House Study Bill 621 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SODERBERG) 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 5183YC (1) 84 av/nh

H.F. _____ 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 5183YC (1) 84 av/nh 1/ 23

H.F. _____ 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 5183YC (1) 84 av/nh 2/ 23

H.F. _____ 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 premium for duplication of 26 insurance. Failing to refund premiums paid for a Medicare 27 supplement policy after the effective date of a subsequently 28 purchased Medicare advantage plan, where there have been no 29 claims made on the Medicare supplement policy, and it can be 30 established that the carrier of the Medicare supplement policy 31 has no exposure to pay benefits if a claim is submitted to it 32 during the time that both the Medicare supplement policy and 33 the Medicare advantage plan are in effect. For the purposes 34 of this subsection, “Medicare supplement policy” and “Medicare 35 -3- LSB 5183YC (1) 84 av/nh 3/ 23

H.F. _____ advantage plan” mean the same as defined by the commissioner of 1 insurance pursuant to rules adopted under chapter 17A. 2 Sec. 10. NEW SECTION . 507C.17A Rehabilitation or 3 liquidation of a domestic insurer covered under the federal 4 Dodd-Frank Wall Street Reform and Consumer Protection Act. 5 1. The provisions of this section apply in accordance 6 with Tit. II of the federal Dodd-Frank Wall Street Reform and 7 Consumer Protection Act, Pub. L. No. 111-203, 12 U.S.C. § 5301 8 et seq., with respect to a domestic insurer that is a covered 9 financial company, as that term is defined under 12 U.S.C. § 10 5381. 11 2. The commissioner may petition the district court for an 12 order of rehabilitation or liquidation of a domestic insurer 13 pursuant to this section on any of the following grounds: 14 a. Upon a determination and notification given by the 15 secretary of the treasury of the United States, in consultation 16 with the president of the United States, that the insurer is 17 a covered financial company satisfying the requirements of 18 12 U.S.C. § 5383(b), and the board of directors, or a body 19 performing similar functions of a board of directors, of the 20 insurer acquiesces or consents to the appointment of a receiver 21 pursuant to 12 U.S.C. § 5382(a)(1)(A)(i) with such consent 22 to be considered as consent to an order of rehabilitation or 23 liquidation. 24 b. Upon an order of the United States district court for 25 the District of Columbia under 12 U.S.C. § 5382(a)(1)(A)(iv)(I) 26 granting the petition of the secretary of the treasury of 27 the United States concerning the insurer under 12 U.S.C. § 28 5382(a)(1)(A)(i). 29 c. A petition by the secretary of the treasury of the United 30 States concerning the insurer is granted by operation of law 31 under 12 U.S.C. § 5382(a)(1)(A)(v). 32 3. Notwithstanding any other provision of law to the 33 contrary, after notice to the insurer, a district court 34 may grant an order of rehabilitation or liquidation within 35 -4- LSB 5183YC (1) 84 av/nh 4/ 23

H.F. _____ twenty-four hours after the filing of such a petition pursuant 1 to this section. 2 4. If the district court does not make a determination on a 3 petition for an order of rehabilitation or liquidation filed by 4 the commissioner pursuant to this section within twenty-four 5 hours after the filing of the petition, the order shall be 6 deemed granted by operation of law upon the expiration of the 7 twenty-four-hour period. 8 a. At the time that an order is deemed granted under this 9 subsection, the provisions of this chapter shall be deemed 10 to be in effect, and the commissioner shall be deemed to be 11 affirmed as receiver and to have all of the applicable powers 12 provided by this chapter, regardless of whether an order has 13 been entered by the district court. 14 b. If an order is deemed granted by operation of law under 15 this subsection, the district court shall expeditiously enter 16 an order of rehabilitation or liquidation that does all of the 17 following: 18 (1) Is effective as of the date that the order is deemed 19 granted by operation of law. 20 (2) Conforms to the provisions for rehabilitation or 21 liquidation of an insurer contained in this chapter, as 22 applicable. 23 5. An order of rehabilitation or liquidation made pursuant 24 to this section shall not be subject to a stay or injunction 25 pending appeal. 26 6. Nothing in this section shall be construed to supersede 27 or impair any other power or authority of the commissioner or 28 the district court under this chapter. 29 Sec. 11. Section 507E.5, subsection 2, Code 2011, is amended 30 to read as follows: 31 2. The commissioner may share documents, materials, or 32 other information, including confidential and privileged 33 documents, materials, or other information, with other 34 state, federal, and international regulatory agencies, with 35 -5- LSB 5183YC (1) 84 av/nh 5/ 23

H.F. _____ the national association of insurance commissioners and its 1 affiliates or subsidiaries, and with local, state, federal, and 2 international law enforcement authorities, provided that the 3 recipient agrees to maintain the confidential and privileged 4 status of the document, material, or other information, 5 pursuant to Iowa law. 6 Sec. 12. Section 511.8, subsection 14, Code Supplement 7 2011, is amended to read as follows: 8 14. Urban real estate and personal property. 9 a. Personal or real property or both located within the 10 United States or the Dominion of Canada, other than real 11 property used or to be used primarily for agricultural, 12 horticultural, ranching or mining purposes, which produces 13 income or which by suitable improvement will produce income. 14 However, personal property acquired under this subsection shall 15 be acquired for the purpose of entering into a contract for 16 the sale or for a use under which the contractual payments 17 may reasonably be expected to result in the recovery of the 18 investment and an investment return within the anticipated 19 useful life of the property. Legal title to the real property 20 may be acquired subject to a contract of sale. 21 b. “Real property” as used in this subsection includes a all 22 of the following: 23 (1) A leasehold of real estate , an . 24 (2) An undivided interest in a leasehold of real estate , and 25 an . 26 (3) An undivided interest in the fee title of real estate. 27 (4) A controlling membership, partnership, shareholder, or 28 trust interest in any entity created solely for the purpose 29 of owning and operating any of the interests described in 30 subparagraph (1), (2), or (3), if the entity is expressly 31 limited to that purpose within its organizational documents. 32 c. Investments under this subsection are not eligible in 33 excess of ten percent of the legal reserve. 34 Sec. 13. Section 511.8, subsection 19, Code Supplement 35 -6- LSB 5183YC (1) 84 av/nh 6/ 23

H.F. _____ 2011, is amended to read as follows: 1 19. Other foreign government or corporate obligations. 2 a. Bonds or other evidences of indebtedness, not to 3 include currency, issued, assumed, or guaranteed by a foreign 4 government other than Canada, or by a corporation incorporated 5 under the laws of a foreign government other than Canada. Such 6 governmental obligations must be valid, legally authorized 7 and issued, and on the date of acquisition have predominantly 8 investment qualities and characteristics as provided by 9 rule. Such corporate obligations must meet the qualifications 10 established in subsection 5 for bonds and other evidences of 11 indebtedness issued, assumed, or guaranteed by a corporation 12 incorporated under the laws of the United States or Canada. 13 Foreign investments authorized by this subsection are not 14 eligible in excess of twenty twenty-five percent of the 15 legal reserve of the life insurance company or association. 16 Investments in obligations of a foreign government, other 17 than Canada and , the United Kingdom, and foreign governments 18 rated AAA by Standard and Poor’s division of McGraw-Hill 19 companies, inc., or Aaa by Moody’s investors services, inc., 20 are not eligible in excess of two percent of the legal reserve 21 in the securities of foreign governments of any one foreign 22 nation. Investments in obligations of the United Kingdom are 23 not eligible in excess of four percent of the legal reserve. 24 Investments in obligations of foreign governments rated either 25 AAA by Standard and Poor’s division of McGraw-Hill companies, 26 inc., or Aaa by Moody’s investors services, inc., are not 27 eligible in excess of five percent of the legal reserve. 28 Investments in a corporation incorporated under the laws of a 29 foreign government other than Canada are not eligible in excess 30 of two percent of the legal reserve in the securities of any 31 one foreign corporation. 32 b. Eligible investments in foreign obligations under this 33 subsection are limited to the types of obligations specifically 34 referred to in this subsection . This subsection in no way 35 -7- LSB 5183YC (1) 84 av/nh 7/ 23

H.F. _____ limits or restricts investments in Canadian obligations and 1 securities specifically authorized in other subsections of this 2 section . 3 c. This subsection shall not authorize investment in 4 evidences of indebtedness issued, assumed, or guaranteed by a 5 foreign government which engages in a consistent pattern of 6 gross violations of human rights. 7 Sec. 14. Section 511.8, subsection 23, Code Supplement 8 2011, is amended by adding the following new paragraph: 9 NEW PARAGRAPH . g. For securities loaned pursuant to this 10 subsection that are included in the legal reserve of the life 11 insurance company or association, the collateral received for 12 the loaned securities shall not be eligible for inclusion in 13 the legal reserve. 14 Sec. 15. Section 511.40, Code 2011, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 5. a. The gross amount of premiums 17 received by a life insurance company or association for an 18 employer-owned life insurance contract which has not been 19 allocated to another state shall be allocated to this state 20 for purposes of section 432.1, subsection 1, if either of the 21 following is applicable: 22 (1) The contract is issued or delivered in this state. 23 (2) The company or association is domiciled in this state. 24 b. To the extent that premiums are allocated to this state 25 pursuant to paragraph “a” , the provisions of section 505.14 are 26 not applicable to those premiums. 27 c. As used in this subsection, “employer-owned life 28 insurance contract” means a policy which provides coverage on 29 a life for which the employer has an insurable interest under 30 this section or a similar provision of the laws of another 31 state and the policy is owned by either the employer or a trust 32 established by the employer for the benefit of the employer or 33 the employer’s active or retired employees. 34 Sec. 16. Section 514.4, Code 2011, is amended to read as 35 -8- LSB 5183YC (1) 84 av/nh 8/ 23

H.F. _____ follows: 1 514.4 Directors. 2 1. At least two-thirds of the directors of a hospital 3 service corporation, medical service corporation, dental 4 service corporation, or pharmaceutical or optometric service 5 corporation subject to this chapter shall be at all times 6 subscribers and not more than one-third of the directors 7 shall be providers as provided in this section . The board of 8 directors of each corporation shall consist of at least nine 9 members. 10 2. A subscriber director is a director of the board of 11 a corporation who is a subscriber and who is not a provider 12 of health care pursuant to section 514B.1, subsection 7 , a 13 person who has material financial or fiduciary interest in the 14 delivery of health care services or a related industry, an 15 employee of an institution which provides health care services, 16 or a spouse or a member of the immediate family of such a 17 person. However, a subscriber director of a dental service 18 corporation may be an employee, officer, director, or trustee 19 of a hospital or other entity that does not have a provider 20 contract with the dental service corporation. A subscriber 21 director of a hospital or medical service corporation shall be 22 a subscriber of the services of that corporation. 23 3. A provider director of a corporation subject to this 24 chapter shall be at all times a person who has a material 25 financial interest in or is a fiduciary to or an employee 26 of or is a spouse or member of the immediate family of a 27 provider having a contract with such corporation to render to 28 its subscribers the services of such corporation or who is a 29 hospital trustee. 30 4. A director may serve on a board of only one corporation 31 at a time subject to this chapter . 32 5. The commissioner of insurance shall adopt rules pursuant 33 to chapter 17A to implement the process of the election of 34 subscriber directors of the board of directors of a corporation 35 -9- LSB 5183YC (1) 84 av/nh 9/ 23

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

H.F. _____ residents of Iowa and elected as board members from Iowa. 1 Sec. 17. Section 515.69, subsection 1, Code 2011, is amended 2 to read as follows: 3 1. A stock insurance company organized under or by the 4 laws of any other state or foreign government for the purpose 5 specified in this chapter , shall not, directly or indirectly, 6 take risks or transact business of insurance in this state 7 unless the company has two and one-half million dollars of 8 actual paid-up capital, and a surplus in cash or invested in 9 securities authorized by law of not less than two and one-half 10 million dollars, possesses the actual amount of capital and 11 surplus required of any company organized pursuant to this 12 chapter, or if the company is a mutual insurance company, the 13 actual amount of surplus required of any mutual insurance 14 company organized pursuant to this chapter, exclusive of assets 15 deposited in a state, territory, district, or country for the 16 special benefit or security of those insured in that state, 17 territory, district, or country. 18 Sec. 18. Section 515.120, Code 2011, is amended to read as 19 follows: 20 515.120 Business with nonadmitted insurers. 21 1. This chapter does not prevent a licensed resident or 22 nonresident producer of this state, qualified to write excess 23 and surplus lines insurance, from procuring insurance in 24 certain nonadmitted insurers if such insurance is restricted 25 to the type and kind of insurance authorized by this chapter , 26 excluding insurance authorized under section 515.48, 27 subsection 5 , paragraph “a” , and the producer makes oath to 28 the commissioner of insurance in the form prescribed by the 29 commissioner that the producer has made diligent effort to 30 place the insurance in authorized insurers and has either 31 exhausted the capacity of all authorized insurers or has been 32 unable to obtain the desired insurance in insurers licensed to 33 transact business in this state. 34 2. The procuring of a contract of insurance in a nonadmitted 35 -11- LSB 5183YC (1) 84 av/nh 11/ 23

H.F. _____ insurer makes the insurer liable for, and the producer shall 1 pay, the taxes on the premiums as if the insurer were duly 2 authorized to transact business in the state. 3 3. A sworn report of all business transacted by producers 4 of this state in nonadmitted insurers shall be made to the 5 commissioner of insurance on or before March 1 of each year 6 for the preceding calendar year, on the form required by the 7 commissioner of insurance. The report shall be accompanied by 8 a remittance to cover the taxes on the premiums. A producer 9 who makes the oath, pays the taxes on the premiums, and 10 files the report has not written such contracts of insurance 11 unlawfully, and is not personally liable for the contracts. 12 4. Notwithstanding subsection 1, for purposes of this 13 section and sections 515.121 and 515.122, excess and surplus 14 lines insurance includes disability insurance that is in excess 15 of policy limits available in admitted insurers. 16 Sec. 19. Section 515.136, Code 2011, is amended to read as 17 follows: 18 515.136 Value of building —— liability. 19 The insurance company or association issuing such policy may 20 show the actual value of said property at date of policy, and 21 any depreciation in the value thereof before the loss occurred; 22 but the said An insurance company or association shall be 23 liable for the actual value of the property insured at the date 24 of the loss, unless such value exceeds the amount stated in the 25 policy. 26 Sec. 20. Section 515A.7, subsection 1, paragraph b, 27 subparagraph (5), Code 2011, is amended to read as follows: 28 (5) An insurer may adopt a scheduled or schedule rating plan 29 providing for credits or debits in an amount not exceeding the 30 maximum modification allowed as set forth by the commissioner 31 by rule. This amount shall be in addition to the permitted 32 deviations set forth in subparagraphs (1) through (4). 33 Sec. 21. Section 518.14, subsection 4, paragraph f, 34 unnumbered paragraph 1, Code 2011, is amended to read as 35 -12- LSB 5183YC (1) 84 av/nh 12/ 23

H.F. _____ follows: 1 Common stocks, common stock equivalents, mutual fund shares, 2 securities convertible into common stocks or common stock 3 equivalents, or preferred stocks issued or guaranteed by a 4 corporation incorporated under the laws of the United States 5 or a state, or the laws of Canada or a province of Canada , 6 or by limited partnerships publicly traded on a nationally 7 established stock exchange in the United States . Aggregate 8 investments in nondividend paying stocks shall not exceed five 9 percent of surplus. 10 Sec. 22. Section 518A.12, subsection 4, paragraph f, 11 unnumbered paragraph 1, Code 2011, is amended to read as 12 follows: 13 Common stocks, common stock equivalents, mutual fund shares, 14 securities convertible into common stocks or common stock 15 equivalents, or preferred stocks issued or guaranteed by a 16 corporation incorporated under the laws of the United States 17 or a state, or the laws of Canada or a province of Canada , 18 or by limited partnerships publicly traded on a nationally 19 established stock exchange in the United States . Aggregate 20 investments in nondividend paying stocks shall not exceed five 21 percent of surplus. 22 Sec. 23. Section 521E.1, subsection 4, unnumbered paragraph 23 1, Code 2011, is amended to read as follows: 24 “Domestic insurer” means an insurance company domiciled in 25 this state and licensed to transact the business of insurance 26 under chapter 508 , 512B, 515 , or 520 , except that it shall not 27 include any of the following: 28 Sec. 24. Section 521E.1, subsection 4, paragraph b, Code 29 2011, is amended by striking the paragraph. 30 Sec. 25. Section 521E.1, subsections 6 and 7, Code 2011, are 31 amended to read as follows: 32 6. “Foreign insurer” means an insurance company not 33 domiciled in this state which is licensed to transact the 34 business of insurance in this state under chapter 508 , 512B, 35 -13- LSB 5183YC (1) 84 av/nh 13/ 23

H.F. _____ 515 , or 520 . 1 7. “Life and health insurer” means an insurance company 2 licensed under chapter 508 , a fraternal benefit society 3 organized under chapter 512B, or a licensed property and 4 casualty insurer writing only accident and health insurance 5 under chapter 515 . 6 Sec. 26. Section 521E.3, subsection 1, paragraph a, 7 subparagraph (2), Code Supplement 2011, is amended to read as 8 follows: 9 (2) For a life and health insurer, the insurer’s 10 total adjusted capital is greater than or equal to its 11 company-action-level risk-based capital but less than the 12 product of its authorized-control-level risk-based capital and 13 two and one-half three , and has a negative trend. 14 Sec. 27. Section 522C.6, Code 2011, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 3. a. A licensed public adjuster who, 17 after hearing, is found to have violated this chapter or any 18 rule adopted or order issued pursuant to this chapter, may 19 be ordered to cease and desist from engaging in the conduct 20 resulting in the violation and may be assessed a civil penalty 21 as provided in section 505.7A. 22 b. A person who, after hearing, is found to have violated 23 this chapter by acting as a public adjuster without proper 24 licensure may be ordered to cease and desist from engaging in 25 the conduct resulting in the violation and may be assessed a 26 civil penalty according to the provisions of chapter 507A. 27 c. If a person has engaged, is engaging, or is about to 28 engage in any act or practice constituting a violation of 29 this chapter or any rule adopted or order issued pursuant to 30 this chapter, the commissioner may issue a summary order that 31 includes a brief statement of findings of fact, conclusions of 32 law, and policy reasons for the order, and that directs the 33 person to cease and desist from engaging in the act or practice 34 constituting the violation and that may assess a civil penalty 35 -14- LSB 5183YC (1) 84 av/nh 14/ 23

H.F. _____ or take other affirmative action as in the judgment of the 1 commissioner is necessary to assure that the person complies 2 with the requirements of this chapter as provided in chapter 3 507A. 4 d. If a person does not comply with an order issued pursuant 5 to this subsection, the commissioner may petition a court of 6 competent jurisdiction to enforce the order. The court shall 7 not require the commissioner to post a bond in an action or 8 proceeding under this subsection. If the court finds, after 9 notice and opportunity for hearing, that the person is not in 10 compliance with an order, the court may adjudge the person to 11 be in civil contempt of the order. The court may impose a civil 12 penalty against the person for contempt in an amount not less 13 than three thousand dollars but not greater than ten thousand 14 dollars for each violation and may grant any other relief that 15 the court determines is just and proper in the circumstances. 16 Sec. 28. Section 598.20A, Code 2011, is amended to read as 17 follows: 18 598.20A Beneficiary revocation —— life insurance. 19 1. Except as preempted by federal law, if a decree of 20 dissolution, annulment, or separate maintenance is issued after 21 an insured the policy owner of an insurance contract insuring 22 the policy owner’s own life has designated the insured’s policy 23 owner’s spouse or one or more relatives of the insured’s policy 24 owner’s spouse as a beneficiary under a life insurance policy 25 in effect on the date of the decree, a provision in the life 26 insurance policy making such a designation is voided by the 27 issuance of the decree unless any of the following apply: 28 a. The decree designates the insured’s policy owner’s former 29 spouse or one or more relatives of the insured’s policy owner’s 30 spouse as beneficiary. 31 b. After issuance of the decree, the insured policy owner 32 executes a designation of beneficiary form provided by the 33 insurance company naming the insured’s policy owner’s former 34 spouse or one or more relatives of the insured’s policy owner’s 35 -15- LSB 5183YC (1) 84 av/nh 15/ 23

H.F. _____ former spouse as beneficiary. 1 c. The insured policy owner and the insured’s policy owner’s 2 former spouse remarry. 3 2. If a beneficiary designation is not effective pursuant to 4 subsection 1 , the benefits or proceeds of the life insurance 5 policy are payable to an alternate beneficiary, or if there is 6 no alternate beneficiary, to the estate of the insured policy 7 owner . 8 3. An insurer who pays benefits or proceeds of a life 9 insurance policy to a beneficiary under a designation that is 10 void pursuant to subsection 1 is not liable for payment to an 11 alternative beneficiary as provided under subsection 2 unless 12 both of the following apply: 13 a. At least ten days prior to payment of the benefits 14 or proceeds of the life insurance policy to the designated 15 beneficiary, the insurer receives written notice at the home 16 office of the insurer that the designation of the beneficiary 17 is not effective pursuant to subsection 1 . 18 b. The insurer has failed to interplead the benefits or 19 proceeds of the life insurance policy in a court of competent 20 jurisdiction in accordance with the rules of civil procedure. 21 4. This section does not limit the right of a beneficiary 22 to seek recovery from any person or entity that erroneously 23 receives or collects the benefits or proceeds from a life 24 insurance policy. 25 5. This section does not affect the right of an insured’s 26 former a policy owner’s spouse to assert an ownership interest 27 in a life insurance policy insuring the life of the policy 28 owner that is not disclosed to the insured’s policy owner’s 29 spouse prior to the decree of dissolution, annulment, or 30 separate maintenance and that is not addressed by the decree. 31 6. For purposes of this section , “relative of the insured’s 32 policy owner’s spouse” means a person who is related to the 33 insured’s policy owner’s former spouse by blood, adoption, 34 or affinity, and who, subsequent to a decree of dissolution, 35 -16- LSB 5183YC (1) 84 av/nh 16/ 23

H.F. _____ annulment, or separate maintenance, ceases to be related to the 1 insured policy owner by blood, adoption, or affinity. 2 Sec. 29. EFFECTIVE UPON ENACTMENT. The following 3 provision or provisions of this Act, being deemed of immediate 4 importance, take effect upon enactment: 5 1. The section of this Act enacting section 507C.17A. 6 EXPLANATION 7 This bill relates to various matters under the purview of the 8 insurance division of the department of commerce. 9 DEPARTMENT OF PUBLIC HEALTH. Code section 135.22A(2)(g) 10 is stricken to remove the commissioner of insurance from the 11 membership of the advisory council on brain injuries. 12 UNIFORM SECURITIES ACT (BLUE SKY LAW). Code section 13 502.412(3) is amended to increase the amount of the 14 disciplinary penalty for registrants that the administrator 15 (commissioner of insurance or the commissioner’s deputy) can 16 impose for a violation of the Code chapter from a maximum of 17 $5,000 to $10,000 for a single violation, and from $500,000 to 18 $1 million for more than one violation, or in such amount as 19 agreed to by the parties. 20 Code section 502.604(4) is amended to increase the amount 21 of a civil penalty the administrator can impose against a 22 person for engaging in an act, practice, or course of business 23 in violation of the Code chapter from a maximum of $5,000 to 24 $10,000 for a single violation, and from $500,000 to $1 million 25 for more than one violation, or in an amount agreed to by the 26 parties. 27 New Code section 502.604(5A) provides that a person 28 who fails to obey a valid cease and desist order issued by 29 the administrator may be subject to a civil penalty in an 30 amount of not less than $1,000 and not more than $10,000 for 31 violating the order. Each day the failure to obey continues 32 constitutes a separate violation. The penalties provided in 33 this subsection are in addition to, and not exclusive of other 34 remedies that may be available. 35 -17- LSB 5183YC (1) 84 av/nh 17/ 23

H.F. _____ INSURANCE DIVISION. Code section 505.8(10) is amended to 1 allow the commissioner to assess the costs of the examination 2 of a regulated entity necessary to accomplish compliance with 3 the insurance laws of this state. 4 DOMESTIC INSURANCE COMPANIES. New Code section 506.14 5 provides that any plan for the voluntary dissolution of a 6 domestic mutual insurance company licensed in this state shall 7 be presented for approval by the commissioner not less than 90 8 days prior to notice of the plan to the policyholders. The 9 commissioner must approve the plan if it complies with all 10 applicable laws and is fair and equitable to the company and to 11 its policyholders. 12 EXAMINATION OF INSURANCE COMPANIES. Code section 13 507.10(4)(a) is amended to allow the board of directors of 14 an insurance company to signal that each member has reviewed 15 an examination report with a notation in the board’s meeting 16 minutes instead of by filing affidavits indicating that each 17 member has received a copy of the report. 18 Code section 507.14 is amended to allow the commissioner 19 to release confidential documents and other materials to the 20 international association of insurance supervisors and the bank 21 for international settlements provided that those entities 22 give written certification that the records will be kept 23 confidential. 24 INSURANCE TRADE PRACTICES. New Code section 507B.4(20) 25 makes it an unfair or deceptive act or practice in the business 26 of insurance to fail to refund premiums paid for a Medicare 27 supplement policy after the effective date of a subsequently 28 purchased Medicare advantage plan if the insurer has no 29 exposure to pay benefits under the Medicare supplement policy 30 during the time that both the supplement policy and the 31 advantage plan are in effect. 32 INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION. 33 New Code section 507C.17A contains provisions that apply in 34 accordance with the federal Dodd-Frank Wall Street Reform and 35 -18- LSB 5183YC (1) 84 av/nh 18/ 23