House File 986 - Reprinted HOUSE FILE 986 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 911) (SUCCESSOR TO HSB 256) (As Amended and Passed by the House April 24, 2025 ) A BILL FOR An Act relating to matters under the purview of the department 1 of insurance and financial services, the utilities 2 commission, and the department of transportation, including 3 financial literacy and exploitation, tax confidentiality, 4 health insurance rates, health savings accounts, insurer 5 withdrawals, property insurance, service contracts, the 6 Iowa individual health benefit reinsurance association, and 7 the Iowa cemetery Act, motor vehicle financial liability 8 coverage, and including penalties and effective date 9 provisions. 10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 11 HF 986 (3) 91 nls/ko/md

H.F. 986 DIVISION I 1 FINANCIAL LITERACY AND FINANCIAL EXPLOITATION 2 Section 1. Section 502.410, subsection 2, Code 2025, is 3 amended to read as follows: 4 2. Agents. The fee for an individual is forty dollars 5 when filing an application for registration as an agent, a fee 6 of forty dollars when filing a renewal of registration as an 7 agent, and a fee of forty dollars when filing for a change of 8 registration as an agent. Of each forty-dollar fee collected, 9 ten dollars is appropriated to the securities investor 10 education and financial literacy training fund established 11 under financial literacy and investor education fund created 12 in section 502.601, subsection 5 546.14, and ten dollars is 13 appropriated to the financial exploitation prevention fund 14 created in section 546.15 . If the filing results in a denial 15 or withdrawal, the administrator shall retain the fee. 16 Sec. 2. Section 502.601, subsection 4, Code 2025, is amended 17 by striking the subsection and inserting in lieu thereof the 18 following: 19 4. Financial literacy and investor education. Initiatives 20 involving financial literacy and investor education shall 21 comply with the initiatives in section 546.14, subsection 1, 22 and section 546.15, subsection 1. 23 Sec. 3. Section 502.601, subsection 5, Code 2025, is amended 24 by striking the subsection. 25 Sec. 4. Section 505.7, subsection 3, Code 2025, is amended 26 to read as follows: 27 3. Forty percent of the nonexamination Nonexamination 28 revenues payable to the division of insurance or the department 29 of revenue in connection with the regulation of insurance 30 companies or other entities subject to the regulatory 31 jurisdiction of the division shall be deposited in the commerce 32 revolving fund created in section 546.12 and shall be subject 33 to annual appropriation to the division for its operations 34 and is also subject to expenditure under subsection 6 . The 35 -1- HF 986 (3) 91 nls/ko/md 1/ 35

H.F. 986 remaining nonexamination revenues payable to the division of 1 insurance or the department of revenue shall be deposited in 2 the general fund of the state. 3 Sec. 5. Section 505.8, subsection 17, Code 2025, is amended 4 to read as follows: 5 17. a. The commissioner shall utilize the senior health 6 insurance information program to assist in the dissemination 7 of objective and noncommercial educational material and to 8 raise awareness of prudent consumer choices in considering the 9 purchase of various insurance products designed for the health 10 care needs of older Iowans. 11 b. A senior health insurance information program fund 12 is created in the state treasury under the control of the 13 commissioner and moneys in the fund are appropriated to the 14 division for the purposes specified in paragraph “a” . 15 c. Notwithstanding any law to the contrary, moneys shall be 16 deposited into the senior health insurance information fund as 17 follows: 18 (1) Any appropriation made by the general assembly from the 19 general fund for the purpose of paragraph “a” . 20 (2) Any moneys available to and obtained or accepted by the 21 division from the federal government for deposit in the senior 22 health insurance information fund. 23 (3) Any other moneys or grants secured by the division that 24 align with the purpose of paragraph “a” . 25 d. Notwithstanding section 12C.7, subsection 2, interest or 26 earnings on moneys deposited in the senior health information 27 program fund shall be credited to the senior health information 28 program fund. Notwithstanding section 8.33, moneys in the 29 senior health information program fund that remain unencumbered 30 or unobligated at the close of a fiscal year shall not revert 31 but shall remain available for expenditure for the purposes 32 designated. 33 Sec. 6. Section 546.2, subsection 4, Code 2025, is amended 34 by adding the following new paragraph: 35 -2- HF 986 (3) 91 nls/ko/md 2/ 35

H.F. 986 NEW PARAGRAPH . g. To identify and coordinate appropriate 1 opportunities for collaboration under sections 546.14 and 2 546.15 with the chief administrative officers of each division 3 and each chief administrative officer’s respective regulated 4 entities. 5 Sec. 7. NEW SECTION . 546.14 Financial literacy and investor 6 education fund. 7 1. The director shall develop and implement financial 8 literacy and investor education initiatives for the public by 9 providing education on financial topics, including but not 10 limited to the topics required to be offered and taught for 11 grades nine through twelve under section 256.11, subsection 5, 12 paragraph “k” , subparagraph (1). 13 2. A financial literacy and investor education fund is 14 created in the state treasury under the control of the director 15 for the purposes specified in subsection 1. The fund shall 16 consist of any moneys appropriated to the fund by the general 17 assembly and any other moneys available and obtained or 18 accepted by the department for placement in the fund including 19 all of the following: 20 a. Moneys appropriated to the fund pursuant to section 21 502.410, subsection 2. 22 b. Notwithstanding any provision of law to the contrary, 23 the director may, at the director’s discretion, transfer up to 24 two hundred fifty thousand dollars from the commerce revolving 25 fund created in section 546.12 to complete the objectives under 26 subsection 1. 27 c. Notwithstanding any provision of law to the contrary, 28 any moneys received by the department by reason of civil 29 penalties assessed pursuant to chapter 502 may be deposited 30 in the financial literacy and investor education fund at the 31 discretion of the director. 32 d. The director may collaborate with organizations with an 33 interest in financial literacy and investor education. The 34 director may accept a grant or donation to be placed in the 35 -3- HF 986 (3) 91 nls/ko/md 3/ 35

H.F. 986 financial literacy and investor education fund. 1 3. Notwithstanding any provision of law to the contrary, 2 moneys in the financial literacy and investor education fund 3 may be transferred to the financial exploitation prevention 4 fund in section 546.15 at the discretion of the director. 5 4. Notwithstanding section 12C.7, subsection 2, interest or 6 earnings on moneys in the fund shall be credited to the fund. 7 Notwithstanding section 8.33, moneys appropriated in this 8 section that remain unencumbered or unobligated at the close of 9 a fiscal year shall not revert but shall remain available for 10 expenditure for the purposes designated. 11 Sec. 8. NEW SECTION . 546.15 Financial exploitation 12 prevention fund. 13 1. The director shall develop and implement initiatives to 14 accomplish all of the following: 15 a. Educate the public on financial exploitation. 16 b. Assist individuals who are known, suspected, or potential 17 victims of financial exploitation. 18 c. Conduct investigations, refer investigations to other law 19 enforcement, and assist in the prosecution of persons involved 20 in financial exploitation. 21 2. A financial exploitation prevention fund is created 22 in the state treasury under the control of the director and 23 consists of any moneys appropriated to the fund by the general 24 assembly for the purposes of subsection 1, and any other moneys 25 available and obtained or accepted by the department for 26 placement in the fund including all of the following: 27 a. Moneys appropriated to the fund pursuant to section 28 502.410, subsection 2. 29 b. Notwithstanding any provision of law to the contrary, the 30 director may, at the director’s discretion, transfer up to two 31 hundred fifty thousand dollars from the commerce revolving fund 32 to complete the objectives of this section. 33 c. Notwithstanding any provision of law to the contrary, 34 any moneys received by the department as a result of civil 35 -4- HF 986 (3) 91 nls/ko/md 4/ 35

H.F. 986 penalties assessed pursuant to chapter 502 may be placed into 1 the financial exploitation prevention fund at the discretion of 2 the director. 3 d. The director may collaborate with organizations with an 4 interest in financial exploitation prevention and education. 5 e. The director may accept a grant or donation to be placed 6 in the financial exploitation prevention fund. 7 3. Notwithstanding section 12C.7, subsection 2, interest or 8 earnings on moneys in the fund shall be credited to the fund. 9 Notwithstanding section 8.33, moneys appropriated in this 10 section that remain unencumbered or unobligated at the close of 11 a fiscal year shall not revert but shall remain available for 12 expenditure for the purposes designated. 13 4. a. All investigation files, investigation reports, 14 and all other investigative information in the possession of 15 the department pursuant to this section shall be confidential 16 records under chapter 22, except as specifically provided in 17 this section, and shall not be subject to release by discovery, 18 subpoena, or other means of legal compulsion until opened for 19 public inspection by the department, or upon the consent of 20 the department, or until a court of competent jurisdiction 21 determines, after notice to the department and hearing, 22 that the department will not be unnecessarily hindered in 23 accomplishing the purposes of this section if opened for public 24 inspection. Investigative information in the possession of 25 the department may be disclosed, in the director’s discretion, 26 to appropriate regulatory or law enforcement agencies within 27 the state, another state, the District of Columbia, or another 28 territory or country. 29 b. The director may share documents, materials, or other 30 information, including confidential and privileged documents, 31 materials, or other information, with any person provided 32 that the recipient agrees to maintain the confidential 33 and privileged status of the document, material, or other 34 information pursuant to Iowa law. 35 -5- HF 986 (3) 91 nls/ko/md 5/ 35

H.F. 986 c. The director may receive documents, materials, or other 1 information, including confidential and privileged documents, 2 materials, or other information from any person and shall 3 maintain as confidential and privileged any document, material, 4 or other information received with notice or the understanding 5 that it is confidential or privileged under the laws of the 6 jurisdiction that is the source of the document, material, or 7 other information. 8 d. The director may enter into an agreement governing the 9 sharing and use of documents, materials, or other information 10 consistent with this section. 11 e. An investigator or other staff member of the department 12 shall not be subject to subpoena in a civil action concerning 13 any matter of which the department investigator or other staff 14 member has knowledge pursuant to a pending or continuing 15 investigation conducted by the department pursuant to this 16 chapter. 17 Sec. 9. TRANSFER OF MONEYS. On the effective date of this 18 division of this Act, any unencumbered and unobligated moneys 19 remaining in the securities investor education and financial 20 literacy training fund created in section 502.601 shall be 21 transferred to the financial literacy and investor education 22 fund created in section 546.14, as enacted in this division of 23 this Act. 24 DIVISION II 25 TAX ON GROSS PREMIUMS —— CONFIDENTIALITY 26 Sec. 10. Section 432.1, Code 2025, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 7. a. A tax return filed under this 29 section shall not be subject to inspection under chapter 22. 30 It shall be unlawful for any present or former officer or 31 employee of the state to willfully or recklessly publish any 32 tax return filed under this section. A person who violates 33 this paragraph shall be guilty of a serious misdemeanor and, in 34 addition to any other penalty, shall be dismissed from state 35 -6- HF 986 (3) 91 nls/ko/md 6/ 35

H.F. 986 office or discharged from state employment. 1 b. This section shall not be construed to prohibit the 2 department of revenue from turning over information and tax 3 returns in the department of revenue’s possession pursuant 4 to this subsection to duly authorized officers of the United 5 States, or tax officials of other states, pursuant to an 6 agreement between the commissioner of insurance and any of the 7 following: 8 (1) The secretary of the treasury of the United States, or 9 the secretary’s delegate. 10 (2) The commissioner of insurance of another state. 11 Sec. 11. Section 432.1A, Code 2025, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 8. a. A tax return filed under this 14 section shall not be subject to inspection under chapter 22. 15 It shall be unlawful for any present or former officer or 16 employee of the state to willfully or recklessly publish any 17 tax return filed under this section. A person who violates 18 this paragraph shall be guilty of a serious misdemeanor and, in 19 addition to any other penalty, shall be dismissed from state 20 office or discharged from state employment. 21 b. This section shall not be construed to prohibit the 22 department of revenue from turning over information and 23 tax returns in the department’s possession pursuant to this 24 subsection to duly authorized officers of the United States, or 25 tax officials of other states, pursuant to an agreement between 26 the commissioner of insurance and any of the following: 27 (1) The secretary of the treasury of the United States, or 28 the secretary’s delegate. 29 (2) The commissioner of insurance of another state. 30 DIVISION III 31 HEALTH INSURANCE RATE INCREASES —— PUBLIC HEARINGS 32 Sec. 12. Section 505.19, subsection 2, Code 2025, is amended 33 to read as follows: 34 2. The commissioner shall may hold a public hearing 35 -7- HF 986 (3) 91 nls/ko/md 7/ 35

H.F. 986 at the time a carrier files for proposed health insurance 1 rate increases exceeding the average annual health spending 2 growth rate as provided in subsection 1 , prior to approval or 3 disapproval of the proposed rate increases for that carrier by 4 the commissioner. 5 DIVISION IV 6 HEALTH SAVINGS ACCOUNTS AND QUALIFIED HIGH-DEDUCTIBLE HEALTH 7 PLANS —— COST-SHARING 8 Sec. 13. NEW SECTION . 509.3B Health savings accounts and 9 qualified high-deductible health plans —— cost-sharing. 10 If a copayment, coinsurance, or deductible paid as 11 cost-sharing by an enrollee under this chapter may result in 12 the enrollee becoming ineligible for a health savings account 13 associated with the enrollee’s qualified high-deductible 14 health plan under section 223 of the Internal Revenue Code, 15 the cost-sharing shall apply only to the enrollee’s qualified 16 high-deductible health plan after the enrollee satisfies the 17 enrollee’s minimum deductible, except for items or services 18 determined to be preventive care under section 223(c)(2)(C) of 19 the Internal Revenue Code. 20 Sec. 14. NEW SECTION . 514A.3C Health savings accounts and 21 qualified high-deductible health plans —— cost-sharing. 22 If a copayment, coinsurance, or deductible paid as 23 cost-sharing by an enrollee under this chapter may result in 24 the enrollee becoming ineligible for a health savings account 25 associated with the enrollee’s qualified high-deductible 26 health plan under section 223 of the Internal Revenue Code, 27 the cost-sharing shall apply only to the enrollee’s qualified 28 high-deductible health plan after the enrollee satisfies the 29 enrollee’s minimum deductible, except for items or services 30 determined to be preventive care under section 223(c)(2)(C) of 31 the Internal Revenue Code. 32 DIVISION V 33 INSURANCE COMPANY WITHDRAWAL REQUIREMENTS 34 Sec. 15. NEW SECTION . 505.36 Insurer —— withdrawal 35 -8- HF 986 (3) 91 nls/ko/md 8/ 35

H.F. 986 requirements. 1 1. Definitions. As used in this section, unless the context 2 otherwise requires: 3 a. “Commissioner” means the commissioner of insurance. 4 b. “Insurer” means an insurance company, an affiliate of 5 an insurance company, or other legal entity authorized to 6 engage in the business of insurance in this state, including 7 a reciprocal exchange, an interinsurance exchange, and a 8 lloyd’s plan. “Insurer” does not include an eligible surplus 9 lines insurer under chapter 515I, a county mutual insurance 10 association under chapter 518, a state mutual insurance 11 association under chapter 518A, an entity offering health 12 coverage, or an entity offering accident and sickness coverage. 13 2. Exemption. This section shall not apply to a transfer of 14 business from one insurer to another insurer if the insurer to 15 whom the business is being transferred is all of the following: 16 a. Within the same insurance holding company system as the 17 insurer from whom business is being transferred. 18 b. Authorized to engage in the business of insurance in this 19 state. 20 c. Not a reciprocal or interinsurance exchange, a lloyd’s 21 plan, a state mutual insurance association, or a county mutual 22 insurance association. 23 3. Withdrawal plan required. An insurer shall file a 24 withdrawal plan with the commissioner in any of the following 25 circumstances: 26 a. The insurer intends to reduce the insurer’s total annual 27 premium volume in the state by fifty percent or more. 28 b. For an insurer whose premiums for the immediately 29 preceding year are greater than one tenth of one percent of the 30 total direct premiums written in this state by all insurers 31 for that line of business in the four most recent quarters of 32 published data on the division’s internet site, the insurer 33 intends to reduce the insurer’s total annual premium in the 34 state in a line of insurance by seventy-five percent or more. 35 -9- HF 986 (3) 91 nls/ko/md 9/ 35

H.F. 986 c. For any line of business with annual premiums greater 1 than twenty thousand dollars, the insurer intends to reduce the 2 insurer’s total annual premium volume in the state in a line of 3 private passenger automobile insurance, homeowners insurance, 4 or dwelling property insurance by fifty percent or more. 5 4. Withdrawal plan. 6 a. A withdrawal plan filed under this section shall provide 7 for all of the following: 8 (1) The insurer fulfilling all contractual obligations. 9 (2) The insurer providing service to all policyholders and 10 claimants. 11 (3) The insurer meeting all statutory obligations, 12 including but not limited to payment of assessments to the 13 guaranty fund and participation in an assigned risk plan. 14 b. A withdrawal plan filed pursuant to this section shall, 15 at a minimum, include all of the following: 16 (1) The date on which the insurer proposes to commence 17 execution of the withdrawal plan, and the date on which 18 execution of the withdrawal plan will be completed. 19 (2) The reason for withdrawal for each line of insurance. 20 (3) Each policy form by number, and all of the following 21 information: 22 (a) The total number of policyholders. 23 (b) The total amount of premiums impacted for each line of 24 insurance. 25 (4) The total number of insurance producers impacted for 26 each line of insurance. 27 (5) A copy of the notification the insurer will provide to 28 each impacted insurance producer. 29 (6) A copy of the notification or nonrenewal the insurer 30 will provide to each impacted policyholder. 31 (7) Details regarding the insurer’s fulfillment of 32 contractual obligations to the insurer’s policyholders during 33 the withdrawal. 34 (8) Whether replacement coverage will be provided to a 35 -10- HF 986 (3) 91 nls/ko/md 10/ 35

H.F. 986 policyholder and, if so, the insurer shall provide all of the 1 following: 2 (a) The insurer’s relationship with the replacing insurer. 3 (b) The underwriting requirements and rates that will be 4 used to underwrite the policyholder. 5 (9) An estimate of the percentage of the Iowa market 6 affected by withdrawal. 7 (10) Any third-party contracts that provide for continuity 8 of coverage for policyholders. 9 (11) A list of the lines of insurance that the insurer will 10 continue to offer in the state. 11 5. Commissioner approval. 12 a. Except as provided in paragraph “b” , the commissioner 13 shall approve a withdrawal plan that has been determined to 14 meet all of the following requirements: 15 (1) The withdrawal plan provides a minimum of one hundred 16 eighty calendar days’ notice to the commissioner. 17 (2) The withdrawal plan includes notice to policyholders as 18 required by chapter 515. 19 (3) The withdrawal plan complies with subsection 4. 20 b. If the commissioner finds that a withdrawal plan does 21 not comply with paragraph “a” , the commissioner may modify, 22 restrict, limit, or deny the withdrawal plan. 23 c. An insurer may request a hearing within thirty calendar 24 days of the commissioner’s decision to modify, restrict, limit, 25 or deny the insurer’s withdrawal plan. A hearing under this 26 paragraph shall be held within sixty calendar days of the 27 insurer’s request unless a later date is agreed to by the 28 insurer and the commissioner, or permitted by the commissioner 29 for good cause. 30 6. Resumption of writing insurance after withdrawal. An 31 insurer that withdraws from writing all lines of insurance 32 in the state shall not, without prior approval of the 33 commissioner, resume writing insurance in the state for a 34 minimum of five years from the date of completion of the 35 -11- HF 986 (3) 91 nls/ko/md 11/ 35

H.F. 986 insurer’s withdrawal. 1 7. Remedies. A violation of this section shall constitute 2 an unfair method of competition and unfair or deceptive act or 3 practice under section 507B.4. 4 8. Rules. The commissioner may adopt rules pursuant 5 to chapter 17A as necessary to administer and enforce this 6 section. 7 Sec. 16. Section 507B.4, subsection 3, Code 2025, is amended 8 by adding the following new paragraph: 9 NEW PARAGRAPH . v. Improper withdrawal of an 10 insurer. Failure of an insurer to comply with section 11 505.36. As used in this paragraph, “insurer” means the same as 12 defined in section 505.36, subsection 1. 13 DIVISION VI 14 SERVICE COMPANIES, SERVICE CONTRACTS, AND LICENSES 15 Sec. 17. Section 507B.4, subsection 3, Code 2025, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . v. Service contracts. Failure of a person 18 in the business of service contracts to comply with chapter 19 523C. 20 Sec. 18. Section 523C.1, Code 2025, is amended by adding the 21 following new subsections: 22 NEW SUBSECTION . 1A. “Communicating in a verifiable manner” 23 means communication by in-person delivery, email, or, if there 24 is an auditable record of the communication, by telephone. 25 NEW SUBSECTION . 6A. “Person” means an individual or a 26 business entity. 27 NEW SUBSECTION . 12A. “Service contract holder” means the 28 original purchaser of a service contract or the successor in 29 interest or transferee entitled to services under the service 30 contract. 31 NEW SUBSECTION . 12B. “Substitute part” means a part that is 32 not issued by the original part manufacturer, including but not 33 limited to a remanufactured part, an aftermarket part, and a 34 part obtained from a salvage yard. 35 -12- HF 986 (3) 91 nls/ko/md 12/ 35

H.F. 986 NEW SUBSECTION . 12C. “Support services” means a person that 1 provides services that support, or a person that works under 2 the direction of, a licensed service company in connection with 3 the issuance, offer for sale, sale, or administration of a 4 service contract in this state, including but not limited to a 5 person that provides marketing, administrative, or technical 6 support to a service company. 7 Sec. 19. Section 523C.1, subsection 4, Code 2025, is amended 8 to read as follows: 9 4. “Motor vehicle” means any vehicle that is self-propelled 10 vehicle and subject to registration under chapter 321 . 11 Sec. 20. Section 523C.2, Code 2025, is amended by striking 12 the section and inserting in lieu thereof the following: 13 523C.2 License required. 14 1. A person that shall be contractually obligated to the 15 service contract holder under the terms of the service contract 16 shall not directly or indirectly issue, offer for sale, or 17 sell a motor vehicle service contract or residential service 18 contract in this state unless the person is a licensed service 19 company. 20 2. This chapter shall not apply to any person that provides 21 support services. A service company that utilizes support 22 services shall ensure the support services’ compliance with the 23 issuance, offer for sale, or sale of a service contract under 24 this chapter. 25 3. A service company shall maintain a license for the 26 duration of time that the service company is contractually 27 obligated to a service contract holder under the terms of a 28 service contract. 29 4. A service company shall report to the commissioner 30 within thirty calendar days any material change to the 31 information submitted by the service company in the service 32 company’s initial license application, or license renewal 33 application, including a change in the service company’s 34 contact information, ownership, officers or directors directly 35 -13- HF 986 (3) 91 nls/ko/md 13/ 35

H.F. 986 responsible for the provider’s service contract business, 1 or any other change that substantially affects the service 2 company’s operations in the state. 3 5. A service company shall report to the commissioner any 4 administrative action taken against the service company in 5 another jurisdiction within thirty calendar days of the final 6 disposition. The report shall include a copy of the order, 7 consent to the order, and other relevant legal documents. 8 6. Within thirty calendar days of the initial pretrial 9 hearing date, a service company shall report to the 10 commissioner a criminal prosecution in any jurisdiction of an 11 owner with more than a ten percent ownership stake, an officer, 12 or a director directly responsible for the service contract 13 business of the service company, for an offense involving 14 dishonesty or a false statement including but not limited 15 to fraud, theft, misappropriation of funds, falsification 16 of documents, deceptive acts or practices, or other related 17 offenses. The report shall include a copy of the initial 18 complaint filed, the order resulting from the hearing, and any 19 other relevant legal documents. 20 Sec. 21. Section 523C.3, Code 2025, is amended by striking 21 the section and inserting in lieu thereof the following: 22 523C.3 Application for license. 23 1. Application for a license as a service company 24 shall be filed with the commissioner on a form approved 25 by the commissioner and shall include all of the following 26 information: 27 a. The name and principal address of the applicant. 28 b. The state of incorporation of the applicant. 29 c. The name and address of the applicant’s registered agent 30 for service of process in Iowa. 31 d. The legal name of all of the following: 32 (1) Each owner of the service company that has a greater 33 than ten percent ownership stake in the service company. 34 (2) Each officer of the service company. 35 -14- HF 986 (3) 91 nls/ko/md 14/ 35

H.F. 986 (3) Each director directly responsible for the business of 1 the service company. 2 e. A certificate of good standing for the applicant issued 3 by the secretary of state and dated not more than thirty 4 calendar days from the date of the application. 5 f. Evidence of compliance with section 523C.5. 6 g. A copy of each motor vehicle service contract form to be 7 used, issued, or offered for sale in this state by the service 8 company. 9 h. A copy of each residential service contract form to be 10 used, issued, or offered for sale in this state by the service 11 company. 12 i. A national association of insurance commissioners’ 13 biographical affidavit and the verification of the biographical 14 affidavit for the chief executive officer and chief financial 15 officer of the service company, or for the individuals in 16 the equivalent positions. The service company shall use a 17 third-party vendor from a list of vendors approved by the 18 commissioner to verify the biographical affidavits. The 19 service company shall pay all costs associated with the 20 required verifications. 21 j. A list of any disciplinary actions taken against the 22 service company, or any of the service company’s owners, 23 officers, or directors directly responsible for the provider’s 24 service contract business, in the immediately preceding ten 25 years by a regulatory agency or state attorney general in any 26 jurisdiction. 27 2. The application shall be accompanied by all of the 28 following: 29 a. A license fee in the amount of five hundred dollars. 30 b. A fee in the amount of thirty-five dollars for each motor 31 vehicle service contract form provided pursuant to subsection 32 1, paragraph “g” . 33 3. If the application for a service company license contains 34 the information under subsection 1, is accompanied by the fees 35 -15- HF 986 (3) 91 nls/ko/md 15/ 35

H.F. 986 under subsection 2, and the commissioner has not denied the 1 application pursuant to section 523C.9, the commissioner shall 2 issue the license to the applicant. 3 4. Fees collected under this section shall be deposited 4 into the service company oversight fund as provided in section 5 523C.24. 6 Sec. 22. Section 523C.4, Code 2025, is amended by striking 7 the section and inserting in lieu thereof the following: 8 523C.4 License expiration and renewal. 9 1. A license issued under this chapter shall be valid for a 10 period of one year. A license that is not renewed prior to the 11 expiration date shall be deemed expired. Prior to a license 12 expiration date, and if a renewal application was submitted at 13 least fourteen calendar days prior to the license expiration 14 date, the commissioner may extend the renewal period for an 15 additional thirty calendar days. 16 2. An application for license renewal shall include the 17 information required for an initial license as described in 18 section 523C.3, subsection 1, paragraphs “a” through “f” , 19 and a list of each service contract form the service company 20 continues to use, offer for sale, or issue in the state, 21 including the service contract form name, number, and the date 22 the form was last revised. 23 3. The license renewal application shall be accompanied by 24 all of the following: 25 a. A license renewal fee in the amount of two hundred 26 dollars. 27 b. A fee in the amount of three percent of the aggregate 28 amount of payments the service company received for the sale 29 or issuance of residential service contracts in this state 30 during the period beginning on the date the service company’s 31 license was issued until the date of the service company’s 32 renewal filing, provided that such fee shall be no less than 33 one hundred dollars and no greater than fifty thousand dollars. 34 c. A fee in the amount of thirty-five dollars for each motor 35 -16- HF 986 (3) 91 nls/ko/md 16/ 35

H.F. 986 vehicle service contract form filed with the commissioner that 1 the service company continues to use, offer for sale, or issue 2 in the state. 3 d. The number of motor vehicle service contracts and the 4 number of residential service contracts issued during the 5 immediately preceding calendar year by the service company in 6 this state. 7 e. The number of motor vehicle service contracts and the 8 number of residential service contracts canceled during the 9 immediately preceding calendar year by the service company in 10 this state. 11 f. The total dollar amount of refunds issued to service 12 contract holders by the service company during the immediately 13 preceding calendar year for canceled motor vehicle service 14 contracts in this state, and the total dollar amount of refunds 15 issued to service contract holders by the service company 16 during the immediately preceding calendar year for canceled 17 residential service contracts in this state. 18 g. The total dollar amount of motor vehicle service contract 19 fees, and the total dollar amount of residential service 20 contract fees, collected during the immediately preceding 21 calendar year by the service company for contracts sold in this 22 state. 23 h. The number of claims filed with the service company 24 for motor vehicle service contracts in this state during 25 the immediately preceding calendar year, and the number of 26 claims filed with the service company for residential service 27 contracts in this state during the immediately preceding 28 calendar year. 29 i. The total dollar amount of claims paid by the service 30 company for motor vehicle service contracts sold by the service 31 company in this state during the immediately preceding calendar 32 year, and the total dollar amount of claims paid by the service 33 company for residential service contracts sold by the service 34 company in this state during the immediately preceding calendar 35 -17- HF 986 (3) 91 nls/ko/md 17/ 35

H.F. 986 year. 1 j. The total number of claims during the immediately 2 preceding calendar year for motor vehicle service contracts 3 in this state that did not result in repair, replacement, 4 payment, or other thing of value to the service contract 5 holder by the service company, and the total number of claims 6 during the immediately preceding calendar year for residential 7 service contracts in this state that did not result in repair, 8 replacement, payment, or other thing of value to the service 9 contract holder by the service company. 10 k. The total number of written complaints regarding motor 11 vehicle service contracts received by the service company 12 during the immediately preceding calendar year, and the 13 total number of written complaints regarding residential 14 service contracts received by the service company during the 15 immediately preceding calendar year, including complaints 16 received directly from a consumer, indirectly on behalf of a 17 consumer from a third party other than a regulatory agency, and 18 from a regulatory agency. 19 l. The number of lawsuits filed by a third party or a 20 regulatory agency, against the service company during the 21 immediately preceding calendar year regarding service contracts 22 issued, offered for sale, or sold by the service company. 23 4. If the license renewal application complies with this 24 section, and the commissioner has not refused to renew the 25 license pursuant to section 523C.9, the commissioner shall 26 renew the license. If the commissioner refuses renewal of a 27 license pursuant to section 523C.9, the refusal shall be in 28 writing setting forth the grounds for the refusal. 29 5. If a service company submits a license renewal 30 application after the license has expired, the service company 31 shall pay a reinstatement fee of eight hundred dollars, and 32 applicable fees pursuant to subsection 3. 33 6. a. A service company whose license has expired, and is 34 not within an additional thirty-day extension period granted 35 -18- HF 986 (3) 91 nls/ko/md 18/ 35

H.F. 986 by the commissioner pursuant to section 523C.4, subsection 1, 1 shall not offer, extend, or renew a service contract until the 2 service company’s license has been renewed, or the service 3 company has been issued a new license. 4 b. If, at the time a service contract is issued or sold in 5 this state, the service company has an expired license that is 6 not within an additional thirty-day extension period granted 7 by the commissioner pursuant to section 523C.4, subsection 1, 8 the service contract may be canceled at the discretion of the 9 service contract holder. If a service contract holder chooses 10 to cancel a service contract, the full purchase price of the 11 service contract, less any claims paid, shall be refunded to 12 the service contract holder within thirty calendar days. A ten 13 percent penalty shall be added each month to the refund if the 14 refund is not paid to the service contract holder within the 15 thirty calendar days. 16 Sec. 23. Section 523C.7, Code 2025, is amended by striking 17 the section and inserting in lieu thereof the following: 18 523C.7 Disclosure to service contract holders —— contract 19 form —— required provisions. 20 1. A service contract shall not be issued, sold, or offered 21 for sale in this state unless the service company does all of 22 the following: 23 a. Provides a receipt for the purchase of the service 24 contract to the service contract holder. 25 b. Provides a complete sample copy of the service contract 26 to the consumer prior to purchase. A service company may 27 comply with this paragraph by providing the consumer with a 28 complete electronic sample copy of the service contract, or 29 directing the consumer to a complete sample copy of the service 30 contract at an internet site. A paper copy of the sample 31 service contract shall be provided upon the request of the 32 consumer at the expense of the service company. 33 c. Provides a fully executed paper or electronic copy of 34 the service contract to the service contract holder within ten 35 -19- HF 986 (3) 91 nls/ko/md 19/ 35