House File 2339 - Introduced HOUSE FILE 2339 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 621) A BILL FOR An Act relating to various matters under the purview of the 1 insurance division of the department of commerce, providing 2 penalties, and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5183HV (3) 84 av/nh

H.F. 2339 Section 1. Section 135.22A, subsection 2, paragraph g, Code 1 2011, is amended by striking the paragraph. 2 Sec. 2. Section 502.412, subsection 3, Code 2011, is amended 3 to read as follows: 4 3. Disciplinary penalties —— registrants. If the 5 administrator finds that the order is in the public interest 6 and subsection 4 , paragraphs “a” through “f” , “h” , “i” , “j” , 7 “l” , or “m” , authorizes the action, an order under this chapter 8 may censure, impose a bar, or impose a civil penalty in an 9 amount not to exceed a maximum of five ten thousand dollars 10 for a single violation or five hundred thousand one million 11 dollars for more than one violation, or in an amount as agreed 12 to by the parties, on a registrant, and, if the registrant is 13 a broker-dealer or investment adviser, a partner, officer, 14 director, or person having a similar status or performing 15 similar functions, or a person directly or indirectly in 16 control, of the broker-dealer or investment adviser. 17 Sec. 3. Section 502.604, subsection 4, Code Supplement 18 2011, is amended to read as follows: 19 4. Civil penalty —— restitution —— corrective action. In a 20 final order under subsection 3 , the administrator may impose a 21 civil penalty up to an amount not to exceed a maximum of five 22 ten thousand dollars for a single violation or five hundred 23 thousand one million dollars for more than one violation, or 24 in an amount as agreed to by the parties, order restitution, 25 or take other corrective action as the administrator deems 26 necessary and appropriate to accomplish compliance with 27 the laws of the state relating to all securities business 28 transacted in the state. 29 Sec. 4. Section 502.604, Code Supplement 2011, is amended by 30 adding the following new subsection: 31 NEW SUBSECTION . 5A. Failure to obey cease and desist 32 order. A person who fails to obey a valid cease and desist 33 order issued by the administrator under this section may, after 34 notice and opportunity for a hearing, be subject to a civil 35 -1- LSB 5183HV (3) 84 av/nh 1/ 22

H.F. 2339 penalty in an amount of not less than one thousand dollars and 1 not to exceed ten thousand dollars for violating the order. 2 Each day the failure to obey the cease and desist order occurs 3 or continues constitutes a separate violation of the order. 4 The penalties provided in this subsection are in addition to, 5 and not exclusive of, other remedies that may be available. 6 Sec. 5. Section 505.8, subsection 10, Code Supplement 2011, 7 is amended to read as follows: 8 10. The commissioner may, after a hearing conducted 9 pursuant to chapter 17A , assess fines or penalties , ; assess 10 costs of an examination, investigation , or proceeding , ; 11 order restitution , ; or take other corrective action as the 12 commissioner deems necessary and appropriate to accomplish 13 compliance with the laws of the state relating to all insurance 14 business transacted in the state. 15 Sec. 6. NEW SECTION . 506.14 Voluntary dissolution of 16 domestic mutual insurance companies. 17 1. Any plan for voluntary dissolution of a domestic 18 mutual insurance company licensed to transact the business 19 of insurance under chapter 508, 515, 518, or 518A shall be 20 presented for approval by the commissioner not less than ninety 21 days in advance of notice of the plan to policyholders. 22 2. The commissioner shall approve the plan if the 23 commissioner finds that the plan complies with all applicable 24 provisions of law and is fair and equitable to the domestic 25 mutual insurance company and its policyholders. 26 Sec. 7. Section 507.10, subsection 4, paragraph a, Code 27 2011, is amended to read as follows: 28 a. All orders entered pursuant to subsection 3 , paragraph 29 “a” , shall be accompanied by findings and conclusions resulting 30 from the commissioner’s consideration and review of the 31 examination report, relevant examiner work papers, and any 32 written submissions or rebuttals. Any such order is a final 33 administrative decision and may be appealed pursuant to chapter 34 17A , and shall be served upon the company by certified mail, 35 -2- LSB 5183HV (3) 84 av/nh 2/ 22

H.F. 2339 together with a copy of the adopted examination report. Within 1 thirty days of the issuance of the adopted report, the company 2 shall file affidavits executed by each of its directors stating 3 under oath that they have received a copy of the adopted report 4 and related orders. The board of directors of the company 5 shall timely review the adopted report. The minutes of the 6 meeting of the board at which the adopted report is considered 7 shall reflect that each member of the board has reviewed the 8 adopted report. 9 Sec. 8. Section 507.14, subsection 4, Code 2011, is amended 10 to read as follows: 11 4. Confidential documents, materials, information, 12 administrative or judicial orders, or other actions may be 13 disclosed to a regulatory official of any state, federal 14 agency, or foreign country provided that the recipients are 15 required, under their law, to maintain their confidentiality. 16 Confidential records may be disclosed to the national 17 association of insurance commissioners , the international 18 association of insurance supervisors, and the bank for 19 international settlements, provided that the association 20 certifies associations and the bank certify by written 21 statement that the confidentiality of the records will be 22 maintained. 23 Sec. 9. Section 507B.4, Code 2011, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 20. Refund of unearned premium. Failure of 26 an issuer of a Medicare supplement policy to adjust coverage 27 dates to terminate coverage on the date that coincides with 28 the effective date of a policy or contract providing any 29 hospital, medical, prescription drug, or other health care 30 benefits pursuant to 42 U.S.C. ch. 7, subch. XVIII, Part C, 31 commonly known as Medicare Part C, pursuant to Tit. XVIII of 32 the federal Social Security Act, or any regulations issued 33 pursuant thereto, and to refund any unearned premium to the 34 insured based on that revised termination date, where the 35 -3- LSB 5183HV (3) 84 av/nh 3/ 22

H.F. 2339 policyholder or contract holder provides written notice to the 1 issuer that the policyholder or contract holder desires to 2 terminate the policy or contract and provides documentation 3 substantiating that the policyholder or contract holder has 4 coverage commonly known as Medicare Part C. This subsection 5 shall not be construed to require a refund of premium for any 6 period of time in excess of five years prior to the date that 7 written notice is provided to an issuer. 8 Sec. 10. NEW SECTION . 507C.17A Rehabilitation or 9 liquidation of a domestic insurer covered under the federal 10 Dodd-Frank Wall Street Reform and Consumer Protection Act. 11 1. The provisions of this section apply in accordance 12 with Tit. II of the federal Dodd-Frank Wall Street Reform and 13 Consumer Protection Act, Pub. L. No. 111-203, 12 U.S.C. § 5301 14 et seq., with respect to a domestic insurer that is a covered 15 financial company, as that term is defined under 12 U.S.C. § 16 5381. 17 2. The commissioner may petition the district court for an 18 order of rehabilitation or liquidation of a domestic insurer 19 pursuant to this section on any of the following grounds: 20 a. Upon a determination and notification given by the 21 secretary of the treasury of the United States, in consultation 22 with the president of the United States, that the insurer is 23 a covered financial company satisfying the requirements of 24 12 U.S.C. § 5383(b), and the board of directors, or a body 25 performing similar functions of a board of directors, of the 26 insurer acquiesces or consents to the appointment of a receiver 27 pursuant to 12 U.S.C. § 5382(a)(1)(A)(i) with such consent 28 to be considered as consent to an order of rehabilitation or 29 liquidation. 30 b. Upon an order of the United States district court for 31 the District of Columbia under 12 U.S.C. § 5382(a)(1)(A)(iv)(I) 32 granting the petition of the secretary of the treasury of 33 the United States concerning the insurer under 12 U.S.C. § 34 5382(a)(1)(A)(i). 35 -4- LSB 5183HV (3) 84 av/nh 4/ 22

H.F. 2339 c. A petition by the secretary of the treasury of the United 1 States concerning the insurer is granted by operation of law 2 under 12 U.S.C. § 5382(a)(1)(A)(v). 3 3. Notwithstanding any other provision of law to the 4 contrary, after notice to the insurer, a district court 5 may grant an order of rehabilitation or liquidation within 6 twenty-four hours after the filing of such a petition pursuant 7 to this section. 8 4. If the district court does not make a determination on a 9 petition for an order of rehabilitation or liquidation filed by 10 the commissioner pursuant to this section within twenty-four 11 hours after the filing of the petition, the order shall be 12 deemed granted by operation of law upon the expiration of the 13 twenty-four-hour period. 14 a. At the time that an order is deemed granted under this 15 subsection, the provisions of this chapter shall be deemed 16 to be in effect, and the commissioner shall be deemed to be 17 affirmed as receiver and to have all of the applicable powers 18 provided by this chapter, regardless of whether an order has 19 been entered by the district court. 20 b. If an order is deemed granted by operation of law under 21 this subsection, the district court shall expeditiously enter 22 an order of rehabilitation or liquidation that does all of the 23 following: 24 (1) Is effective as of the date that the order is deemed 25 granted by operation of law. 26 (2) Conforms to the provisions for rehabilitation or 27 liquidation of an insurer contained in this chapter, as 28 applicable. 29 5. An order of rehabilitation or liquidation made pursuant 30 to this section shall not be subject to a stay or injunction 31 pending appeal. 32 6. Nothing in this section shall be construed to supersede 33 or impair any other power or authority of the commissioner or 34 the district court under this chapter. 35 -5- LSB 5183HV (3) 84 av/nh 5/ 22

H.F. 2339 Sec. 11. Section 507E.5, subsection 2, Code 2011, is amended 1 to read as follows: 2 2. The commissioner may share documents, materials, or 3 other information, including confidential and privileged 4 documents, materials, or other information, with other 5 state, federal, and international regulatory agencies, with 6 the national association of insurance commissioners and its 7 affiliates or subsidiaries, and with local, state, federal, and 8 international law enforcement authorities, provided that the 9 recipient agrees to maintain the confidential and privileged 10 status of the document, material, or other information, 11 pursuant to Iowa law. 12 Sec. 12. Section 511.8, subsection 14, Code Supplement 13 2011, is amended to read as follows: 14 14. Urban real estate and personal property. 15 a. Personal or real property or both located within the 16 United States or the Dominion of Canada, other than real 17 property used or to be used primarily for agricultural, 18 horticultural, ranching or mining purposes, which produces 19 income or which by suitable improvement will produce income. 20 However, personal property acquired under this subsection shall 21 be acquired for the purpose of entering into a contract for 22 the sale or for a use under which the contractual payments 23 may reasonably be expected to result in the recovery of the 24 investment and an investment return within the anticipated 25 useful life of the property. Legal title to the real property 26 may be acquired subject to a contract of sale. 27 b. “Real property” as used in this subsection includes a all 28 of the following: 29 (1) A leasehold of real estate , an . 30 (2) An undivided interest in a leasehold of real estate , and 31 an . 32 (3) An undivided interest in the fee title of real estate. 33 (4) A controlling membership, partnership, shareholder, or 34 trust interest in any entity created solely for the purpose 35 -6- LSB 5183HV (3) 84 av/nh 6/ 22

H.F. 2339 of owning and operating any of the interests described in 1 subparagraph (1), (2), or (3), if the entity is expressly 2 limited to that purpose within its organizational documents. 3 c. Investments under this subsection are not eligible in 4 excess of ten percent of the legal reserve. 5 Sec. 13. Section 511.8, subsection 19, Code Supplement 6 2011, is amended to read as follows: 7 19. Other foreign government or corporate obligations. 8 a. Bonds or other evidences of indebtedness, not to 9 include currency, issued, assumed, or guaranteed by a foreign 10 government other than Canada, or by a corporation incorporated 11 under the laws of a foreign government other than Canada. Such 12 governmental obligations must be valid, legally authorized 13 and issued, and on the date of acquisition have predominantly 14 investment qualities and characteristics as provided by 15 rule. Such corporate obligations must meet the qualifications 16 established in subsection 5 for bonds and other evidences of 17 indebtedness issued, assumed, or guaranteed by a corporation 18 incorporated under the laws of the United States or Canada. 19 Foreign investments authorized by this subsection are not 20 eligible in excess of twenty twenty-five percent of the 21 legal reserve of the life insurance company or association. 22 Investments in obligations of a foreign government, other 23 than Canada and , the United Kingdom, and foreign governments 24 rated AAA by Standard and Poor’s division of McGraw-Hill 25 companies, inc., or Aaa by Moody’s investors services, inc., 26 are not eligible in excess of two percent of the legal reserve 27 in the securities of foreign governments of any one foreign 28 nation. Investments in obligations of the United Kingdom are 29 not eligible in excess of four percent of the legal reserve. 30 Investments in obligations of foreign governments rated either 31 AAA by Standard and Poor’s division of McGraw-Hill companies, 32 inc., or Aaa by Moody’s investors services, inc., are not 33 eligible in excess of five percent of the legal reserve. 34 Investments in a corporation incorporated under the laws of a 35 -7- LSB 5183HV (3) 84 av/nh 7/ 22

H.F. 2339 foreign government other than Canada are not eligible in excess 1 of two percent of the legal reserve in the securities of any 2 one foreign corporation. 3 b. Eligible investments in foreign obligations under this 4 subsection are limited to the types of obligations specifically 5 referred to in this subsection . This subsection in no way 6 limits or restricts investments in Canadian obligations and 7 securities specifically authorized in other subsections of this 8 section . 9 c. This subsection shall not authorize investment in 10 evidences of indebtedness issued, assumed, or guaranteed by a 11 foreign government which engages in a consistent pattern of 12 gross violations of human rights. 13 Sec. 14. Section 511.8, subsection 23, Code Supplement 14 2011, is amended by adding the following new paragraph: 15 NEW PARAGRAPH . g. For securities loaned pursuant to this 16 subsection that are included in the legal reserve of the life 17 insurance company or association, the collateral received for 18 the loaned securities shall not be eligible for inclusion in 19 the legal reserve. 20 Sec. 15. Section 511.40, Code 2011, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 5. a. The gross amount of premiums 23 received by a life insurance company or association for an 24 employer-owned life insurance contract which has not been 25 allocated to another state shall be allocated to this state 26 for purposes of section 432.1, subsection 1, if either of the 27 following is applicable: 28 (1) The contract is issued or delivered in this state. 29 (2) The company or association is domiciled in this state. 30 b. To the extent that premiums are allocated to this state 31 pursuant to paragraph “a” , the provisions of section 505.14 are 32 not applicable to those premiums. 33 c. As used in this subsection, “employer-owned life 34 insurance contract” means a policy which provides coverage on 35 -8- LSB 5183HV (3) 84 av/nh 8/ 22

H.F. 2339 a life for which the employer has an insurable interest under 1 this section or a similar provision of the laws of another 2 state and the policy is owned by either the employer or a trust 3 established by the employer for the benefit of the employer or 4 the employer’s active or retired employees. 5 Sec. 16. Section 514.4, Code 2011, is amended to read as 6 follows: 7 514.4 Directors. 8 1. At least two-thirds of the directors of a hospital 9 service corporation, medical service corporation, dental 10 service corporation, or pharmaceutical or optometric service 11 corporation subject to this chapter shall be at all times 12 subscribers and not more than one-third of the directors 13 shall be providers as provided in this section . The board of 14 directors of each corporation shall consist of at least nine 15 members. 16 2. A subscriber director is a director of the board of 17 a corporation who is a subscriber and who is not a provider 18 of health care pursuant to section 514B.1, subsection 7 , a 19 person who has material financial or fiduciary interest in the 20 delivery of health care services or a related industry, an 21 employee of an institution which provides health care services, 22 or a spouse or a member of the immediate family of such a 23 person. However, a subscriber director of a dental service 24 corporation may be an employee, officer, director, or trustee 25 of a hospital or other entity that does not have a provider 26 contract with the dental service corporation. A subscriber 27 director of a hospital or medical service corporation shall be 28 a subscriber of the services of that corporation. 29 3. A provider director of a corporation subject to this 30 chapter shall be at all times a person who has a material 31 financial interest in or is a fiduciary to or an employee 32 of or is a spouse or member of the immediate family of a 33 provider having a contract with such corporation to render to 34 its subscribers the services of such corporation or who is a 35 -9- LSB 5183HV (3) 84 av/nh 9/ 22

H.F. 2339 hospital trustee. 1 4. A director may serve on a board of only one corporation 2 at a time subject to this chapter . 3 5. The commissioner of insurance shall adopt rules pursuant 4 to chapter 17A to implement the process of the election of 5 subscriber directors of the board of directors of a corporation 6 to ensure the representation of a broad spectrum of subscriber 7 interest on each board and establish criteria for the selection 8 of nominees. The rules shall provide for an independent 9 subscriber nominating committee to serve until the composition 10 of the board of directors meets the percentage requirements 11 of this section . Once the composition requirements of this 12 section are met, the nominations for subscriber directors 13 shall be made by the subscriber directors of the board under 14 procedures the board establishes which shall also permit 15 nomination by a petition of at least fifty subscribers. The 16 board shall also establish procedures to permit nomination of 17 provider directors by petition of at least fifty participating 18 providers. A member of the board of directors of a corporation 19 subject to this chapter shall not serve on the independent 20 subscriber nominating committee. The nominating committee 21 shall consist of subscribers as defined in this section . The 22 rules of the commissioner of insurance shall also permit 23 nomination of subscriber directors by a petition of at least 24 fifty subscribers, and nomination of provider directors 25 by a petition of at least fifty participating providers. 26 These petitions shall be considered only by the independent 27 nominating committee during the duration of the committee. 28 Following the discontinuance of the committee, the petition 29 process shall be continued and the board of directors of the 30 corporation shall consider the petitions. The independent 31 subscriber nominating committee is not subject to chapter 17A . 32 The nominating committee shall not receive per diem or expenses 33 for the performance of their duties. 34 6. Population factors, representation of different 35 -10- LSB 5183HV (3) 84 av/nh 10/ 22

H.F. 2339 geographic regions, and the demography of the service area of 1 the corporation subject to this chapter shall be considered 2 when making nominations for the board of directors of a 3 corporation subject to this chapter . 4 7. A corporation serving states in addition to Iowa shall be 5 required to implement this section only for directors who are 6 residents of Iowa and elected as board members from Iowa. 7 Sec. 17. Section 515.26, Code 2011, is amended to read as 8 follows: 9 515.26 Directors. 10 The affairs of a company organized as provided by this 11 chapter shall be managed by a number of directors, of not less 12 than five nor more than twenty-one. In the case of a mutual 13 company, all such directors shall be policyholders. 14 Sec. 18. Section 515.69, subsection 1, Code 2011, is amended 15 to read as follows: 16 1. A stock insurance company organized under or by the 17 laws of any other state or foreign government for the purpose 18 specified in this chapter , shall not, directly or indirectly, 19 take risks or transact business of insurance in this state 20 unless the company has two and one-half million dollars of 21 actual paid-up capital, and a surplus in cash or invested in 22 securities authorized by law of not less than two and one-half 23 million dollars, possesses the actual amount of capital and 24 surplus required of any company organized pursuant to this 25 chapter, or if the company is a mutual insurance company, the 26 actual amount of surplus required of any mutual insurance 27 company organized pursuant to this chapter, exclusive of assets 28 deposited in a state, territory, district, or country for the 29 special benefit or security of those insured in that state, 30 territory, district, or country. 31 Sec. 19. Section 515.136, Code 2011, is amended to read as 32 follows: 33 515.136 Value of building —— liability. 34 The insurance company or association issuing such policy may 35 -11- LSB 5183HV (3) 84 av/nh 11/ 22

H.F. 2339 show the actual value of said property at date of policy, and 1 any depreciation in the value thereof before the loss occurred; 2 but the said An insurance company or association shall be 3 liable for the actual value of the property insured at the date 4 of the loss, unless such value exceeds the amount stated in the 5 policy. 6 Sec. 20. Section 515A.7, subsection 1, paragraph b, 7 subparagraph (5), Code 2011, is amended to read as follows: 8 (5) An insurer may adopt a scheduled or schedule rating plan 9 providing for credits or debits in an amount not exceeding the 10 maximum modification allowed as set forth by the commissioner 11 by rule. This amount shall be in addition to the permitted 12 deviations set forth in subparagraphs (1) through (4). 13 Sec. 21. Section 518.14, subsection 4, paragraph f, 14 unnumbered paragraph 1, Code 2011, is amended to read as 15 follows: 16 Common stocks, common stock equivalents, mutual fund 17 shares, securities convertible into common stocks or common 18 stock equivalents, or preferred stocks issued or guaranteed 19 by a corporation incorporated under the laws of the United 20 States or a state, or the laws of Canada or a province of 21 Canada , or limited partnerships publicly traded on a nationally 22 established stock exchange in the United States . Aggregate 23 investments in nondividend paying stocks shall not exceed five 24 percent of surplus. 25 Sec. 22. Section 518A.12, subsection 4, paragraph f, 26 unnumbered paragraph 1, Code 2011, is amended to read as 27 follows: 28 Common stocks, common stock equivalents, mutual fund 29 shares, securities convertible into common stocks or common 30 stock equivalents, or preferred stocks issued or guaranteed 31 by a corporation incorporated under the laws of the United 32 States or a state, or the laws of Canada or a province of 33 Canada , or limited partnerships publicly traded on a nationally 34 established stock exchange in the United States . Aggregate 35 -12- LSB 5183HV (3) 84 av/nh 12/ 22

H.F. 2339 investments in nondividend paying stocks shall not exceed five 1 percent of surplus. 2 Sec. 23. Section 521E.1, subsection 4, unnumbered paragraph 3 1, Code 2011, is amended to read as follows: 4 “Domestic insurer” means an insurance company domiciled in 5 this state and licensed to transact the business of insurance 6 under chapter 508 , 512B, 515 , or 520 , except that it shall not 7 include any of the following: 8 Sec. 24. Section 521E.1, subsection 4, paragraph b, Code 9 2011, is amended by striking the paragraph. 10 Sec. 25. Section 521E.1, subsections 6 and 7, Code 2011, are 11 amended to read as follows: 12 6. “Foreign insurer” means an insurance company not 13 domiciled in this state which is licensed to transact the 14 business of insurance in this state under chapter 508 , 512B, 15 515 , or 520 . 16 7. “Life and health insurer” means an insurance company 17 licensed under chapter 508 , a fraternal benefit society 18 organized under chapter 512B, or a licensed property and 19 casualty insurer writing only accident and health insurance 20 under chapter 515 . 21 Sec. 26. Section 521E.3, subsection 1, paragraph a, 22 subparagraph (2), Code Supplement 2011, is amended to read as 23 follows: 24 (2) For a life and health insurer, the insurer’s 25 total adjusted capital is greater than or equal to its 26 company-action-level risk-based capital but less than the 27 product of its authorized-control-level risk-based capital and 28 two and one-half three , and has a negative trend. 29 Sec. 27. Section 522C.6, Code 2011, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 3. a. A licensed public adjuster who, 32 after hearing, is found to have violated this chapter or any 33 rule adopted or order issued pursuant to this chapter, may 34 be ordered to cease and desist from engaging in the conduct 35 -13- LSB 5183HV (3) 84 av/nh 13/ 22

H.F. 2339 resulting in the violation and may be assessed a civil penalty 1 as provided in section 505.7A. 2 b. A person who, after hearing, is found to have violated 3 this chapter by acting as a public adjuster without proper 4 licensure may be ordered to cease and desist from engaging in 5 the conduct resulting in the violation and may be assessed a 6 civil penalty according to the provisions of chapter 507A. 7 c. If a person has engaged, is engaging, or is about to 8 engage in any act or practice constituting a violation of 9 this chapter or any rule adopted or order issued pursuant to 10 this chapter, the commissioner may issue a summary order that 11 includes a brief statement of findings of fact, conclusions of 12 law, and policy reasons for the order, and that directs the 13 person to cease and desist from engaging in the act or practice 14 constituting the violation and that may assess a civil penalty 15 or take other affirmative action as in the judgment of the 16 commissioner is necessary to assure that the person complies 17 with the requirements of this chapter as provided in chapter 18 507A. 19 d. If a person does not comply with an order issued pursuant 20 to this subsection, the commissioner may petition a court of 21 competent jurisdiction to enforce the order. The court shall 22 not require the commissioner to post a bond in an action or 23 proceeding under this subsection. If the court finds, after 24 notice and opportunity for hearing, that the person is not in 25 compliance with an order, the court may adjudge the person to 26 be in civil contempt of the order. The court may impose a civil 27 penalty against the person for contempt in an amount not less 28 than three thousand dollars but not greater than ten thousand 29 dollars for each violation and may grant any other relief that 30 the court determines is just and proper in the circumstances. 31 Sec. 28. Section 598.20A, Code 2011, is amended to read as 32 follows: 33 598.20A Beneficiary revocation —— life insurance. 34 1. Except as preempted by federal law, if a decree of 35 -14- LSB 5183HV (3) 84 av/nh 14/ 22

H.F. 2339 dissolution, annulment, or separate maintenance is issued after 1 an insured the policy owner of an insurance contract insuring 2 the policy owner’s own life has designated the insured’s policy 3 owner’s spouse or one or more relatives of the insured’s policy 4 owner’s spouse as a beneficiary under a life insurance policy 5 in effect on the date of the decree, a provision in the life 6 insurance policy making such a designation is voided by the 7 issuance of the decree unless any of the following apply: 8 a. The decree designates the insured’s policy owner’s former 9 spouse or one or more relatives of the insured’s policy owner’s 10 spouse as beneficiary. 11 b. After issuance of the decree, the insured policy owner 12 executes a designation of beneficiary form provided by the 13 insurance company naming the insured’s policy owner’s former 14 spouse or one or more relatives of the insured’s policy owner’s 15 former spouse as beneficiary. 16 c. The insured policy owner and the insured’s policy owner’s 17 former spouse remarry. 18 2. If a beneficiary designation is not effective pursuant to 19 subsection 1 , the benefits or proceeds of the life insurance 20 policy are payable to an alternate beneficiary, or if there is 21 no alternate beneficiary, to the estate of the insured policy 22 owner . 23 3. An insurer who pays benefits or proceeds of a life 24 insurance policy to a beneficiary under a designation that is 25 void pursuant to subsection 1 is not liable for payment to an 26 alternative beneficiary as provided under subsection 2 unless 27 both of the following apply: 28 a. At least ten days prior to payment of the benefits 29 or proceeds of the life insurance policy to the designated 30 beneficiary, the insurer receives written notice at the home 31 office of the insurer that the designation of the beneficiary 32 is not effective pursuant to subsection 1 . 33 b. The insurer has failed to interplead the benefits or 34 proceeds of the life insurance policy in a court of competent 35 -15- LSB 5183HV (3) 84 av/nh 15/ 22

H.F. 2339 jurisdiction in accordance with the rules of civil procedure. 1 4. This section does not limit the right of a beneficiary 2 to seek recovery from any person or entity that erroneously 3 receives or collects the benefits or proceeds from a life 4 insurance policy. 5 5. This section does not affect the right of an insured’s 6 former a policy owner’s spouse to assert an ownership interest 7 in a life insurance policy insuring the life of the policy 8 owner that is not disclosed to the insured’s policy owner’s 9 spouse prior to the decree of dissolution, annulment, or 10 separate maintenance and that is not addressed by the decree. 11 6. For purposes of this section , “relative of the insured’s 12 policy owner’s spouse” means a person who is related to the 13 insured’s policy owner’s former spouse by blood, adoption, 14 or affinity, and who, subsequent to a decree of dissolution, 15 annulment, or separate maintenance, ceases to be related to the 16 insured policy owner by blood, adoption, or affinity. 17 Sec. 29. EFFECTIVE UPON ENACTMENT. The following 18 provision or provisions of this Act, being deemed of immediate 19 importance, take effect upon enactment: 20 1. The section of this Act enacting section 507C.17A. 21 EXPLANATION 22 This bill relates to various matters under the purview of the 23 insurance division of the department of commerce. 24 DEPARTMENT OF PUBLIC HEALTH. Code section 135.22A(2)(g) 25 is stricken to remove the commissioner of insurance from the 26 membership of the advisory council on brain injuries. 27 UNIFORM SECURITIES ACT (BLUE SKY LAW). Code section 28 502.412(3) is amended to increase the amount of the 29 disciplinary penalty for registrants that the administrator 30 (commissioner of insurance or the commissioner’s deputy) can 31 impose for a violation of the Code chapter from a maximum of 32 $5,000 to $10,000 for a single violation, and from $500,000 to 33 $1 million for more than one violation, or in such amount as 34 agreed to by the parties. 35 -16- LSB 5183HV (3) 84 av/nh 16/ 22

H.F. 2339 Code section 502.604(4) is amended to increase the amount 1 of a civil penalty the administrator can impose against a 2 person for engaging in an act, practice, or course of business 3 in violation of the Code chapter from a maximum of $5,000 to 4 $10,000 for a single violation, and from $500,000 to $1 million 5 for more than one violation, or in an amount agreed to by the 6 parties. 7 New Code section 502.604(5A) provides that a person 8 who fails to obey a valid cease and desist order issued by 9 the administrator may be subject to a civil penalty in an 10 amount of not less than $1,000 and not more than $10,000 for 11 violating the order. Each day the failure to obey continues 12 constitutes a separate violation. The penalties provided in 13 this subsection are in addition to, and not exclusive of other 14 remedies that may be available. 15 INSURANCE DIVISION. Code section 505.8(10) is amended to 16 allow the commissioner to assess the costs of the examination 17 of a regulated entity necessary to accomplish compliance with 18 the insurance laws of this state. 19 DOMESTIC INSURANCE COMPANIES. New Code section 506.14 20 provides that any plan for the voluntary dissolution of a 21 domestic mutual insurance company licensed in this state shall 22 be presented for approval by the commissioner not less than 90 23 days prior to notice of the plan to the policyholders. The 24 commissioner must approve the plan if it complies with all 25 applicable laws and is fair and equitable to the company and to 26 its policyholders. 27 EXAMINATION OF INSURANCE COMPANIES. Code section 28 507.10(4)(a) is amended to allow the board of directors of 29 an insurance company to signal that each member has reviewed 30 an examination report with a notation in the board’s meeting 31 minutes instead of by filing affidavits indicating that each 32 member has received a copy of the report. 33 Code section 507.14 is amended to allow the commissioner 34 to release confidential documents and other materials to the 35 -17- LSB 5183HV (3) 84 av/nh 17/ 22

H.F. 2339 international association of insurance supervisors and the bank 1 for international settlements provided that those entities 2 give written certification that the records will be kept 3 confidential. 4 INSURANCE TRADE PRACTICES. New Code section 507B.4(20) 5 makes it an unfair or deceptive act or practice in the business 6 of insurance for an issuer of a Medicare supplement policy 7 to fail to terminate that coverage and refund any unearned 8 premiums, upon receiving written notice from the policyholder 9 that the policyholder desires to terminate the coverage and has 10 obtained Medicare Part C coverage. An issuer is not required 11 to refund premiums for any period of time in excess of five 12 years prior to the date of receiving such written notice. 13 INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION. 14 New Code section 507C.17A contains provisions that apply in 15 accordance with the federal Dodd-Frank Wall Street Reform and 16 Consumer Protection Act to a domestic insurer that is a covered 17 financial company, as that term is defined in federal law. 18 The bill provides that the commissioner of insurance may 19 file a petition in the state district court for an order of 20 rehabilitation or liquidation of such a domestic insurer upon 21 receiving notice from the secretary of the treasury of the 22 United States that the insurer acquiesces or consents to the 23 appointment of a receiver; upon an order of the United States 24 district court for the District of Columbia as to that insurer; 25 or when a petition of the secretary of the treasury of the 26 United States concerning the insurer is granted by operation 27 of law. 28 Notwithstanding any other provision of law to the contrary, 29 the state district court, after notice to the insurer, may 30 grant an order on such a petition within 24 hours after the 31 filing of the petition. If the district court does not make a 32 determination on the petition within 24 hours of its filing, 33 the order is deemed granted by operation of law upon expiration 34 of the 24-hour period. 35 -18- LSB 5183HV (3) 84 av/nh 18/ 22