Senate File 583 - 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.  Section 502.607, subsection 2, Code 2021, is
2amended by adding the following new paragraph:
3   NEW PARAGRAPH.  g.  A record obtained by the administrator or
4by law enforcement under section 502.809.
5   Sec. 2.  Section 502.607, subsection 3, Code 2021, is amended
6to read as follows:
   73.  Administrator discretion to disclose.  If disclosure
8is for the purpose of a civil, administrative, or criminal
9investigation, action, or proceeding or to a person specified
10in section 502.608, subsection 1, the administrator may
11disclose a record obtained in connection with an audit or
12inspection under section 502.411, subsection 4, or a record
13obtained in connection with an investigation under section
14502.602 or section 502.809.
15   Sec. 3.  NEW SECTION.  502.801  Definitions.
   16For purposes of this article, unless the context otherwise
17requires:
   181.  “Eligible adult” means any of the following:
   19a.  A person sixty-five years of age or older.
   20b.  A dependent adult as defined in section 235B.2.
   212.  “Financial exploitation” means any act or omission taken
22by a person to wrongfully and knowingly deprive an eligible
23adult of money, assets, or property, or to obtain control over
24or otherwise use, convert, or divert the benefits, property,
25resources, or assets of the eligible adult by intimidation,
26deception, coercion, fraud, extortion, or undue influence.
   273.  “Permissible third party” means any of the following:
   28a.  A person the eligible adult previously designated to
29receive the notification described in section 502.804.
   30b.  A person otherwise permitted to receive the notification
31described in section 502.804 by any state or federal law or any
32rule issued by the financial industry regulatory authority.
   334.  “Qualified individual” means any of the following:
   34a.  An agent who has received training pursuant to section
35502.808.
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   1b.  An investment adviser representative who has received
2training pursuant to section 502.808.
   3c.  A person who has received training pursuant to
4section 502.808 and who serves in a supervisory, compliance,
5senior investor protection, or legal capacity for any of the
6following:
   7(1)  A broker-dealer.
   8(2)  An investment adviser.
9   Sec. 4.  NEW SECTION.  502.802  Notification to administrator.
   10If a broker-dealer, investment adviser, or qualified
11individual reasonably believes financial exploitation of
12an eligible adult has occurred, has been attempted, or is
13being attempted, the broker-dealer, investment adviser, or
14qualified individual may promptly notify the administrator.
15The administrator may adopt rules regarding the form and manner
16of the notification under this section.
17   Sec. 5.  NEW SECTION.  502.803  Notification to administrator
18— immunity.
   19A broker-dealer, investment adviser, or qualified individual
20who, acting reasonably and in good faith, makes a disclosure
21of information to the administrator pursuant to this article
22shall be immune from administrative or civil liability that
23might otherwise arise from such disclosure or for any failure
24to notify the eligible adult of the disclosure. Other than
25matters related to the reporting of the financial exploitation
26of an eligible adult pursuant to this section, this section
27shall not abrogate or modify any existing statutory or common
28law privileges or immunities.
29   Sec. 6.  NEW SECTION.  502.804  Notification to permissible
30third party.
   311.  If a broker-dealer, investment adviser, or qualified
32individual reasonably believes financial exploitation of
33an eligible adult has occurred, has been attempted, or is
34being attempted, the broker-dealer, investment adviser, or
35qualified individual may notify a permissible third party. The
-2-1administrator may adopt rules regarding the form and manner of
2the notification under this section.
   32.  Broker-dealers, investment advisers, and qualified
4individuals shall not notify a permissible third party the
5broker-dealer, investment adviser, or qualified individual
6reasonably suspects of financial exploitation or other abuse
7of the eligible adult.
8   Sec. 7.  NEW SECTION.  502.805  Notification to permissible
9third party — immunity.
   10A broker-dealer, investment adviser, or qualified individual
11who, acting reasonably and in good faith, complies with section
12502.804 shall be immune from any administrative or civil
13liability that might otherwise arise from such disclosure.
14   Sec. 8.  NEW SECTION.  502.806  Disbursements or transactions
15— delay.
   161.  If a broker-dealer, investment adviser, or qualified
17individual reasonably believes a disbursement or transaction
18will likely result in or contribute to the financial
19exploitation of an eligible adult, the broker-dealer,
20investment adviser, or qualified individual shall initiate an
21internal review of the requested disbursement or transaction.
   222.  A broker-dealer or investment adviser may delay a
23disbursement or transaction from an eligible adult’s account or
24an account on which an eligible adult is a beneficiary if all
25of the following apply:
   26a.  The broker-dealer, investment adviser, or qualified
27individual reasonably believes, after initiating the internal
28review referenced in subsection 1, that the requested
29disbursement or transaction will likely result in or contribute
30to the financial exploitation of an eligible adult.
   31b.  Immediately, but in no event more than two business
32days after the disbursement or transaction is delayed,
33the broker-dealer or investment adviser provides written
34notification of the delay and the reason for the delay to
35all persons authorized to transact business on the account.
-3-1Broker-dealers, investment advisers, and qualified individuals
2shall not notify a person authorized to transact business
3on the account if the broker-dealer, investment adviser,
4or qualified individual reasonably believes the person
5has committed financial exploitation, attempted financial
6exploitation, or other abuse of the eligible adult.
   7c.  Immediately, but in no event more than two business
8days after the disbursement or transaction is delayed, the
9broker-dealer or investment adviser notifies the administrator
10of the delay and provides to the administrator the reason
11for the delay, including the results of the internal review
12referenced in subsection 1.
   13d.  The broker-dealer or investment adviser continues
14the internal review of the suspected or attempted financial
15exploitation of the eligible adult, as necessary, and provides
16the administrator with updates upon request.
   173.  Any delay of a disbursement or transaction authorized by
18this section will expire upon the first to occur of any of the
19following:
   20a.  A determination by the broker-dealer or investment
21adviser that the disbursement or transaction will not result in
22or contribute to financial exploitation of the eligible adult.
   23b.  Fifteen business days after the date on which the
24broker-dealer or investment adviser first delayed disbursement
25of the funds or transaction, unless the administrator requests
26the broker-dealer or investment adviser to extend the delay,
27in which case the delay shall expire no more than twenty-five
28business days after the date on which the broker-dealer or
29investment adviser first delayed the disbursement of the funds
30or the transaction.
   314.  Notwithstanding subsection 3, upon the petition of
32the administrator, the broker-dealer or investment adviser
33who initiated the delay pursuant to this section, or another
34interested party, a court of competent jurisdiction may enter
35an order terminating, extending, or modifying the delay of the
-4-1disbursement or transaction and may order other protective
2relief.
   35.  The administrator may adopt rules regarding the form and
4manner of the notifications under this section.
5   Sec. 9.  NEW SECTION.  502.807  Disbursements of transactions
6— delay — immunity.
   7A broker-dealer or investment adviser who, acting reasonably
8and in good faith, complies with section 502.806 shall be
9immune from any administrative or civil liability that
10might otherwise arise from such delay in a disbursement or
11transaction.
12   Sec. 10.  NEW SECTION.  502.808  Training requirements.
   131.  A broker-dealer or investment adviser shall provide
14to its qualified individuals training appropriate to the job
15responsibilities of a qualified individual. The training shall
16include all of the following:
   17a.  Instruction on how to identify the suspected or attempted
18exploitation of an eligible adult, including common signs
19indicating the financial exploitation of an eligible adult,
20and how to provide notification regarding the suspected or
21attempted exploitation of an eligible adult.
   22b.  Instruction regarding privacy and confidentiality
23requirements.
   242.  A broker-dealer or investment adviser shall provide
25the training required by this section as soon as reasonably
26practicable, but at least within one year after the date
27the qualified individual begins employment with or becomes
28affiliated or associated with a broker-dealer or investment
29adviser.
   303.  The administrator may adopt rules specifying the content
31and method of the training required by this section.
32   Sec. 11.  NEW SECTION.  502.809  Records.
   33A broker-dealer or investment adviser shall provide access
34to or copies of records that are relevant to the suspected
35or attempted financial exploitation of an eligible adult to
-5-1the administrator, either as part of a notification to the
2administrator pursuant to section 502.802, or upon the request
3of the administrator. The records may include historical
4records as well as records relating to the most recent
5transactions that may comprise financial exploitation of an
6eligible adult. The administrator may share the records with
7law enforcement if the administrator determines it is necessary
8or appropriate in the public interest and for the protection
9of the eligible adult. All records made available to the
10administrator or law enforcement pursuant to this section
11shall be considered confidential public records under chapter
1222 and shall not be available for examination by the public
13pursuant to section 22.2. Nothing in this section shall limit
14or otherwise impede the authority of the administrator or law
15enforcement to access or examine the books and records of
16broker-dealers and investment advisers as otherwise provided
17by law.
18   Sec. 12.  NEW SECTION.  502.810  Financial exploitation —
19appropriation.
   201.  For the fiscal year beginning July 1, 2021, and each
21fiscal year thereafter, there is appropriated from the
22department of commerce revolving fund created in section 546.12
23to the insurance division seventy-five thousand dollars for
24the sole and exclusive purpose of investigating complaints
25and notifications related to financial exploitation of
26eligible adults. The insurance division shall use the funds
27appropriated under this subsection for one full-time equivalent
28position.
   292.  Notwithstanding section 8.33, moneys appropriated in
30this section that remain unencumbered or unobligated at the
31close of the fiscal year shall not revert but shall remain
32available for expenditure for the purposes designated until the
33close of the succeeding fiscal year.
34   Sec. 13.  NEW SECTION.  502.811  Financial exploitation —
35reporting.
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   1Annually, on or before January 15 of each year, the insurance
2division shall submit a report to the governor and the general
3assembly concerning the notifications the insurance division
4received related to the potential financial exploitation of
5eligible adults, and the insurance division’s investigation
6of the notifications, during the preceding calendar year.
7The report shall include the number of notifications the
8insurance division received, the amount of time employees of
9the insurance division spent investigating the notifications,
10and the number of incidents of founded financial exploitation
11of eligible adults.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
   15This bill relates to the financial exploitation of persons
16designated as eligible adults. The bill defines an eligible
17adult as persons 65 years of age or older and certain dependent
18adults as defined in Code section 235B.2.
   19The bill authorizes broker-dealers, investment advisers,
20and qualified individuals to notify the commissioner of
21insurance if they reasonably believe financial exploitation
22of an eligible adult has occurred, has been attempted,
23or is being attempted. The bill provides immunity for
24broker-dealers, investment advisers, and qualified individuals
25from administrative or civil liability incurred or imposed as
26a result of this notification or as a result of any failure to
27alert the eligible adult of the notification.
   28The bill allows broker-dealers, investment advisers, and
29qualified individuals to notify permissible third parties
30if they reasonably believe financial exploitation of an
31eligible adult has occurred, has been attempted, or is
32being attempted. The bill similarly provides immunity for
33broker-dealers, investment advisers, and qualified individuals
34from administrative or civil liability incurred or imposed as
35a result of this notification.
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   1The bill prohibits broker-dealers, investment advisers,
2and qualified individuals from notifying a permissible third
3party if the broker-dealer, investment adviser, or qualified
4individual reasonably suspects the permissible third party of
5financial exploitation or other abuse of the eligible adult.
   6The bill requires a broker-dealer, investment adviser,
7or qualified individual to initiate an internal review of a
8requested disbursement or transaction if the broker-dealer,
9investment adviser, or qualified individual reasonably believes
10the disbursement or transaction will likely result in or
11contribute to the financial exploitation of an eligible adult.
   12The bill allows a broker-dealer or investment adviser
13to delay a disbursement or transaction from an eligible
14adult’s account or an account on which an eligible adult is
15a beneficiary if certain enumerated steps are followed. The
16bill also prohibits broker-dealers, investment advisers, and
17qualified individuals from notifying a person authorized
18to transact business on the eligible adult’s account or an
19account on which an eligible adult is a beneficiary if the
20broker-dealer, investment adviser, or qualified individual
21reasonably believes the person has committed financial
22exploitation or other abuse of the eligible adult.
   23The bill establishes when and under what conditions the
24delay of the disbursement or transaction is to end. The bill
25provides immunity for broker-dealers and investment advisers
26from administrative or civil liability incurred or imposed as
27a result of the delay.
   28The bill requires broker-dealers or investment advisers
29to provide to qualified individuals training related to
30identifying financial exploitation of eligible adults and
31privacy and confidentiality requirements.
   32The bill also requires broker-dealers and investment
33advisers to provide the commissioner of insurance access to
34and copies of records relevant to investigations of financial
35exploitation of eligible adults in certain enumerated
-8-1circumstances. The bill authorizes the commissioner to
2share the records with law enforcement when the administrator
3determines it is necessary or appropriate in the public
4interest and for the protection of the eligible adult. The
5bill provides these records are considered confidential records
6for purposes of Code chapter 22, and are not available for
7examination under Code section 22.2.
   8The bill requires the insurance division of the department
9of commerce to submit an annual report to the governor and the
10general assembly that includes the number of notifications
11the insurance division received related to the potential
12financial exploitation of eligible adults, the amount of time
13employees of the insurance division spent investigating the
14notifications, and the number of incidents of founded financial
15exploitation of eligible adults, during the preceding calendar
16year.
   17The bill makes an appropriation from the commerce revolving
18fund created in Code section 546.12 to the insurance division
19of the department of commerce for the fiscal year beginning
20July 1, 2021, and each year thereafter, for purposes of
21investigating complaints and notifications related to financial
22exploitation of eligible adults.
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