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House Study Bill 574 - IntroducedA Bill ForAn Act 1relating to the financial exploitation of designated
2eligible adults, and making an appropriation.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 502.801 Definitions.
2For purposes of this article, unless the context otherwise
3requires:
41. “Eligible adult” means any of the following:
5a. A person sixty-five years of age or older.
6b. A dependent adult as defined in section 235B.2.
72. “Financial exploitation” means any act or omission taken
8by a person to wrongfully and knowingly deprive an eligible
9adult of money, assets, or property, or to obtain control over
10or otherwise use, convert, or divert the benefits, property,
11resources, or assets of the eligible adult by intimidation,
12deception, coercion, fraud, extortion, or undue influence.
133. “Permissible third party” means any of the following:
14a. A person the eligible adult previously designated to
15receive the notification described in section 502.804.
16b. A person otherwise permitted to receive the notification
17described in section 502.804 by any state or federal law or any
18rule issued by the financial industry regulatory authority.
194. “Qualified individual” means any of the following:
20a. An agent who has received training pursuant to section
21502.808.
22b. An investment adviser representative who has received
23training pursuant to section 502.808.
24c. A person who has received training pursuant to
25section 502.808 and who serves in a supervisory, compliance,
26senior investor protection, or legal capacity for any of the
27following:
28(1) A broker-dealer.
29(2) An investment adviser.
30 Sec. 2. NEW SECTION. 502.802 Notification to administrator.
31If a broker-dealer, investment adviser, or qualified
32individual reasonably believes financial exploitation of an
33eligible adult has occurred, has been attempted, or is being
34attempted, the broker-dealer, investment adviser, or qualified
35individual shall promptly notify the administrator. The
-1-1administrator may adopt rules regarding the form and manner of
2the notification under this section.
3 Sec. 3. NEW SECTION. 502.803 Notification to administrator
4— immunity.
5A broker-dealer, investment adviser, or qualified individual
6who, acting reasonably and in good faith, makes a disclosure
7of information to the administrator pursuant to this article
8shall be immune from administrative or civil liability that
9might otherwise arise from such disclosure or for any failure
10to notify the eligible adult of the disclosure. This section
11shall not abrogate or modify any existing statutory or common
12law privileges or immunities.
13 Sec. 4. NEW SECTION. 502.804 Notification to permissible
14third party.
151. If a broker-dealer, investment adviser, or qualified
16individual reasonably believes financial exploitation of
17an eligible adult has occurred, has been attempted, or is
18being attempted, the broker-dealer, investment adviser, or
19qualified individual may notify a permissible third party. The
20administrator may adopt rules regarding the form and manner of
21the notification under this section.
222. Broker-dealers, investment advisers, and qualified
23individuals shall not notify a permissible third party the
24broker-dealer, investment adviser, or qualified individual
25reasonably suspects of financial exploitation or other abuse
26of the eligible adult.
27 Sec. 5. NEW SECTION. 502.805 Notification to permissible
28third party — immunity.
29A broker-dealer, investment adviser, or qualified individual
30who, acting reasonably and in good faith, complies with section
31502.804 shall be immune from any administrative or civil
32liability that might otherwise arise from such disclosure.
33 Sec. 6. NEW SECTION. 502.806 Disbursements or transactions
34— delay.
351. If a broker-dealer, investment adviser, or qualified
-2-1individual reasonably believes a disbursement or transaction
2will likely result in or contribute to the financial
3exploitation of an eligible adult, the broker-dealer,
4investment adviser, or qualified individual shall initiate an
5internal review of the requested disbursement or transaction.
62. A broker-dealer or investment adviser may delay a
7disbursement or transaction from an eligible adult’s account or
8an account on which an eligible adult is a beneficiary if all
9of the following apply:
10a. The broker-dealer, investment adviser, or qualified
11individual reasonably believes, after initiating the internal
12review referenced in subsection 1, that the requested
13disbursement or transaction will likely result in or contribute
14to the financial exploitation of an eligible adult.
15b. Immediately, but in no event more than two business
16days after the disbursement or transaction is delayed,
17the broker-dealer or investment adviser provides written
18notification of the delay and the reason for the delay to
19all persons authorized to transact business on the account.
20Broker-dealers, investment advisers, and qualified individuals
21shall not notify a person authorized to transact business
22on the account if the broker-dealer, investment adviser,
23or qualified individual reasonably believes the person
24has committed financial exploitation, attempted financial
25exploitation, or other abuse of the eligible adult.
26c. Immediately, but in no event more than two business
27days after the disbursement or transaction is delayed, the
28broker-dealer or investment adviser notifies the administrator
29of the delay and provides to the administrator the reason
30for the delay, including the results of the internal review
31referenced in subsection 1.
32d. The broker-dealer continues the internal review of the
33suspected or attempted financial exploitation of the eligible
34adult, as necessary, and provides the administrator with
35updates upon request.
-3- 13. Any delay of a disbursement or transaction authorized by
2this section will expire upon the first to occur of any of the
3following:
4a. A determination by the broker-dealer or investment
5adviser that the disbursement or transaction will not result in
6or contribute to financial exploitation of the eligible adult.
7b. Fifteen business days after the date on which the
8broker-dealer or investment adviser first delayed disbursement
9of the funds or transaction, unless the administrator requests
10the broker-dealer or investment adviser to extend the delay,
11in which case the delay shall expire no more than twenty-five
12business days after the date on which the broker-dealer or
13investment adviser first delayed the disbursement of the funds
14or the transaction.
154. Notwithstanding subsection 3, upon the petition of
16the administrator, the broker-dealer or investment adviser
17who initiated the delay pursuant to this section, or another
18interested party, a court of competent jurisdiction may enter
19an order terminating, extending, or modifying the delay of the
20disbursement or transaction and may order other protective
21relief.
225. The administrator may adopt rules regarding the form and
23manner of the notifications under this section.
24 Sec. 7. NEW SECTION. 502.807 Disbursements of transactions
25— delay — immunity.
26A broker-dealer or investment adviser who, acting reasonably
27and in good faith, complies with section 502.806 shall be
28immune from any administrative or civil liability that
29might otherwise arise from such delay in a disbursement or
30transaction.
31 Sec. 8. NEW SECTION. 502.808 Training requirements.
321. A broker-dealer or investment adviser shall provide
33to its qualified individuals training appropriate to the job
34responsibilities of a qualified individual. The training shall
35include all of the following:
-4- 1a. Instruction on how to identify the suspected or attempted
2exploitation of an eligible adult, including common signs
3indicating the financial exploitation of an eligible adult,
4and how to provide notification regarding the suspected or
5attempted exploitation of an eligible adult.
6b. Instruction regarding privacy and confidentiality
7requirements.
82. A broker-dealer or investment adviser shall provide
9the training required by this section as soon as reasonably
10practicable, but at least within one year after the date
11the qualified individual begins employment with or becomes
12affiliated or associated with a broker-dealer or investment
13adviser.
143. The administrator may adopt rules specifying the content
15and method of the training required by this section.
16 Sec. 9. NEW SECTION. 502.809 Records.
171. A broker-dealer or investment adviser shall provide
18access to or copies of records that are relevant to the
19suspected or attempted financial exploitation of an eligible
20adult to the administrator and to law enforcement, either as
21part of a referral to the administrator or law enforcement,
22or upon the request of the administrator or law enforcement
23pursuant to an investigation. The records may include
24historical records as well as records relating to the most
25recent transactions that may comprise financial exploitation of
26an eligible adult.
272. All records made available to the administrator, the
28department of human services, or law enforcement pursuant to
29this section shall be considered confidential public records
30under chapter 22 and shall not be available for examination by
31the public pursuant to section 22.2.
323. Nothing in this section shall limit or otherwise impede
33the authority of the administrator to access or examine the
34books and records of broker-dealers or investment advisers as
35otherwise provided by law.
-5-1 Sec. 10. NEW SECTION. 502.810 Financial exploitation —
2appropriation.
31. For the fiscal year beginning July 1, 2020, and each
4fiscal year thereafter, there is appropriated from the
5department of commerce revolving fund created in section 546.12
6to the insurance division seventy-five thousand dollars for
7the sole and exclusive purpose of investigating complaints
8and notifications related to financial exploitation of
9eligible adults. The insurance division shall use the funds
10appropriated under this subsection for one full-time equivalent
11position.
122. Notwithstanding section 8.33, moneys appropriated in
13this section that remain unencumbered or unobligated at the
14close of the fiscal year shall not revert but shall remain
15available for expenditure for the purposes designated until the
16close of the succeeding fiscal year.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to the financial exploitation of persons
21designated as eligible adults. The bill defines an eligible
22adult as persons 65 years of age or older and certain dependent
23adults as defined in Code section 252B.2.
24The bill requires broker-dealers, investment advisers,
25and qualified individuals to notify the commissioner of
26insurance if they reasonably believe financial exploitation
27of an eligible adult has occurred, has been attempted,
28or is being attempted. The bill provides immunity for
29broker-dealers, investment advisers, and qualified individuals
30from administrative or civil liability incurred or imposed as
31a result of this notification or as a result of any failure to
32alert the eligible adult of the notification.
33The bill allows broker-dealers, investment advisers, and
34qualified individuals to notify permissible third parties
35if they reasonably believe financial exploitation of an
-6-1eligible adult has occurred, has been attempted, or is
2being attempted. The bill similarly provides immunity for
3broker-dealers, investment advisers, and qualified individuals
4from administrative or civil liability incurred or imposed as
5a result of this notification.
6The bill prohibits broker-dealers, investment advisers,
7and qualified individuals from notifying a permissible third
8party if the broker-dealer, investment adviser, or qualified
9individual reasonably suspects the permissible third party of
10financial exploitation or other abuse of the eligible adult.
11The bill requires a broker-dealer, investment adviser,
12or qualified individual to initiate an internal review of a
13requested disbursement or transaction if the broker-dealer,
14investment adviser, or qualified individual reasonably believes
15the disbursement or transaction will likely result in or
16contribute to the financial exploitation of an eligible adult.
17The bill allows a broker-dealer or investment adviser
18to delay a disbursement or transaction from an eligible
19adult’s account or an account on which an eligible adult is
20a beneficiary if certain enumerated steps are followed. The
21bill also prohibits broker-dealers, investment advisers, and
22qualified individuals from notifying a person authorized
23to transact business on the eligible adult’s account or an
24account on which an eligible adult is a beneficiary if the
25broker-dealer, investment adviser, or qualified individual
26reasonably believes the person has committed financial
27exploitation or other abuse of the eligible adult.
28The bill establishes when and under what conditions the
29delay of the disbursement or transaction is to end. The bill
30provides immunity for broker-dealers and investment advisers
31from administrative or civil liability incurred or imposed as
32a result of the delay.
33The bill requires broker-dealers or investment advisers
34to provide to qualified individuals training related to
35identifying financial exploitation of eligible adults and
-7-1privacy and confidentiality requirements.
2The bill also requires broker-dealers and investment
3advisers to provide the commissioner of insurance and law
4enforcement officers access to and copies of records relevant
5to investigations of financial exploitation of eligible adults
6in certain enumerated circumstances. The bill provides these
7records are considered confidential records for purposes of
8Code chapter 22, and are not available for examination under
9Code section 22.2.
10The bill makes an appropriation from the commerce revolving
11fund created in Code section 546.12 to the insurance division
12of the department of commerce for the fiscal year beginning
13July 1, 2020, and each year thereafter, for purposes of
14investigating complaints and notifications related to financial
15exploitation of eligible adults.
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2eligible adults, and making an appropriation.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 502.801 Definitions.
2For purposes of this article, unless the context otherwise
3requires:
41. “Eligible adult” means any of the following:
5a. A person sixty-five years of age or older.
6b. A dependent adult as defined in section 235B.2.
72. “Financial exploitation” means any act or omission taken
8by a person to wrongfully and knowingly deprive an eligible
9adult of money, assets, or property, or to obtain control over
10or otherwise use, convert, or divert the benefits, property,
11resources, or assets of the eligible adult by intimidation,
12deception, coercion, fraud, extortion, or undue influence.
133. “Permissible third party” means any of the following:
14a. A person the eligible adult previously designated to
15receive the notification described in section 502.804.
16b. A person otherwise permitted to receive the notification
17described in section 502.804 by any state or federal law or any
18rule issued by the financial industry regulatory authority.
194. “Qualified individual” means any of the following:
20a. An agent who has received training pursuant to section
21502.808.
22b. An investment adviser representative who has received
23training pursuant to section 502.808.
24c. A person who has received training pursuant to
25section 502.808 and who serves in a supervisory, compliance,
26senior investor protection, or legal capacity for any of the
27following:
28(1) A broker-dealer.
29(2) An investment adviser.
30 Sec. 2. NEW SECTION. 502.802 Notification to administrator.
31If a broker-dealer, investment adviser, or qualified
32individual reasonably believes financial exploitation of an
33eligible adult has occurred, has been attempted, or is being
34attempted, the broker-dealer, investment adviser, or qualified
35individual shall promptly notify the administrator. The
-1-1administrator may adopt rules regarding the form and manner of
2the notification under this section.
3 Sec. 3. NEW SECTION. 502.803 Notification to administrator
4— immunity.
5A broker-dealer, investment adviser, or qualified individual
6who, acting reasonably and in good faith, makes a disclosure
7of information to the administrator pursuant to this article
8shall be immune from administrative or civil liability that
9might otherwise arise from such disclosure or for any failure
10to notify the eligible adult of the disclosure. This section
11shall not abrogate or modify any existing statutory or common
12law privileges or immunities.
13 Sec. 4. NEW SECTION. 502.804 Notification to permissible
14third party.
151. If a broker-dealer, investment adviser, or qualified
16individual reasonably believes financial exploitation of
17an eligible adult has occurred, has been attempted, or is
18being attempted, the broker-dealer, investment adviser, or
19qualified individual may notify a permissible third party. The
20administrator may adopt rules regarding the form and manner of
21the notification under this section.
222. Broker-dealers, investment advisers, and qualified
23individuals shall not notify a permissible third party the
24broker-dealer, investment adviser, or qualified individual
25reasonably suspects of financial exploitation or other abuse
26of the eligible adult.
27 Sec. 5. NEW SECTION. 502.805 Notification to permissible
28third party — immunity.
29A broker-dealer, investment adviser, or qualified individual
30who, acting reasonably and in good faith, complies with section
31502.804 shall be immune from any administrative or civil
32liability that might otherwise arise from such disclosure.
33 Sec. 6. NEW SECTION. 502.806 Disbursements or transactions
34— delay.
351. If a broker-dealer, investment adviser, or qualified
-2-1individual reasonably believes a disbursement or transaction
2will likely result in or contribute to the financial
3exploitation of an eligible adult, the broker-dealer,
4investment adviser, or qualified individual shall initiate an
5internal review of the requested disbursement or transaction.
62. A broker-dealer or investment adviser may delay a
7disbursement or transaction from an eligible adult’s account or
8an account on which an eligible adult is a beneficiary if all
9of the following apply:
10a. The broker-dealer, investment adviser, or qualified
11individual reasonably believes, after initiating the internal
12review referenced in subsection 1, that the requested
13disbursement or transaction will likely result in or contribute
14to the financial exploitation of an eligible adult.
15b. Immediately, but in no event more than two business
16days after the disbursement or transaction is delayed,
17the broker-dealer or investment adviser provides written
18notification of the delay and the reason for the delay to
19all persons authorized to transact business on the account.
20Broker-dealers, investment advisers, and qualified individuals
21shall not notify a person authorized to transact business
22on the account if the broker-dealer, investment adviser,
23or qualified individual reasonably believes the person
24has committed financial exploitation, attempted financial
25exploitation, or other abuse of the eligible adult.
26c. Immediately, but in no event more than two business
27days after the disbursement or transaction is delayed, the
28broker-dealer or investment adviser notifies the administrator
29of the delay and provides to the administrator the reason
30for the delay, including the results of the internal review
31referenced in subsection 1.
32d. The broker-dealer continues the internal review of the
33suspected or attempted financial exploitation of the eligible
34adult, as necessary, and provides the administrator with
35updates upon request.
-3- 13. Any delay of a disbursement or transaction authorized by
2this section will expire upon the first to occur of any of the
3following:
4a. A determination by the broker-dealer or investment
5adviser that the disbursement or transaction will not result in
6or contribute to financial exploitation of the eligible adult.
7b. Fifteen business days after the date on which the
8broker-dealer or investment adviser first delayed disbursement
9of the funds or transaction, unless the administrator requests
10the broker-dealer or investment adviser to extend the delay,
11in which case the delay shall expire no more than twenty-five
12business days after the date on which the broker-dealer or
13investment adviser first delayed the disbursement of the funds
14or the transaction.
154. Notwithstanding subsection 3, upon the petition of
16the administrator, the broker-dealer or investment adviser
17who initiated the delay pursuant to this section, or another
18interested party, a court of competent jurisdiction may enter
19an order terminating, extending, or modifying the delay of the
20disbursement or transaction and may order other protective
21relief.
225. The administrator may adopt rules regarding the form and
23manner of the notifications under this section.
24 Sec. 7. NEW SECTION. 502.807 Disbursements of transactions
25— delay — immunity.
26A broker-dealer or investment adviser who, acting reasonably
27and in good faith, complies with section 502.806 shall be
28immune from any administrative or civil liability that
29might otherwise arise from such delay in a disbursement or
30transaction.
31 Sec. 8. NEW SECTION. 502.808 Training requirements.
321. A broker-dealer or investment adviser shall provide
33to its qualified individuals training appropriate to the job
34responsibilities of a qualified individual. The training shall
35include all of the following:
-4- 1a. Instruction on how to identify the suspected or attempted
2exploitation of an eligible adult, including common signs
3indicating the financial exploitation of an eligible adult,
4and how to provide notification regarding the suspected or
5attempted exploitation of an eligible adult.
6b. Instruction regarding privacy and confidentiality
7requirements.
82. A broker-dealer or investment adviser shall provide
9the training required by this section as soon as reasonably
10practicable, but at least within one year after the date
11the qualified individual begins employment with or becomes
12affiliated or associated with a broker-dealer or investment
13adviser.
143. The administrator may adopt rules specifying the content
15and method of the training required by this section.
16 Sec. 9. NEW SECTION. 502.809 Records.
171. A broker-dealer or investment adviser shall provide
18access to or copies of records that are relevant to the
19suspected or attempted financial exploitation of an eligible
20adult to the administrator and to law enforcement, either as
21part of a referral to the administrator or law enforcement,
22or upon the request of the administrator or law enforcement
23pursuant to an investigation. The records may include
24historical records as well as records relating to the most
25recent transactions that may comprise financial exploitation of
26an eligible adult.
272. All records made available to the administrator, the
28department of human services, or law enforcement pursuant to
29this section shall be considered confidential public records
30under chapter 22 and shall not be available for examination by
31the public pursuant to section 22.2.
323. Nothing in this section shall limit or otherwise impede
33the authority of the administrator to access or examine the
34books and records of broker-dealers or investment advisers as
35otherwise provided by law.
-5-1 Sec. 10. NEW SECTION. 502.810 Financial exploitation —
2appropriation.
31. For the fiscal year beginning July 1, 2020, and each
4fiscal year thereafter, there is appropriated from the
5department of commerce revolving fund created in section 546.12
6to the insurance division seventy-five thousand dollars for
7the sole and exclusive purpose of investigating complaints
8and notifications related to financial exploitation of
9eligible adults. The insurance division shall use the funds
10appropriated under this subsection for one full-time equivalent
11position.
122. Notwithstanding section 8.33, moneys appropriated in
13this section that remain unencumbered or unobligated at the
14close of the fiscal year shall not revert but shall remain
15available for expenditure for the purposes designated until the
16close of the succeeding fiscal year.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to the financial exploitation of persons
21designated as eligible adults. The bill defines an eligible
22adult as persons 65 years of age or older and certain dependent
23adults as defined in Code section 252B.2.
24The bill requires broker-dealers, investment advisers,
25and qualified individuals to notify the commissioner of
26insurance if they reasonably believe financial exploitation
27of an eligible adult has occurred, has been attempted,
28or is being attempted. The bill provides immunity for
29broker-dealers, investment advisers, and qualified individuals
30from administrative or civil liability incurred or imposed as
31a result of this notification or as a result of any failure to
32alert the eligible adult of the notification.
33The bill allows broker-dealers, investment advisers, and
34qualified individuals to notify permissible third parties
35if they reasonably believe financial exploitation of an
-6-1eligible adult has occurred, has been attempted, or is
2being attempted. The bill similarly provides immunity for
3broker-dealers, investment advisers, and qualified individuals
4from administrative or civil liability incurred or imposed as
5a result of this notification.
6The bill prohibits broker-dealers, investment advisers,
7and qualified individuals from notifying a permissible third
8party if the broker-dealer, investment adviser, or qualified
9individual reasonably suspects the permissible third party of
10financial exploitation or other abuse of the eligible adult.
11The bill requires a broker-dealer, investment adviser,
12or qualified individual to initiate an internal review of a
13requested disbursement or transaction if the broker-dealer,
14investment adviser, or qualified individual reasonably believes
15the disbursement or transaction will likely result in or
16contribute to the financial exploitation of an eligible adult.
17The bill allows a broker-dealer or investment adviser
18to delay a disbursement or transaction from an eligible
19adult’s account or an account on which an eligible adult is
20a beneficiary if certain enumerated steps are followed. The
21bill also prohibits broker-dealers, investment advisers, and
22qualified individuals from notifying a person authorized
23to transact business on the eligible adult’s account or an
24account on which an eligible adult is a beneficiary if the
25broker-dealer, investment adviser, or qualified individual
26reasonably believes the person has committed financial
27exploitation or other abuse of the eligible adult.
28The bill establishes when and under what conditions the
29delay of the disbursement or transaction is to end. The bill
30provides immunity for broker-dealers and investment advisers
31from administrative or civil liability incurred or imposed as
32a result of the delay.
33The bill requires broker-dealers or investment advisers
34to provide to qualified individuals training related to
35identifying financial exploitation of eligible adults and
-7-1privacy and confidentiality requirements.
2The bill also requires broker-dealers and investment
3advisers to provide the commissioner of insurance and law
4enforcement officers access to and copies of records relevant
5to investigations of financial exploitation of eligible adults
6in certain enumerated circumstances. The bill provides these
7records are considered confidential records for purposes of
8Code chapter 22, and are not available for examination under
9Code section 22.2.
10The bill makes an appropriation from the commerce revolving
11fund created in Code section 546.12 to the insurance division
12of the department of commerce for the fiscal year beginning
13July 1, 2020, and each year thereafter, for purposes of
14investigating complaints and notifications related to financial
15exploitation of eligible adults.
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