House Study Bill 607 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SODERBERG) A BILL FOR An Act relating to the provision of evidence of insurance to 1 insureds and related real property lenders, and providing 2 penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6036HC (4) 84 av/nh

H.F. _____ Section 1. Section 507B.4, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 20. Evidence of insurance. Any violation 3 of section 515.139A. 4 Sec. 2. NEW SECTION . 515.139A Evidence of insurance. 5 1. As used in this section, unless the context otherwise 6 requires: 7 a. “Evidence” or “evidence of insurance” means a binder 8 or certificate of insurance that does not expire prior to, 9 or is otherwise automatically renewed until, delivery of the 10 related policy, and specifies the insurance coverage issued or 11 to be issued under the policy in reasonable detail as well as 12 indicating the mortgagee, loss payee, and additional insureds 13 as applicable. A certificate of insurance containing language 14 to the effect that the certificate is provided “for information 15 only” is not “evidence” or “evidence of insurance”. 16 b. “Policy” means a contract of insurance, inclusive of 17 all endorsements, amendments, and supplemental information 18 evidencing any exclusions or conditions which are applicable 19 to the contract of insurance. 20 c. “Real property lender” means a person or a person’s 21 successors or assigns holding a mortgage or instrument creating 22 a lien with an insurable interest in the insured real property. 23 2. An insurer or an insurance producer shall deliver a 24 policy to the insured and to the related real property lender 25 no later than thirty days following the policy effective date, 26 including each annual renewal effective date, or following 27 payment of the required premium, whichever occurs earlier. In 28 lieu of delivering the original policy, the insurer or the 29 insurance producer may provide the insured and related real 30 property lender with evidence of insurance, so long as the 31 evidence remains effective until delivery of the policy. 32 3. An insured and a real property lender may rely on 33 evidence of insurance, including as admissible proof of 34 insurance in any private civil action or administrative 35 -1- LSB 6036HC (4) 84 av/nh 1/ 3

H.F. _____ proceeding. 1 4. This section is applicable to all insureds and insurers 2 associated with insurance coverage on property, operations, or 3 risks located in this state, regardless of where the insured 4 or insurer is located. 5 5. This section shall not be construed to prevent a real 6 property lender from requiring that a borrower secure and 7 maintain insurance coverage in connection with a residential or 8 commercial real estate loan and provide such lender with a copy 9 of the policy or evidence of insurance as a condition of making 10 the loan and annually at each policy renewal date. 11 6. The commissioner may adopt rules pursuant to chapter 17A 12 to carry out the provisions of this section. 13 7. A person who fails to comply with the provisions of this 14 section or rules adopted pursuant to this section is subject to 15 the provisions of chapter 507B. 16 EXPLANATION 17 This bill relates to the provision of evidence of insurance 18 to an insured and to a related real property lender that has 19 a mortgage or lien on the insured’s real property. The bill 20 defines “evidence” or “evidence of insurance” as a binder or 21 certificate of insurance that does not expire prior to, or is 22 automatically renewed until, delivery of the related insurance 23 policy. The evidence of insurance must specify the insurance 24 coverage issued or to be issued under the policy in reasonable 25 detail and indicate the parties to the insurance policy. A 26 certificate of insurance that contains language to the effect 27 that it is for information only does not constitute evidence 28 of insurance. 29 The bill requires an insurer or insurance producer to 30 deliver an insurance policy to the insured and related real 31 property lender no later than 30 days following the policy 32 effective or renewal date, or when the required premium is 33 paid, whichever occurs earlier. In lieu of delivering the 34 policy, the insurer or insurance producer may provide evidence 35 -2- LSB 6036HC (4) 84 av/nh 2/ 3

H.F. _____ of insurance, so long as the evidence remains effective until 1 delivery of the insurance policy. 2 An insured and a real property lender may rely on evidence of 3 insurance, including as admissible proof of insurance in any 4 private civil action or administrative proceeding. 5 The bill is applicable to all insureds and insurers 6 associated with insurance coverage on property, operations, or 7 risks located in this state regardless of where the insured or 8 insurer is located. 9 A violation of the provisions of the bill constitutes an 10 illegal insurance trade practice under Code chapter 507B 11 and may be punishable with a cease and desist order, civil 12 penalties, and license suspension or revocation as provided in 13 that Code chapter. 14 -3- LSB 6036HC (4) 84 av/nh 3/ 3