HSB 151 (LSB 2541YC (3) 87)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON COWNIE)

A BILL FOR

An Act relating to requirements for domestic surplus lines insurers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 515I.2, Code 2017, is amended by adding the following new subsections:
   NEW SUBSECTION.  6A.  “Domestic surplus lines insurer” means a nonadmitted insurer that is domiciled in this state with which a surplus lines insurance producer may place surplus lines insurance.
   NEW SUBSECTION.  11A.  “Kind of insurance” means any one of the types of insurance required to be reported in the annual statement filed with the commissioner by an admitted insurer.
    Sec. 2.  NEW SECTION.  515I.4A  Requirements for domestic surplus lines insurers.
   1.  A nonadmitted insurer that is domiciled in this state shall be deemed a domestic surplus lines insurer if all of the following requirements are met:
   a.  The nonadmitted insurer possesses policyholder surplus of at least fifteen million dollars.
   b.  The nonadmitted insurer is an eligible surplus lines insurer in at least one jurisdiction other than this state.
   c.  The board of directors of the nonadmitted insurer has passed a resolution seeking approval as a domestic surplus lines insurer in this state. 
   d.  The commissioner has approved the nonadmitted insurer as a domestic surplus lines insurer in the state.
   2.  For the purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010, 15 U.S.C. §8201 et seq., a domestic surplus lines insurer shall be considered a nonadmitted insurer as the term is referenced in the Act, with respect to risks insured in this state.
   3.  A domestic surplus lines insurer shall be deemed an eligible surplus lines insurer and is subject to any requirements of this chapter that are applicable to an eligible surplus lines insurer. A domestic surplus lines insurer is authorized to write any kind of insurance that a nonadmitted insurer not domiciled in this state is eligible to write.
   4.  Notwithstanding any other provision of law to the contrary, a policy or contract issued in this state by a domestic surplus lines insurer shall be subject to taxes assessed on a surplus lines policy or contract issued by a nonadmitted insurer, including the premium tax on surplus lines insurance, but shall not be subject to other taxes levied on an admitted insurer, whether domestic or foreign.
   5.  A policy or contract issued by a domestic surplus lines insurer is not a policy or contract for which coverage is provided under the Iowa insurance guaranty association pursuant to chapter 515B or the Iowa life and health insurance guaranty association pursuant to chapter 508C.
   6.  All financial and solvency requirements imposed in this state upon a domestic admitted insurer are applicable to a domestic surplus lines insurer unless a domestic surplus lines insurer is specifically exempted from such requirements.
   7.  A policy or contract issued by a domestic surplus lines insurer in this state is exempt from all requirements imposed in this state relating to insurance rating plans, policy or contract forms, policy or contract cancellation and nonrenewal, or premiums charged to the insured in the same manner and to the same extent as a policy or contract issued by a nonadmitted insurer domiciled in another state.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes requirements for domestic surplus lines insurers in the state. A “domestic surplus lines insurer” is a nonadmitted insurer that is domiciled in this state with which a surplus lines insurance producer may place surplus lines insurance. The bill specifies requirements that a nonadmitted insurer domiciled in this state must meet to be considered a domestic surplus lines insurer.
   A domestic surplus lines insurer is considered a nonadmitted insurer as that term is used in the federal Nonadmitted and Reinsurance Reform Act of 2010. A domestic surplus lines insurer is deemed to be an eligible surplus lines insurer and is subject to any requirements of Code chapter 515I that are applicable to an eligible surplus lines insurer. A domestic surplus lines insurer is authorized to write any kind of insurance that a nonadmitted insurer not domiciled in this state can write, which refers to any of the types of insurance required to be reported in the annual statement filed with the commissioner of insurance by an admitted insurer.
   Notwithstanding any other provision of law to the contrary, a policy or contract issued in this state by a domestic surplus lines insurer is subject to the same taxes as are assessed on a policy or contract issued by a nonadmitted insurer, including the premium tax on surplus lines insurance, but is not subject to other taxes levied on an admitted insurer, whether domestic or foreign. A policy or contract issued by a domestic surplus lines insurer is not subject to the jurisdiction of the Iowa insurance guaranty association pursuant to Code chapter 515B or the Iowa life and health insurance guaranty association pursuant to Code chapter 508C.
   All financial and solvency requirements imposed in this state upon a domestic admitted insurer are applicable to a domestic surplus lines insurer unless a domestic surplus lines insurer is specifically exempted from such requirements. The bill exempts a policy or contract issued by a domestic surplus lines insurer from all requirements imposed in this state relating to insurance rating plans, policy or contract forms, policy or contract cancellation and nonrenewal, and premiums charged to the insured in the same manner and to the same extent as a policy or contract issued by a nonadmitted insurer domiciled in another state.