Bill Text: IA HF632 | 2015-2016 | 86th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: A bill for an act relating to various matters involving insurance and the insurance division of the department of commerce and including effective date provisions. Effective 7-2-15, with exception of section 3, effective 1-1-16.
Spectrum: Committee Bill
Status: (Passed) 2015-07-02 - Signed by Governor. H.J. 1187. [HF632 Detail]
Download: Iowa-2015-HF632-Enrolled.html
Bill Title: A bill for an act relating to various matters involving insurance and the insurance division of the department of commerce and including effective date provisions. Effective 7-2-15, with exception of section 3, effective 1-1-16.
Spectrum: Committee Bill
Status: (Passed) 2015-07-02 - Signed by Governor. H.J. 1187. [HF632 Detail]
Download: Iowa-2015-HF632-Enrolled.html
House File 632 - Enrolled
HOUSE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO HF 454)
(SUCCESSOR TO HSB 139)
\5
A BILL FOR
\1
House File 632
AN ACT
RELATING TO VARIOUS MATTERS INVOLVING INSURANCE AND THE
INSURANCE DIVISION OF THE DEPARTMENT OF COMMERCE AND
INCLUDING EFFECTIVE DATE AND RETROACTIVE APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 22.7, subsection 58, Code 2015, is
amended to read as follows:
58. Information filed with the commissioner of insurance
pursuant to sections 523A.204 and, 523A.205, 523A.206,
523A.207, 523A.401, 523A.502A, and 523A.803.
Sec. 2. Section 502.103, Code 2015, is amended to read as
follows:
502.103 References to federal statutes.
"Securities Act of 1933", 15 U.S.C. {77a et seq.; "Securities
Exchange Act of 1934", 15 U.S.C. {78a et seq.; "Public Utility
Holding Company Act of 1935", 15 U.S.C. {79 et seq.; "Investment
Company Act of 1940", 15 U.S.C. {80a=1 et seq.; "Investment
Advisers Act of 1940", 15 U.S.C. {80b=1 et seq.; "Employee
Retirement Income Security Act of 1974", 29 U.S.C. {1001 et
seq.; "National Housing Act", 12 U.S.C. {1701; "Commodity
Exchange Act", 7 U.S.C. {1 et seq.; "Internal Revenue Code",
26 U.S.C. {1 et seq.; "Securities Investor Protection Act
of 1970", 15 U.S.C. {78aaa et seq.; "Securities Litigation
Uniform Standards Act of 1998", 112 Stat. 3227; "Small Business
Investment Act of 1958", 15 U.S.C. {661 et seq.; and "Electronic
Signatures in Global and National Commerce Act", 15 U.S.C. {7001
et seq.; and "Dodd=Frank Wall Street Reform and Consumer
Protection Act", Pub. L. No. 111=203 mean those federal statutes
and the rules and regulations adopted under those federal
statutes, as in effect on January 1, 2005 2015.
Sec. 3. Section 502.202, Code 2015, is amended by adding the
following new subsection:
NEW SUBSECTION. 24. Intrastate crowdfunding.
a. Definitions. As used in this subsection, unless the
context otherwise requires:
(1) "Intermediary" means a broker=dealer that is subject
to the registration requirements of section 502.401 and that
facilitates the offer and sale of securities by issuers to
investors through an internet=based system that is open to
and accessible by the general public. "Intermediary" also
means an entity registered with the administrator as an Iowa
crowdfunding portal.
(2) "Intrastate crowdfunding" means the offer or sale of a
security by an issuer in a transaction that is available for
purchase only by Iowa residents and by business organizations
located in, and organized and registered under the laws of,
this state.
(3) "Iowa crowdfunding portal" means an entity incorporated
or organized under the laws of this state, authorized to do
business in this state, and engaged exclusively in intrastate
crowdfunding offers and sales of exempt securities in this
state through an internet site and which does not operate or
facilitate a secondary market in securities.
b. Exemption not available. The exemption in this
subsection is not available to any of the following:
(1) A foreign issuer.
(2) An investment company, as defined in section 3 of the
federal Investment Company Act of 1940.
(3) A development stage company that either has no specific
business plan or purpose or has indicated that the company's
business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person.
(4) A company with a class of securities registered under
the federal Securities Exchange Act of 1934.
(5) Any person who is subject to a disqualifying event as
described in the regulations adopted in accordance with section
926 of the federal Dodd=Frank Wall Street Reform and Consumer
Protection Act, Pub. L. No. 111=203, or in rules adopted by the
administrator pursuant to chapter 17A.
c. Aggregate sales limit. The aggregate amount of
securities sold to all investors by the issuer during the
twelve=month period preceding the date of the offer or sale,
including any amount sold in reliance upon the exemption in
this subsection, shall not exceed one million dollars other
than either of the following:
(1) Securities sold to Iowa resident institutional
investors.
(2) Securities sold to the Iowa resident issuer's
management.
d. Individual sales limit. The aggregate amount of
securities sold to an investor by the issuer during the
twelve=month period preceding the date of the offer or sale,
including any amount sold in reliance upon the exemption in
this subsection, shall not exceed five thousand dollars unless
the investor is an accredited investor who resides in Iowa.
For purposes of this individual sales limit, the following
investors shall be treated as one investor:
(1) A relative, spouse, or relative of the spouse of an
investor who has the same principal residence as the investor.
(2) A trust or estate in which an investor and any related
person collectively have more than fifty percent of the
beneficial interest, excluding contingent interests.
(3) A corporation or other organization of which an investor
and any related person collectively are beneficial owners of
more than fifty percent of the equity securities, excluding
directors' qualifying shares, or equity interests.
e. Use of an intermediary. All offers and sales of
securities made in reliance upon the exemption in this
subsection shall be made through an intermediary's internet
site.
f. Notice to administrator. Prior to the offer of any
security in this state made in reliance upon the exemption
in this subsection, the issuer shall file a notice with
the administrator in a form and format approved by the
administrator, and including the filing fee specified by rule,
if any.
g. Rulemaking. The administrator shall adopt all rules
necessary to implement the exemption in this subsection
including but not limited to all of the following:
(1) Mandatory disclosures.
(2) Restrictions on advertising and communications.
(3) Target amount, offering period, and escrow
requirements.
(4) Use and compensation of promoters.
(5) Restrictions on the sale of securities purchased under
the exemption in this subsection.
(6) Sales reports.
(7) Limitations on the offering price.
(8) Duties of an intermediary which shall include providing
the administrator with continuous investor=level access to the
intermediary's internet site.
(9) Records maintenance.
(10) Duties and registration requirements for internet site
operators.
Sec. 4. Section 502.302, subsection 1, paragraph a,
subparagraph (1), Code 2015, is amended to read as follows:
(1) A person who is the issuer of a federal covered
security under section 18(b)(2) of the Securities Act of
1933 shall initially make a notice filing and annually renew
a notice filing in this state for an indefinite amount or a
fixed amount. The fixed amount must be for two hundred fifty
thousand dollars.
Sec. 5. Section 502.302, subsection 1, paragraph a,
subparagraph (2), unnumbered paragraph 1, Code 2015, is amended
to read as follows:
A notice filer shall pay a filing fee in the amount of
four hundred dollars when the notice is filed. If the amount
covered by the notice is indefinite, the notice filer shall pay
a filing fee of one thousand dollars. If the amount covered by
the notice is fixed, the notice filer shall pay a filing fee
of two hundred fifty dollars, and all of the following shall
apply:
Sec. 6. Section 502.302, subsection 1, paragraph a,
subparagraph (2), subparagraph divisions (a) and (b), Code
2015, are amended by striking the subparagraph divisions.
Sec. 7. Section 502.302, subsection 2, Code 2015, is amended
to read as follows:
2. Notice filing effectiveness and renewal. A notice filing
under subsection 1 is effective for one year commencing on
the later of the notice filing or the effectiveness of the
offering filed with the securities and exchange commission.
On or before expiration, the issuer may renew a notice filing
by filing a copy of those records filed by the issuer with
the securities and exchange commission that are required by
rule or order under this chapter to be filed and by paying
the a renewal fee required by subsection 1, paragraph "a" of
four hundred dollars. A previously filed consent to service
of process complying with section 502.611 may be incorporated
by reference in a renewal. A renewed notice filing becomes
effective upon the expiration of the filing being renewed.
Sec. 8. Section 502.412, subsection 9, Code 2015, is amended
to read as follows:
9. Limit on investigation or proceeding. The administrator
shall not institute a proceeding under subsection 1, 2,
or 3 based solely on material facts actually known by the
administrator unless an investigation or the proceeding is
instituted within one year two years after the administrator
actually acquires knowledge of the material facts.
Sec. 9. Section 505.26, Code 2015, is amended by adding the
following new subsection:
NEW SUBSECTION. 7. The commissioner shall adopt rules
pursuant to chapter 17A that provide requirements, not to
exceed seventy=two hours for urgent claims and five calendar
days for non=urgent claims, for a health carrier or pharmacy
benefits manager to respond to a health care provider's request
for prior authorization of prescription drug benefits or to
request additional information from a health care provider
concerning such a request.
Sec. 10. Section 511.8, subsection 5, paragraphs a and b,
Code 2015, are amended to read as follows:
a. (1) If fixed interest=bearing obligations, the net
earnings of the issuing, assuming, or guaranteeing corporation
available for its fixed charges for a period of five fiscal
years next preceding the date of acquisition of the obligations
by such insurance company shall have averaged per year not
less than one and one=half times such average annual fixed
charges of the issuing, assuming, or guaranteeing corporation
applicable to such period, and, during at least one of the last
two years of such period, its net earnings shall have been
not less than one and one=half times its fixed charges for
such year; or if, at the date of acquisition, the obligations
are adequately secured and have investment qualities and
characteristics wherein the speculative elements are not
predominant investment grade as defined by the commissioner by
rule.
(2) However, with respect to fixed interest=bearing
obligations which are issued, assumed, or guaranteed by a
financial company, the net earnings by the financial company
available for its fixed charges for the period of five fiscal
years preceding the date of acquisition of the obligations by
the insurance company shall have averaged per year not less
than one and one=fourth times such average annual fixed charges
of the issuing, assuming, or guaranteeing financial company
applicable to such period, and, during at least one of the last
two years of the period, its net earnings shall have been not
less than one and one=fourth times its fixed charges for such
year; or if, at the date of acquisition, the obligations are
adequately secured and speculative elements are not predominant
in their investment qualities and characteristics investment
grade as defined by the commissioner by rule. As used in
this subparagraph (2), "financial company" means a corporation
which on the average over its last five fiscal years preceding
the date of acquisition of its obligations by the insurer,
has had at least fifty percent of its net income, including
income derived from subsidiaries, derived from the business
of wholesale, retail, installment, mortgage, commercial,
industrial or consumer financing, or from banking or factoring,
or from similar or related lines of business.
b. If adjustment, income, or other contingent interest
obligations, the net earnings of the issuing, assuming, or
guaranteeing corporation available for its fixed charges
for a period of five fiscal years next preceding the date
of acquisition of the obligations by such insurance company
shall have averaged per year not less than one and one=half
times such average annual fixed charges of the issuing,
assuming, or guaranteeing corporation and its average annual
maximum contingent interest applicable to such period and,
during at least one of the last two years of such period, its
net earnings shall have been not less than one and one=half
times the sum of its fixed charges and maximum contingent
interest for such year, or if, at the date of acquisition,
the obligations are adequately secure and have investment
qualities and characteristics and speculative elements are not
predominant investment grade as defined by the commissioner by
rule.
Sec. 11. Section 511.8, subsection 6, paragraph a,
subparagraph (1), subparagraph division (b), unnumbered
paragraph 1, Code 2015, is amended to read as follows:
The net earnings available for fixed charges and preferred
dividends of the issuing corporation shall have been, for
each of the five fiscal years immediately preceding the date
of acquisition, not less than one and one=half times the sum
of the annual fixed charges and contingent interest, if any,
and the annual preferred dividend requirements as of the date
of acquisition; or at the date of acquisition the preferred
stock has is investment qualities and characteristics wherein
speculative elements are not predominant grade as defined by
the commissioner by rule.
Sec. 12. Section 511.8, subsection 8, unnumbered paragraph
1, Code 2015, is amended to read as follows:
Securities included under subsections 5, 6, and 7, and
subsection 9, paragraph "h", shall not be eligible:
Sec. 13. Section 511.8, subsection 8, paragraph b,
unnumbered paragraph 1, Code 2015, is amended to read as
follows:
The investments of any company or association in such the
securities of a corporation shall not be eligible in excess of
exceed the following percentages of the legal reserve of such
company or association:
Sec. 14. Section 511.8, subsection 8, paragraph b,
subparagraphs (1) and (2), Code 2015, are amended to read as
follows:
(1) With the exception of public securities For any one
corporation other than a public utility company, two percent
of the legal reserve in the securities of any one corporation.
Five For any one public utility company, five percent of the
legal reserve in the securities of any one public utility
corporation.
(2) Seventy=five percent of the legal reserve in the
securities described in subsection 5 issued by other than
public utility corporations. Fifty percent of the legal
reserve in the For securities described in subsection 5 issued
by public utility corporations companies, fifty percent of the
legal reserve.
Sec. 15. Section 511.8, subsection 9, Code 2015, is amended
by adding the following new paragraph:
NEW PARAGRAPH. h. Mezzanine real estate loans subject to
the following conditions:
(1) The terms of the mezzanine real estate loan agreement
shall do all of the following:
(a) Require that each pledgor abstain from granting
additional security interests in the equity interest pledged.
(b) Set forth techniques to minimize the likelihood or
impact of a bankruptcy filing on the part of the real estate
owner or the mezzanine real estate loan borrower consistent
with the national association of insurance commissioners'
accounting practices and procedures manual.
(c) Require the real estate owner or mezzanine real estate
loan borrower to do all of the following:
(i) Hold no assets other than, in the case of the real
estate owner, the real property, and in the case of the
mezzanine real estate loan borrower, the equity interest of the
real estate owner.
(ii) Not engage in any business other than, in the case
of the real estate owner, the ownership and operation of the
real estate, and in the case of the mezzanine real estate loan
borrower, holding an ownership interest in the real estate
owner.
(iii) Not incur additional debt, other than limited trade
payables, a first mortgage loan, or mezzanine real estate
loans.
(2) At the time of purchase, the sum of the first mortgage
and the mezzanine real estate loans shall not exceed ninety
percent of the value of the real estate evidenced by a
current appraisal and the mezzanine real estate loan shall be
classified as CM4 or better in accordance with the national
association of insurance commissioners' rating methodology, or
an equivalent or successor rating.
(3) The value of a company's or association's total
investments qualified under this paragraph "h" shall not exceed
three percent of the legal reserve subject to the following
conditions:
(a) The value of a company's or association's total
investments qualified under this paragraph "h" in mezzanine
real estate loans classified as CM3 in accordance with the
national association of insurance commissioners' rating
methodology or an equivalent or successor rating at the time of
purchase shall not exceed two percent of the legal reserve.
(b) The value of a company's or association's total
investments qualified under this paragraph "h" in mezzanine
real estate loans classified as CM4 in accordance with the
national association of insurance commissioners' rating
methodology or an equivalent or successor rating at the time of
purchase shall not exceed one percent of the legal reserve.
(4) For purposes of this paragraph "h", "mezzanine real
estate loan" means a loan secured by a pledge of a direct or
indirect equity interest in an entity that owns real estate.
Sec. 16. Section 511.8, subsection 13, Code 2015, is amended
to read as follows:
13. Collateral loans. Loans secured by collateral
consisting of any securities assets or investments qualified in
under this section, provided the amount of the loan is not in
excess of ninety percent of the value of the securities assets
or investments. Provided further that subsection 8 shall apply
to the collateral securities assets or investments pledged
to the payment of loans authorized in qualified under this
subsection.
Sec. 17. Section 511.8, subsection 18, paragraph a, Code
2015, is amended to read as follows:
a. (1) Common stocks, or shares, or equity interests issued
by solvent corporations or institutions are eligible if the
total investment in the common stocks, or shares in, or equity
interests of the corporations or institutions does not exceed
ten percent of legal reserve, provided not more than one=half
percent of the legal reserve is invested in common stocks,
or shares, or equity interests of any one corporation or
institution. However, the not more than four percent of legal
reserve shall be invested in common stocks, or shares shall be
, or equity interests which do not meet one of the following
requirements:
(a) Are listed or admitted to trading on an established
foreign securities exchange or a securities exchange in the
United States or shall be.
(b) Are publicly held and traded in the "over=the=counter
market" and, provided that market quotations shall be readily
available, and further, the investment.
(2) An investment in common stocks, shares, or equity
interests shall not create a conflict of interest for an
officer or director of the company between the insurance
company and the corporation whose common stocks, or shares, or
equity interests are purchased.
Sec. 18. Section 511.8, subsection 20, paragraph b, Code
2015, is amended to read as follows:
b. For purposes of this subsection, "venture capital
fund" means a corporation, partnership, proprietorship, or
other entity formed under the laws of the United States, or
a state, district, or territory of the United States, whose
principal business is or will be the making of investments in,
and the provision of significant managerial assistance to,
small businesses which meet the small business administration
definition of small business. "Equity interests" means limited
partnership interests and other equity interests in which
liability is limited to the amount of the investment, but does
not mean general partnership interests or other interests
involving general liability. "Venture capital fund" includes an
equity interest in the Iowa fund of funds as defined in section
15E.62 and an equity interest in an innovation fund as defined
in section 15E.52.
Sec. 19. Section 511.8, subsection 22, paragraphs c and d,
Code 2015, are amended to read as follows:
c. Investments in financial instruments used in hedging
transactions are not eligible in excess of two percent of
the legal reserve in the financial instruments of any one
corporation, less any securities of that corporation owned
by the company or association and in which its legal reserve
is invested, except insofar as the financial instruments are
collateralized by cash, United States government obligations
as authorized by subsection 1, or obligations of or guaranteed
by a United States government=sponsored enterprise which on
the date they are pledged as collateral are adequately secured
and have investment qualities and characteristics wherein the
speculative elements are not predominant investment grade as
defined by the commissioner by rule, which are deposited with a
custodian bank as defined in subsection 21, and held under a
written agreement with the custodian bank that complies with
subsection 21 and provides for the proceeds of the collateral,
subject to the terms and conditions of the applicable
collateral or other credit support agreement, to be remitted to
the legal reserve deposit of the company or association and to
vest in the state in accordance with section 508.18 whenever
proceedings under that section are instituted.
d. Investments in financial instruments used in hedging
transactions are not eligible in excess of ten percent of the
legal reserve, except insofar as the financial instruments are
collateralized by cash, United States government obligations
as authorized by subsection 1, or obligations of or guaranteed
by a United States government=sponsored enterprise which on
the date they are pledged as collateral are adequately secured
and have investment qualities and characteristics wherein the
speculative elements are not predominant investment grade as
defined by the commissioner by rule, which are deposited with a
custodian bank as defined in subsection 21, and held under a
written agreement with the custodian bank that complies with
subsection 21 and provides for the proceeds of the collateral,
subject to the terms and conditions of the applicable
collateral or other credit support agreement, to be remitted to
the legal reserve deposit of the company or association and to
vest in the state in accordance with section 508.18 whenever
proceedings under that section are instituted.
Sec. 20. Section 511.8, subsection 22, paragraph e,
subparagraph (1), Code 2015, is amended to read as follows:
(1) Investments in financial instruments of foreign
governments or foreign corporate obligations, other than
Canada, used in hedging transactions shall be included
in the limitation contained in subsection 19 that allows
only twenty percent of the legal reserve of the company or
association to be invested in such foreign investments, except
insofar as the financial instruments are collateralized by
cash, United States government obligations as authorized by
subsection 1, or obligations of or guaranteed by a United
States government=sponsored enterprise which on the date
they are pledged as collateral are adequately secured and
have investment qualities and characteristics wherein the
speculative elements are not predominant investment grade as
defined by the commissioner by rule, which are deposited with a
custodian bank as defined in subsection 21, and held under a
written agreement with the custodian bank that complies with
subsection 21 and provides for the proceeds of the collateral,
subject to the terms and conditions of the applicable
collateral or other credit support agreement, to be remitted to
the legal reserve deposit of the company or association and to
vest in the state in accordance with section 508.18 whenever
proceedings under that section are instituted.
Sec. 21. Section 514G.102, Code 2015, is amended to read as
follows:
514G.102 Scope.
The requirements of this chapter apply to policies delivered
or issued for delivery in this state on or after July 1, 2008.
The requirements of this chapter related to independent review
of benefit trigger determinations apply to all claims made on
or after January 1, 2009. The requirements of this chapter
related to prompt payment of claims and the payment of interest
apply to all long=term care insurance policies. This chapter
is not intended to supersede the obligations of entities
subject to this chapter to comply with the substance of other
applicable insurance laws not in conflict with this chapter,
except that laws and regulations designed and intended to apply
to Medicare supplement insurance policies shall not be applied
to long=term care insurance.
Sec. 22. Section 515.35, subsection 4, paragraph m, Code
2015, is amended to read as follows:
m. Venture capital funds. Shares or equity interests in
venture capital funds which agree to invest an amount equal to
at least fifty percent of the investments by a company in small
businesses having their principal offices within this state and
having either more than one=half of their assets within this
state or more than one=half of their employees employed within
this state. A company shall not invest more than five percent
of its capital and surplus under this paragraph. For purposes
of this paragraph, "venture capital fund" means a corporation,
partnership, proprietorship, or other entity formed under the
laws of the United States, or a state, district, or territory
of the United States, whose principal business is or will be
the making of investments in, and the provision of significant
managerial assistance to, small businesses which meet the small
business administration definition of small business. "Equity
interests" means limited partnership interests and other equity
interests in which liability is limited to the amount of the
investment, but does not mean general partnership interests or
other interests involving general liability. "Venture capital
fund" includes an equity interest in the Iowa fund of funds
as defined in section 15E.62 and an equity interest in an
innovation fund as defined in section 15E.52.
Sec. 23. Section 515.125, subsection 2, Code 2015, is
amended to read as follows:
2. An insurer shall not fail to renew a policy except by
notice to the insured as provided in this chapter. A notice
of intention not to renew is not effective unless mailed or
delivered by the insurer to the named insured at least thirty
days prior to the expiration date of the policy. A notice
of intention not to renew is not required if the insured is
transferred from an insurer to an affiliate for future coverage
as a result of a merger, acquisition, or company restructuring
and if the transfer results in the same or broader coverage
insurance company admitted in Iowa which is an affiliate of, as
defined in section 521A.1, the transferring insurer and all of
the following conditions are met:
a. The transfer does not result in an interruption in
coverage.
b. The rating of the affiliate from the A.M. Best company or
a substitute rating service acceptable to the commissioner, is
the same or better than the rating of the transferring insurer.
c. The transfer results in the same or broader coverage.
d. Notice of the transfer is delivered to the insured or
sent by first class mail to the insured's last known address
not less than thirty days prior to the transfer. The notice
required by this paragraph is not required in the event that
the insured requests or consents to the transfer.
e. The notice of transfer provides the name and telephone
number of the insured's insurance producer, agent, or agency,
if any.
Sec. 24. Section 515.128, subsection 3, Code 2015, is
amended to read as follows:
3. This section applies to all forms of commercial property
and casualty insurance written pursuant to this chapter. It
does not apply if the insurer has offered to renew or if the
insured fails to pay a premium due or any advance premium
required by the insurer for renewal. A notice of nonrenewal
is not required if the insured is transferred from an insurer
to an affiliate for future coverage as a result of a merger,
acquisition, or company restructuring and if the transfer
results in the same or broader coverage insurance company
admitted in Iowa which is an affiliate of, as defined in
section 521A.1, the transferring insurer and all of the
following conditions are met:
a. The transfer does not result in an interruption in
coverage.
b. The rating of the affiliate from the A.M. Best company or
a substitute rating service acceptable to the commissioner, is
the same or better than the rating of the transferring insurer.
c. The transfer results in the same or broader coverage.
d. Notice of the transfer is delivered to the insured or
sent by first class mail to the insured's last known address
not less than forty=five days prior to the transfer. The
notice required by this paragraph is not required in the event
that the insured requests or consents to the transfer.
e. The notice of transfer provides the name and telephone
number of the insured's insurance producer, agent, or agency,
if any.
Sec. 25. Section 521A.5, subsection 4, paragraph d, Code
2015, is amended to read as follows:
d. The board of directors of a domestic insurer shall
establish one or more committees comprised solely of directors
who or other persons appointed by the board, the majority of
whom are not officers or employees of the insurer or of any
entity controlling, controlled by, or under common control with
the insurer and who are not beneficial owners of a controlling
interest in the voting stock of the insurer or any such entity.
The committee or committees shall have responsibility for
recommending or nominating candidates for director for election
by shareholders or policyholders, evaluating the performance
of officers deemed to be principal officers of the insurer,
and recommending to the board of directors the selection and
compensation of the principal officers.
Sec. 26. Section 523A.102, subsection 8, Code 2015, is
amended by striking the subsection.
Sec. 27. Section 523A.204, subsection 3, Code 2015, is
amended to read as follows:
3. All records maintained by the commissioner under this
section shall be confidential pursuant to section 22.7,
subsection 58, and shall not be made available for inspection
or copying except upon the approval of the commissioner or the
attorney general, or except when sought by the preneed seller
to whom the records relate. Such records shall be privileged
and confidential in any judicial or administrative proceeding
except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 28. Section 523A.204, subsections 4 and 5, Code 2015,
are amended by striking the subsections.
Sec. 29. Section 523A.205, subsection 2, Code 2015, is
amended by striking the subsection.
Sec. 30. Section 523A.205, subsection 3, Code 2015, is
amended to read as follows:
3. Notwithstanding chapter 22, all All records maintained
by the commissioner under this section shall be confidential
pursuant to section 22.7, subsection 58, and shall not be made
available for inspection or copying except upon approval of the
commissioner or the attorney general, or except when sought by
the financial institution to whom the records relate. Such
records shall be privileged and confidential in any judicial or
administrative proceeding except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 31. Section 523A.206, subsection 6, Code 2015, is
amended by striking the subsection and inserting in lieu
thereof the following:
6. All records maintained by the commissioner under this
section, including work papers, notes, recorded information,
documents, and copies thereof that are produced or obtained
by or disclosed to the commissioner or another person in the
course of a compliance examination, shall be confidential
pursuant to section 22.7, subsection 58, and shall not be
made available for inspection and copying except upon the
approval of the commissioner or the attorney general. Such
records shall be privileged and confidential in any judicial or
administrative proceeding except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 32. Section 523A.207, Code 2015, is amended to read as
follows:
523A.207 Audits by certified public accountants == penalty.
1. A purchase agreement shall not be sold or transferred,
as part of the sale of a business or the assets of a business,
until an audit has been performed by a certified public
accountant and filed with the commissioner that expresses the
auditor's opinion of the adequacy of funding related to the
purchase agreements to be sold or transferred. If the buyer
of a purchase agreement sold or transferred as part of the
sale of a business or the assets of a business, fails to file
such an audit, the commissioner shall suspend the preneed
seller's license of the buyer and the preneed sales license of
any sales agent in the employ of the buyer until the audit is
filed. In addition, the commissioner shall assess a penalty
against the buyer in an amount up to one hundred dollars for
each day that the audit remains unfiled. The commissioner
shall allow a thirty=day grace period after the date that a
purchase agreement is sold or transferred before suspension of
a license or assessment of a penalty for failure to file an
audit pursuant to this section.
2. All records maintained by the commissioner under this
section shall be confidential pursuant to section 22.7,
subsection 58, and shall not be made available for inspection
or copying except upon approval of the commissioner or the
attorney general, or except when sought by the preneed seller
to whom the records relate. Such records shall be privileged
and confidential in any judicial or administrative proceeding
except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 33. Section 523A.401, subsection 8, Code 2015, is
amended to read as follows:
8. An insurance company issuing policies funding purchase
agreements subject to this chapter shall file an annual report
with the commissioner on a form prescribed by the commissioner.
The report shall list the applicable insurance policies
outstanding for each seller. Computer printouts may be
submitted so long as each legibly provides the same information
required in the prescribed form.
Sec. 34. Section 523A.401, Code 2015, is amended by adding
the following new subsection:
NEW SUBSECTION. 10. All records maintained by the
commissioner under this section shall be confidential
pursuant to section 22.7, subsection 58, and shall not be made
available for inspection or copying except upon approval of the
commissioner or the attorney general, or except when sought
by the insurance company to whom the records relate. Such
records shall be privileged and confidential in any judicial or
administrative proceeding except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 35. Section 523A.402, subsection 8, Code 2015, is
amended to read as follows:
8. An insurance company issuing annuities funding purchase
agreements subject to this chapter shall file an annual report
with the commissioner on a form prescribed by the commissioner.
The report shall list the applicable annuities outstanding for
each seller. Computer printouts may be submitted so long as
each legibly provides the same information required in the
prescribed form.
Sec. 36. Section 523A.405, Code 2015, is amended by striking
the section and inserting in lieu thereof the following:
523A.405 Bond in lieu of trust fund.
The commissioner shall, by rule, establish terms and
conditions under which a seller may, in lieu of trust
requirements, file with the commissioner a surety bond issued
by a surety company authorized to do business and doing
business in this state.
Sec. 37. Section 523A.501, subsection 2, Code 2015, is
amended to read as follows:
2. An application for a preneed seller's license shall be
filed on a form and in a format prescribed by the commissioner
and be accompanied by a fifty dollar filing fee in an amount
set by the commissioner by rule. The application shall include
the name of the natural person or legal entity to be licensed
as the preneed seller and, if applicable, any other name
under which the preneed seller will be transacting business,
including any names registered with the secretary of state or a
county clerk. The application shall be updated as necessary
to ensure that the commissioner has been notified of all names
under which the preneed seller is operating and doing business.
Sec. 38. Section 523A.501, subsection 7, Code 2015, is
amended to read as follows:
7. A preneed seller's license shall be renewed every four
years by filing the form prescribed by the commissioner under
subsection 2, accompanied by a renewal fee in an amount set by
the commissioner by rule expires annually on April 15. If the
preneed seller has filed a complete annual report and paid the
required fees as required in section 523A.204, the commissioner
shall renew the preneed seller's license until April 15 of the
following year.
Sec. 39. Section 523A.502, subsection 5, Code 2015, is
amended by striking the subsection and inserting in lieu
thereof the following:
5. A sales license shall expire annually on April 15. If
the sales agent has filed a substantially complete annual
report as required in section 523A.502A, the commissioner shall
renew the sales license until April 15 of the following year.
Sec. 40. Section 523A.502A, subsections 1 and 2, Code 2015,
are amended to read as follows:
1. A sales agent shall file with the commissioner not later
than April 1 of each year an annual report on a form prescribed
by the commissioner describing each purchase agreement sold
by the sales agent during the year. An annual report must be
filed whether or not sales were made during the year and even
if the sales agent is no longer an agent of a preneed seller or
licensed by the commissioner.
2. All records maintained by the commissioner under this
section shall be confidential pursuant to section 22.7,
subsection 58, and shall not be made available for inspection
or copying except upon the approval of the commissioner or the
attorney general, or except when sought by the sales agent to
whom the records relate. Such records shall be privileged
and confidential in any judicial or administrative proceeding
except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 41. Section 523A.502A, subsections 3 and 4, Code 2015,
are amended by striking the subsections.
Sec. 42. Section 523A.803, subsection 1, paragraph c, Code
2015, is amended by striking the paragraph.
Sec. 43. Section 523A.803, Code 2015, is amended by adding
the following new subsection:
NEW SUBSECTION. 1A. All records maintained by the
commissioner under this section, including work papers, notes,
recorded information, documents, and copies thereof that are
produced or obtained by or disclosed to the commissioner or
another person in the course of an investigation, shall be
confidential pursuant to section 22.7, subsection 58, and shall
not be made available for inspection and copying except upon
the approval of the commissioner or the attorney general. Such
records shall be privileged and confidential in any judicial or
administrative proceeding except any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the insurance
division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the insurance division or
the attorney general to recover moneys for embezzlement,
misappropriation, or misuse of trust funds.
Sec. 44. Section 523A.807, subsection 3, unnumbered
paragraph 1, Code 2015, is amended to read as follows:
If the commissioner finds that a person has violated section
523A.201, 523A.202, 523A.203, 523A.207, 523A.401, 523A.402,
523A.403, 523A.404, 523A.405, 523A.501, 523A.502, or 523A.504
or any rule adopted pursuant thereto, the commissioner may
order any or all of the following:
Sec. 45. Section 523I.810, subsection 9, Code 2015, is
amended to read as follows:
9. A cemetery may, by resolution adopted by a vote of at
least two=thirds of the members of its board at any authorized
meeting of the board, authorize the withdrawal and use of
not more than twenty percent of the principal of the care
fund to acquire additional land for cemetery purposes, to
repair a mausoleum or other building or structure intended for
cemetery purposes, to build, improve, or repair boundaries,
roads and walkways in the cemetery, to construct a columbarium,
mausoleum, or similar structure to create additional interment
spaces, to purchase equipment for tree, shrub, and lawn care,
to purchase backhoes or similar equipment used to open and
close interment spaces, or to purchase recordkeeping software
used to maintain ownership records or interment records. The
resolution shall establish a reasonable repayment schedule, not
to exceed five years, and provide for interest in an amount
comparable to the care fund's current rate of return on its
investments. However, the care fund shall not be diminished
below an amount equal to the greater of twenty=five thousand
dollars or five thousand dollars per acre of land in the
cemetery. The resolution, and if the deposit of care fund
income over five years is unlikely to fund replenishment of the
principal of the care fund, either a bond or proof of insurance
to guarantee replenishment of the care fund, shall be filed
with the commissioner thirty days prior to the withdrawal of
funds.
Sec. 46. Section 523I.811, subsection 1, paragraph b, Code
2015, is amended to read as follows:
b. Maintaining drains, water lines, roads, buildings,
boundaries, fences, and other structures.
Sec. 47. Section 523I.811, subsection 1, Code 2015, is
amended by adding the following new paragraphs:
NEW PARAGRAPH. g. To purchase equipment to maintain the
cemetery.
NEW PARAGRAPH. h. To purchase backhoes or similar equipment
used to open and close interment spaces.
NEW PARAGRAPH. i. To purchase equipment used to construct
a columbarium, mausoleum, or similar structure to create
additional interment spaces.
Sec. 48. NEW SECTION. 523I.811A Emergency use of care
funds.
1. Notwithstanding any other provision of this chapter,
a perpetual care cemetery may apply to the commissioner to
withdraw funds from the cemetery's care fund for a financial
emergency. The commissioner shall, by rule, establish
standards and procedures for such applications and for
withdrawals from care funds.
2. Upon application, the commissioner may allow a perpetual
care cemetery to withdraw funds from the care fund if the
commissioner finds that the cemetery has an urgent financial
need and the withdrawal is deemed reasonable and prudent to
fund a necessary expense of the cemetery. The commissioner
shall establish conditions for the specific use of the funds
withdrawn and may require repayment of all or part of the
amount withdrawn.
Sec. 49. EFFECTIVE DATE. The following provision or
provisions of this Act take effect January 1, 2016:
1. The section of this Act adding section 502.202,
subsection 24.
Sec. 50. EFFECTIVE UPON ENACTMENT. Unless otherwise
provided, this Act, if approved by the governor on or after
July 1, 2015, takes effect upon enactment.
Sec. 51. RETROACTIVE APPLICABILITY. Unless otherwise
provided, this Act, with the exception of the section of this
Act adding section 502.202, subsection 24, if approved by the
governor on or after July 1, 2015, applies retroactively to
July 1, 2015.
Sec. 52. DIRECTIONS TO CODE EDITOR. The Iowa code editor is
directed to transfer section 515.11 to new section 515.23.
Sec. 53. REPEAL. Section 523A.504, Code 2015, is repealed.
KRAIG PAULSEN
Speaker of the House
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 632, Eighty=sixth General Assembly.
CARMINE BOAL
Chief Clerk of the House
Approved , 2015
TERRY E. BRANSTAD
Governor
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