HSB 76 (LSB 1726HC (4) 86)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON COWNIE)

A BILL FOR

An Act relating to electronic delivery and posting of insurance notices and documents.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 505B.1, subsection 2, Code 2015, is amended to read as follows:
   2.  Subject to subsection 4 the requirements of this section, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, or presented by electronic means so long as the notice or document meets the requirements of chapter 554D.
    Sec. 2.  Section 505B.1, subsection 4, paragraph b, Code 2015, is amended by striking the paragraph and inserting in lieu thereof the following:
   b.  The party, before giving consent, is provided with a clear and conspicuous statement informing the party of the following:
   (1)  The right of the party to withdraw consent to have a notice or document delivered by electronic means at any time, and any conditions or consequences imposed in the event consent is withdrawn.
   (2)  The types of notices and documents to which the party’s consent applies.
   (3)  The right of a party to have a notice or document delivered in paper form.
   (4)  The procedures a party must follow to withdraw consent to have a notice or document delivered by electronic means or to update the party’s electronic mail address.
    Sec. 3.  Section 505B.1, subsection 4, Code 2015, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  0d.  On at least an annual basis, the insurer notifies the party of the party’s electronic mail address on file with the insurer.
   NEW PARAGRAPH.  00d.  The insurer takes measures reasonably calculated to ensure that delivery of a notice or document by electronic means results in receipt of the notice or document by the party.
    Sec. 4.  Section 505B.1, subsection 4, paragraph d, subparagraph (1), Code 2015, is amended to read as follows:
   (1)  Provides the party with a statement that describes all of the following:
   (a)  The revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means.
   (b)  The right of the party to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed under paragraph “b”, subparagraph (2) at the time of initial consent.
    Sec. 5.  Section 505B.1, subsection 8, paragraph c, Code 2015, is amended to read as follows:
   c.  Failure by an insurer to comply with subsection 4, paragraph paragraphs “0d”, “00d”, and “d”, may be treated, at the election of the party, as a withdrawal of consent for purposes of this section.
    Sec. 6.  Section 505B.1, subsection 10, Code 2015, is amended to read as follows:
   10.  If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before July 1, 2014, and pursuant to this section an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall notify the party do all of the following:
   a.  Provide the party with a statement that describes all of the following:
   a.  (1)  The notices or documents that may will be delivered by electronic means under this section that were not previously delivered electronically.
   b.  (2)  The party’s right to withdraw consent to have notices or documents delivered by electronic means without the imposition of any condition or consequence that was not disclosed at the time of initial consent.
   b.  Comply with all of the requirements of subsection 4, paragraph “b”.
    Sec. 7.  Section 505B.1, subsection 11, Code 2015, is amended by striking the subsection and inserting in lieu thereof the following:
   11.  An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if either of the following occurs:
   a.  The insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party.
   b.  The insurer becomes aware that the electronic mail address provided by the party is no longer valid.
    Sec. 8.  Section 505B.1, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  11A.  An insurance producer licensed pursuant to chapter 522B shall not be subject to civil liability for any harm or injury that occurs as a result of a party’s consent to receive any notice or document by electronic means or an insurer’s failure to deliver a notice or document by electronic means.
    Sec. 9.  Section 505B.2, Code 2015, is amended to read as follows:
   505B.2  Posting of policies on the internet.
   1.  Notwithstanding any contrary provision of chapter 554D, an insurer may mail, deliver, or post on the insurer’s internet site insurance documents, including policies, riders, endorsements, and annuity contracts that do not contain personally identifiable information. If the insurer elects to post an insurance policy or endorsement on the insurer’s internet site in lieu of mailing or delivering the policy or endorsement to the insured, the insurer must comply with all of the following conditions:
   1.  a.  The policy or endorsement must be accessible and remain accessible to the insured and to the licensed insurance producer of record for as long as the policy or endorsement is in force.
   2.  b.  After the expiration of the policy or endorsement, the insurer must archive the expired policy or endorsement for a period of five years or other period required by law, and make the policy or endorsement available upon request.
   3.  c.  The policy or endorsement must be posted in a manner that enables the insured and the licensed insurance producer of record to print and save the policy or endorsement using programs and applications that are widely available on the internet and free to use.
   4.  d.  The insurer must provide the following information in, or simultaneously with, each declarations page provided at the time of issuance of the initial policy and any renewal of that policy:
   a.  (1)  A description of the exact policy or endorsement purchased by the insured.
   b.  (2)  A method by which the insured may obtain description of the insured’s right to receive, upon request and without charge, a paper copy of the insured’s policy or endorsement by mail.
   c.  (3)  An internet address where the insured’s policy or endorsement is posted.
   e.  The insurer, upon request and without charge, must deliver a paper copy of the policy or endorsements to the insured by mail.
   5.  f.  The insurer must provide notice, in the format preferred by the insured, of any changes to the policy or endorsement, the insured’s right to obtain, upon request and without charge, a paper copy of such policy or endorsement, and the internet address where such policy or endorsement is posted.
   2.  Nothing in this section shall be construed to affect the timing or content of any notice or document required to be provided or made available to any insured under applicable law.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the electronic delivery and posting of insurance notices and documents. The bill provides that the electronic delivery of such notices and documents by insurers must meet the requirements of Code section 505B.1 as well as the requirements of Code chapter 554D, which relates generally to electronic transactions.
   The bill provides that an insurance notice or document may be delivered by electronic means if, before giving consent, the party who is to receive the notice (an applicant, insured, policyholder, or annuity contract holder) is provided with a statement explaining the right to withdraw consent to such delivery at any time, the types of notices and documents to which consent applies, the right to have the notices and documents in paper form, and the procedures to withdraw consent or update the party’s electronic mail address. The insurer must also notify the party annually of the party’s electronic address that is on file for the party and take reasonable measures to ensure that electronic delivery to the party is successful.
   If there is a change in hardware or software requirements for access to or retention of electronic notices or documents, the insurer must inform the party of the changes and the right of the party to withdraw consent. Failure of an insurer to comply with these requirements may be treated as a withdrawal of consent.
   If the insurer intends to electronically deliver additional notices or documents to a party who has consented to such delivery, the insurer must provide the party with a statement describing what additional items will be electronically delivered, and reiterate what consent means and the party’s right to withdraw such consent.
   An insurer is required to deliver a notice or document by any other delivery method permitted by law if the insurer attempts an electronic delivery and reasonably believes the party did not receive the notice or document, or the insurer becomes aware that the party’s electronic mail address is no longer valid.
   An insurance producer licensed pursuant to Code chapter 522B shall not be subject to civil liability for any harm or injury that occurs because of a party’s consent to receive electronic delivery or an insurer’s failure to electronically deliver a notice or document.
   A policy or endorsement posted on an insurer’s internet site instead of being mailed or delivered must be accessible to the insured and to the licensed insurance producer of record for as long as the policy or endorsement is in force, must be archived for a period of five years or other period required by law, and must be posted in a manner that allows the insured and the insurance producer to print the policy or endorsement. The insurer must also provide information upon issuance of the policy or upon renewal about the insured’s right to request a paper copy of the policy or endorsement by mail without charge.
   The bill provides that nothing in Code section 505B.2 shall be construed to affect the timing or content of any notice or document required to be provided or made available to any insured under applicable law.