Senate File 2293 - Introduced SENATE FILE 2293 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3066) 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 5183SV (3) 84 av/nh

S.F. 2293 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 5183SV (3) 84 av/nh 1/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 2/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 3/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 4/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 5/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 6/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 7/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 8/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 9/ 28

S.F. 2293 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 5183SV (3) 84 av/nh 10/ 28

S.F. 2293 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 514E.1, Code 2011, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 12A. “HIPIOWA-FED” means the limited 10 liability company organized by the association for the 11 purposes of administering the state of Iowa temporary high-risk 12 insurance pool program pursuant to a contract with the United 13 States department of health and human services. 14 Sec. 18. Section 514E.2, subsection 2, Code 2011, is amended 15 by striking the subsection and inserting in lieu thereof the 16 following: 17 2. a. The board of directors of the association shall 18 consist of seven voting members and seven nonvoting members. 19 The voting members shall be appointed by the governor, subject 20 to confirmation by the senate. The governor shall designate 21 one voting member as chairperson and one as vice chairperson. 22 b. The voting members of the board of directors shall be 23 appointed by the governor as follows: 24 (1) Two persons who represent the interests of small 25 business from nominations made to the governor by nationally 26 recognized groups that represent the interests of small 27 business. 28 (2) Two persons who represent the interests of consumers 29 from nominations made to the governor by nationally recognized 30 groups that represent the interests of consumers. 31 (3) One person who is an insurance producer licensed under 32 chapter 522B. 33 (4) One person who is a health care actuary or economist 34 with expertise in health insurance. 35 -11- LSB 5183SV (3) 84 av/nh 11/ 28

S.F. 2293 (5) One person who is a health care provider. 1 c. The nonvoting members are as follows: 2 (1) The commissioner or the commissioner’s designee. 3 (2) The director of human services or the director’s 4 designee. 5 (3) The director of public health or the director’s 6 designee. 7 (4) Four members of the general assembly, one appointed 8 by the speaker of the house of representatives, one appointed 9 by the minority leader of the house of representatives, 10 one appointed by the majority leader of the senate, and one 11 appointed by the minority leader of the senate. 12 d. Meetings of the board of directors shall be held at 13 the call of the chairperson or upon the request of at least 14 two voting members. Four voting members shall constitute a 15 quorum and the affirmative vote of four voting members shall be 16 necessary for any action taken by the board. 17 e. The voting members of the board of directors shall be 18 appointed for staggered terms of three years within sixty days 19 after the effective date of this Act and by December 15 of each 20 year thereafter. The initial terms of the voting members of 21 the board shall be staggered at the discretion of the governor. 22 A voting member of the board is eligible for reappointment. 23 The governor shall fill a vacancy on the board in the same 24 manner as the original appointment for the remainder of the 25 term. 26 f. Members of the board may be reimbursed from the moneys 27 of the association for expenses incurred by them as members, 28 but shall not be otherwise compensated by the association for 29 their services. 30 Sec. 19. Section 514E.2, subsection 4, Code 2011, is amended 31 to read as follows: 32 4. a. The plan of operation may provide that the powers 33 and duties of the association may be delegated to a person who 34 will perform functions similar to those of the association. 35 -12- LSB 5183SV (3) 84 av/nh 12/ 28

S.F. 2293 A delegation under this section takes effect only upon the 1 approval of both the board of directors and the commissioner. 2 The commissioner shall not approve a delegation unless 3 the protections afforded to the insured are substantially 4 equivalent to or greater than those provided under this 5 chapter . 6 b. A delegation made to a person pursuant to this subsection 7 shall be subject to annual review by the government oversight 8 standing committees of the general assembly. Within sixty days 9 after the effective date of this Act and annually thereafter, 10 any person to whom the powers and duties of the association 11 have been delegated pursuant to this subsection shall submit a 12 report to the government oversight committees setting forth the 13 following: 14 (1) The scope of the functions performed by the person. 15 (2) Any contractual provisions between the person and the 16 association or between the person and any other entity on 17 behalf of the association. 18 (3) An accounting of the activities and services performed 19 by the person on behalf of the association. 20 (4) An accounting of all payments made to the person by the 21 association, including but not limited to an itemization of the 22 services rendered and the amount of each payment apportioned to 23 the performance of each activity or service. 24 (5) Any other information requested by the board of 25 directors of the association, the commissioner of insurance, or 26 the government oversight committees. 27 Sec. 20. Section 514E.2, Code 2011, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 5A. The association shall accept 30 third-party payment of premiums for an individual enrolled in 31 health insurance coverage from the association. 32 Sec. 21. Section 514E.2, subsection 7, Code 2011, is amended 33 by adding the following new paragraph: 34 NEW PARAGRAPH . 0b. Following the close of each calendar 35 -13- LSB 5183SV (3) 84 av/nh 13/ 28

S.F. 2293 year, HIPIOWA-FED shall determine the net premiums and 1 payments, the expenses of administration, and the incurred 2 losses of the program for the year. HIPIOWA-FED shall certify 3 the amount of any net loss for the preceding calendar year to 4 the commissioner of insurance and director of revenue and to 5 the United States department of health and human services. In 6 the event that additional federal funding is not provided to 7 HIPIOWA-FED to offset the loss, the loss shall be assessed by 8 the association on behalf of HIPIOWA-FED to all members of the 9 association in proportion to their respective shares of total 10 health insurance premiums or payments for subscriber contracts 11 received in Iowa during the second preceding calendar year, or 12 with paid losses in the year, coinciding with or ending during 13 the calendar year or on any other equitable basis as provided 14 in the plan of operation of the association or as required by 15 the United States department of health and human services. In 16 sharing losses, the association, on behalf of HIPIOWA-FED, may 17 abate or defer in any part the assessment of a member, if, in 18 the opinion of the board of the association, payment of the 19 assessment would endanger the ability of the member to fulfill 20 its contractual obligations. The association, on behalf 21 of HIPIOWA-FED, may also provide for an initial or interim 22 assessment against members of the association if necessary to 23 assure the financial capability of HIPIOWA-FED to meet the 24 incurred or estimated claims expenses or operating expenses of 25 the temporary high-risk insurance pool program until the next 26 calendar year is completed. Net gains, if any, must be held at 27 interest to offset future losses or allocated to reduce future 28 premiums. 29 Sec. 22. Section 514E.2, Code 2011, is amended by adding the 30 following new subsections: 31 NEW SUBSECTION . 12A. The association shall be considered a 32 governmental body for purposes of chapter 21 and a government 33 body for purposes of chapter 22. A person to whom the 34 association delegates the duties and powers of the association 35 -14- LSB 5183SV (3) 84 av/nh 14/ 28

S.F. 2293 shall be considered a governmental body for purposes of chapter 1 21 and a government body for purposes of chapter 22 to the 2 extent that the person carries out the powers and duties of the 3 association. 4 NEW SUBSECTION . 12B. HIPIOWA-FED shall be considered a 5 governmental body for purposes of chapter 21 and a government 6 body for purposes of chapter 22. A person to whom the duties 7 and powers of the limited liability company are delegated shall 8 be considered a governmental body for purposes of chapter 9 21 and a government body for purposes of chapter 22 to the 10 extent that the person carries out the powers and duties of the 11 limited liability company. 12 Sec. 23. Section 514J.103, subsection 1, Code Supplement 13 2011, is amended to read as follows: 14 1. Except as provided in subsection 2 , this chapter shall 15 apply to all health carriers , including health carriers issuing 16 a policy or certificate that provides coverage for dental care . 17 Sec. 24. Section 514J.103, subsection 2, paragraph a, Code 18 Supplement 2011, is amended to read as follows: 19 a. A policy or certificate that provides coverage only for a 20 specified disease, specified accident or accident-only, credit, 21 disability income, hospital indemnity, long-term care, dental 22 care, vision care, or any other limited supplemental benefit. 23 Sec. 25. Section 515.26, Code 2011, is amended to read as 24 follows: 25 515.26 Directors. 26 The affairs of a company organized as provided by this 27 chapter shall be managed by a number of directors, of not less 28 than five nor more than twenty-one. In the case of a mutual 29 company, all such directors shall be policyholders. 30 Sec. 26. Section 515.69, subsection 1, Code 2011, is amended 31 to read as follows: 32 1. A stock insurance company organized under or by the 33 laws of any other state or foreign government for the purpose 34 specified in this chapter , shall not, directly or indirectly, 35 -15- LSB 5183SV (3) 84 av/nh 15/ 28

S.F. 2293 take risks or transact business of insurance in this state 1 unless the company has two and one-half million dollars of 2 actual paid-up capital, and a surplus in cash or invested in 3 securities authorized by law of not less than two and one-half 4 million dollars, possesses the actual amount of capital and 5 surplus required of any company organized pursuant to this 6 chapter, or if the company is a mutual insurance company, the 7 actual amount of surplus required of any mutual insurance 8 company organized pursuant to this chapter, exclusive of assets 9 deposited in a state, territory, district, or country for the 10 special benefit or security of those insured in that state, 11 territory, district, or country. 12 Sec. 27. Section 515.136, Code 2011, is amended to read as 13 follows: 14 515.136 Value of building —— liability. 15 The insurance company or association issuing such policy may 16 show the actual value of said property at date of policy, and 17 any depreciation in the value thereof before the loss occurred; 18 but the said An insurance company or association shall be 19 liable for the actual value of the property insured at the date 20 of the loss, unless such value exceeds the amount stated in the 21 policy. 22 Sec. 28. Section 515A.7, subsection 1, paragraph b, 23 subparagraph (5), Code 2011, is amended to read as follows: 24 (5) An insurer may adopt a scheduled or schedule rating plan 25 providing for credits or debits in an amount not exceeding the 26 maximum modification allowed as set forth by the commissioner 27 by rule. This amount shall be in addition to the permitted 28 deviations set forth in subparagraphs (1) through (4). 29 Sec. 29. Section 518.14, subsection 4, paragraph f, 30 unnumbered paragraph 1, Code 2011, is amended to read as 31 follows: 32 Common stocks, common stock equivalents, mutual fund 33 shares, securities convertible into common stocks or common 34 stock equivalents, or preferred stocks issued or guaranteed 35 -16- LSB 5183SV (3) 84 av/nh 16/ 28

S.F. 2293 by a corporation incorporated under the laws of the United 1 States or a state, or the laws of Canada or a province of 2 Canada , or limited partnerships publicly traded on a nationally 3 established stock exchange in the United States . Aggregate 4 investments in nondividend paying stocks shall not exceed five 5 percent of surplus. 6 Sec. 30. Section 518A.12, subsection 4, paragraph f, 7 unnumbered paragraph 1, Code 2011, is amended to read as 8 follows: 9 Common stocks, common stock equivalents, mutual fund 10 shares, securities convertible into common stocks or common 11 stock equivalents, or preferred stocks issued or guaranteed 12 by a corporation incorporated under the laws of the United 13 States or a state, or the laws of Canada or a province of 14 Canada , or limited partnerships publicly traded on a nationally 15 established stock exchange in the United States . Aggregate 16 investments in nondividend paying stocks shall not exceed five 17 percent of surplus. 18 Sec. 31. Section 521E.1, subsection 4, unnumbered paragraph 19 1, Code 2011, is amended to read as follows: 20 “Domestic insurer” means an insurance company domiciled in 21 this state and licensed to transact the business of insurance 22 under chapter 508 , 512B, 515 , or 520 , except that it shall not 23 include any of the following: 24 Sec. 32. Section 521E.1, subsection 4, paragraph b, Code 25 2011, is amended by striking the paragraph. 26 Sec. 33. Section 521E.1, subsections 6 and 7, Code 2011, are 27 amended to read as follows: 28 6. “Foreign insurer” means an insurance company not 29 domiciled in this state which is licensed to transact the 30 business of insurance in this state under chapter 508 , 512B, 31 515 , or 520 . 32 7. “Life and health insurer” means an insurance company 33 licensed under chapter 508 , a fraternal benefit society 34 organized under chapter 512B, or a licensed property and 35 -17- LSB 5183SV (3) 84 av/nh 17/ 28

S.F. 2293 casualty insurer writing only accident and health insurance 1 under chapter 515 . 2 Sec. 34. Section 521E.3, subsection 1, paragraph a, 3 subparagraph (2), Code Supplement 2011, is amended to read as 4 follows: 5 (2) For a life and health insurer, the insurer’s 6 total adjusted capital is greater than or equal to its 7 company-action-level risk-based capital but less than the 8 product of its authorized-control-level risk-based capital and 9 two and one-half three , and has a negative trend. 10 Sec. 35. Section 522C.6, Code 2011, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 3. a. A licensed public adjuster who, 13 after hearing, is found to have violated this chapter or any 14 rule adopted or order issued pursuant to this chapter, may 15 be ordered to cease and desist from engaging in the conduct 16 resulting in the violation and may be assessed a civil penalty 17 as provided in section 505.7A. 18 b. A person who, after hearing, is found to have violated 19 this chapter by acting as a public adjuster without proper 20 licensure may be ordered to cease and desist from engaging in 21 the conduct resulting in the violation and may be assessed a 22 civil penalty according to the provisions of chapter 507A. 23 c. If a person has engaged, is engaging, or is about to 24 engage in any act or practice constituting a violation of 25 this chapter or any rule adopted or order issued pursuant to 26 this chapter, the commissioner may issue a summary order that 27 includes a brief statement of findings of fact, conclusions of 28 law, and policy reasons for the order, and that directs the 29 person to cease and desist from engaging in the act or practice 30 constituting the violation and that may assess a civil penalty 31 or take other affirmative action as in the judgment of the 32 commissioner is necessary to assure that the person complies 33 with the requirements of this chapter as provided in chapter 34 507A. 35 -18- LSB 5183SV (3) 84 av/nh 18/ 28