SENATE/HOUSE FILE _____

BY  (PROPOSED DEPARTMENT OF COMMERCE/INSURANCE DIVISION BILL)

A BILL FOR

An Act relating to various matters under the purview of the insurance division of the department of commerce, providing penalties, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 135.22A, subsection 2, paragraph g, Code 2011, is amended by striking the paragraph.
    Sec. 2.  Section 502.412, subsection 3, Code 2011, is amended to read as follows:
   3.  Disciplinary penalties —— registrants.  If the administrator finds that the order is in the public interest and subsection 4, paragraphs “a” through “f”, “h”, “i”, “j”, “l”, or “m”, authorizes the action, an order under this chapter may censure, impose a bar, or impose a civil penalty in an amount not to exceed a maximum of five
 
ten thousand dollars for a single violation or five hundred thousand
 
one million dollars for more than one violation,
 
or in an amount as agreed to by the parties, on a registrant, and, if the registrant is a broker-dealer or investment adviser, a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser.
    Sec. 3.  Section 502.604, subsection 4, Code Supplement 2011, is amended to read as follows:
   4.  Civil penalty —— restitution —— corrective action.  In a final order under subsection 3, the administrator may impose a civil penalty up to an amount not to exceed a maximum of five
 
ten thousand dollars for a single violation or five hundred thousand
 
one million dollars for more than one violation,
 
or in an amount as agreed to by the parties, order restitution, or take other corrective action as the administrator deems necessary and appropriate to accomplish compliance with the laws of the state relating to all securities business transacted in the state.
    Sec. 4.  Section 502.604, Code Supplement 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  5A.  Failure to obey cease and desist order.  A person who fails to obey a valid cease and desist order issued by the administrator under this section may, after notice and opportunity for a hearing, be subject to a civil penalty in an amount of not less than one thousand dollars and not to exceed ten thousand dollars for violating the order. Each day the failure to obey the cease and desist order occurs or continues constitutes a separate violation of the order. The penalties provided in this subsection are in addition to, and not exclusive of, other remedies that may be available.
    Sec. 5.  Section 505.8, subsection 10, Code Supplement 2011, is amended to read as follows:
   10.  The commissioner may, after a hearing conducted pursuant to chapter 17A, assess fines or penalties,; assess costs of an
 
examination, investigation, or proceeding,; order restitution,; or take other corrective action as the commissioner deems necessary and appropriate to accomplish compliance with the laws of the state relating to all insurance business transacted in the state.
    Sec. 6.  NEW SECTION.  506.14  Voluntary dissolution of domestic mutual insurance companies.
   1.  Any plan for voluntary dissolution of a domestic mutual insurance company licensed to transact the business of insurance under chapter 508, 515, 518, or 518A shall be presented for approval by the commissioner not less than ninety days in advance of notice of the plan to policyholders.
   2.  The commissioner shall approve the plan if the commissioner finds that the plan complies with all applicable provisions of law and is fair and equitable to the domestic mutual insurance company and its policyholders. 
    Sec. 7.  Section 507.10, subsection 4, paragraph a, Code 2011, is amended to read as follows:
   a.  All orders entered pursuant to subsection 3, paragraph “a”, shall be accompanied by findings and conclusions resulting from the commissioner’s consideration and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. Any such order is a final administrative decision and may be appealed pursuant to chapter 17A, and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within thirty days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.

The board of directors of the company shall timely review the adopted report. The minutes of the meeting of the board at which the adopted report is considered shall reflect that each member of the board has reviewed the adopted report.
    Sec. 8.  Section 507.14, subsection 4, Code 2011, is amended to read as follows:
   4.  Confidential documents, materials, information, administrative or judicial orders, or other actions may be disclosed to a regulatory official of any state, federal agency, or foreign country provided that the recipients are required, under their law, to maintain their confidentiality. Confidential records may be disclosed to the national association of insurance commissioners, the international association of insurance supervisors, and the bank for international settlements, provided that the association certifies
 
associations and the bank certify by written statement that the confidentiality of the records will be maintained.
    Sec. 9.  Section 507B.4, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  20.  Refund of premium for duplication of insurance.  Failing to refund premiums paid for a Medicare supplement policy after the effective date of a subsequently purchased Medicare advantage plan, where there have been no claims made on the Medicare supplement policy, and it can be established that the carrier of the Medicare supplement policy has no exposure to pay benefits if a claim is submitted to it during the time that both the Medicare supplement policy and the Medicare advantage plan are in effect. For the purposes of this subsection, “Medicare supplement policy” and “Medicare advantage plan” mean the same as defined by the commissioner of insurance pursuant to rules adopted under chapter 17A.
    Sec. 10.  NEW SECTION.  507C.17A  Rehabilitation or liquidation of a domestic insurer covered under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act.
   1.  The provisions of this section apply in accordance with Tit. II of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 12 U.S.C. § 5301 et seq., with respect to a domestic insurer that is a covered financial company, as that term is defined under 12 U.S.C. § 5381.
   2.  The commissioner may petition the district court for an order of rehabilitation or liquidation of a domestic insurer pursuant to this section on any of the following grounds:
   a.  Upon a determination and notification given by the secretary of the treasury of the United States, in consultation with the president of the United States, that the insurer is a covered financial company satisfying the requirements of 12 U.S.C. § 5383(b), and the board of directors, or a body performing similar functions of a board of directors, of the insurer acquiesces or consents to the appointment of a receiver pursuant to 12 U.S.C. § 5382(a)(1)(A)(i) with such consent to be considered as consent to an order of rehabilitation or liquidation.
   b.  Upon an order of the United States district court for the District of Columbia under 12 U.S.C. § 5382(a)(1)(A)(iv)(I) granting the petition of the secretary of the treasury of the United States concerning the insurer under 12 U.S.C. § 5382(a)(1)(A)(i).
   c.  A petition by the secretary of the treasury of the United States concerning the insurer is granted by operation of law under 12 U.S.C. § 5382(a)(1)(A)(v).
   3.  Notwithstanding any other provision of law to the contrary, after notice to the insurer, a district court may grant an order of rehabilitation or liquidation within twenty-four hours after the filing of such a petition pursuant to this section.
   4.  If the district court does not make a determination on a petition for an order of rehabilitation or liquidation filed by the commissioner pursuant to this section within twenty-four hours after the filing of the petition, the order shall be deemed granted by operation of law upon the expiration of the twenty-four-hour period. 
   a.  At the time that an order is deemed granted under this subsection, the provisions of this chapter shall be deemed to be in effect, and the commissioner shall be deemed to be affirmed as receiver and to have all of the applicable powers provided by this chapter, regardless of whether an order has been entered by the district court.
   b.  If an order is deemed granted by operation of law under this subsection, the district court shall expeditiously enter an order of rehabilitation or liquidation that does all of the following:
   (1)  Is effective as of the date that the order is deemed granted by operation of law.
   (2)  Conforms to the provisions for rehabilitation or liquidation of an insurer contained in this chapter, as applicable.
   5.  An order of rehabilitation or liquidation made pursuant to this section shall not be subject to a stay or injunction pending appeal.
   6.  Nothing in this section shall be construed to supersede or impair any other power or authority of the commissioner or the district court under this chapter.
    Sec. 11.  Section 507E.5, subsection 2, Code 2011, is amended to read as follows:
   2.  The commissioner may share documents, materials, or other information, including confidential and privileged documents, materials, or other information, with other state, federal, and international regulatory agencies, with the national association of insurance commissioners and its affiliates or subsidiaries, and with
 
local, state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidential and privileged status of the document, material, or other information, pursuant to Iowa law.
    Sec. 12.  Section 511.8, subsection 14, Code Supplement 2011, is amended to read as follows:
   14.  Urban real estate and personal property.
   a.  Personal or real property or both located within the United States or the Dominion of Canada, other than real property used or to be used primarily for agricultural, horticultural, ranching or mining purposes, which produces income or which by suitable improvement will produce income. However, personal property acquired under this subsection shall be acquired for the purpose of entering into a contract for the sale or for a use under which the contractual payments may reasonably be expected to result in the recovery of the investment and an investment return within the anticipated useful life of the property. Legal title to the real property may be acquired subject to a contract of sale.
   b.  “Real property” as used in this subsection includes a
 
all of the following:
   (1)  A
 
leasehold of real estate, an.
   (2)  An
 
undivided interest in a leasehold of real estate, and an.
   (3)  An
 
undivided interest in the fee title of real estate.
   (4)  A controlling membership, partnership, shareholder, or trust interest in any entity created solely for the purpose of owning and operating any of the interests described in subparagraph (1), (2), or (3), if the entity is expressly limited to that purpose within its organizational documents.
   c.  Investments under this subsection are not eligible in excess of ten percent of the legal reserve.
    Sec. 13.  Section 511.8, subsection 19, Code Supplement 2011, is amended to read as follows:
   19.  Other foreign government or corporate obligations.
   a.  Bonds or other evidences of indebtedness, not to include currency, issued, assumed, or guaranteed by a foreign government other than Canada, or by a corporation incorporated under the laws of a foreign government other than Canada. Such governmental obligations must be valid, legally authorized and issued, and on the date of acquisition have predominantly investment qualities and characteristics as provided by rule. Such corporate obligations must meet the qualifications established in subsection 5 for bonds and other evidences of indebtedness issued, assumed, or guaranteed by a corporation incorporated under the laws of the United States or Canada. Foreign investments authorized by this subsection are not eligible in excess of twenty
 
twenty-five percent of the legal reserve of the life insurance company or association. Investments in obligations of a foreign government, other than Canada and, the United Kingdom,
 
and foreign governments rated AAA by Standard and Poor’s division of McGraw-Hill companies, inc., or Aaa by Moody’s investors services, inc., are not eligible in excess of two percent of the legal reserve in the securities of foreign governments of any one foreign nation. Investments in obligations of the United Kingdom are not eligible in excess of four percent of the legal reserve.

Investments in obligations of foreign governments rated either AAA by Standard and Poor’s division of McGraw-Hill companies, inc., or Aaa by Moody’s investors services, inc., are not eligible in excess of five percent of the legal reserve. Investments in a corporation incorporated under the laws of a foreign government other than Canada are not eligible in excess of two percent of the legal reserve in the securities of any one foreign corporation.
   b.  Eligible investments in foreign obligations under this subsection are limited to the types of obligations specifically referred to in this subsection. This subsection in no way limits or restricts investments in Canadian obligations and securities specifically authorized in other subsections of this section.
   c.  This subsection shall not authorize investment in evidences of indebtedness issued, assumed, or guaranteed by a foreign government which engages in a consistent pattern of gross violations of human rights.
    Sec. 14.  Section 511.8, subsection 23, Code Supplement 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  g.  For securities loaned pursuant to this subsection that are included in the legal reserve of the life insurance company or association, the collateral received for the loaned securities shall not be eligible for inclusion in the legal reserve.
    Sec. 15.  Section 511.40, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.
  a.  The gross amount of premiums received by a life insurance company or association for an employer-owned life insurance contract which has not been allocated to another state shall be allocated to this state for purposes of section 432.1, subsection 1, if either of the following is applicable:
   (1)  The contract is issued or delivered in this state.
   (2)  The company or association is domiciled in this state.
   b.  To the extent that premiums are allocated to this state pursuant to paragraph “a”, the provisions of section 505.14 are not applicable to those premiums.
   c.  As used in this subsection, “employer-owned life insurance contract” means a policy which provides coverage on a life for which the employer has an insurable interest under this section or a similar provision of the laws of another state and the policy is owned by either the employer or a trust established by the employer for the benefit of the employer or the employer’s active or retired employees. 
    Sec. 16.  Section 514.4, Code 2011, is amended to read as follows:
   514.4  Directors.
   1.  At least two-thirds of the directors of a hospital service corporation, medical service corporation, dental service corporation, or pharmaceutical or optometric service corporation subject to this chapter shall be at all times subscribers and not more than one-third of the directors shall be providers as provided in this section. The board of directors of each corporation shall consist of at least nine members.
   2.  A subscriber director is a director of the board of a corporation who is a subscriber and who is not a provider of health care pursuant to section 514B.1, subsection 7, a person who has material financial or fiduciary interest in the delivery of health care services or a related industry, an employee of an institution which provides health care services, or a spouse or a member of the immediate family of such a person. However, a subscriber director of a dental service corporation may be an employee, officer, director, or trustee of a hospital
 
or other entity that does not
 
have a provider contract with the dental service corporation. A subscriber director of a hospital or medical service corporation shall be a subscriber of the services of that corporation.
   3.  A provider director of a corporation subject to this chapter shall be at all times a person who has a material financial interest in or is a fiduciary to or an employee of or is a spouse or member of the immediate family of a provider having a contract with such corporation to render to its subscribers the services of such corporation or who is a hospital trustee.
   4.  A director may serve on a board of only one corporation at a time subject to this chapter.
   5.  The commissioner of insurance shall adopt rules pursuant to chapter 17A to implement the process of the election of subscriber directors of the board of directors of a corporation to ensure the representation of a broad spectrum of subscriber interest on each board and establish criteria for the selection of nominees. The rules shall provide for an independent subscriber nominating committee to serve until the composition of the board of directors meets the percentage requirements of this section. Once the composition requirements of this section are met, the nominations for subscriber directors shall be made by the subscriber directors of the board under procedures the board establishes which shall also permit nomination by a petition of at least fifty subscribers. The board shall also establish procedures to permit nomination of provider directors by petition of at least fifty participating providers. A member of the board of directors of a corporation subject to this chapter shall not serve on the independent subscriber nominating committee. The nominating committee shall consist of subscribers as defined in this section. The rules of the commissioner of insurance shall also permit nomination of subscriber directors by a petition of at least fifty subscribers, and nomination of provider directors by a petition of at least fifty participating providers. These petitions shall be considered only by the independent nominating committee during the duration of the committee. Following the discontinuance of the committee, the petition process shall be continued and the board of directors of the corporation shall consider the petitions. The independent subscriber nominating committee is not subject to chapter 17A. The nominating committee shall not receive per diem or expenses for the performance of their duties.
   6.  Population factors, representation of different geographic regions, and the demography of the service area of the corporation subject to this chapter shall be considered when making nominations for the board of directors of a corporation subject to this chapter.
   7.  A corporation serving states in addition to Iowa shall be required to implement this section only for directors who are residents of Iowa and elected as board members from Iowa.
    Sec. 17.  Section 515.69, subsection 1, Code 2011, is amended to read as follows:
   1.  A stock insurance company organized under or by the laws of any other state or foreign government for the purpose specified in this chapter, shall not, directly or indirectly, take risks or transact business of insurance in this state unless the company has two and one-half million dollars of actual paid-up capital, and a surplus in cash or invested in securities authorized by law of not less than two and one-half million dollars,
 
possesses the actual amount of capital and surplus required of any company organized pursuant to this chapter, or if the company is a mutual insurance company, the actual amount of surplus required of any mutual insurance company organized pursuant to this chapter, exclusive of assets deposited in a state, territory, district, or country for the special benefit or security of those insured in that state, territory, district, or country.
    Sec. 18.  Section 515.120, Code 2011, is amended to read as follows:
   515.120  Business with nonadmitted insurers.
   1.  This chapter does not prevent a licensed resident or nonresident producer of this state, qualified to write excess and surplus lines insurance, from procuring insurance in certain nonadmitted insurers if such insurance is restricted to the type and kind of insurance authorized by this chapter, excluding insurance authorized under section 515.48, subsection 5, paragraph “a”, and the producer makes oath to the commissioner of insurance in the form prescribed by the commissioner that the producer has made diligent effort to place the insurance in authorized insurers and has either exhausted the capacity of all authorized insurers or has been unable to obtain the desired insurance in insurers licensed to transact business in this state.
   2.  The procuring of a contract of insurance in a nonadmitted insurer makes the insurer liable for, and the producer shall pay, the taxes on the premiums as if the insurer were duly authorized to transact business in the state.
   3.  A sworn report of all business transacted by producers of this state in nonadmitted insurers shall be made to the commissioner of insurance on or before March 1 of each year for the preceding calendar year, on the form required by the commissioner of insurance. The report shall be accompanied by a remittance to cover the taxes on the premiums. A producer who makes the oath, pays the taxes on the premiums, and files the report has not written such contracts of insurance unlawfully, and is not personally liable for the contracts.
   4.  Notwithstanding subsection 1, for purposes of this section and sections 515.121 and 515.122, excess and surplus lines insurance includes disability insurance that is in excess of policy limits available in admitted insurers.
    Sec. 19.  Section 515.136, Code 2011, is amended to read as follows:
   515.136  Value of building —— liability.
   The insurance company or association issuing such policy may show the actual value of said property at date of policy, and any depreciation in the value thereof before the loss occurred; but the said
 
An insurance company or association shall be liable for the actual value of the property insured at the date of the loss, unless such value exceeds the amount stated in the policy.
    Sec. 20.  Section 515A.7, subsection 1, paragraph b, subparagraph (5), Code 2011, is amended to read as follows:
   (5)  An insurer may adopt a scheduled or
 
schedule rating plan providing for credits or debits in an amount not exceeding the maximum modification allowed as set forth by the commissioner by rule. This amount shall be in addition to the permitted deviations set forth in subparagraphs (1) through (4).
    Sec. 21.  Section 518.14, subsection 4, paragraph f, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Common stocks, common stock equivalents, mutual fund shares, securities convertible into common stocks or common stock equivalents, or preferred stocks issued or guaranteed by a corporation incorporated under the laws of the United States or a state, or the laws of Canada or a province of Canada, or by limited partnerships publicly traded on a nationally established stock exchange in the United States. Aggregate investments in nondividend paying stocks shall not exceed five percent of surplus.
    Sec. 22.  Section 518A.12, subsection 4, paragraph f, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Common stocks, common stock equivalents, mutual fund shares, securities convertible into common stocks or common stock equivalents, or preferred stocks issued or guaranteed by a corporation incorporated under the laws of the United States or a state, or the laws of Canada or a province of Canada, or by limited partnerships publicly traded on a nationally established stock exchange in the United States. Aggregate investments in nondividend paying stocks shall not exceed five percent of surplus.
    Sec. 23.  Section 521E.1, subsection 4, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   “Domestic insurer” means an insurance company domiciled in this state and licensed to transact the business of insurance under chapter 508,
 
512B, 515, or 520, except that it shall not include any of the following:
    Sec. 24.  Section 521E.1, subsection 4, paragraph b, Code 2011, is amended by striking the paragraph.
    Sec. 25.  Section 521E.1, subsections 6 and 7, Code 2011, are amended to read as follows:
   6.  “Foreign insurer” means an insurance company not domiciled in this state which is licensed to transact the business of insurance in this state under chapter 508,
 
512B, 515, or 520.
   7.  “Life and health insurer” means an insurance company licensed under chapter 508, a fraternal benefit society organized under chapter 512B, or a licensed property and casualty insurer writing only accident and health insurance under chapter 515.
    Sec. 26.  Section 521E.3, subsection 1, paragraph a, subparagraph (2), Code Supplement 2011, is amended to read as follows:
   (2)  For a life and health insurer, the insurer’s total adjusted capital is greater than or equal to its company-action-level risk-based capital but less than the product of its authorized-control-level risk-based capital and two and one-half
 
three, and has a negative trend.
    Sec. 27.  Section 522C.6, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.
  a.  A licensed public adjuster who, after hearing, is found to have violated this chapter or any rule adopted or order issued pursuant to this chapter, may be ordered to cease and desist from engaging in the conduct resulting in the violation and may be assessed a civil penalty as provided in section 505.7A.
   b.  A person who, after hearing, is found to have violated this chapter by acting as a public adjuster without proper licensure may be ordered to cease and desist from engaging in the conduct resulting in the violation and may be assessed a civil penalty according to the provisions of chapter 507A.
   c.  If a person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of this chapter or any rule adopted or order issued pursuant to this chapter, the commissioner may issue a summary order that includes a brief statement of findings of fact, conclusions of law, and policy reasons for the order, and that directs the person to cease and desist from engaging in the act or practice constituting the violation and that may assess a civil penalty or take other affirmative action as in the judgment of the commissioner is necessary to assure that the person complies with the requirements of this chapter as provided in chapter 507A.
   d.  If a person does not comply with an order issued pursuant to this subsection, the commissioner may petition a court of competent jurisdiction to enforce the order. The court shall not require the commissioner to post a bond in an action or proceeding under this subsection. If the court finds, after notice and opportunity for hearing, that the person is not in compliance with an order, the court may adjudge the person to be in civil contempt of the order. The court may impose a civil penalty against the person for contempt in an amount not less than three thousand dollars but not greater than ten thousand dollars for each violation and may grant any other relief that the court determines is just and proper in the circumstances.
    Sec. 28.  Section 598.20A, Code 2011, is amended to read as follows:
   598.20A  Beneficiary revocation —— life insurance.
   1.  Except as preempted by federal law, if a decree of dissolution, annulment, or separate maintenance is issued after an insured
 
the policy owner of an insurance contract insuring the policy owner’s own life has designated the insured’s
 
policy owner’s spouse or one or more relatives of the insured’s
 
policy owner’s spouse as a beneficiary under a life insurance policy in effect on the date of the decree, a provision in the life insurance policy making such a designation is voided by the issuance of the decree unless any of the following apply:
   a.  The decree designates the insured’s
 
policy owner’s former spouse or one or more relatives of the insured’s
 
policy owner’s spouse as beneficiary.
   b.  After issuance of the decree, the insured
 
policy owner executes a designation of beneficiary form provided by the insurance company naming the insured’s
 
policy owner’s former spouse or one or more relatives of the insured’s
 
policy owner’s former spouse as beneficiary.
   c.  The insured
 
policy owner and the insured’s
 
policy owner’s former spouse remarry.
   2.  If a beneficiary designation is not effective pursuant to subsection 1, the benefits or proceeds of the life insurance policy are payable to an alternate beneficiary, or if there is no alternate beneficiary, to the estate of the insured
 
policy owner.
   3.  An insurer who pays benefits or proceeds of a life insurance policy to a beneficiary under a designation that is void pursuant to subsection 1 is not liable for payment to an alternative beneficiary as provided under subsection 2 unless both of the following apply:
   a.  At least ten days prior to payment of the benefits or proceeds of the life insurance policy to the designated beneficiary, the insurer receives written notice at the home office of the insurer that the designation of the beneficiary is not effective pursuant to subsection 1.
   b.  The insurer has failed to interplead the benefits or proceeds of the life insurance policy in a court of competent jurisdiction in accordance with the rules of civil procedure.
   4.  This section does not limit the right of a beneficiary to seek recovery from any person or entity that erroneously receives or collects the benefits or proceeds from a life insurance policy.
   5.  This section does not affect the right of an insured’s former
 
a policy owner’s spouse to assert an ownership interest in a life insurance policy
 
insuring the life of the policy owner that is not disclosed to the insured’s
 
policy owner’s spouse prior to the decree of dissolution, annulment, or separate maintenance and that is not addressed by the decree.
   6.  For purposes of this section, “relative of the insured’s
 
policy owner’s spouse” means a person who is related to the insured’s
 
policy owner’s former spouse by blood, adoption, or affinity, and who, subsequent to a decree of dissolution, annulment, or separate maintenance, ceases to be related to the insured
 
policy owner by blood, adoption, or affinity.
    Sec. 29.  EFFECTIVE UPON ENACTMENT.  The following provision or provisions of this Act, being deemed of immediate importance, take effect upon enactment:
   1.  The section of this Act enacting section 507C.17A.
EXPLANATION
   This bill relates to various matters under the purview of the insurance division of the department of commerce.
   DEPARTMENT OF PUBLIC HEALTH. Code section 135.22A(2)(g) is stricken to remove the commissioner of insurance from the membership of the advisory council on brain injuries.
   UNIFORM SECURITIES ACT (BLUE SKY LAW). Code section 502.412(3) is amended to increase the amount of the disciplinary penalty for registrants that the administrator (commissioner of insurance or the commissioner’s deputy) can impose for a violation of the Code chapter from a maximum of $5,000 to $10,000 for a single violation, and from $500,000 to $1 million for more than one violation, or in such amount as agreed to by the parties.
   Code section 502.604(4) is amended to increase the amount of a civil penalty the administrator can impose against a person for engaging in an act, practice, or course of business in violation of the Code chapter from a maximum of $5,000 to $10,000 for a single violation, and from $500,000 to $1 million for more than one violation, or in an amount agreed to by the parties.
   New Code section 502.604(5A) provides that a person who fails to obey a valid cease and desist order issued by the administrator may be subject to a civil penalty in an amount of not less than $1,000 and not more than $10,000 for violating the order. Each day the failure to obey continues constitutes a separate violation. The penalties provided in this subsection are in addition to, and not exclusive of other remedies that may be available. 
   INSURANCE DIVISION. Code section 505.8(10) is amended to allow the commissioner to assess the costs of the examination of a regulated entity necessary to accomplish compliance with the insurance laws of this state.
   DOMESTIC INSURANCE COMPANIES. New Code section 506.14 provides that any plan for the voluntary dissolution of a domestic mutual insurance company licensed in this state shall be presented for approval by the commissioner not less than 90 days prior to notice of the plan to the policyholders. The commissioner must approve the plan if it complies with all applicable laws and is fair and equitable to the company and to its policyholders.
   EXAMINATION OF INSURANCE COMPANIES. Code section 507.10(4)(a) is amended to allow the board of directors of an insurance company to signal that each member has reviewed an examination report with a notation in the board’s meeting minutes instead of by filing affidavits indicating that each member has received a copy of the report.
   Code section 507.14 is amended to allow the commissioner to release confidential documents and other materials to the international association of insurance supervisors and the bank for international settlements provided that those entities give written certification that the records will be kept confidential.
   INSURANCE TRADE PRACTICES. New Code section 507B.4(20) makes it an unfair or deceptive act or practice in the business of insurance to fail to refund premiums paid for a Medicare supplement policy after the effective date of a subsequently purchased Medicare advantage plan if the insurer has no exposure to pay benefits under the Medicare supplement policy during the time that both the supplement policy and the advantage plan are in effect.
   INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION. New Code section 507C.17A contains provisions that apply in accordance with the federal Dodd-Frank Wall Street Reform and Consumer Protection Act to a domestic insurer that is a covered financial company, as that term is defined in federal law.
   The bill provides that the commissioner of insurance may file a petition in the state district court for an order of rehabilitation or liquidation of such a domestic insurer upon receiving notice from the secretary of the treasury of the United States that the insurer acquiesces or consents to the appointment of a receiver; upon an order of the United States district court for the District of Columbia as to that insurer; or when a petition of the secretary of the treasury of the United States concerning the insurer is granted by operation of law.
   Notwithstanding any other provision of law to the contrary, the state district court, after notice to the insurer, may grant an order on such a petition within 24 hours after the filing of the petition. If the district court does not make a determination on the petition within 24 hours of its filing, the order is deemed granted by operation of law upon expiration of the 24-hour period. 
   At the time an order is deemed granted, the provisions of Code chapter 507C are deemed to be in effect, the commissioner is deemed to be affirmed as the receiver and to have all of the applicable powers provided by Code chapter 507C, and the state district court must expeditiously enter an order of rehabilitation or liquidation. An order of rehabilitation or liquidation made pursuant to the provisions of the bill is not subject to a stay or injunction pending appeal.
   This provision is effective upon enactment.
   INSURANCE FRAUD. Code section 507E.5(2) is amended to allow the commissioner to share documents with local as well as state, federal, and international law enforcement authorities if the recipient agrees to maintain the confidentiality of confidential and privileged documents that are shared.
   LIFE INSURANCE COMPANIES AND ASSOCIATIONS. Code section 511.8(14) is amended to provide that a life insurance company can include in its legal reserve as real property a controlling membership, partnership, shareholder, or trust interest in any entity created solely for the purpose of owning and operating a leasehold of real estate, an undivided interest in a leasehold of real estate, or an undivided interest in the fee title of real estate. The entity must be expressly limited to that purpose by its organizational documents.
   Code section 511.8(19) is amended to provide that a life insurance company can include in its legal reserve certain foreign investments not in excess of 25, instead of 20, percent of its legal reserve. Investments in obligations of a foreign government rated AAA by Standard and Poor’s division of McGraw-Hill companies, inc., or Aaa by Moody’s investors services, inc., are eligible for inclusion in the legal reserve up to 5, instead of 2, percent of the legal reserve.
   Code section 511.8(23) is amended to provide that if securities held in a life insurance company’s legal reserve are loaned, the collateral received for the loaned securities is not eligible for inclusion in the legal reserve.
   New Code section 511.40(5) provides that the gross amount of premiums received by a life insurance company or association for an employer-owned life insurance contract shall be allocated to this state for purposes of calculating the state premium tax if the contract is issued or delivered in this state or the company or association is domiciled in this state. For purposes of the subsection, “employer-owned life insurance contract” means a policy which provides coverage on a life for which the employer has an insurable interest under this Code section or the laws of another state and the policy is owned by either the employer or a trust established by the employer for the benefit of the employer or the employer’s active or retired employees.
   NONPROFIT HEALTH SERVICE CORPORATIONS. Code section 514.4 is amended to provide that a person who is affiliated with a hospital or other entity that does not have a provider contract with a dental service corporation can serve as a subscriber director of that corporation.
   INSURANCE OTHER THAN LIFE. Code section 515.69(1) is amended to require that a foreign stock insurance company must possess the actual amount of capital and surplus required of any company organized pursuant to Code chapter 515, or if the insurer is a mutual company, the actual amount of surplus required of any mutual company organized pursuant to Code chapter 515. Currently, a foreign stock insurance company is required to have $2.5 million of actual paid-up capital, and a surplus in cash or invested in securities authorized by law of not less than $2.5 million.
   Code section 515.120 is amended to provide that excess and surplus lines insurance that can be purchased from nonadmitted insurers includes disability insurance that is in excess of policy limits available in admitted insurers.
   Code section 515.136 is amended to provide that an insurance company or association is liable for the actual value of the property insured at a date of a loss, unless that value exceeds the amount stated in the policy. Currently, the insurer issuing such a policy may show the actual value of the property at the date of issuance of the policy and any depreciation in the value of the property after a loss occurred but is still liable for the actual value of the property insured on the date of loss or the policy amount, whichever is less.
   WORKERS’ COMPENSATION LIABILITY INSURANCE. Code section 515A.7(1)(b)(5) is amended to remove a reference to a “scheduled rating plan”, a term that is not defined in the Code chapter.
   COUNTY MUTUAL INSURANCE ASSOCIATIONS. Code section 518.14(4)(f) is amended to allow county mutual insurance associations to invest in stocks that are issued or guaranteed by limited partnerships publicly traded on a nationally established stock exchange in the United States.
   STATE MUTUAL INSURANCE ASSOCIATIONS. Code section 518A.12(4)(f) is amended to allow state mutual insurance associations to invest in stocks that are issued or guaranteed by limited partnerships publicly traded on a nationally established stock exchange in the United States.
   RISK-BASED CAPITAL REQUIREMENTS FOR INSURERS. Code section 521E.1(4) is amended to provide that for purposes of the Code chapter, a fraternal benefit society organized under Code chapter 512B is a domestic insurer. Code section 521E.1(4)(b), which excepted a fraternal benefit society from inclusion as a domestic insurer, is stricken. Corresponding changes to include such a society are made in Code section 521E.1(6) and (7).
   Code section 521E.3(1)(a)(2) is amended to provide that for a life and health insurer, a company-action-level event means the insurer’s total adjusted capital is greater than or equal to its company-action-level risk-based capital but less than the product of its authorized-control-level risk-based capital and three, instead of two and one-half, and has a negative trend.
   LICENSING OF PUBLIC ADJUSTERS. Code section 522C.6 is amended to add provisions allowing the commissioner of insurance to hold hearings, issue cease and desist orders, assess civil penalties, and petition for enforcement of those orders by the district court against persons who violate the provisions of Code chapter 522C. The district court is authorized to adjudge a violator in civil contempt of an order and to impose a civil penalty for contempt of not less than $3,000 but not more than $10,000 for each violation and grant any other relief the court determines is just and proper under the circumstances.
   DISSOLUTION OF MARRIAGE AND DOMESTIC RELATIONS. Code section 598.20A is amended to provide that it is the policy owner of an insurance contract insuring the policy owner’s own life, not the insured, who designates the beneficiary of the policy and is authorized to make changes in that designation after a decree of dissolution of marriage, annulment, or separate maintenance.