HF 463 (LSB 2191HV (1) 90)

HOUSE FILE 463

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 167)

A BILL FOR

An Act relating to insurance policy terms and public policy considerations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 509.3, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  a.  A policy or policy form in connection with a policy of group accident or health insurance, or combination thereof, that is issued in this state shall not contain a provision that is unjust, unfair, inequitable, misleading, deceptive, encourages misrepresentation of the policy, or that is otherwise contrary to public policy.
   b.  It shall be unlawful for a carrier to issue a policy, or to use a policy form in connection with a policy, after notice from the commissioner of insurance that the policy or policy form violates paragraph “a”.
   c.  A carrier shall have twenty days after receipt of a notice under paragraph “b” to request a hearing to contest the commissioner’s notice. The hearing shall be conducted pursuant to chapter 17A. If the hearing results in a decision that affirms the commissioner’s notice, the decision shall be provided to the carrier in writing and shall specify the reasons for the decision.
    Sec. 2.  NEW SECTION.  513B.4C  Filing requirement —— prior approval.
   1.  a.  A group policy of insurance against loss or expense from sickness, or from the bodily injury or death by accident of the insured, shall not be issued or delivered in this state by a carrier until a copy of the policy has been filed with, and approved by, the commissioner.
   b.  An application, rider, or endorsement shall not be used in connection with a group policy under paragraph “a” until a copy of the policy form has been filed with, and approved by, the commissioner.
   2.  A filing under subsection 1 shall be deemed approved unless disapproved by the commissioner within thirty days of the date the filing is received by the commissioner.
    Sec. 3.  NEW SECTION.  513B.4D  Filing —— disapproval.
   1.  a.  The commissioner shall provide notice to a carrier that has filed a policy form pursuant to section 513B.4C, subsection 1, if upon review of the policy form the commissioner finds any of the following:
   (1)  The benefits provided are unreasonable in relation to the premium charged.
   (2)  The policy form contains a provision that is unjust, unfair, inequitable, misleading, deceptive, encourages misrepresentation of the policy, or is otherwise contrary to public policy.
   b.  The notice under paragraph “a” shall do all of the following:
   (1)  Advise the carrier that the policy form does not comply with this section, or with the rules adopted pursuant to chapter 17 to implement and administer this section.
   (2)  Advise the carrier that it shall be unlawful for the carrier to issue the policy form or to use the policy form in connection with any policy.
   (3)  Provide the specific reasons for the commissioner’s disapproval of the policy form.
   2.  A carrier shall have twenty days after receipt of a notice under subsection 1 to request a hearing to contest the commissioner’s notice. The hearing shall be conducted pursuant to chapter 17A. If the hearing results in a decision that affirms the commissioner’s notice, the decision shall be provided to the carrier in writing and shall specify the reasons for the decision.
    Sec. 4.  NEW SECTION.  513B.4E  Withdrawal of approval.
   1.  The commissioner may, after opportunity for hearing, withdraw the commissioner’s previous approval of a policy form under section 513B.4C if the policy form is in violation of section 513B.4D, subsection 1, paragraph “a”. The hearing shall be conducted pursuant to chapter 17A. Notice to the carrier of the hearing shall specify the matters to be considered at the hearing.
   2.  It shall be unlawful for a carrier to issue a policy form, or to use a policy form in connection with any group policy, on or after the effective date of the commissioner’s withdrawal of a previous approval of the policy form.
   3.  If a hearing results in a decision to withdraw a previous approval of a policy form, the decision shall be provided to the carrier in writing and shall specify the reasons for the commissioner’s withdrawal of the prior approval.
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 insurance policy terms and public policy considerations.
   The bill prohibits a policy or policy form (form) in connection with a group accident or health insurance policy (group policy) that is issued in this state from containing a provision that is unjust, unfair, inequitable, misleading, deceptive, encourages misrepresentation, or that is otherwise contrary to public policy (contrary to policy). The bill makes it unlawful for a carrier to issue a policy or to use a form in connection with any group policy after notice from the commissioner of insurance (commissioner) that the policy or form violates the prohibition. A carrier has 20 days after receipt of the notice to request a hearing to contest the commissioner’s notice. The hearing shall be conducted pursuant to Code chapter 17A and if it results in a decision that affirms the commissioner’s notice, the decision shall be provided to the carrier in writing and specify the reasons for the decision.
   A group policy of insurance against loss or expense from sickness, or from the bodily injury or death by accident of the insured (accident and health policy), shall not be issued or delivered in this state by a carrier until a copy of the policy has been filed with, and approved by, the commissioner. Applications, riders, or endorsements shall not be used in connection with the accident and health policy until a copy of the policy form has been filed with, and approved by, the commissioner. A filing shall be deemed approved unless disapproved by the commissioner within 30 days. If upon review of a form the commissioner finds that the benefits provided are unreasonable in relation to the premium charged, or that the form contains a provision contrary to public policy, the commissioner shall provide notice to the carrier that advises the carrier as detailed in the bill. The carrier has 20 days after receipt of the notice to request a hearing, to be conducted pursuant to Code chapter 17A. The division permits the commissioner, after opportunity for hearing, to withdraw the commissioner’s previous approval of a form in circumstances detailed in the bill. A carrier is prohibited from issuing a form, or from using a form in connection with any group policy, on or after the effective date of the commissioner’s withdrawal of the previous approval. If a hearing results in a decision to withdraw a previous approval, the decision shall be provided to the carrier in writing.