H.F. _____ Section 1. Section 515I.2, Code 2017, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 6A. “Domestic surplus lines insurer” means 3 a nonadmitted insurer that is domiciled in this state with 4 which a surplus lines insurance producer may place surplus 5 lines insurance. 6 NEW SUBSECTION . 11A. “Kind of insurance” means any one of 7 the types of insurance required to be reported in the annual 8 statement filed with the commissioner by an admitted insurer. 9 Sec. 2. NEW SECTION . 515I.4A Requirements for domestic 10 surplus lines insurers. 11 1. A nonadmitted insurer that is domiciled in this state 12 shall be deemed a domestic surplus lines insurer if all of the 13 following requirements are met: 14 a. The nonadmitted insurer possesses policyholder surplus of 15 at least fifteen million dollars. 16 b. The nonadmitted insurer is an eligible surplus lines 17 insurer in at least one jurisdiction other than this state. 18 c. The board of directors of the nonadmitted insurer has 19 passed a resolution seeking approval as a domestic surplus 20 lines insurer in this state. 21 d. The commissioner has approved the nonadmitted insurer as 22 a domestic surplus lines insurer in the state. 23 2. For the purposes of the federal Nonadmitted and 24 Reinsurance Reform Act of 2010, 15 U.S.C. §8201 et seq., 25 a domestic surplus lines insurer shall be considered a 26 nonadmitted insurer as the term is referenced in the Act, with 27 respect to risks insured in this state. 28 3. A domestic surplus lines insurer shall be deemed 29 an eligible surplus lines insurer and is subject to any 30 requirements of this chapter that are applicable to an eligible 31 surplus lines insurer. A domestic surplus lines insurer is 32 authorized to write any kind of insurance that a nonadmitted 33 insurer not domiciled in this state is eligible to write. 34 4. Notwithstanding any other provision of law to the 35 -1- LSB 2541YC (3) 87 av/rn/rj 1/ 3

H.F. _____ contrary, a policy or contract issued in this state by a 1 domestic surplus lines insurer shall be subject to taxes 2 assessed on a surplus lines policy or contract issued by a 3 nonadmitted insurer, including the premium tax on surplus lines 4 insurance, but shall not be subject to other taxes levied on an 5 admitted insurer, whether domestic or foreign. 6 5. A policy or contract issued by a domestic surplus lines 7 insurer is not a policy or contract for which coverage is 8 provided under the Iowa insurance guaranty association pursuant 9 to chapter 515B or the Iowa life and health insurance guaranty 10 association pursuant to chapter 508C. 11 6. All financial and solvency requirements imposed in this 12 state upon a domestic admitted insurer are applicable to a 13 domestic surplus lines insurer unless a domestic surplus lines 14 insurer is specifically exempted from such requirements. 15 7. A policy or contract issued by a domestic surplus lines 16 insurer in this state is exempt from all requirements imposed 17 in this state relating to insurance rating plans, policy or 18 contract forms, policy or contract cancellation and nonrenewal, 19 or premiums charged to the insured in the same manner and to 20 the same extent as a policy or contract issued by a nonadmitted 21 insurer domiciled in another state. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill establishes requirements for domestic surplus 26 lines insurers in the state. A “domestic surplus lines 27 insurer” is a nonadmitted insurer that is domiciled in this 28 state with which a surplus lines insurance producer may place 29 surplus lines insurance. The bill specifies requirements that 30 a nonadmitted insurer domiciled in this state must meet to be 31 considered a domestic surplus lines insurer. 32 A domestic surplus lines insurer is considered a nonadmitted 33 insurer as that term is used in the federal Nonadmitted and 34 Reinsurance Reform Act of 2010. A domestic surplus lines 35 -2- LSB 2541YC (3) 87 av/rn/rj 2/ 3

H.F. _____ insurer is deemed to be an eligible surplus lines insurer and 1 is subject to any requirements of Code chapter 515I that are 2 applicable to an eligible surplus lines insurer. A domestic 3 surplus lines insurer is authorized to write any kind of 4 insurance that a nonadmitted insurer not domiciled in this 5 state can write, which refers to any of the types of insurance 6 required to be reported in the annual statement filed with the 7 commissioner of insurance by an admitted insurer. 8 Notwithstanding any other provision of law to the contrary, 9 a policy or contract issued in this state by a domestic surplus 10 lines insurer is subject to the same taxes as are assessed on a 11 policy or contract issued by a nonadmitted insurer, including 12 the premium tax on surplus lines insurance, but is not subject 13 to other taxes levied on an admitted insurer, whether domestic 14 or foreign. A policy or contract issued by a domestic surplus 15 lines insurer is not subject to the jurisdiction of the Iowa 16 insurance guaranty association pursuant to Code chapter 515B 17 or the Iowa life and health insurance guaranty association 18 pursuant to Code chapter 508C. 19 All financial and solvency requirements imposed in this 20 state upon a domestic admitted insurer are applicable to a 21 domestic surplus lines insurer unless a domestic surplus lines 22 insurer is specifically exempted from such requirements. The 23 bill exempts a policy or contract issued by a domestic surplus 24 lines insurer from all requirements imposed in this state 25 relating to insurance rating plans, policy or contract forms, 26 policy or contract cancellation and nonrenewal, and premiums 27 charged to the insured in the same manner and to the same 28 extent as a policy or contract issued by a nonadmitted insurer 29 domiciled in another state. 30 -3- LSB 2541YC (3) 87 av/rn/rj 3/ 3