration
date,
whichever
is
later,
25
the
policy
or
contract
lapses.
26
2.
If
an
insurer
fails
to
comply
with
the
notice
27
requirements
of
this
section,
the
policy
or
contract
shall
be
28
extended
on
the
same
terms
and
conditions
for
another
policy
or
29
contract
term
or
until
the
effective
date
of
similar
insurance
30
procured
by
the
insured,
whichever
is
earlier.
The
insurer
may
31
make
continued
coverage
contingent
upon
the
payment
of
premium.
32
3.
Renewal
of
a
policy
or
contract
does
not
constitute
a
33
waiver
or
estoppel
with
respect
to
grounds
for
cancellation
34
that
existed
before
the
effective
date
of
the
renewal.
35
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Sec.
17.
Section
515C.5,
Code
2009,
is
amended
to
read
as
1
follows:
2
515C.5
Limit
of
outstanding
liability.
3
1.
A
Unless
a
request
to
suspend
the
requirements
of
4
this
section
is
granted
by
the
commissioner
as
set
forth
in
5
subsection
2,
a
mortgage
guaranty
insurer
shall
not
at
any
time
6
have
outstanding
a
total
liability,
net
of
reinsurance,
in
7
excess
of
twenty-five
times
its
capital,
unassigned
funds
and
8
contingency
reserve.
It
A
mortgage
guaranty
insurer
shall
not
9
insure
loans
secured
by
properties
in
a
single
housing
tract
or
10
in
a
contiguous
tract
(not
which
is
not
separated
by
more
than
11
one-half
mile)
mile
in
excess
of
ten
percent
of
its
capital,
12
unassigned
funds
,
and
contingency
reserve.
Coverage
may
be
13
provided
only
if
the
properties
in
such
tract
are
residential
14
buildings,
buildings
designed
for
occupancy
by
not
more
than
15
four
families,
or
owner-occupied
mobile
homes.
16
2.
Upon
request
of
a
mortgage
guaranty
insurer,
the
17
commissioner
may
suspend
the
requirements
contained
in
18
subsection
1
for
such
time
and
under
such
conditions
as
the
19
commissioner
may
order.
The
commissioner
may
adopt
rules
as
20
necessary
relating
to
the
consideration
of
such
requests
for
21
suspension
of
those
requirements.
22
Sec.
18.
Section
523A.102,
Code
2009,
is
amended
by
adding
23
the
following
new
subsections:
24
NEW
SUBSECTION
.
16A.
“Irrevocable
purchase
agreement”
means
25
a
purchase
agreement
that
does
not
allow
a
distribution
of
26
trust
assets,
including
insurance
or
annuity
proceeds,
to
the
27
purchaser
or
beneficiary
prior
to
the
death
of
the
beneficiary,
28
other
than
the
ability
of
the
purchaser
to
direct
the
transfer
29
of
the
trust
assets
to
another
licensed
seller.
30
NEW
SUBSECTION
.
25A.
“Revocable
purchase
agreement”
means
31
a
purchase
agreement
that
allows
the
purchaser
to
cancel
the
32
purchase
agreement
and
direct
a
distribution
or
refund
of
the
33
trust
assets.
34
Sec.
19.
Section
523A.204,
subsection
4,
Code
Supplement
1
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2009,
is
amended
to
read
as
follows:
2
4.
The
commissioner
shall
levy
an
administrative
penalty
3
in
the
amount
of
up
to
five
hundred
dollars
against
a
preneed
4
seller
that
fails
to
file
the
annual
report
when
due,
payable
5
to
the
state
for
deposit
as
provided
in
section
505.7.
6
However,
the
commissioner
may
waive
the
administrative
penalty
7
upon
a
showing
of
good
cause
or
financial
hardship.
8
Sec.
20.
Section
523A.207,
Code
2009,
is
amended
to
read
as
9
follows:
10
523A.207
Audits
by
certified
public
accountants.
11
1.
A
purchase
agreement
shall
not
be
sold
or
transferred,
12
as
part
of
the
sale
of
a
business
or
the
assets
of
a
business,
13
until
an
audit
has
been
performed
by
a
certified
public
14
accountant
and
filed
with
the
commissioner
that
expresses
the
15
auditor’s
opinion
of
the
adequacy
of
funding
related
to
the
16
purchase
agreements
to
be
sold
or
transferred.
17
2.
If
the
person
selling
or
transferring
a
purchase
18
agreement
fails
to
comply
with
the
requirements
of
subsection
19
1,
the
obligation
to
file
an
audit
report
shall
be
shared
by
20
any
preneed
seller
who
assumes
the
obligations
of
the
purchase
21
agreement.
In
addition,
the
person
selling
or
transferring
the
22
purchase
agreement
shall
remain
jointly
and
severally
liable
23
to
perform
the
terms
of
the
purchase
agreement
until
the
audit
24
report
is
received
by
the
commissioner.
25
Sec.
21.
Section
523A.401,
subsection
5,
paragraph
a,
Code
26
2009,
is
amended
to
read
as
follows:
27
a.
Except
as
necessary
and
appropriate
to
satisfy
the
28
requirements
regarding
burial
trust
funds
under
Title
XIX
of
29
the
federal
Social
Security
Act,
the
The
policy
shall
not
30
be
owned
by
the
seller,
the
policy
shall
not
be
irrevocably
31
assigned
to
the
seller,
and
the
assignment
of
proceeds
from
the
32
insurance
policy
to
the
seller
shall
be
limited
to
the
seller’s
33
interests
as
they
appear
in
the
purchase
agreement,
and
34
conditioned
on
the
seller’s
delivery
of
cemetery
merchandise,
35
funeral
merchandise,
and
funeral
services
pursuant
to
a
1
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purchase
agreement.
2
Sec.
22.
Section
523A.401,
Code
2009,
is
amended
by
adding
3
the
following
new
subsection:
4
NEW
SUBSECTION
.
9.
The
commissioner,
by
rule,
may
require
5
written
trust
agreements
and
establish
terms
and
conditions
for
6
trusts
holding
insurance
policies.
The
seller
or
any
officer,
7
director,
agent,
employee,
or
affiliate
of
the
seller
shall
not
8
serve
as
a
trustee.
The
commissioner
may
require
amendments
to
9
a
trust
agreement
that
is
not
in
accord
with
the
provisions
of
10
this
chapter
or
rules
adopted
under
this
chapter.
11
Sec.
23.
Section
523A.402,
subsection
5,
paragraph
a,
Code
12
2009,
is
amended
to
read
as
follows:
13
a.
Except
as
necessary
and
appropriate
to
satisfy
the
14
requirements
regarding
burial
trust
funds
under
Title
XIX
of
15
the
federal
Social
Security
Act,
the
The
annuity
shall
not
be
16
owned
by
the
seller
or
irrevocably
assigned
to
the
seller
and
17
any
designation
of
the
seller
as
a
beneficiary
shall
not
be
18
made
irrevocable.
19
Sec.
24.
Section
523A.402,
Code
2009,
is
amended
by
adding
20
the
following
new
subsection:
21
NEW
SUBSECTION
.
9.
The
commissioner,
by
rule,
may
require
22
written
trust
agreements
and
establish
terms
and
conditions
for
23
trusts
holding
annuities.
The
seller
or
any
officer,
director,
24
agent,
employee,
or
affiliate
of
the
seller
shall
not
serve
as
25
a
trustee.
The
commissioner
may
require
amendments
to
a
trust
26
agreement
that
is
not
in
accord
with
the
provisions
of
this
27
chapter
or
rules
adopted
under
this
chapter.
28
Sec.
25.
Section
523A.502A,
subsection
3,
Code
Supplement
29
2009,
is
amended
to
read
as
follows:
30
3.
The
commissioner
shall
levy
an
administrative
penalty
31
in
the
amount
of
up
to
five
hundred
dollars
against
a
sales
32
agent
who
fails
to
file
an
annual
report
when
due,
payable
to
33
the
state
for
deposit
as
provided
in
section
505.7.
However,
34
the
commissioner
may
waive
the
administrative
penalty
upon
a
35
showing
of
good
cause
or
financial
hardship.
1
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Sec.
26.
Section
523A.601,
subsection
1,
paragraph
b,
Code
2
2009,
is
amended
to
read
as
follows:
3
b.
Specify
the
cemetery
merchandise,
funeral
merchandise,
4
funeral
services,
or
a
combination
thereof
to
be
provided,
and
5
the
cost
of
each
merchandise
item
or
service
,
if
selected
.
6
Sec.
27.
Section
523A.601,
subsection
1,
paragraphs
f
and
g,
7
Code
2009,
are
amended
to
read
as
follows:
8
f.
State
Unless
the
purchaser
or
beneficiary
is
receiving
or
9
has
applied
to
receive
Medicaid
or
supplemental
security
income
10
benefits,
state
that
the
purchase
of
the
cemetery
merchandise,
11
funeral
merchandise,
and
funeral
services
is
revocable
and
12
specify
the
damages
for
cancellation,
if
any
.
The
purchase
13
agreement
may
provide
that
if
the
purchaser
or
beneficiary
is
14
receiving
or
has
applied
to
receive
Medicaid
or
supplemental
15
security
income
benefits,
the
purchase
agreement
may
be
an
16
irrevocable
purchase
agreement,
subject
to
the
requirements
of
17
section
523A.602,
subsection
4.
18
g.
State
clearly
who
has
the
authority
to
cancel,
amend,
or
19
revoke
the
purchase
agreement
to
purchase
cemetery
merchandise,
20
funeral
merchandise,
and
funeral
services
and
specify
the
21
penalties
for
cancellation,
if
any
.
22
Sec.
28.
Section
523A.602,
subsection
3,
Code
2009,
is
23
amended
to
read
as
follows:
24
3.
This
section
does
not
prohibit
a
purchaser
who
is
25
or
may
become
eligible
for
receiving
or
has
applied
to
26
receive
benefits
under
Title
Tit.
XIX
of
the
federal
Social
27
Security
Act
from
making
a
guaranteed
price
purchase
agreement
28
irrevocable
,
subject
to
the
requirements
of
subsection
4,
to
29
the
extent
that
federal
law
or
regulations
require
that
such
30
an
agreement
be
irrevocable
for
purposes
of
a
purchaser’s
31
eligibility
for
benefits
under
Title
Tit.
XIX
of
the
federal
32
Social
Security
Act,
as
permitted
under
federal
law.
The
33
seller
of
credit
sale
agreements
shall
comply
with
the
34
requirements
of
chapter
537,
the
Iowa
consumer
credit
code,
35
and
is
subject
to
the
remedies
and
penalties
provided
in
that
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chapter
for
noncompliance.
2
Sec.
29.
Section
523A.602,
Code
2009,
is
amended
by
adding
3
the
following
new
subsection:
4
NEW
SUBSECTION
.
4.
An
irrevocable
purchase
agreement
is
5
subject
to
the
following
restrictions
as
a
matter
of
law:
6
a.
The
purchase
agreement
must
include
a
selection
of
the
7
cemetery
merchandise,
funeral
merchandise,
funeral
services,
8
or
a
combination
thereof
to
be
provided
and
the
cost
of
each
9
merchandise
item
or
service.
10
b.
A
life
insurance
policy
or
annuity
funding
the
purchase
11
agreement,
if
any,
must
be
held
in
trust
by
the
preneed
12
seller
and
titled
appropriately
pursuant
to
the
purchaser’s
13
irrevocable
assignment
of
ownership
to
the
trust.
The
preneed
14
seller
may
be
named
a
nominal
owner
of
the
life
insurance
15
policy
or
annuity
only
for
such
time
as
it
takes
to
immediately
16
transfer
the
policy
or
annuity
into
trust.
17
c.
Any
transfer
of
trust
assets
must
be
to
another
licensed
18
preneed
seller
in
connection
with
an
assumption
of
the
existing
19
purchase
agreement
or
a
new
purchase
agreement
for
the
same
20
selection
of
cemetery
merchandise,
funeral
merchandise,
21
funeral
services,
or
a
combination
thereof
to
be
provided
22
and
specifying
the
cost
of
each
merchandise
item
or
service
23
selected.
24
Sec.
30.
Section
523A.807,
subsection
3,
unnumbered
25
paragraph
1,
Code
Supplement
2009,
is
amended
to
read
as
26
follows:
27
If
the
commissioner
finds
that
a
person
has
violated
section
28
523A.201,
523A.202,
523A.203,
523A.207,
523A.401,
523A.402,
29
523A.403,
523A.404,
523A.405,
523A.501,
or
523A.502
,
or
30
523A.504
or
any
rule
adopted
pursuant
thereto,
the
commissioner
31
may
order
any
or
all
of
the
following:
32
Sec.
31.
Section
523I.213A,
Code
2009,
is
amended
by
adding
33
the
following
new
subsection:
34
NEW
SUBSECTION
.
7.
Notwithstanding
chapter
22,
the
35
commissioner
shall
not
make
information
obtained
in
the
course
1
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H.F.
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of
an
examination
public,
except
when
a
duty
under
this
chapter
2
requires
the
commissioner
to
take
action
against
a
cemetery
3
or
to
cooperate
with
another
law
enforcement
agency,
or
when
4
the
commissioner
is
called
as
a
witness
in
a
civil
or
criminal
5
proceeding.
6
EXPLANATION
7
This
bill
relates
to
various
matters
under
the
purview
of
the
8
insurance
division
of
the
department
of
commerce.
9
IOWA
GRAIN
INDEMNITY
BOARD.
Code
section
203D.4(1)
is
10
amended
to
remove
the
commissioner
of
insurance
or
a
designee
11
as
a
member
of
the
Iowa
grain
indemnity
fund
board.
12
UNIFORM
SECURITIES
ACT.
Code
section
502.305(2)
is
amended
13
to
allow
the
administrator
of
the
Iowa
uniform
securities
14
Act
to
adopt
rules
that
require
certain
filings
to
be
made
15
electronically
either
with
the
administrator
or
a
designee
of
16
the
administrator
and
that
require
filers
to
submit
filings
and
17
pay
processing
fees
to
such
a
designee.
18
EXAMINATION
OF
INSURANCE
COMPANIES.
Code
section
507.4(2)
19
is
amended
to
allow
the
commissioner
of
insurance
to
employ
20
insurance
examiners
who
are
exempt
from
the
state
merit
system
21
and
to
pay
those
examiners
pursuant
to
a
pay
plan
that
is
22
substantially
equivalent
to
that
used
for
bank
examiners.
A
23
coordinating
amendment
is
made
to
Code
section
20.4
exempting
24
such
insurance
examiners
from
the
state
merit
system.
25
LIFE
INSURANCE
COMPANIES
AND
ASSOCIATIONS.
New
Code
26
section
508.33A
authorizes
Iowa
life
insurance
companies
to
27
organize
wholly
owned
limited
purpose
subsidiary
life
insurance
28
companies
to
reinsure
the
risks
of
the
organizing
company
and
29
its
affiliated
companies.
Before
assuming
any
risks
under
a
30
reinsurance
contract,
a
new
limited
purpose
subsidiary
life
31
insurance
company
must
submit
and
receive
approval
of
its
32
plan
of
operation
from
the
commissioner.
The
commissioner
33
is
required
to
adopt
rules
to
regulate
such
limited
purpose
34
insurers
and
no
limited
purpose
insurer
can
be
organized
prior
35
to
the
effective
date
of
such
rules.
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Code
section
5l1.8(5)
is
amended
to
allow
life
insurance
2
companies
to
invest
in
certain
securities
that
are
rated
three
3
for
legal
reserve
purposes.
New
Code
section
511.8(8)(d)
is
4
a
coordinating
amendment
that
provides
that
such
securities
5
are
not
eligible
investments
in
excess
of
2
percent
of
the
6
legal
reserve
and
not
more
than
one-eighth
of
1
percent
of
the
7
legal
reserve
can
be
invested
in
the
securities
of
any
one
8
corporation.
9
Code
section
5l1.8(16)
is
amended
to
provide
that
common
10
stocks
or
shares
issued
by
any
federal
home
loan
bank
that
11
are
eligible
common
stocks
or
shares
for
inclusion
in
a
12
life
insurance
company’s
legal
reserve
may
be
deposited
as
13
securities
with
the
commissioner.
14
Code
section
5l1.8(23)(c)
and
(e)
are
amended
to
provide
15
that
if
a
security
loan
made
by
a
life
insurance
company
to
a
16
specified
entity
is
collateralized
by
cash,
the
insurer
may
17
reinvest
the
cash
in
class
one
money
market
funds,
among
other
18
things.
If
such
reinvestments
are
made
in
a
pooled
fund,
19
the
average
maturity
of
the
securities
in
the
pooled
fund
20
must
be
180
days
or
less
and
the
individual
maturities
of
the
21
securities
must
be
397
days
or
less.
“Maturity”
is
defined
22
to
mean
the
earlier
of
the
fixed
date
on
which
the
holder
of
23
the
security
is
unconditionally
entitled
to
receive
principal
24
and
interest
in
full
or
the
date
on
which
the
holder
of
the
25
security
is
unconditionally
entitled
upon
demand
to
receive
26
principal
and
interest
in
full.
Such
securities
loaned
in
27
this
manner
cannot
be
included
in
the
legal
reserve
of
a
life
28
insurance
company
in
excess
of
10,
formerly
20,
percent
of
the
29
legal
reserve.
30
New
Code
section
5l1.8(23)(f)
is
added
to
allow
a
life
31
insurance
company
or
association
to
hold
securities
which
are
32
the
subject
of
a
reverse
repurchase
agreement
in
its
legal
33
reserve,
subject
to
the
limitation
that
such
securities
are
34
treated
as
securities
loaned
and
cannot
be
included
in
legal
35
reserve
in
excess
of
l0
percent
of
the
reserve.
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EXTERNAL
REVIEW
OF
HEALTH
CARE
COVERAGE
DECISIONS.
Code
2
section
514J.7(2)
is
amended
to
provide
that
an
enrollee
or
a
3
treating
health
care
provider
who
seeks
external
review
of
a
4
health
care
coverage
decision
is
entitled
to
be
told
the
name
5
of
the
expert
person
selected
to
perform
the
external
review.
6
INSURANCE
OTHER
THAN
LIFE.
Code
section
515.125(1)
is
7
amended
to
except
new
provisions
in
the
bill
pertaining
8
to
personal
lines
insurance
policies
or
contracts
from
the
9
forfeiture
and
notice
requirements
of
this
section.
10
New
Code
section
515.129A
provides
that
personal
lines
11
policies
or
contracts
of
insurance
that
have
been
in
effect
for
12
more
than
60
days
cannot
be
canceled
without
notice
and
that
13
such
notice
is
not
effective
unless
it
is
based
on
one
or
more
14
of
the
specified
reasons.
15
New
Code
section
515.129B
provides
that
an
insurer
cannot
16
refuse
to
renew
a
personal
lines
policy
or
contract
of
17
insurance
unless
at
least
30
days
before
the
end
date
of
the
18
policy
or
contract
the
insurer
delivers
or
mails
written
notice
19
to
the
first
named
insured
at
the
insured’s
last
known
address,
20
of
the
insurer’s
intention
not
to
renew
accompanied
by
an
21
explanation
of
the
specific
reason
for
the
nonrenewal.
22
New
Code
section
515.129C
sets
forth
requirements
for
the
23
notice
to
an
insured
of
the
renewal
or
nonrenewal
of
personal
24
lines
policies
or
contracts.
Such
notice
must
be
mailed
or
25
delivered
to
the
first
named
insured
at
least
30
days
prior
to
26
the
end
of
the
policy
or
contract
term
and
must
also
be
mailed,
27
delivered,
or
electronically
transmitted
to
the
producer
of
28
record
of
the
policy
or
contract.
An
offer
to
renew
shall
29
state
the
amount
and
due
date
of
the
premium.
If
the
renewal
30
premium
is
not
received
by
the
due
date
or
the
policy
or
31
contract
expiration
date,
whichever
is
later,
the
policy
or
32
contract
lapses.
If
an
insurer
fails
to
comply
with
these
33
notice
requirements,
the
policy
or
contract
is
extended
on
34
the
same
terms
and
conditions
for
another
policy
or
contract
35
term
or
until
the
effective
date
that
similar
insurance
is
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procured
by
the
insured,
whichever
is
earlier.
Renewal
of
a
2
policy
or
contract
under
this
Code
section
does
not
constitute
3
an
estoppel
or
waiver
with
respect
to
grounds
for
cancellation
4
that
existed
prior
to
the
effective
date
of
the
renewal.
5
MORTGAGE
GUARANTY
INSURANCE.
Code
section
515C.5
is
6
amended
to
allow
the
commissioner
to
suspend
the
requirements
7
concerning
the
amount
of
outstanding
liability
that
a
mortgage
8
guaranty
insurer
may
have
upon
request
of
the
insurer
for
9
such
time
and
under
such
conditions
as
the
commissioner
may
10
order.
The
commissioner
may
adopt
rules
as
necessary
relating
11
to
the
consideration
of
such
requests
for
suspension
of
those
12
requirements.
13
CEMETERY
AND
FUNERAL
MERCHANDISE,
AND
FUNERAL
SERVICES.
14
Code
section
523A.102
is
amended
to
add
definitions
of
15
irrevocable
and
revocable
purchase
agreements
to
furnish
16
cemetery
and
funeral
merchandise,
and
funeral
services,
or
a
17
combination
thereof.
18
Code
section
523A.204(4)
is
amended
to
give
the
commissioner
19
the
discretion
to
levy
an
administrative
penalty
in
an
amount
20
up
to
$500
against
a
preneed
seller
who
fails
to
file
an
annual
21
report
when
due.
A
corresponding
change
to
Code
section
22
523A.502A
allows
the
commissioner
such
discretion
when
levying
23
a
penalty
against
a
sales
agent
who
fails
to
file
a
report
when
24
due.
25
Code
section
523A.207
is
amended
to
provide
that
if
a
26
person
selling
or
transferring
a
purchase
agreement
fails
to
27
comply
with
the
obligation
to
file
an
audit
report
with
the
28
commissioner
prior
to
the
sale
or
transfer,
that
obligation
is
29
shared
by
any
preneed
seller
that
assumes
the
obligations
of
30
the
purchase
agreement.
In
addition,
the
seller
or
transferor
31
of
the
purchase
agreement
remains
jointly
and
severally
liable
32
to
perform
the
terms
of
the
purchase
agreement
until
the
audit
33
report
is
received
by
the
commissioner.
34
Code
section
523A.401(5)
is
amended
to
provide
that
when
a
35
purchase
agreement
is
funded
by
insurance
policy
proceeds,
the
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insurance
policy
shall
not
be
owned
by
the
seller
and
to
delete
2
an
exception
to
this
requirement
related
to
social
security
3
requirements
pertaining
to
burial
trust
funds.
A
corresponding
4
change
is
made
to
Code
section
523A.402(5)(a)
to
provide
5
that
when
a
purchase
agreement
is
funded
by
annuity
proceeds
6
the
annuity
shall
not
be
owned
by
the
seller
and
to
delete
a
7
similar
exception
in
relation
to
social
security
requirements.
8
Code
section
523A.401(9)
is
added
to
allow
the
commissioner
to
9
adopt
rules
to
require
written
trust
agreements
and
establish
10
terms
and
conditions
for
trusts
holding
insurance
policies
that
11
fund
purchase
agreements.
Code
section
523A.402(9)
is
added
to
12
allow
the
adoption
of
similar
rules
as
to
annuities
that
fund
13
purchase
agreements.
14
Code
section
523A.601
is
amended
to
allow
disclosures
15
concerning
purchase
agreements
to
include
information
that
16
tells
purchasers
or
beneficiaries
that
the
agreement
may
be
17
made
irrevocable
if
the
purchaser
or
beneficiary
is
receiving
18
or
has
applied
to
receive
Medicaid
or
supplemental
security
19
income
benefits.
This
language
corresponds
to
the
changes
made
20
in
Code
section
523A.602(3).
21
Code
section
523A.602(4)
is
added
to
specify
the
22
restrictions
applicable
to
an
irrevocable
purchase
agreement.
23
Such
a
purchase
agreement
must
specify
the
merchandise
and
24
services
selected
and
the
cost
of
each;
a
life
insurance
25
policy
or
annuity
funding
the
agreement
must
be
held
in
trust
26
by
the
preneed
seller;
and
any
transfer
of
trust
assets
must
27
be
to
another
licensed
preneed
seller
in
connection
with
an
28
assumption
of
the
existing
purchase
agreement
or
a
new
purchase
29
agreement
for
the
same
selection
of
merchandise
and
services
30
and
specifying
the
cost.
31
Code
section
523A.807(3)
relating
to
penalties
for
32
violations
of
specific
sections
of
Code
chapter
523A
is
amended
33
to
apply
to
violations
of
Code
sections
523A.203
(qualification
34
and
investment
requirements
of
financial
institution
trustees);
35
523A.207
(performance
of
audits
prior
to
sale
of
purchase
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agreements);
and
523A.504
(appointment
of
sales
agents
and
2
payment
of
fees).
A
violation
of
one
of
these
sections
may
3
result
in
civil
penalties
and
orders
prohibiting
sales
pursuant
4
to
Code
chapter
523A.
5
CEMETERY
REGULATION.
Code
section
523I.213A(7)
is
added
6
to
provide
that
notwithstanding
Iowa’s
open
records
law,
7
the
commissioner
shall
not
make
information
obtained
in
the
8
course
of
an
examination
of
a
cemetery
public
except
under
9
the
specified
circumstances.
A
corresponding
change
is
10
made
by
adding
Code
section
20.7(65),
which
states
that
such
11
information
is
not
a
public
record.
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