HF 2582 (LSB 6840HV (1) 91)

HOUSE FILE 2582

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 701)

A BILL FOR

An Act relating to investigations of insurance fraud related to adjusters, appraisers, and umpires, and license and financial responsibility requirements for adjusters, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 507E.8, subsection 1, paragraphs a and b, Code 2026, are amended to read as follows:
   a.  For purposes of an arrest resulting from a criminal violation of any provision of the Code subject to the jurisdiction of the commissioner established as a result of an investigation pursuant to this chapter or chapter 502, 502A, 507A, 522C, 522F, 523A, 523C, 523D, or 523I.
   b.  While conducting an investigation or engaged in an assignment authorized by this chapter or chapter 502, 502A, 507A, 522C, 522F, 523A, 523C, 523D, or 523I.
    Sec. 2.  Section 522C.4, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  An insurance producer licensed under chapter 522B appointed by, and granted claim authority by, an insurer or self-insurer.
    Sec. 3.  Section 522C.7, Code 2026, is amended to read as follows:
   522C.7  Financial responsibility.
   1.  Prior to issuance of a license under section 522C.5A, 522C.5B, 522C.5C, or 522C.5D, an applicant shall secure evidence of financial responsibility through a surety bond as in a form and manner prescribed by the commissioner. The surety bond shall be executed and issued by an insurer authorized to issue surety bonds in this state and meet the following requirements:
   a.  The surety bond shall be a minimum of fifty thousand dollars.
   b.  The surety bond shall be in favor of the state and specifically authorize recovery by the commissioner on behalf of any person in this state who sustains damages as the result of an adjuster’s erroneous act, failure to act, fraud, or unfair or deceptive act or practice under chapter 507B.
   c.  The surety bond shall not be terminated without prior written notice filed with the division a minimum of thirty calendar days prior to termination.
   2.  The division may request that an adjuster provide evidence of financial responsibility at any time the division deems relevant.
   3.  An adjuster shall immediately notify the division if the adjuster’s evidence of financial responsibility terminates in violation of subsection 1, paragraph “c”, or becomes impaired, and the adjuster’s license shall become inactive until the adjuster provides the division with evidence of financial responsibility.
    Sec. 4.  EMERGENCY RULES.  The insurance division may adopt emergency rules under section 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph “b”, to implement the provisions of this Act amending section 522C.7, and the rules shall be effective immediately upon filing unless a later date is specified in the rules. Any rules adopted in accordance with this section shall also be published as a notice of intended action as provided in section 17A.4.
    Sec. 5.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
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 investigations of insurance fraud related to adjusters, appraisers, and umpires, and license and financial responsibility requirements for adjusters.
   Under current law, an individual employed by the insurance division (division) and designated as a peace officer shall be considered a law enforcement officer for purposes of an arrest resulting from a criminal violation of the Code subject to the jurisdiction of the commissioner of insurance (commissioner) after an investigation pursuant to, or while conducting an investigation or engaged in an assignment authorized by, Code chapter 502, 502A, 507A, 507E, 523A, 523C, 523D, or 523I.  The bill also includes an investigation pursuant to, or an investigation or assignment authorized by, Code chapters 522C (licensing of adjusters) and 522F (licensing and regulation of appraisers and umpires).
   Under the bill, a license as an adjuster shall not be required for a licensed insurance producer appointed by, and granted claim authority by, an insurer or self-insurer.
   Under current law, prior to issuance of a license as an adjuster, an applicant must secure evidence of financial responsibility through a surety bond as prescribed by the commissioner, executed and issued by an insurer authorized to issue surety bonds. Additionally, the division may request evidence of financial responsibility at any time and an adjuster shall immediately notify the division if the adjuster’s evidence of financial responsibility terminates, at which time the adjuster’s license shall become inactive. The bill eliminates these requirements and instead requires that, prior to being issued a license as an adjuster, an applicant secure evidence of financial responsibility in a form and manner prescribed by the commissioner.
   The division may adopt emergency rules to implement the provisions of the bill amending Code section 522C.7.
   The bill, being deemed of immediate importance, takes effect upon enactment.