H.F. 454 Section 1. Section 22.7, subsection 58, Code 2015, is 1 amended to read as follows: 2 58. Information filed with the commissioner of insurance 3 pursuant to sections 523A.204 and , 523A.205, 523A.206, 4 523A.207, 523A.401, 523A.502A , and 523A.803 . 5 Sec. 2. Section 502.103, Code 2015, is amended to read as 6 follows: 7 502.103 References to federal statutes. 8 “Securities Act of 1933” , 15 U.S.C. §77a et seq.; “Securities 9 Exchange Act of 1934” , 15 U.S.C. §78a et seq.; “Public Utility 10 Holding Company Act of 1935” , 15 U.S.C. §79 et seq.; “Investment 11 Company Act of 1940” , 15 U.S.C. §80a-1 et seq.; “Investment 12 Advisers Act of 1940” , 15 U.S.C. §80b-1 et seq.; “Employee 13 Retirement Income Security Act of 1974” , 29 U.S.C. §1001 et 14 seq.; “National Housing Act” , 12 U.S.C. §1701; “Commodity 15 Exchange Act” , 7 U.S.C. §1 et seq.; “Internal Revenue Code” , 16 26 U.S.C. §1 et seq.; “Securities Investor Protection Act 17 of 1970” , 15 U.S.C. §78aaa et seq.; “Securities Litigation 18 Uniform Standards Act of 1998” , 112 Stat. 3227; “Small Business 19 Investment Act of 1958” , 15 U.S.C. §661 et seq.; and “Electronic 20 Signatures in Global and National Commerce Act” , 15 U.S.C. 21 §7001 et seq. ; and “ Dodd-Frank Wall Street Reform and Consumer 22 Protection Act” , Pub. L. No. 111–203 mean those federal statutes 23 and the rules and regulations adopted under those federal 24 statutes, as in effect on January 1, 2005 2015 . 25 Sec. 3. Section 502.202, Code 2015, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 24. Intrastate crowdfunding. 28 a. Definitions. As used in this subsection, unless the 29 context otherwise requires: 30 (1) “Intermediary” means a broker-dealer that is subject 31 to the registration requirements of section 502.401 and that 32 facilitates the offer and sale of securities by issuers to 33 investors through an internet-based system that is open to 34 and accessible by the general public. If an intermediary’s 35 -1- LSB 1287HV (2) 86 av/nh 1/ 30

H.F. 454 activity as a broker-dealer is limited to offerings conducted 1 in accordance with the exemption in this subsection, the 2 administrator shall by rule list the specific broker-dealer 3 requirements with which the intermediary must comply. 4 (2) “Intrastate crowdfunding” means the offer or sale of a 5 security by an issuer in a transaction that is available for 6 purchase only by Iowa residents and by business organizations 7 located in, and organized and registered under the laws of, 8 this state. 9 b. Exemption not available. The exemption in this 10 subsection is not available to any of the following: 11 (1) A foreign issuer. 12 (2) An investment company, as defined in section 3 of the 13 federal Investment Company Act of 1940. 14 (3) A development stage company that either has no specific 15 business plan or purpose or has indicated that the company’s 16 business plan is to engage in a merger or acquisition with an 17 unidentified company or companies, or other entity or person. 18 (4) A company with a class of securities registered under 19 the federal Securities Exchange Act of 1934. 20 (5) Any person who is subject to a disqualifying event as 21 described in the regulations adopted in accordance with section 22 926 of the federal Dodd-Frank Wall Street Reform and Consumer 23 Protection Act, Pub. L. No. 111-203, or in rules adopted by the 24 administrator pursuant to chapter 17A. 25 c. Aggregate sales limit. The aggregate amount of 26 securities sold to all investors by the issuer during the 27 twelve-month period preceding the date of the offer or sale, 28 including any amount sold in reliance upon the exemption in 29 this subsection, shall not exceed one million dollars other 30 than either of the following: 31 (1) Securities sold to Iowa resident institutional 32 investors. 33 (2) Securities sold to the Iowa resident issuer’s 34 management. 35 -2- LSB 1287HV (2) 86 av/nh 2/ 30

H.F. 454 d. Individual sales limit. The aggregate amount of 1 securities sold to an investor by the issuer during the 2 twelve-month period preceding the date of the offer or sale, 3 including any amount sold in reliance upon the exemption in 4 this subsection, shall not exceed five thousand dollars unless 5 the investor is an accredited investor who resides in Iowa. 6 For purposes of this individual sales limit, the following 7 investors shall be treated as one investor: 8 (1) A relative, spouse, or relative of the spouse of an 9 investor who has the same principal residence as the investor. 10 (2) A trust or estate in which an investor and any related 11 person collectively have more than fifty percent of the 12 beneficial interest, excluding contingent interests. 13 (3) A corporation or other organization of which an investor 14 and any related person collectively are beneficial owners of 15 more than fifty percent of the equity securities, excluding 16 directors’ qualifying shares, or equity interests. 17 e. Use of an intermediary. All offers and sales of 18 securities made in reliance upon the exemption in this 19 subsection shall be made through an intermediary’s internet 20 site. 21 f. Notice to administrator. Prior to the offer of any 22 security in this state made in reliance upon the exemption 23 in this subsection, the issuer shall file a notice with 24 the administrator in a form and format approved by the 25 administrator, and including the filing fee specified by rule, 26 if any. 27 g. Rulemaking. The administrator shall adopt all rules 28 necessary to implement the exemption in this subsection 29 including but not limited to all of the following: 30 (1) Mandatory disclosures. 31 (2) Restrictions on advertising and communications. 32 (3) Target amount, offering period, and escrow 33 requirements. 34 (4) Use and compensation of promoters. 35 -3- LSB 1287HV (2) 86 av/nh 3/ 30

H.F. 454 (5) Restrictions on the sale of securities purchased under 1 the exemption in this subsection. 2 (6) Sales reports. 3 (7) Limitations on the offering price. 4 (8) Duties of an intermediary which shall include providing 5 the administrator with continuous investor-level access to the 6 intermediary’s internet site. 7 (9) Records maintenance. 8 (10) Duties and registration requirements for internet site 9 operators. 10 Sec. 4. Section 502.302, subsection 1, paragraph a, 11 subparagraph (1), Code 2015, is amended to read as follows: 12 (1) A person who is the issuer of a federal covered 13 security under section 18(b)(2) of the Securities Act of 14 1933 shall initially make a notice filing and annually renew 15 a notice filing in this state for an indefinite amount or a 16 fixed amount . The fixed amount must be for two hundred fifty 17 thousand dollars. 18 Sec. 5. Section 502.302, subsection 1, paragraph a, 19 subparagraph (2), unnumbered paragraph 1, Code 2015, is amended 20 to read as follows: 21 A notice filer shall pay a filing fee in the amount of 22 four hundred dollars when the notice is filed. If the amount 23 covered by the notice is indefinite, the notice filer shall pay 24 a filing fee of one thousand dollars. If the amount covered by 25 the notice is fixed, the notice filer shall pay a filing fee 26 of two hundred fifty dollars, and all of the following shall 27 apply: 28 Sec. 6. Section 502.302, subsection 1, paragraph a, 29 subparagraph (2), subparagraph divisions (a) and (b), Code 30 2015, are amended by striking the subparagraph divisions. 31 Sec. 7. Section 502.302, subsections 2 and 3, Code 2015, are 32 amended to read as follows: 33 2. Notice filing effectiveness and renewal. A notice filing 34 under subsection 1 is effective for one year commencing on 35 -4- LSB 1287HV (2) 86 av/nh 4/ 30

H.F. 454 the later of the notice filing or the effectiveness of the 1 offering filed with the securities and exchange commission. 2 On or before expiration, the issuer may renew a notice filing 3 by filing a copy of those records filed by the issuer with 4 the securities and exchange commission that are required by 5 rule or order under this chapter to be filed and by paying 6 the a renewal fee required by subsection 1 , paragraph “a” of 7 four hundred dollars . A previously filed consent to service 8 of process complying with section 502.611 may be incorporated 9 by reference in a renewal. A renewed notice filing becomes 10 effective upon the expiration of the filing being renewed. 11 3. Notice filings for federal covered securities under 12 section 18(b)(4)(D). With respect to a security that is a 13 federal covered security under section 18(b)(4)(D) of the 14 Securities Act of 1933, 15 U.S.C. §77r(b)(4)(D), a rule under 15 this chapter may require a notice filing by or on behalf of an 16 issuer to include a copy of form D, including the appendix, as 17 promulgated by the securities and exchange commission, and a 18 consent to service of process complying with section 502.611 19 signed by the issuer not later than fifteen days after the 20 first sale of the federal covered security in this state and 21 the payment of a fee of one hundred dollars; and the payment of 22 a fee of two hundred fifty dollars for any late filing. 23 Sec. 8. Section 502.412, subsection 9, Code 2015, is amended 24 to read as follows: 25 9. Limit on investigation or proceeding. The administrator 26 shall not institute a proceeding under subsection 1, 2, 27 or 3 based solely on material facts actually known by the 28 administrator unless an investigation or the proceeding is 29 instituted within one year two years after the administrator 30 actually acquires knowledge of the material facts. 31 Sec. 9. Section 511.8, subsection 5, paragraphs a and b, 32 Code 2015, are amended to read as follows: 33 a. (1) If fixed interest-bearing obligations, the net 34 earnings of the issuing, assuming, or guaranteeing corporation 35 -5- LSB 1287HV (2) 86 av/nh 5/ 30

H.F. 454 available for its fixed charges for a period of five fiscal 1 years next preceding the date of acquisition of the obligations 2 by such insurance company shall have averaged per year not 3 less than one and one-half times such average annual fixed 4 charges of the issuing, assuming, or guaranteeing corporation 5 applicable to such period, and, during at least one of the last 6 two years of such period, its net earnings shall have been 7 not less than one and one-half times its fixed charges for 8 such year; or if, at the date of acquisition, the obligations 9 are adequately secured and have investment qualities and 10 characteristics wherein the speculative elements are not 11 predominant investment grade as defined by the commissioner by 12 rule . 13 (2) However, with respect to fixed interest-bearing 14 obligations which are issued, assumed, or guaranteed by a 15 financial company, the net earnings by the financial company 16 available for its fixed charges for the period of five fiscal 17 years preceding the date of acquisition of the obligations by 18 the insurance company shall have averaged per year not less 19 than one and one-fourth times such average annual fixed charges 20 of the issuing, assuming, or guaranteeing financial company 21 applicable to such period, and, during at least one of the last 22 two years of the period, its net earnings shall have been not 23 less than one and one-fourth times its fixed charges for such 24 year; or if, at the date of acquisition, the obligations are 25 adequately secured and speculative elements are not predominant 26 in their investment qualities and characteristics investment 27 grade as defined by the commissioner by rule . As used in 28 this subparagraph (2), “financial company” means a corporation 29 which on the average over its last five fiscal years preceding 30 the date of acquisition of its obligations by the insurer, 31 has had at least fifty percent of its net income, including 32 income derived from subsidiaries, derived from the business 33 of wholesale, retail, installment, mortgage, commercial, 34 industrial or consumer financing, or from banking or factoring, 35 -6- LSB 1287HV (2) 86 av/nh 6/ 30

H.F. 454 or from similar or related lines of business. 1 b. If adjustment, income, or other contingent interest 2 obligations, the net earnings of the issuing, assuming, or 3 guaranteeing corporation available for its fixed charges 4 for a period of five fiscal years next preceding the date 5 of acquisition of the obligations by such insurance company 6 shall have averaged per year not less than one and one-half 7 times such average annual fixed charges of the issuing, 8 assuming, or guaranteeing corporation and its average annual 9 maximum contingent interest applicable to such period and, 10 during at least one of the last two years of such period, its 11 net earnings shall have been not less than one and one-half 12 times the sum of its fixed charges and maximum contingent 13 interest for such year, or if, at the date of acquisition, 14 the obligations are adequately secure and have investment 15 qualities and characteristics and speculative elements are not 16 predominant investment grade as defined by the commissioner by 17 rule . 18 Sec. 10. Section 511.8, subsection 6, paragraph a, 19 subparagraph (1), subparagraph division (b), unnumbered 20 paragraph 1, Code 2015, is amended to read as follows: 21 The net earnings available for fixed charges and preferred 22 dividends of the issuing corporation shall have been, for 23 each of the five fiscal years immediately preceding the date 24 of acquisition, not less than one and one-half times the sum 25 of the annual fixed charges and contingent interest, if any, 26 and the annual preferred dividend requirements as of the date 27 of acquisition; or at the date of acquisition the preferred 28 stock has is investment qualities and characteristics wherein 29 speculative elements are not predominant grade as defined by 30 the commissioner by rule . 31 Sec. 11. Section 511.8, subsection 8, unnumbered paragraph 32 1, Code 2015, is amended to read as follows: 33 Securities included under subsections 5, 6, and 7 , and 34 subsection 9, paragraph “h” , shall not be eligible: 35 -7- LSB 1287HV (2) 86 av/nh 7/ 30

H.F. 454 Sec. 12. Section 511.8, subsection 8, paragraph b, 1 unnumbered paragraph 1, Code 2015, is amended to read as 2 follows: 3 The investments of any company or association in such the 4 securities of a corporation shall not be eligible in excess of 5 exceed the following percentages of the legal reserve of such 6 company or association: 7 Sec. 13. Section 511.8, subsection 8, paragraph b, 8 subparagraphs (1) and (2), Code 2015, are amended to read as 9 follows: 10 (1) With the exception of public securities For any one 11 corporation other than a public utility company , two percent 12 of the legal reserve in the securities of any one corporation . 13 Five For any one public utility company, five percent of the 14 legal reserve in the securities of any one public utility 15 corporation . 16 (2) Seventy-five percent of the legal reserve in the 17 securities described in subsection 5 issued by other than 18 public utility corporations. Fifty percent of the legal 19 reserve in the For securities described in subsection 5 issued 20 by public utility corporations companies, fifty percent of the 21 legal reserve . 22 Sec. 14. Section 511.8, subsection 9, Code 2015, is amended 23 by adding the following new paragraph: 24 NEW PARAGRAPH . h. Mezzanine real estate loans subject to 25 the following conditions: 26 (1) The terms of the mezzanine real estate loan agreement 27 shall do all of the following: 28 (a) Require that each pledgor abstain from granting 29 additional security interests in the equity interest pledged. 30 (b) Set forth techniques to minimize the likelihood or 31 impact of a bankruptcy filing on the part of the real estate 32 owner or the mezzanine real estate loan borrower consistent 33 with the national association of insurance commissioners’ 34 accounting practices and procedures manual. 35 -8- LSB 1287HV (2) 86 av/nh 8/ 30

H.F. 454 (c) Require the real estate owner or mezzanine real estate 1 loan borrower to do all of the following: 2 (i) Hold no assets other than, in the case of the real 3 estate owner, the real property, and in the case of the 4 mezzanine real estate loan borrower, the equity interest of the 5 real estate owner. 6 (ii) Not engage in any business other than, in the case 7 of the real estate owner, the ownership and operation of the 8 real estate, and in the case of the mezzanine real estate loan 9 borrower, holding an ownership interest in the real estate 10 owner. 11 (iii) Not incur additional debt, other than limited trade 12 payables, a first mortgage loan, or mezzanine real estate 13 loans. 14 (2) At the time of purchase, the sum of the first mortgage 15 and the mezzanine real estate loans shall not exceed ninety 16 percent of the value of the real estate evidenced by a 17 current appraisal and the mezzanine real estate loan shall be 18 classified as CM4 or better in accordance with the national 19 association of insurance commissioners’ rating methodology, or 20 an equivalent or successor rating. 21 (3) The value of a company’s or association’s total 22 investments qualified under this paragraph “h” shall not exceed 23 three percent of the legal reserve subject to the following 24 conditions: 25 (a) The value of a company’s or association’s total 26 investments qualified under this paragraph “h” in mezzanine 27 real estate loans classified as CM3 in accordance with the 28 national association of insurance commissioners’ rating 29 methodology or an equivalent or successor rating at the time of 30 purchase shall not exceed two percent of the legal reserve. 31 (b) The value of a company’s or association’s total 32 investments qualified under this paragraph “h” in mezzanine 33 real estate loans classified as CM4 in accordance with the 34 national association of insurance commissioners’ rating 35 -9- LSB 1287HV (2) 86 av/nh 9/ 30

H.F. 454 methodology or an equivalent or successor rating at the time of 1 purchase shall not exceed one percent of the legal reserve. 2 (4) For purposes of this paragraph “h” , “mezzanine real 3 estate loan” means a loan secured by a pledge of a direct or 4 indirect equity interest in an entity that owns real estate. 5 Sec. 15. Section 511.8, subsection 13, Code 2015, is amended 6 to read as follows: 7 13. Collateral loans. Loans secured by collateral 8 consisting of any securities assets or investments qualified in 9 under this section , provided the amount of the loan is not in 10 excess of ninety percent of the value of the securities assets 11 or investments . Provided further that subsection 8 shall apply 12 to the collateral securities assets or investments pledged 13 to the payment of loans authorized in qualified under this 14 subsection . 15 Sec. 16. Section 511.8, subsection 18, paragraph a, Code 16 2015, is amended to read as follows: 17 a. (1) Common stocks , or shares , or equity interests issued 18 by solvent corporations or institutions are eligible if the 19 total investment in the common stocks , or shares in , or equity 20 interests of the corporations or institutions does not exceed 21 ten percent of legal reserve, provided not more than one-half 22 percent of the legal reserve is invested in common stocks , 23 or shares , or equity interests of any one corporation or 24 institution . However, the not more than four percent of legal 25 reserve shall be invested in common stocks , or shares shall be 26 , or equity interests which do not meet one of the following 27 requirements: 28 (a) Are listed or admitted to trading on an established 29 foreign securities exchange or a securities exchange in the 30 United States or shall be . 31 (b) Are publicly held and traded in the “over-the-counter 32 market” and , provided that market quotations shall be readily 33 available , and further, the investment . 34 (2) An investment in common stocks, shares, or equity 35 -10- LSB 1287HV (2) 86 av/nh 10/ 30

H.F. 454 interests shall not create a conflict of interest for an 1 officer or director of the company between the insurance 2 company and the corporation whose common stocks , or shares , or 3 equity interests are purchased. 4 Sec. 17. Section 511.8, subsection 20, paragraph b, Code 5 2015, is amended to read as follows: 6 b. For purposes of this subsection , “venture capital 7 fund” means a corporation, partnership, proprietorship, or 8 other entity formed under the laws of the United States, or 9 a state, district, or territory of the United States, whose 10 principal business is or will be the making of investments in, 11 and the provision of significant managerial assistance to, 12 small businesses which meet the small business administration 13 definition of small business. “Equity interests” means limited 14 partnership interests and other equity interests in which 15 liability is limited to the amount of the investment, but does 16 not mean general partnership interests or other interests 17 involving general liability. “Venture capital fund” includes an 18 equity interest in the Iowa fund of funds as defined in section 19 15E.62 and an equity interest in an innovation fund as defined 20 in section 15E.52 . 21 Sec. 18. Section 511.8, subsection 22, paragraphs c and d, 22 Code 2015, are amended to read as follows: 23 c. Investments in financial instruments used in hedging 24 transactions are not eligible in excess of two percent of 25 the legal reserve in the financial instruments of any one 26 corporation, less any securities of that corporation owned 27 by the company or association and in which its legal reserve 28 is invested, except insofar as the financial instruments are 29 collateralized by cash, United States government obligations 30 as authorized by subsection 1 , or obligations of or guaranteed 31 by a United States government-sponsored enterprise which on 32 the date they are pledged as collateral are adequately secured 33 and have investment qualities and characteristics wherein the 34 speculative elements are not predominant investment grade as 35 -11- LSB 1287HV (2) 86 av/nh 11/ 30

H.F. 454 defined by the commissioner by rule , which are deposited with a 1 custodian bank as defined in subsection 21 , and held under a 2 written agreement with the custodian bank that complies with 3 subsection 21 and provides for the proceeds of the collateral, 4 subject to the terms and conditions of the applicable 5 collateral or other credit support agreement, to be remitted to 6 the legal reserve deposit of the company or association and to 7 vest in the state in accordance with section 508.18 whenever 8 proceedings under that section are instituted. 9 d. Investments in financial instruments used in hedging 10 transactions are not eligible in excess of ten percent of the 11 legal reserve, except insofar as the financial instruments are 12 collateralized by cash, United States government obligations 13 as authorized by subsection 1 , or obligations of or guaranteed 14 by a United States government-sponsored enterprise which on 15 the date they are pledged as collateral are adequately secured 16 and have investment qualities and characteristics wherein the 17 speculative elements are not predominant investment grade as 18 defined by the commissioner by rule , which are deposited with a 19 custodian bank as defined in subsection 21 , and held under a 20 written agreement with the custodian bank that complies with 21 subsection 21 and provides for the proceeds of the collateral, 22 subject to the terms and conditions of the applicable 23 collateral or other credit support agreement, to be remitted to 24 the legal reserve deposit of the company or association and to 25 vest in the state in accordance with section 508.18 whenever 26 proceedings under that section are instituted. 27 Sec. 19. Section 511.8, subsection 22, paragraph e, 28 subparagraph (1), Code 2015, is amended to read as follows: 29 (1) Investments in financial instruments of foreign 30 governments or foreign corporate obligations, other than 31 Canada, used in hedging transactions shall be included 32 in the limitation contained in subsection 19 that allows 33 only twenty percent of the legal reserve of the company or 34 association to be invested in such foreign investments, except 35 -12- LSB 1287HV (2) 86 av/nh 12/ 30

H.F. 454 insofar as the financial instruments are collateralized by 1 cash, United States government obligations as authorized by 2 subsection 1 , or obligations of or guaranteed by a United 3 States government-sponsored enterprise which on the date 4 they are pledged as collateral are adequately secured and 5 have investment qualities and characteristics wherein the 6 speculative elements are not predominant investment grade as 7 defined by the commissioner by rule , which are deposited with a 8 custodian bank as defined in subsection 21 , and held under a 9 written agreement with the custodian bank that complies with 10 subsection 21 and provides for the proceeds of the collateral, 11 subject to the terms and conditions of the applicable 12 collateral or other credit support agreement, to be remitted to 13 the legal reserve deposit of the company or association and to 14 vest in the state in accordance with section 508.18 whenever 15 proceedings under that section are instituted. 16 Sec. 20. Section 514G.102, Code 2015, is amended to read as 17 follows: 18 514G.102 Scope. 19 The requirements of this chapter apply to policies delivered 20 or issued for delivery in this state on or after July 1, 2008. 21 The requirements of this chapter related to independent review 22 of benefit trigger determinations apply to all claims made on 23 or after January 1, 2009. The requirements of this chapter 24 related to prompt payment of claims and the payment of interest 25 apply to all long-term care insurance policies. This chapter 26 is not intended to supersede the obligations of entities 27 subject to this chapter to comply with the substance of other 28 applicable insurance laws not in conflict with this chapter , 29 except that laws and regulations designed and intended to apply 30 to Medicare supplement insurance policies shall not be applied 31 to long-term care insurance. 32 Sec. 21. Section 515.35, subsection 4, paragraph m, Code 33 2015, is amended to read as follows: 34 m. Venture capital funds. Shares or equity interests in 35 -13- LSB 1287HV (2) 86 av/nh 13/ 30

H.F. 454 venture capital funds which agree to invest an amount equal to 1 at least fifty percent of the investments by a company in small 2 businesses having their principal offices within this state and 3 having either more than one-half of their assets within this 4 state or more than one-half of their employees employed within 5 this state. A company shall not invest more than five percent 6 of its capital and surplus under this paragraph. For purposes 7 of this paragraph, “venture capital fund” means a corporation, 8 partnership, proprietorship, or other entity formed under the 9 laws of the United States, or a state, district, or territory 10 of the United States, whose principal business is or will be 11 the making of investments in, and the provision of significant 12 managerial assistance to, small businesses which meet the small 13 business administration definition of small business. “Equity 14 interests” means limited partnership interests and other equity 15 interests in which liability is limited to the amount of the 16 investment, but does not mean general partnership interests or 17 other interests involving general liability. “Venture capital 18 fund” includes an equity interest in the Iowa fund of funds 19 as defined in section 15E.62 and an equity interest in an 20 innovation fund as defined in section 15E.52 . 21 Sec. 22. Section 521A.5, subsection 4, paragraph d, Code 22 2015, is amended to read as follows: 23 d. The board of directors of a domestic insurer shall 24 establish one or more committees comprised solely of directors 25 who or other persons appointed by the board, the majority of 26 whom are not officers or employees of the insurer or of any 27 entity controlling, controlled by, or under common control with 28 the insurer and who are not beneficial owners of a controlling 29 interest in the voting stock of the insurer or any such entity. 30 The committee or committees shall have responsibility for 31 recommending or nominating candidates for director for election 32 by shareholders or policyholders, evaluating the performance 33 of officers deemed to be principal officers of the insurer, 34 and recommending to the board of directors the selection and 35 -14- LSB 1287HV (2) 86 av/nh 14/ 30

H.F. 454 compensation of the principal officers. 1 Sec. 23. Section 523A.102, subsection 8, Code 2015, is 2 amended by striking the subsection. 3 Sec. 24. Section 523A.102, Code 2015, is amended by adding 4 the following new subsection: 5 NEW SUBSECTION . 13A. “Guaranteed” means that the 6 preneed seller has agreed to accept the funds available from 7 contractual payments made by the purchaser and the allocable 8 portion of accumulated income as payment in full for the 9 applicable items of merchandise and services selected and 10 identified in the purchase agreement, and that the purchaser, 11 beneficiary, and the beneficiary’s estate are not obligated to 12 pay any additional costs related to updated charges for price 13 increases on the merchandise and services selected even if the 14 additional costs exceed the funds available from contractual 15 payments made by the purchaser and the allocable portion of 16 accumulated income. This provision does not prevent the 17 inclusion of nonguaranteed items in an otherwise guaranteed 18 purchase agreement. 19 Sec. 25. Section 523A.204, subsection 3, Code 2015, is 20 amended to read as follows: 21 3. All records maintained by the commissioner under this 22 section shall be confidential pursuant to section 22.7, 23 subsection 58 , and shall not be made available for inspection 24 or copying except upon the approval of the commissioner or the 25 attorney general , or except when sought by the preneed seller 26 to whom the records relate . Such records shall be privileged 27 and confidential in any judicial or administrative proceeding 28 except any of the following: 29 a. An action commenced by the commissioner. 30 b. An administrative proceeding brought by the insurance 31 division. 32 c. An action or proceeding which arises out of the criminal 33 provisions of the laws of this state or of the United States. 34 d. An action brought by the insurance division or 35 -15- LSB 1287HV (2) 86 av/nh 15/ 30

H.F. 454 the attorney general to recover moneys for embezzlement, 1 misappropriation, or misuse of trust funds. 2 Sec. 26. Section 523A.204, subsections 4 and 5, Code 2015, 3 are amended by striking the subsections. 4 Sec. 27. Section 523A.205, subsection 2, Code 2015, is 5 amended by striking the subsection. 6 Sec. 28. Section 523A.205, subsection 3, Code 2015, is 7 amended to read as follows: 8 3. Notwithstanding chapter 22 , all All records maintained 9 by the commissioner under this section shall be confidential 10 pursuant to section 22.7, subsection 58, and shall not be made 11 available for inspection or copying except upon approval of the 12 commissioner or the attorney general , or except when sought by 13 the financial institution to whom the records relate . Such 14 records shall be privileged and confidential in any judicial or 15 administrative proceeding except any of the following: 16 a. An action commenced by the commissioner. 17 b. An administrative proceeding brought by the insurance 18 division. 19 c. An action or proceeding which arises out of the criminal 20 provisions of the laws of this state or of the United States. 21 d. An action brought by the insurance division or 22 the attorney general to recover moneys for embezzlement, 23 misappropriation, or misuse of trust funds. 24 Sec. 29. Section 523A.206, subsection 6, Code 2015, is 25 amended by striking the subsection and inserting in lieu 26 thereof the following: 27 6. All records maintained by the commissioner under this 28 section, including work papers, notes, recorded information, 29 documents, and copies thereof that are produced or obtained 30 by or disclosed to the commissioner or another person in the 31 course of a compliance examination, shall be confidential 32 pursuant to section 22.7, subsection 58, and shall not be 33 made available for inspection and copying except upon the 34 approval of the commissioner or the attorney general. Such 35 -16- LSB 1287HV (2) 86 av/nh 16/ 30

H.F. 454 records shall be privileged and confidential in any judicial or 1 administrative proceeding except any of the following: 2 a. An action commenced by the commissioner. 3 b. An administrative proceeding brought by the insurance 4 division. 5 c. An action or proceeding which arises out of the criminal 6 provisions of the laws of this state or of the United States. 7 d. An action brought by the insurance division or 8 the attorney general to recover moneys for embezzlement, 9 misappropriation, or misuse of trust funds. 10 Sec. 30. Section 523A.207, Code 2015, is amended to read as 11 follows: 12 523A.207 Audits by certified public accountants —— penalty. 13 1. A purchase agreement shall not be sold or transferred, 14 as part of the sale of a business or the assets of a business, 15 until an audit has been performed by a certified public 16 accountant and filed with the commissioner that expresses the 17 auditor’s opinion of the adequacy of funding related to the 18 purchase agreements to be sold or transferred. If the buyer 19 of a purchase agreement sold or transferred as part of the 20 sale of a business or the assets of a business, fails to file 21 such an audit, the commissioner shall suspend the preneed 22 seller’s license of the buyer and the preneed sales license of 23 any sales agent in the employ of the buyer until the audit is 24 filed. In addition, the commissioner shall assess a penalty 25 against the buyer in an amount up to one hundred dollars for 26 each day that the audit remains unfiled. The commissioner 27 shall allow a thirty-day grace period after the date that a 28 purchase agreement is sold or transferred before suspension of 29 a license or assessment of a penalty for failure to file an 30 audit pursuant to this section . 31 2. All records maintained by the commissioner under this 32 section shall be confidential pursuant to section 22.7, 33 subsection 58, and shall not be made available for inspection 34 or copying except upon approval of the commissioner or the 35 -17- LSB 1287HV (2) 86 av/nh 17/ 30

H.F. 454 attorney general, or except when sought by the preneed seller 1 to whom the records relate. Such records shall be privileged 2 and confidential in any judicial or administrative proceeding 3 except any of the following: 4 a. An action commenced by the commissioner. 5 b. An administrative proceeding brought by the insurance 6 division. 7 c. An action or proceeding which arises out of the criminal 8 provisions of the laws of this state or of the United States. 9 d. An action brought by the insurance division or 10 the attorney general to recover moneys for embezzlement, 11 misappropriation, or misuse of trust funds. 12 Sec. 31. Section 523A.401, subsection 8, Code 2015, is 13 amended to read as follows: 14 8. An insurance company issuing policies funding purchase 15 agreements subject to this chapter shall file an annual report 16 with the commissioner on a form prescribed by the commissioner. 17 The report shall list the applicable insurance policies 18 outstanding for each seller. Computer printouts may be 19 submitted so long as each legibly provides the same information 20 required in the prescribed form. 21 Sec. 32. Section 523A.401, Code 2015, is amended by adding 22 the following new subsection: 23 NEW SUBSECTION . 10. All records maintained by the 24 commissioner under this section shall be confidential 25 pursuant to section 22.7, subsection 58, and shall not be made 26 available for inspection or copying except upon approval of the 27 commissioner or the attorney general, or except when sought 28 by the insurance company to whom the records relate. Such 29 records shall be privileged and confidential in any judicial or 30 administrative proceeding except any of the following: 31 a. An action commenced by the commissioner. 32 b. An administrative proceeding brought by the insurance 33 division. 34 c. An action or proceeding which arises out of the criminal 35 -18- LSB 1287HV (2) 86 av/nh 18/ 30

H.F. 454 provisions of the laws of this state or of the United States. 1 d. An action brought by the insurance division or 2 the attorney general to recover moneys for embezzlement, 3 misappropriation, or misuse of trust funds. 4 Sec. 33. Section 523A.402, subsection 8, Code 2015, is 5 amended to read as follows: 6 8. An insurance company issuing annuities funding purchase 7 agreements subject to this chapter shall file an annual report 8 with the commissioner on a form prescribed by the commissioner. 9 The report shall list the applicable annuities outstanding for 10 each seller. Computer printouts may be submitted so long as 11 each legibly provides the same information required in the 12 prescribed form. 13 Sec. 34. Section 523A.405, Code 2015, is amended by striking 14 the section and inserting in lieu thereof the following: 15 523A.405 Bond in lieu of trust fund. 16 The commissioner may, by rule, establish terms and 17 conditions under which a seller may, in lieu of trust 18 requirements, file with the commissioner a surety bond issued 19 by a surety company authorized to do business and doing 20 business in this state. 21 Sec. 35. Section 523A.501, subsection 2, Code 2015, is 22 amended to read as follows: 23 2. An application for a preneed seller’s license shall be 24 filed on a form and in a format prescribed by the commissioner 25 and be accompanied by a fifty dollar filing fee in an amount 26 set by the commissioner by rule . The application shall include 27 the name of the natural person or legal entity to be licensed 28 as the preneed seller and, if applicable, any other name 29 under which the preneed seller will be transacting business, 30 including any names registered with the secretary of state or a 31 county clerk. The application shall be updated as necessary 32 to ensure that the commissioner has been notified of all names 33 under which the preneed seller is operating and doing business. 34 Sec. 36. Section 523A.501, subsection 7, Code 2015, is 35 -19- LSB 1287HV (2) 86 av/nh 19/ 30

H.F. 454 amended to read as follows: 1 7. A preneed seller’s license shall be renewed every four 2 years by filing the form prescribed by the commissioner under 3 subsection 2 , accompanied by a renewal fee in an amount set by 4 the commissioner by rule expires annually on April 15 . If the 5 preneed seller has filed a complete annual report and paid the 6 required fees as required in section 523A.204, the commissioner 7 shall renew the preneed seller’s license until April 15 of the 8 following year. 9 Sec. 37. Section 523A.502, subsection 5, Code 2015, is 10 amended by striking the subsection and inserting in lieu 11 thereof the following: 12 5. A sales license shall expire annually on April 15. If 13 the sales agent has filed a substantially complete annual 14 report as required in section 523A.502A, the commissioner shall 15 renew the sales license until April 15 of the following year. 16 Sec. 38. Section 523A.502A, subsections 1 and 2, Code 2015, 17 are amended to read as follows: 18 1. A sales agent shall file with the commissioner not later 19 than April 1 of each year an annual report on a form prescribed 20 by the commissioner describing each purchase agreement sold 21 by the sales agent during the year. An annual report must be 22 filed whether or not sales were made during the year and even 23 if the sales agent is no longer an agent of a preneed seller or 24 licensed by the commissioner. 25 2. All records maintained by the commissioner under this 26 section shall be confidential pursuant to section 22.7, 27 subsection 58 , and shall not be made available for inspection 28 or copying except upon the approval of the commissioner or the 29 attorney general , or except when sought by the sales agent to 30 whom the records relate . Such records shall be privileged 31 and confidential in any judicial or administrative proceeding 32 except any of the following: 33 a. An action commenced by the commissioner. 34 b. An administrative proceeding brought by the insurance 35 -20- LSB 1287HV (2) 86 av/nh 20/ 30

H.F. 454 division. 1 c. An action or proceeding which arises out of the criminal 2 provisions of the laws of this state or of the United States. 3 d. An action brought by the insurance division or 4 the attorney general to recover moneys for embezzlement, 5 misappropriation, or misuse of trust funds. 6 Sec. 39. Section 523A.502A, subsections 3 and 4, Code 2015, 7 are amended by striking the subsections. 8 Sec. 40. Section 523A.803, subsection 1, paragraph c, Code 9 2015, is amended by striking the paragraph. 10 Sec. 41. Section 523A.803, Code 2015, is amended by adding 11 the following new subsection: 12 NEW SUBSECTION . 1A. All records maintained by the 13 commissioner under this section, including work papers, notes, 14 recorded information, documents, and copies thereof that are 15 produced or obtained by or disclosed to the commissioner or 16 another person in the course of an investigation, shall be 17 confidential pursuant to section 22.7, subsection 58, and shall 18 not be made available for inspection and copying except upon 19 the approval of the commissioner or the attorney general. Such 20 records shall be privileged and confidential in any judicial or 21 administrative proceeding except any of the following: 22 a. An action commenced by the commissioner. 23 b. An administrative proceeding brought by the insurance 24 division. 25 c. An action or proceeding which arises out of the criminal 26 provisions of the laws of this state or of the United States. 27 d. An action brought by the insurance division or 28 the attorney general to recover moneys for embezzlement, 29 misappropriation, or misuse of trust funds. 30 Sec. 42. Section 523A.807, subsection 3, unnumbered 31 paragraph 1, Code 2015, is amended to read as follows: 32 If the commissioner finds that a person has violated section 33 523A.201 , 523A.202 , 523A.203 , 523A.207 , 523A.401 , 523A.402 , 34 523A.403 , 523A.404 , 523A.405 , 523A.501 , 523A.502 , or 523A.504 35 -21- LSB 1287HV (2) 86 av/nh 21/ 30

H.F. 454 or any rule adopted pursuant thereto, the commissioner may 1 order any or all of the following: 2 Sec. 43. Section 523I.810, subsection 9, Code 2015, is 3 amended to read as follows: 4 9. A cemetery may, by resolution adopted by a vote of at 5 least two-thirds of the members of its board at any authorized 6 meeting of the board, authorize the withdrawal and use of 7 not more than twenty percent of the principal of the care 8 fund to acquire additional land for cemetery purposes, to 9 repair a mausoleum or other building or structure intended for 10 cemetery purposes, to build, improve, or repair boundaries, 11 roads and walkways in the cemetery, to construct a columbarium, 12 mausoleum, or similar structure to create additional interment 13 spaces, to purchase equipment for tree, shrub, and lawn care, 14 to purchase backhoes or similar equipment used to open and 15 close interment spaces, or to purchase recordkeeping software 16 used to maintain ownership records or interment records. The 17 resolution shall establish a reasonable repayment schedule, not 18 to exceed five years , and provide for interest in an amount 19 comparable to the care fund’s current rate of return on its 20 investments . However, the care fund shall not be diminished 21 below an amount equal to the greater of twenty-five thousand 22 dollars or five thousand dollars per acre of land in the 23 cemetery. The resolution, and if the deposit of care fund 24 income over five years is unlikely to fund replenishment of the 25 principal of the care fund, either a bond or proof of insurance 26 to guarantee replenishment of the care fund, shall be filed 27 with the commissioner thirty days prior to the withdrawal of 28 funds. 29 Sec. 44. Section 523I.811, subsection 1, paragraph b, Code 30 2015, is amended to read as follows: 31 b. Maintaining drains, water lines, roads, buildings, 32 boundaries, fences, and other structures. 33 Sec. 45. Section 523I.811, subsection 1, Code 2015, is 34 amended by adding the following new paragraphs: 35 -22- LSB 1287HV (2) 86 av/nh 22/ 30

H.F. 454 NEW PARAGRAPH . g. To purchase equipment to maintain the 1 cemetery. 2 NEW PARAGRAPH . h. To purchase backhoes or similar equipment 3 used to open and close interment spaces. 4 NEW PARAGRAPH . i. To purchase equipment used to construct 5 a columbarium, mausoleum, or similar structure to create 6 additional interment spaces. 7 Sec. 46. NEW SECTION . 523I.811A Emergency use of care 8 funds. 9 1. Notwithstanding any other provision of this chapter, 10 a perpetual care cemetery may apply to the commissioner to 11 withdraw funds from the cemetery’s care fund for a financial 12 emergency. The commissioner shall, by rule, establish 13 standards and procedures for such applications and for 14 withdrawals from care funds. 15 2. Upon application, the commissioner may allow a perpetual 16 care cemetery to withdraw funds from the care fund if the 17 commissioner finds that the cemetery has an urgent financial 18 need and the withdrawal is deemed reasonable and prudent to 19 fund a necessary expense of the cemetery. The commissioner 20 shall establish conditions for the specific use of the funds 21 withdrawn and may require repayment of all or part of the 22 amount withdrawn. 23 Sec. 47. EFFECTIVE DATE. The following provision or 24 provisions of this Act take effect January 1, 2016: 25 1. The section of this Act adding section 502.202, 26 subsection 24. 27 Sec. 48. DIRECTIONS TO CODE EDITOR. The Iowa code editor is 28 directed to transfer section 515.11 to new section 515.23. 29 Sec. 49. REPEAL. Section 523A.504, Code 2015, is repealed. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill relates to various matters involving insurance 34 and the insurance division of the department of commerce and 35 -23- LSB 1287HV (2) 86 av/nh 23/ 30

H.F. 454 includes effective date provisions. 1 UNIFORM SECURITIES ACT. Code section 502.103 is amended 2 to update references in Code chapter 502 to include current 3 federal statutes. New Code section 502.202(24) provides an 4 exemption from certain securities registration and filing 5 requirements for offers and sales of securities known as 6 intrastate crowdfunding and provides limitations and conditions 7 on such offers and sales of securities in the state. All 8 offers and sales of securities made pursuant to the exemption 9 must be made through a broker-dealer’s internet site. 10 “Intrastate crowdfunding” is defined as the offer or sale of a 11 security by an issuer in a transaction that is available for 12 purchase only by Iowa residents and by business organizations 13 located in Iowa and organized and registered under Iowa law. 14 This provision takes effect January 1, 2016. 15 Code section 502.302(1)(a)(1) and (2), concerning specified 16 federal covered securities, are amended to eliminate an option 17 that allows filing fees accompanying notice filings of offers 18 of such securities to be based on a definite or indefinite 19 amount, instead requiring all notice filers to pay a fixed fee 20 of $400. Code section 502.302(1)(a)(2)(a) and (b) are stricken 21 to eliminate the need to file a sales report. Code section 22 502.302(2) is amended to establish a flat fee of $400 for 23 renewals of such filings. 24 Code section 502.412(9) is amended to provide that the 25 administrator of the securities and regulated industries bureau 26 of the insurance division of the department of commerce has two 27 years instead of one year after acquiring material facts to 28 institute a disciplinary proceeding concerning a broker-dealer 29 or investment adviser. 30 LIFE INSURANCE COMPANIES AND ASSOCIATIONS. Code section 31 511.8(5)(a) and (b) are amended to provide that investments 32 in certain corporate obligations made by life insurance 33 companies and associations are allowed if, at the date of 34 acquisition, the obligations are investment grade as defined 35 -24- LSB 1287HV (2) 86 av/nh 24/ 30

H.F. 454 by the commissioner by rule. Similar changes are made as to 1 investments in preferred and guaranteed stocks (Code section 2 511.8(6)(a)(1)(b)), and financial instruments used in hedging 3 transactions (Code section 511.8(22)(c),(d), and (e)(1)). 4 Code section 511.8(8) is amended to provide that specified 5 further restrictions on investments of a life insurance 6 company or association in securities apply to mezzanine real 7 estate loans. Code section 511.8(8)(b) is amended to provide 8 that investments of a life insurance company or association 9 in securities of a corporation shall not exceed specified 10 percentages of the legal reserve. 11 Code section 511.8(8)(b)(1) and (2) are amended to provide 12 that investments in corporate obligations, preferred and 13 guaranteed stocks, equipment trust obligations, or mezzanine 14 real estate loans are limited to 2 percent of legal reserve 15 for any one corporation other than a public utility company, 16 5 percent of the legal reserve for any one public utility 17 company, and 50 percent of the legal reserve for corporate 18 obligations issued by public utility companies. 19 New Code section 511.8(9)(h) provides that a life insurance 20 company or association may invest in mezzanine real estate 21 loans subject to specified conditions. The provision specifies 22 what terms a mezzanine loan agreement must include and limits 23 the value of a life insurance company’s or association’s total 24 investments in mezzanine real estate loans. For purposes of 25 the new provision, “mezzanine real estate loan” means a loan 26 secured by a pledge of a direct or indirect equity interest in 27 an entity that owns real estate. 28 Code section 511.8(13) is amended to provide that life 29 insurance companies and associations can invest in loans 30 secured by collateral consisting of qualified assets or 31 investments instead of securities. 32 Code section 511.8(18)(a) is amended to provide that life 33 insurance companies and associations can invest in certain 34 specified equity interests as well as common stocks and shares 35 -25- LSB 1287HV (2) 86 av/nh 25/ 30

H.F. 454 issued by corporations or institutions. The provision provides 1 limitations on the percentage of legal reserve that can be 2 invested in specified types of common stocks, shares, or equity 3 interests. 4 Code section 511.8(20)(b) is amended to provide that for 5 purposes of investments made by a life insurance company a 6 “venture capital fund” includes an equity interest in an 7 innovation fund as defined in Code section 15E.52. 8 LONG-TERM CARE INSURANCE. Code section 514G.102 is amended 9 to provide that the requirements of Code chapter 514G related 10 to prompt payment of claims and the payment of interest apply 11 to all long-term care insurance policies. 12 INSURANCE OTHER THAN LIFE. The Code editor is directed to 13 transfer Code section 515.11, pertaining to prohibited loans to 14 an officer, director, stockholder, or employee of a company or 15 to a relative of an officer or relative of a company, to Code 16 section 515.23. 17 Code section 515.35(4)(m) is amended to provide that for 18 purposes of investments made by a non-life insurance company, 19 a “venture capital fund” includes an equity interest in an 20 innovation fund as defined in Code section 15E.52. 21 INSURANCE HOLDING COMPANY SYSTEMS. Code section 22 521A.5(4)(d) is amended to require that when a domestic 23 insurer is required to establish a committee or committees of 24 directors or other persons appointed by the board, that are 25 responsible for nominating candidates for director, evaluating 26 the performance of officers, and recommending the selection 27 and compensation of principal officers, the majority of such 28 committee members shall not be officers or employers of any 29 entity controlling, controlled by, or under common control with 30 the insurer. 31 CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES. Code 32 section 523A.102(8) is stricken, eliminating the definition of 33 “credit sale”. 34 New Code section 523A.102(13A) provides that for purposes 35 -26- LSB 1287HV (2) 86 av/nh 26/ 30

H.F. 454 of Code chapter 523A, “guaranteed” means that a preneed seller 1 has agreed to accept the funds available from contractual 2 payments made by a purchaser and the allocable portion of 3 accumulated income on those payments as payment in full for the 4 applicable items of cemetery merchandise and services selected 5 and identified in a purchase agreement for the merchandise and 6 services. A purchaser, beneficiary, or beneficiary’s estate 7 is not obligated to pay any additional costs related to price 8 increases on the merchandise and services selected even if the 9 additional costs exceed the funds available. This provision 10 does not prevent the inclusion of nonguaranteed items in an 11 otherwise guaranteed purchase agreement. 12 Code section 523A.204(3) is amended to provide that 13 information in annual reports provided to the commissioner 14 by preneed sellers is confidential pursuant to the Iowa 15 open records law (Code chapter 22) and shall not be made 16 available for inspection or copying except upon the approval 17 of the commissioner or the attorney general or when sought 18 by the preneed seller to whom the records relate. Such 19 information is also privileged and confidential in any judicial 20 or administrative proceeding except as specified. Similar 21 requirements concerning confidentiality of information provided 22 to the commissioner are added in Code section 523A.205(3) 23 concerning annual reports by financial institutions, Code 24 section 523A.206(6) concerning information obtained in 25 the course of an examination, new Code section 523A.207(2) 26 concerning records obtained during an audit performed by a 27 certified public accountant, new Code section 523A.401(10) 28 concerning information maintained about purchase agreements 29 funded by insurance proceeds, Code section 523A.502A(2) 30 concerning licensure of sales agents, and Code section 31 523A.803(1)(c) concerning investigations into violations of the 32 Code chapter. Code section 22.7, subsection 58, is amended to 33 specify that information provided to the commissioner pursuant 34 to Code sections 523A.205, 523A.206, 523A.207, 523A.401, and 35 -27- LSB 1287HV (2) 86 av/nh 27/ 30

H.F. 454 523A.803 is confidential. 1 Code section 523A.204(4) and (5) are stricken, eliminating 2 provisions related to levying an administrative penalty 3 against a preneed seller for violations of the annual reporting 4 requirement. 5 Code section 523A.205(2) is stricken, eliminating a 6 requirement that the commissioner accept annual reports of 7 preneed sellers in electronic format, including computer 8 diskettes. 9 Code section 523A.401(8) is amended by eliminating the 10 provision that allows computer printouts to be submitted with 11 annual reports filed by insurance companies issuing policies 12 to fund preneed purchase agreements. Code section 523A.402(8) 13 is similarly amended to eliminate the provision that such 14 printouts may be submitted with annual reports pertaining to 15 purchase agreements funded by annuity proceeds. 16 Code section 523A.405 is amended to eliminate specific 17 requirements concerning the use of a surety bond in lieu of 18 trust requirements and instead allows the commissioner, by 19 rule, to establish the terms and conditions under which a 20 seller may file a surety bond. 21 Code section 523A.501(2) is amended to provide that the 22 commissioner may establish the format for applications for a 23 preneed seller’s license. The application is also required to 24 include the name of the natural person or legal entity to be 25 licensed and any other name under which the preneed seller will 26 be transacting business. The application must be updated as 27 necessary to ensure that the commissioner is notified of all 28 names under which the preneed seller is operating and doing 29 business. The application must be accompanied by a filing fee 30 set by rule. The current filing fee is $50. 31 Code section 523A.501(7) is amended to require that a 32 preneed seller’s license be renewed annually instead of every 33 four years. The license shall be renewed April 15 of each 34 year so long as the preneed seller has filed a complete annual 35 -28- LSB 1287HV (2) 86 av/nh 28/ 30

H.F. 454 report and paid the required fees. Code section 523A.502(5) 1 is similarly amended to require annual renewal of the licenses 2 of preneed sales agents. 3 Code section 523A.502A(1) is amended to provide that a sales 4 agent must file an annual report whether or not the sales agent 5 made any sales during the year, is no longer an agent of a 6 preneed seller, or is no longer licensed as a sales agent. 7 Code section 523A.502A(3) and (4) are stricken, eliminating 8 provisions related to levying an administrative penalty against 9 a preneed sales agent for violations of the annual reporting 10 requirement. 11 Code section 523A.504 requiring a preneed seller to file a 12 notice and pay a fee to appoint a person to act as a sales agent 13 of the preneed seller is repealed. Code section 523A.807(3) is 14 amended to remove a cross-reference to the repealed section. 15 CEMETERIES. Code section 523I.810(9) is amended to provide 16 that a cemetery may adopt a resolution to authorize the 17 withdrawal and expenditure of the principal of a cemetery 18 care fund to repair boundaries; to construct a columbarium, 19 mausoleum, or similar structure to create additional interment 20 spaces; and to purchase equipment for tree, shrub, and lawn 21 care; or to purchase backhoes or similar equipment used to open 22 and close interment spaces. The bill eliminates a requirement 23 that the repayment schedule provide for interest on the amount 24 withdrawn from the care fund but if the deposit of care fund 25 income over five years is unlikely to fund replenishment of the 26 principal of the care fund, the resolution must be accompanied 27 by a bond or proof of insurance. 28 Code section 523I.811(1) is amended to provide that 29 distributions from the care fund can be used for the new 30 purposes described in Code section 523I.810(9). 31 New Code section 523I.811A provides that a perpetual care 32 cemetery may make application to the commissioner to withdraw 33 funds from the cemetery’s care fund for a financial emergency. 34 The commissioner may allow such a withdrawal upon finding that 35 -29- LSB 1287HV (2) 86 av/nh 29/ 30