Senate File 2404 - Introduced SENATE FILE 2404 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2200) (SUCCESSOR TO SSB 3093) A BILL FOR An Act relating to matters involving insurance and the 1 insurance division of the department of commerce, providing 2 fees, and resolving inconsistencies. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5362SZ (2) 88 ko/rn
S.F. 2404 DIVISION I 1 INSURANCE 2 Section 1. Section 507B.7, Code 2020, is amended to read as 3 follows: 4 507B.7 Cease and desist orders Orders and penalties. 5 1. If, after hearing, the commissioner determines that a 6 person has engaged in an unfair method of competition or an 7 unfair or deceptive act or practice, the commissioner shall 8 reduce the findings to writing and shall issue and cause to 9 be served upon the person charged with the violation a copy 10 of such findings, an order requiring such person to cease 11 and desist from engaging in such method of competition, act, 12 or practice, and the commissioner may at the commissioner’s 13 discretion order any one or more of the following: 14 a. Payment of a civil penalty of not more than one thousand 15 dollars for each act or violation of this subtitle, but not 16 to exceed an aggregate of ten thousand dollars, unless the 17 person knew or reasonably should have known the person was in 18 violation of this subtitle, in which case the penalty shall be 19 not more than five thousand dollars for each act or violation, 20 but not to exceed an aggregate penalty of fifty thousand 21 dollars in any one six-month period. If the commissioner finds 22 that a violation of this subtitle was directed, encouraged, 23 condoned, ignored, or ratified by the employer of the person or 24 by an insurer, the commissioner shall also assess a penalty to 25 the employer or insurer. 26 b. Suspension or revocation of the license of a person as 27 defined in section 507B.2, subsection 1 , if the person knew or 28 reasonably should have known the person was in violation of 29 this subtitle. 30 c. Payment of interest at the rate of ten percent per 31 annum if the commissioner finds that the insurer failed to 32 pay interest as required under section 507B.4, subsection 3 , 33 paragraph “p” . 34 2. Until the expiration of the time allowed under section 35 -1- LSB 5362SZ (2) 88 ko/rn 1/ 21
S.F. 2404 507B.8 for filing a petition for review if no such petition has 1 been duly filed within such time, or, if a petition for review 2 has been filed within such time, then until the transcript of 3 the record in the proceeding has been filed in the district 4 court, as hereinafter provided, the commissioner may at any 5 time, upon such notice and in such manner as the commissioner 6 may deem proper, modify or set aside in whole or in part any 7 order issued by the commissioner under this section . 8 3. After the expiration of the time allowed for filing 9 such a petition for review if no such petition has been duly 10 filed within such time, the commissioner may at any time, after 11 notice and opportunity for hearing, reopen and alter, modify, 12 or set aside, in whole or in part, any order issued by the 13 commissioner under this section , whenever in the commissioner’s 14 opinion conditions of fact or of law have so changed as 15 to require such action, or if the public interest shall so 16 require. 17 4. Any person who violates a cease and desist an order 18 of the commissioner, and while such order is in effect, may, 19 after notice and hearing and upon order of the commissioner, 20 be subject at the discretion of the commissioner to any one or 21 more of the following: 22 a. A monetary penalty of not more than ten thousand dollars 23 for each and every act or violation. A penalty collected 24 under this lettered paragraph shall be deposited as provided 25 in section 505.7 . 26 b. Suspension or revocation of such person’s license. 27 Sec. 2. Section 514G.103, subsection 10, Code 2020, is 28 amended to read as follows: 29 10. “Independent review entity organization means a review 30 entity organization certified by the commissioner pursuant to 31 section 514G.110, subsection 4 . 32 Sec. 3. Section 514G.110, Code 2020, is amended to read as 33 follows: 34 514G.110 Independent review of benefit trigger 35 -2- LSB 5362SZ (2) 88 ko/rn 2/ 21
S.F. 2404 determinations. 1 1. Request. An insured may file a written request for 2 independent review of a benefit trigger determination with 3 the commissioner after the internal appeal process has been 4 exhausted. The request shall be filed within sixty days after 5 the insured receives written notice of the insurer’s internal 6 appeal decision. 7 2. Eligibility for review. The commissioner shall certify 8 that the request is eligible for independent review if all of 9 the following criteria are satisfied: 10 a. The insured was covered by a long-term care insurance 11 policy issued by the insurer at the time the benefit trigger 12 determination was made. 13 b. The sole reason for requesting an independent review is 14 to review the insurer’s determination that the benefit trigger 15 was not met. 16 c. The insured has exhausted all internal appeal procedures 17 provided under the insured’s long-term care insurance policy. 18 d. The written request for independent review was filed by 19 the insured within sixty days from the date of receipt of the 20 insurer’s internal appeal decision. 21 3. Notice of eligibility. The commissioner shall provide 22 written notice regarding eligibility of a request for 23 independent review to the insured and the insurer within two 24 business days from the date of receipt of the request. 25 a. If the commissioner decides that the request is not 26 eligible for independent review, the written notice shall 27 indicate the reasons for that decision. 28 b. If the commissioner certifies that the request is 29 eligible for independent review, the insurer may appeal that 30 certification by filing a written notice of appeal with the 31 commissioner within three business days from the date of 32 receipt of the notice of certification. If upon further 33 review, the commissioner upholds the certification, the 34 commissioner shall promptly notify the insured and the insurer 35 -3- LSB 5362SZ (2) 88 ko/rn 3/ 21
S.F. 2404 in writing of the reasons for that decision. 1 4. Qualifications of independent review entities 2 organizations . The commissioner shall maintain a list of 3 qualified independent review entities organizations that are 4 certified by the commissioner. Independent review entities 5 organizations shall be recertified by the commissioner every 6 two years in order to remain on the list. In order to be 7 certified, an independent review entity organization shall meet 8 all of the following criteria: 9 a. Have on staff, or contract with, a qualified, licensed 10 health care professional in an appropriate field for 11 determining an insured’s functional or cognitive impairment who 12 can conduct an independent review. 13 (1) In order to be qualified, a licensed health care 14 professional who is a physician shall hold a current 15 certification by a recognized American medical specialty 16 board in a specialty appropriate for determining an insured’s 17 functional or cognitive impairment. 18 (2) In order to be qualified, a licensed health care 19 professional who is not a physician shall hold a current 20 certification in the specialty in which that person is 21 licensed, by a recognized American specialty board in a 22 specialty appropriate for determining an insured’s functional 23 or cognitive impairment. 24 b. Ensure that any licensed health care professional who 25 conducts an independent review has no history of disciplinary 26 actions or sanctions, including but not limited to the loss 27 of staff privileges or any participation restrictions taken 28 or pending by any hospital or state or federal government 29 regulatory agency. 30 c. Ensure that the independent review entity organization 31 or any of its employees, agents, or licensed health care 32 professionals utilized does not receive compensation of any 33 type that is dependent on the outcome of a review. 34 d. Ensure that the independent review entity organization 35 -4- LSB 5362SZ (2) 88 ko/rn 4/ 21
S.F. 2404 or any of its employees, agents, or licensed health care 1 professionals utilized are not in any manner related to, 2 employed by, or affiliated with the insured or with a person 3 who previously provided medical care to the insured. 4 e. Ensure that an independent review entity organization 5 or any of its employees, agents, or licensed health care 6 professionals utilized is not a subsidiary of, or owned or 7 controlled by, an insurer or by a trade association of insurers 8 of which the insurer is a member. 9 f. Have a quality assurance program on file with the 10 commissioner that ensures the timeliness and quality of reviews 11 performed, the qualifications and independence of the licensed 12 health care professionals who perform the reviews, and the 13 confidentiality of the review process. 14 g. Have on staff or contract with a licensed health care 15 practitioner, as defined in section 514G.103, subsection 3 , who 16 is qualified to certify that an individual is chronically ill 17 for purposes of a qualified long-term care insurance contract. 18 5. Independent review process. The independent review 19 process shall be conducted as follows: 20 a. Within three business days of receiving a notice from the 21 commissioner of the certification of a request for independent 22 review or receipt of a denial of an insurer’s appeal from such 23 a certification, the insurer shall do all of the following: 24 (1) Select an independent review entity organization from 25 the list certified by the commissioner and notify the insured 26 in writing of the name, address, and telephone number of the 27 selected independent review entity selected organization . The 28 selected independent review entity selected organization shall 29 utilize a licensed health care professional with qualifications 30 appropriate to the benefit trigger determination that is under 31 review. 32 (2) Notify the independent review entity organization 33 that it has been selected to conduct an independent review 34 of a benefit trigger determination and provide sufficient 35 -5- LSB 5362SZ (2) 88 ko/rn 5/ 21
S.F. 2404 descriptive information to enable the independent review entity 1 organization to provide licensed health care professionals who 2 will be qualified to conduct the review. 3 (3) Provide the commissioner with a copy of the notices sent 4 to the insured and to the selected independent review entity 5 selected organization . 6 b. Within three business days of receiving a notice from 7 an insurer that it has been selected to conduct an independent 8 review, the independent review entity organization shall do one 9 of the following: 10 (1) Accept its selection as the independent review entity 11 organization , designate a qualified licensed health care 12 professional to perform the independent review, and provide 13 notice of that designation to the insured and the insurer, 14 including a brief description of the health care professional’s 15 qualifications and the reasons that person is qualified to 16 determine whether the insured’s benefit trigger has been met. 17 A copy of this notice shall be sent to the commissioner via 18 facsimile. The independent review entity organization is not 19 required to disclose the name of the health care professional 20 selected. 21 (2) Decline its selection as the independent review entity 22 organization or, if the independent review entity organization 23 does not have a licensed health care professional who is 24 qualified to conduct the independent review available, request 25 additional time from the commissioner to have a qualified 26 licensed health care professional certified, and provide 27 notice to the insured, the insurer, and the commissioner. 28 The commissioner shall notify the independent review entity 29 organization , the insured, and the insurer of how to proceed 30 within three business days of receipt of such notice from the 31 independent review entity organization . 32 c. An insured may object to the independent review entity 33 organization selected by the insurer or to the licensed 34 health care professional designated by the independent review 35 -6- LSB 5362SZ (2) 88 ko/rn 6/ 21
S.F. 2404 entity organization to conduct the review by filing a notice 1 of objection along with reasons for the objection , with the 2 commissioner within ten days of receipt of a notice sent by the 3 independent review entity organization pursuant to paragraph 4 “b” . The commissioner shall consider the insured’s objection 5 and shall notify the insured, the insurer, and the independent 6 review entity organization of the commissioner’s decision to 7 sustain or deny the objection within two business days of 8 receipt of the objection. 9 d. Within five business days of receiving a notice from 10 the independent review entity organization accepting its 11 selection or within five business days of receiving a denial 12 of an objection to the independent review entity organization 13 selected, whichever is later, the insured may submit any 14 information or documentation in support of the insured’s claim 15 to both the independent review entity organization and the 16 insurer. 17 e. Within fifteen days of receiving a notice from the 18 independent review entity organization accepting its selection 19 or within three business days of receipt of a denial of 20 an objection to the independent review entity organization 21 selected, whichever is later, an insurer shall do all of the 22 following: 23 (1) Provide the independent review entity organization 24 with any information submitted to the insurer by the insured 25 in support of the insured’s internal appeal of the insurer’s 26 benefit trigger determination. 27 (2) Provide the independent review entity organization with 28 any other relevant documents used by the insurer in making its 29 benefit trigger determination. 30 (3) Provide the insured and the commissioner with 31 confirmation that the information required under subparagraphs 32 (1) and (2) has been provided to the independent review entity 33 organization , including the date the information was provided. 34 f. The independent review entity organization shall not 35 -7- LSB 5362SZ (2) 88 ko/rn 7/ 21
S.F. 2404 commence its review until fifteen days after the selection of 1 the independent review entity organization is final including 2 the resolution of any objection made pursuant to paragraph 3 “c” . During this time period, the insurer may consider any 4 information provided by the insured pursuant to paragraph 5 “d” and overturn or affirm the insurer’s benefit trigger 6 determination based on such information. If the insurer 7 overturns its benefit trigger determination, the independent 8 review process shall immediately cease. 9 g. In conducting a review, the independent review 10 entity organization shall consider only the information 11 and documentation provided to the independent review entity 12 organization pursuant to paragraphs “d” and “e” . 13 h. The independent review entity organization shall submit 14 its decision as soon as possible, but not later than thirty 15 days from the date the independent review entity organization 16 receives the information required under paragraphs “d” and “e” , 17 whichever is received later. The decision shall include a 18 description of the basis for the decision and the date of the 19 benefit trigger determination to which the decision relates. 20 The independent review entity organization , for good cause, 21 may request an extension of time from the commissioner to file 22 its decision. A copy of the decision shall be mailed to the 23 insured, the insurer, and the commissioner. 24 i. All medical records submitted for use by the independent 25 review entity organization shall be maintained as confidential 26 records as required by applicable state and federal laws. The 27 commissioner shall keep all information obtained during the 28 independent review process confidential pursuant to section 29 505.8, subsection 8 , except that the commissioner may share 30 some information obtained as provided under section 505.8, 31 subsection 8 , and as required by this chapter and rules adopted 32 pursuant to this chapter . 33 j. If an insured dies before completion of the independent 34 review, the review shall continue to completion if there 35 -8- LSB 5362SZ (2) 88 ko/rn 8/ 21
S.F. 2404 is potential liability of an insurer to the estate of the 1 insured or to a provider for rendering qualified long-term care 2 services to the insured. 3 6. Costs. All reasonable fees and costs of the independent 4 review entity incurred organization in conducting an 5 independent review under this section shall be paid by the 6 insurer. 7 7. Immunity. An independent review entity organization that 8 conducts a review under this section is not liable for damages 9 arising from determinations made during the review. Immunity 10 does not apply to any act or omission made by an independent 11 review entity organization in bad faith or that involves gross 12 negligence. 13 8. Effect of independent review decision. 14 a. The review decision by the independent review entity 15 organization conducting the review is binding on the insurer. 16 b. The independent review process set forth in this section 17 shall not be considered a contested case under chapter 17A . 18 c. An insured may appeal the review decision by the 19 independent review entity organization conducting the review 20 by filing a petition for judicial review in the district court 21 in the county in which the insured resides. The petition for 22 judicial review shall be filed within fifteen business days 23 after the issuance of the review decision by the independent 24 review organization . The petition shall name the insured 25 as the petitioner and the insurer as the respondent. The 26 petitioner shall not name the independent review entity 27 organization as a party. The commissioner shall not be named 28 as a respondent unless the insured alleges action or inaction 29 by the commissioner under the standards articulated under 30 section 17A.19, subsection 10 . Allegations made against the 31 commissioner under section 17A.19, subsection 10 , must be 32 stated with particularity. The commissioner may, upon motion, 33 intervene in a judicial review proceeding brought pursuant to 34 this paragraph. The findings of fact by the independent review 35 -9- LSB 5362SZ (2) 88 ko/rn 9/ 21
S.F. 2404 entity organization conducting the review are conclusive and 1 binding on appeal. 2 d. An insurer shall not be subject to any penalties, 3 sanctions, or damages for complying in good faith with a review 4 decision rendered by an independent review entity organization 5 pursuant to this section . 6 e. Nothing contained in this section or in section 514G.109 7 shall be construed to limit the right of an insurer to assert 8 any rights an insurer may have under a long-term care insurance 9 policy related to: 10 (1) An insured’s misrepresentation. 11 (2) Changes in the insured’s benefit eligibility. 12 (3) Terms, conditions, and exclusions contained in the 13 policy, other than failure to meet the benefit trigger. 14 f. The requirements of this section and section 514G.109 are 15 not applicable to a group long-term care insurance policy that 16 is governed by the federal Employee Retirement Income Security 17 Act of 1974, as codified at 29 U.S.C. §100 et seq. 18 g. The provisions of this section and section 514G.109 19 are in lieu of and supersede any other third-party review 20 requirement contained in chapter 514J or in any other provision 21 of law. 22 h. The insured may bring an action in the district court 23 in the county in which the insured resides to enforce the 24 review decision of the independent review entity organization 25 conducting the review or the decision of the court on appeal. 26 9. Receipt of notice. Notice required by this section shall 27 be deemed received within five days after the date of mailing. 28 Sec. 4. Section 515D.4, subsection 2, paragraph a, Code 29 2020, is amended to read as follows: 30 a. The named insured or any operator who either resides 31 in the same household or customarily operates an automobile 32 insured under the policy has that person’s driver’s license 33 suspended or revoked during the policy term or, if the policy 34 is a renewal, during its term or the one hundred eighty days 35 -10- LSB 5362SZ (2) 88 ko/rn 10/ 21
S.F. 2404 immediately preceding its effective date. during any of the 1 following: 2 (1) The term of the policy. 3 (2) The term of a renewal policy. 4 (3) One hundred eighty days immediately preceding the 5 effective date of a renewal of the policy. 6 Sec. 5. Section 515D.6, Code 2020, is amended to read as 7 follows: 8 515D.6 Prohibited reasons for nonrenewal . 9 1. No insurer shall refuse to renew a policy solely because 10 of age, residence, sex, race, color, creed, or occupation of 11 an insured. 12 2. No insurer shall require a physical examination of a 13 policyholder as a condition for renewal solely on the basis of 14 age or other arbitrary reason. In the event that an insurer 15 requires a physical examination of a policyholder, the burden 16 of proof in establishing reasonable and sufficient grounds for 17 such requirement shall rest with the insurer and the expenses 18 incident to such examination shall be borne by the insurer. 19 Sec. 6. Section 515F.32, subsection 3, Code 2020, is amended 20 to read as follows: 21 3. “Insurer” includes all companies or associations licensed 22 to transact insurance business in this state under chapters 23 515 , 518 , and 518A , reciprocal insurers issued a certificate 24 of authority pursuant to chapter 520, and companies or 25 associations admitted or seeking to be admitted to do business 26 in this state under any of those chapters, notwithstanding any 27 provision of the Code to the contrary. 28 Sec. 7. Section 515F.36, subsection 2, Code 2020, is amended 29 to read as follows: 30 2. The committee shall consist of seven members. 31 a. Five Four of the members shall be elected to the 32 committee, with one member from each of the following: 33 (1) American property casualty insurance association. 34 (2) Property casualty insurers association of America. 35 -11- LSB 5362SZ (2) 88 ko/rn 11/ 21
S.F. 2404 (3) (2) Iowa insurance institute. 1 (4) (3) Mutual insurance association of Iowa. 2 (5) (4) Independent insurance agents of Iowa. 3 b. Two Three of the members shall be elected to the 4 committee by other insurer members of the plan. 5 Sec. 8. NEW SECTION . 515F.39 Cancellation or nonrenewal —— 6 FAIR notice. 7 If basic property insurance coverage is canceled or not 8 renewed other than for nonpayment of a premium pursuant to 9 section 515.125, 515.126, 515.127, 515.128, 518.23, or 518A.29, 10 the insurer shall notify the named insured that the named 11 insured may be eligible for basic property insurance through 12 the FAIR plan. The notice shall accompany the notice of 13 cancellation or the intent not to renew. 14 Sec. 9. Section 515I.4, subsection 1, paragraph a, Code 15 2020, is amended to read as follows: 16 a. Capital and surplus or its equivalent under the laws of 17 the insurer’s domiciliary jurisdiction which equals the greater 18 of either greatest of the following: 19 (1) The minimum capital and surplus requirements under the 20 laws of this state. 21 (2) Fifteen million dollars. 22 (3) The risk-based capital level requirements pursuant to 23 chapter 521E. 24 Sec. 10. Section 522.9, subsection 1, Code 2020, is amended 25 to read as follows: 26 1. If an insurer fails, without just cause, to file an 27 own risk and solvency assessment summary report by the filing 28 date stipulated to the commissioner pursuant to section 522.5, 29 subsection 1 , paragraph “c” , the commissioner shall, after 30 notice and hearing, impose a penalty of five hundred dollars 31 for each day after the stipulated date that the summary 32 report is not filed. The penalties shall be collected by the 33 commissioner and deposited in the general fund of the state 34 pursuant to section 505.7 . The maximum penalty which may be 35 -12- LSB 5362SZ (2) 88 ko/rn 12/ 21
S.F. 2404 imposed under this section is fifty thousand dollars. 1 DIVISION II 2 CEMETERY AND PRENEED SELLERS AND SALES 3 Sec. 11. Section 523A.204, subsections 1 and 2, Code 2020, 4 are amended to read as follows: 5 1. A preneed seller shall file an annual report with the 6 commissioner not later than April 1 of each year an annual 7 report 15 on a form prescribed by the commissioner. 8 2. A preneed seller filing an annual report shall pay a 9 filing fee of ten dollars per purchase agreement sold during 10 the year covered by the report. Duplicate filing fees are 11 not required for the same purchase agreement. If a purchase 12 agreement has multiple sellers, the filing fee shall be paid 13 by the preneed seller actually providing the merchandise and 14 services. 15 Sec. 12. Section 523A.204, Code 2020, is amended by adding 16 the following new subsection: 17 NEW SUBSECTION . 4. The commissioner may impose a late fee 18 in the amount of five dollars for each day after April 15 that 19 a preneed seller fails to file the preneed seller’s annual 20 report. The maximum late fee that may be imposed pursuant 21 to this section is five hundred dollars. The fee shall be 22 collected by the commissioner and deposited pursuant to section 23 505.7. 24 Sec. 13. Section 523A.501, subsection 7, Code 2020, is 25 amended to read as follows: 26 7. A preneed seller’s license expires shall expire annually 27 on April 15 30 . If the preneed seller has filed a complete 28 an annual report pursuant to section 523A.204, subsection 1, 29 and paid the required filing fees as required in pursuant to 30 section 523A.204 , subsection 2, the commissioner shall renew 31 the preneed seller’s license until April 15 30 of the following 32 year. 33 Sec. 14. Section 523A.502, subsection 5, Code 2020, is 34 amended to read as follows: 35 -13- LSB 5362SZ (2) 88 ko/rn 13/ 21
S.F. 2404 5. A sales license shall expire annually on April 15 30 . 1 If the a sales agent has filed a substantially complete annual 2 report as required in pursuant to section 523A.502A , subsection 3 1, and has fulfilled the continuing education requirements 4 pursuant to subsection 6 of this section, the commissioner 5 shall renew the sales agent’s sales license until April 15 30 6 of the following year. 7 Sec. 15. Section 523A.502A, subsection 1, Code 2020, is 8 amended to read as follows: 9 1. A No later than April 15, a sales agent shall file an 10 annual report with the commissioner not later than April 1 11 of each year an annual report on a form prescribed by the 12 commissioner describing each purchase agreement sold by the 13 sales agent during the year. An annual report must be filed 14 whether or not sales were made a sales agent sold any purchase 15 agreements during the year and even if the whether or not a 16 sales agent is no longer still an agent of a preneed seller or 17 is still licensed by the commissioner. 18 Sec. 16. Section 523A.502A, Code 2020, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 3. The commissioner may impose a late fee 21 in the amount of five dollars for each day after April 15 that a 22 sales agent fails to file the sales agent’s annual report. The 23 maximum late fee that may be imposed pursuant to this section 24 is five hundred dollars. The fee shall be collected by the 25 commissioner and deposited pursuant to section 505.7. 26 Sec. 17. Section 523A.601, subsection 4, Code 2020, is 27 amended to read as follows: 28 4. A purchase agreement shall be signed by the purchaser, 29 the seller, and if the agreement is for mortuary science 30 services as mortuary science is defined in section 156.1 , a 31 person licensed to deliver funeral services. All purchase 32 agreements, including a purchase agreement delivered or 33 executed by electronic means, must have a sales agent 34 identified. A purchase agreement, including a purchase 35 -14- LSB 5362SZ (2) 88 ko/rn 14/ 21
S.F. 2404 agreement delivered or executed by electronic means, shall 1 be reviewed by the sales agent identified and named in the 2 purchase agreement pursuant to subsection 1, paragraph “a” , and 3 signed by the purchaser and seller. If the purchase agreement 4 is for mortuary science services as mortuary science is defined 5 in section 156.1, the purchase agreement must also be signed by 6 a person licensed to deliver funeral services. 7 Sec. 18. Section 523A.807, subsection 3, unnumbered 8 paragraph 1, Code 2020, is amended to read as follows: 9 If the commissioner finds that a person has violated 10 section 523A.201 , 523A.202 , 523A.203 , 523A.207 , 523A.401 , 11 523A.402 , 523A.403 , 523A.404 , 523A.405 , 523A.501 , or 523A.502 , 12 or 523A.502A, or any rule adopted pursuant thereto, the 13 commissioner may order any or all of the following: 14 Sec. 19. Section 523A.812, Code 2020, is amended to read as 15 follows: 16 523A.812 Insurance division regulatory fund. 17 The insurance division may authorize the creation of a 18 special revenue fund in the state treasury, to be known as 19 the insurance division regulatory fund. The commissioner 20 shall allocate annually from the filing fees paid pursuant 21 to section 523A.204 , two dollars for each purchase agreement 22 reported on a preneed seller’s annual report filed pursuant 23 to section 523A.204 for deposit to the regulatory fund. The 24 remainder of the filing fees collected pursuant to section 25 523A.204 shall be deposited as provided in section 505.7 . The 26 commissioner shall also allocate annually the examination 27 fees paid pursuant to section 523A.814 and any examination 28 expense reimbursement for deposit to the regulatory fund. The 29 moneys in the regulatory fund shall be retained in the fund. 30 The moneys are appropriated and, subject to authorization by 31 the commissioner, may be used to pay examiners, examination 32 expenses, investigative expenses, the expenses of mediation 33 ordered by the commissioner, consumer education expenses, the 34 expenses of a toll-free telephone line to receive consumer 35 -15- LSB 5362SZ (2) 88 ko/rn 15/ 21
S.F. 2404 complaints, and the expenses of receiverships established 1 under section 523A.811 . If the commissioner determines that 2 funding is not otherwise available to reimburse the expenses of 3 a person who receives title to a cemetery subject to chapter 4 523I , pursuant to such a receivership, the commissioner shall 5 use moneys in the regulatory fund as necessary to preserve, 6 protect, restore, and maintain the physical integrity of 7 that cemetery and to satisfy claims or demands for cemetery 8 merchandise, funeral merchandise, and funeral services based on 9 purchase agreements which the commissioner determines are just 10 and outstanding. An annual allocation to the regulatory fund 11 shall not be imposed if the current balance of the fund exceeds 12 five hundred thousand dollars. 13 Sec. 20. Section 523I.102, subsection 6, Code 2020, is 14 amended by adding the following new paragraph: 15 NEW PARAGRAPH . d. A cemetery under the jurisdiction and 16 control of a cemetery commission pursuant to section 331.325, 17 subsection 3, paragraph “c” . 18 Sec. 21. Section 523I.213, Code 2020, is amended to read as 19 follows: 20 523I.213 Insurance division’s enforcement fund. 21 A special revenue fund in the state treasury, to be known as 22 the insurance division’s enforcement fund, is created under the 23 authority of the commissioner. The commissioner shall allocate 24 annually from the examination fees paid pursuant to section 25 523I.808 , an amount not exceeding fifty thousand dollars, for 26 deposit to all examination fees collected pursuant to section 27 523I.808 in the insurance division’s enforcement fund. The 28 moneys in the enforcement fund shall be retained in the fund. 29 The moneys are appropriated and, subject to authorization by 30 the commissioner, shall be used to pay examiners, examination 31 expenses, investigative expenses, the expenses of consumer 32 education, compliance, and education programs for filers and 33 other regulated persons, and educational or compliance program 34 materials, the expenses of a toll-free telephone line for 35 -16- LSB 5362SZ (2) 88 ko/rn 16/ 21
S.F. 2404 consumer complaints, and the expenses of receiverships of 1 perpetual care cemeteries established under section 523I.212 . 2 Sec. 22. Section 523I.301, subsections 1 and 2, Code 2020, 3 are amended to read as follows: 4 1. A cemetery shall disclose, prior to the sale of interment 5 rights, whether opening and closing of the interment space is 6 services are included in the purchase of the interment rights. 7 If opening and closing services are not included in the sale of 8 interment rights and the cemetery offers opening and closing 9 services, the cemetery must disclose that the price for this 10 service opening and closing services is subject to change 11 and must disclose the current prices for opening and closing 12 services provided by the cemetery. 13 2. The cemetery shall fully disclose all fees required for 14 interment, entombment, or inurnment of human remains and for 15 disinterment services . 16 Sec. 23. Section 523I.808, Code 2020, is amended to read as 17 follows: 18 523I.808 Examination fee. 19 An examination fee in an amount equal to ten dollars for 20 each certificate of interment rights issued during the time 21 period covered by the report shall be submitted with the a 22 perpetual care cemetery’s annual report in an amount equal to 23 five dollars for each certificate of interment rights issued 24 during the time period covered by the report filed pursuant to 25 section 523I.813 . The cemetery may charge the examination fee 26 directly to the purchaser of the interment rights. 27 Sec. 24. Section 523I.813, subsection 3, Code 2020, is 28 amended to read as follows: 29 3. The commissioner shall levy an administrative penalty 30 in the amount of up to five hundred dollars against a cemetery 31 that fails to file the annual report when due, payable to the 32 state for deposit as provided in section 505.7 . However, 33 the commissioner may waive the administrative penalty upon 34 a showing of good cause or financial hardship may assess a 35 -17- LSB 5362SZ (2) 88 ko/rn 17/ 21
S.F. 2404 late fee in the amount of five dollars for each day after the 1 date a perpetual care cemetery’s annual report is due that the 2 perpetual care cemetery fails to file the annual report. The 3 maximum late fee that may be imposed pursuant to this section 4 is five hundred dollars. The fee shall be collected by the 5 commissioner and deposited pursuant to section 505.7 . 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to various matters involving insurance and 10 the insurance division of the department of commerce. The bill 11 is organized into two divisions. 12 DIVISION I —— INSURANCE. Code section 507B.7 (cease and 13 desist orders) is amended to provide that a person who violates 14 any order of the insurance commissioner (commissioner), may, 15 after notice and hearing be subject to a monetary penalty and 16 suspension or revocation of the person’s license. Current law 17 provides that a person who violates a cease and desist order 18 of the commissioner is subject to the penalty and suspension 19 or revocation. 20 Code chapter 514G (long-term care insurance) is amended 21 to change terminology throughout the Code chapter from 22 an “independent review entity” to an “independent review 23 organization”. 24 The bill amends Code section 515D.4 (notice of cancellation 25 —— reasons) to provide more specification regarding when a 26 person can be excluded from an automobile insurance policy due 27 to the person’s driver’s license being suspended or revoked 28 during the term of the policy or a renewal of the policy. 29 Code section 515F.32 is amended to add reciprocal insurers 30 to the definition of “insurer”. Code section 515F.36 is 31 amended to change the make-up of the membership of the 32 governing committee that administers the FAIR plan. 33 The bill requires that if basic property insurance coverage 34 is canceled or not renewed other than for nonpayment of a 35 -18- LSB 5362SZ (2) 88 ko/rn 18/ 21
S.F. 2404 premium pursuant to Code section 515.125, 515.126, 515.127, 1 515.128, 518.23, or 518A.29, the insurer must notify the named 2 insured that the named insured may be eligible for basic 3 property insurance through the FAIR plan. The notice must 4 accompany the notice of cancellation or the intent not to 5 renew. 6 The bill amends Code section 515I.4 (requirements for 7 eligible surplus lines insurers) to allow a nonadmitted 8 insurer seeking to qualify as an eligible surplus line insurer 9 the option of demonstrating that the nonadmitted insurer 10 has capital and surplus under the laws of the nonadmitted 11 insurer’s domiciliary that equal the risk-based capital level 12 requirements required by Iowa law. Current law requires the 13 nonadmitted insurer to demonstrate that the nonadmitted insurer 14 has capital and surplus under the laws of the nonadmitted 15 insurer’s domiciliary that equal the greater of the minimum 16 capital and surplus required under the laws of this state, or 17 $15 million. 18 Code section 522.9 is amended to allow the commissioner 19 to deposit penalties pursuant to Code section 505.7 (fees —— 20 expenses of division —— assessments) that have been collected 21 due to insurers’ failure to file a timely own risk and solvency 22 assessment summary report. Code section 505.7 requires 23 the commissioner to transfer the collected penalties to the 24 treasurer of state for deposit in the department of commerce 25 revolving fund. Current law requires the commissioner to 26 deposit the penalties into the general fund of the state. 27 DIVISION II —— CEMETERY AND PRENEED SELLERS AND SALES. 28 The bill amends Code section 523A.204 (preneed seller annual 29 reporting requirements) to require a preneed seller to 30 file an annual report no later than April 15. Current law 31 requires the report to be filed by April 1. The bill allows 32 the commissioner to impose a late fee of $5 per day, up to a 33 maximum late fee of $500. The fee is to be collected by the 34 commissioner and deposited pursuant to Code section 505.7. The 35 -19- LSB 5362SZ (2) 88 ko/rn 19/ 21
S.F. 2404 bill specifies that a preneed seller’s license expires annually 1 on April 30, rather than the current expiration date of April 2 15. 3 Code section 523A.502A (sales agent annual reporting 4 requirements) is amended to require a sales agent to file 5 the sales agent’s annual report by April 15, rather than the 6 current due date of April 1. The bill allows the commissioner 7 to impose a late fee of $5 per day, up to a maximum late fee 8 of $500. The fee is to be collected by the commissioner and 9 deposited pursuant to Code section 505.7. The bill allows 10 the commissioner to impose a civil penalty or to issue an 11 order prohibiting the person from selling funeral merchandise, 12 cemetery merchandise, or funeral services. 13 Code section 523A.601 is amended to require all purchase 14 agreements, including purchase agreements delivered or executed 15 by electronic means, to identify a sales agent. The purchase 16 agreement must also be reviewed by the sales agent and signed 17 by the purchaser and seller. If the purchase agreement is for 18 mortuary science services, the purchase agreement must also be 19 signed by a person licensed to deliver funeral services. 20 The bill amends Code section 523A.812 (insurance division 21 regulatory fund) and removes the prohibition on an annual 22 allocation to the regulatory fund if the current balance of the 23 fund exceeds $500,000. 24 Code section 523I.102 is amended to exclude specific 25 cemeteries under the jurisdiction and control of a cemetery 26 commission that has jurisdiction and control over pioneer 27 cemeteries from the definition of “cemetery” for purposes of 28 Code chapter 523I (Iowa cemetery Act). 29 Code section 523I.213 (insurance division’s enforcement 30 fund) is amended to remove the cap on the allocation to the 31 insurance division’s enforcement fund of examination fees paid 32 by perpetual cemeteries with a perpetual cemetery’s annual 33 report. The bill requires the commissioner to deposit all of 34 the examination fees in the enforcement fund. 35 -20- LSB 5362SZ (2) 88 ko/rn 20/ 21
S.F. 2404 Code section 523I.301 (disclosure requirements —— prices 1 and fees) is amended to require a cemetery to disclose, prior 2 to the sale of interment rights, whether opening and closing 3 services are included in the purchase price. The bill also 4 requires a cemetery to fully disclose all fees associated with 5 disinterment services. 6 The bill amends Code section 523I.808 to require an 7 examination fee of $10 per certificate of interment rights 8 issued to be filed with a perpetual care cemetery’s annual 9 report. Under current law, the fee is $5 per certificate of 10 interment rights issued. 11 The bill amends Code section 523I.813 (annual report by 12 perpetual care cemeteries) to allow, rather than to require, 13 the commissioner to impose a late penalty on a perpetual care 14 cemetery that fails to file its annual report on time. 15 -21- LSB 5362SZ (2) 88 ko/rn 21/ 21