SF 2196 (LSB 6676XS (2) 91)

SENATE FILE 2196

BY  WEBSTER

A BILL FOR

An Act relating to a waiting period before settling motor vehicle insurance claims.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 507B.4, subsection 3, paragraph j, Code 2026, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (16)  Failing to wait at least seventy-two hours before settling or attempting to settle a motor vehicle claim as required in section 507B.10.
    Sec. 2.  NEW SECTION.  507B.10  Waiting period before settling motor vehicle claims.
   1.  An insurer shall not settle or attempt to settle a motor vehicle claim during the first seventy-two hours after the occurrence of the event giving rise to the claim.
   2.  An insurer’s duty to promptly settle a claim is tolled during the mandatory waiting period described in subsection 1.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill prohibits an insurer from settling or attempting to settle a motor vehicle claim during the first 72 hours after the occurrence of the event giving rise to the claim. An insurer’s duty to promptly settle a claim is tolled during the mandatory waiting period.
   A person who violates a provision of the bill is subject to entry of a cease and desist order, may be ordered by the commissioner of insurance to pay a civil penalty ranging from $1,000 to $50,000 under Code section 507B.7, and if the person has a license to operate the person’s business, the license is subject to suspension or revocation.