Senate
File
416
-
Introduced
SENATE
FILE
416
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
SSB
1097)
A
BILL
FOR
An
Act
relating
to
the
scope
of
duty
of
an
insurance
producer
1
in
procuring
insurance
for
a
client.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
2297SV
(2)
84
av/rj
S.F.
416
Section
1.
NEW
SECTION
.
522B.2A
Scope
of
duty.
1
1.
The
scope
of
duty
of
an
insurance
producer
to
a
client
2
is
limited
to
using
reasonable
care,
diligence,
and
judgment
3
in
procuring
the
insurance
coverage
requested
by
the
client
4
unless
the
insurance
producer
holds
oneself
out
as
an
insurance
5
specialist,
consultant,
or
counselor
and
receives
compensation
6
for
consultation
and
advice
apart
from
premiums
paid
by
the
7
client
or
commissions
paid
by
an
insurer.
8
2.
The
general
assembly
declares
that
this
section
shall
9
be
interpreted
so
that
the
holding
of
Langwith
v.
Am.
Nat’l
10
Gen.
Ins.
Co.
,
(No.
08-0778)
(Iowa
2010)
is
abrogated
to
the
11
extent
that
decision
expands
the
scope
of
duty
of
an
insurance
12
producer
to
a
client,
in
favor
of
prior
judicial
interpretation
13
limiting
an
insurance
producer’s
scope
of
duty
to
that
scope
of
14
duty
described
in
subsection
1.
15
EXPLANATION
16
New
Code
section
522B.2A
provides
that
the
scope
of
duty
17
of
a
person
licensed
as
an
insurance
producer
to
a
client
18
is
limited
to
using
reasonable
care,
diligence,
and
judgment
19
in
procuring
the
insurance
coverage
requested
by
the
client,
20
unless
the
insurance
producer
holds
oneself
out
as
an
insurance
21
specialist,
consultant,
or
counselor
and
receives
compensation
22
for
consultation
and
advice
apart
from
premiums
paid
by
the
23
client
or
commissions
paid
by
an
insurer.
24
The
bill
further
provides
that
the
new
Code
section
shall
be
25
interpreted
to
abrogate
the
holding
of
a
case
entitled
Langwith
26
v.
Am.
Nat’l
Gen.
Ins.
Co.,
decided
by
the
Iowa
supreme
court
27
on
December
30,
2010,
to
the
extent
that
case
expands
the
scope
28
of
duty
of
an
insurance
producer
to
a
client,
in
favor
of
prior
29
judicial
interpretation
as
described
in
the
bill.
30
In
the
Langwith
case,
the
Iowa
supreme
court
determined,
31
among
other
determinations
in
the
case,
that
its
previous
32
decisions
had
placed
unjustified
limitations
on
the
33
circumstances
that
might
be
considered
in
determining
the
34
duty
undertaken
by
an
insurance
producer
to
procure
insurance
35
-1-
LSB
2297SV
(2)
84
av/rj
1/
2
S.F.
416
for
a
client.
The
court
held,
among
other
holdings
in
the
1
case,
that
it
is
for
the
fact
finder
to
determine,
based
on
2
a
consideration
of
all
the
circumstances,
the
agreement
of
3
the
parties
with
respect
to
the
service
to
be
rendered
by
4
an
insurance
producer
and
whether
that
service
was
performed
5
with
the
skill
and
knowledge
normally
possessed
by
insurance
6
producers
under
like
circumstances.
7
-2-
LSB
2297SV
(2)
84
av/rj
2/
2