Bill Text: IA SF2293 | 2011-2012 | 84th General Assembly | Amended
Bill Title: A bill for an act relating to various matters under the purview of the insurance division of the department of commerce, providing penalties, and including effective date provisions. (Formerly SSB 3066.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2012-05-01 - Senate amendment H-8512 filed. H.J. 897. [SF2293 Detail]
Download: Iowa-2011-SF2293-Amended.html
Senate
File
2293
-
Reprinted
SENATE
FILE
2293
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
SSB
3066)
(As
Amended
and
Passed
by
the
Senate
March
13,
2012
)
A
BILL
FOR
An
Act
relating
to
various
matters
under
the
purview
of
the
1
insurance
division
of
the
department
of
commerce,
providing
2
penalties,
and
including
effective
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
SF
2293
(5)
84
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S.F.
2293
Section
1.
Section
135.22A,
subsection
2,
paragraph
g,
Code
1
2011,
is
amended
by
striking
the
paragraph.
2
Sec.
2.
Section
502.412,
subsection
3,
Code
2011,
is
amended
3
to
read
as
follows:
4
3.
Disciplinary
penalties
——
registrants.
If
the
5
administrator
finds
that
the
order
is
in
the
public
interest
6
and
subsection
4
,
paragraphs
“a”
through
“f”
,
“h”
,
“i”
,
“j”
,
7
“l”
,
or
“m”
,
authorizes
the
action,
an
order
under
this
chapter
8
may
censure,
impose
a
bar,
or
impose
a
civil
penalty
in
an
9
amount
not
to
exceed
a
maximum
of
five
ten
thousand
dollars
10
for
a
single
violation
or
five
hundred
thousand
one
million
11
dollars
for
more
than
one
violation,
or
in
an
amount
as
agreed
12
to
by
the
parties,
on
a
registrant,
and,
if
the
registrant
is
13
a
broker-dealer
or
investment
adviser,
a
partner,
officer,
14
director,
or
person
having
a
similar
status
or
performing
15
similar
functions,
or
a
person
directly
or
indirectly
in
16
control,
of
the
broker-dealer
or
investment
adviser.
17
Sec.
3.
Section
502.604,
subsection
4,
Code
Supplement
18
2011,
is
amended
to
read
as
follows:
19
4.
Civil
penalty
——
restitution
——
corrective
action.
In
a
20
final
order
under
subsection
3
,
the
administrator
may
impose
a
21
civil
penalty
up
to
an
amount
not
to
exceed
a
maximum
of
five
22
ten
thousand
dollars
for
a
single
violation
or
five
hundred
23
thousand
one
million
dollars
for
more
than
one
violation,
or
24
in
an
amount
as
agreed
to
by
the
parties,
order
restitution,
25
or
take
other
corrective
action
as
the
administrator
deems
26
necessary
and
appropriate
to
accomplish
compliance
with
27
the
laws
of
the
state
relating
to
all
securities
business
28
transacted
in
the
state.
29
Sec.
4.
Section
502.604,
Code
Supplement
2011,
is
amended
by
30
adding
the
following
new
subsection:
31
NEW
SUBSECTION
.
5A.
Failure
to
obey
cease
and
desist
32
order.
A
person
who
fails
to
obey
a
valid
cease
and
desist
33
order
issued
by
the
administrator
under
this
section
may,
after
34
notice
and
opportunity
for
a
hearing,
be
subject
to
a
civil
35
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penalty
in
an
amount
of
not
less
than
one
thousand
dollars
and
1
not
to
exceed
ten
thousand
dollars
for
violating
the
order.
2
Each
day
the
failure
to
obey
the
cease
and
desist
order
occurs
3
or
continues
constitutes
a
separate
violation
of
the
order.
4
The
penalties
provided
in
this
subsection
are
in
addition
to,
5
and
not
exclusive
of,
other
remedies
that
may
be
available.
6
Sec.
5.
Section
505.8,
subsection
10,
Code
Supplement
2011,
7
is
amended
to
read
as
follows:
8
10.
The
commissioner
may,
after
a
hearing
conducted
9
pursuant
to
chapter
17A
,
assess
fines
or
penalties
,
;
assess
10
costs
of
an
examination,
investigation
,
or
proceeding
,
;
11
order
restitution
,
;
or
take
other
corrective
action
as
the
12
commissioner
deems
necessary
and
appropriate
to
accomplish
13
compliance
with
the
laws
of
the
state
relating
to
all
insurance
14
business
transacted
in
the
state.
15
Sec.
6.
NEW
SECTION
.
506.14
Voluntary
dissolution
of
16
domestic
mutual
insurance
companies.
17
1.
Any
plan
for
voluntary
dissolution
of
a
domestic
18
mutual
insurance
company
licensed
to
transact
the
business
19
of
insurance
under
chapter
508,
515,
518,
or
518A
shall
be
20
presented
for
approval
by
the
commissioner
not
less
than
ninety
21
days
in
advance
of
notice
of
the
plan
to
policyholders.
22
2.
The
commissioner
shall
approve
the
plan
if
the
23
commissioner
finds
that
the
plan
complies
with
all
applicable
24
provisions
of
law
and
is
fair
and
equitable
to
the
domestic
25
mutual
insurance
company
and
its
policyholders.
26
Sec.
7.
Section
507.10,
subsection
4,
paragraph
a,
Code
27
2011,
is
amended
to
read
as
follows:
28
a.
All
orders
entered
pursuant
to
subsection
3
,
paragraph
29
“a”
,
shall
be
accompanied
by
findings
and
conclusions
resulting
30
from
the
commissioner’s
consideration
and
review
of
the
31
examination
report,
relevant
examiner
work
papers,
and
any
32
written
submissions
or
rebuttals.
Any
such
order
is
a
final
33
administrative
decision
and
may
be
appealed
pursuant
to
chapter
34
17A
,
and
shall
be
served
upon
the
company
by
certified
mail,
35
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together
with
a
copy
of
the
adopted
examination
report.
Within
1
thirty
days
of
the
issuance
of
the
adopted
report,
the
company
2
shall
file
affidavits
executed
by
each
of
its
directors
stating
3
under
oath
that
they
have
received
a
copy
of
the
adopted
report
4
and
related
orders.
The
board
of
directors
of
the
company
5
shall
timely
review
the
adopted
report.
The
minutes
of
the
6
meeting
of
the
board
at
which
the
adopted
report
is
considered
7
shall
reflect
that
each
member
of
the
board
has
reviewed
the
8
adopted
report.
9
Sec.
8.
Section
507.14,
subsection
4,
Code
2011,
is
amended
10
to
read
as
follows:
11
4.
Confidential
documents,
materials,
information,
12
administrative
or
judicial
orders,
or
other
actions
may
be
13
disclosed
to
a
regulatory
official
of
any
state,
federal
14
agency,
or
foreign
country
provided
that
the
recipients
are
15
required,
under
their
law,
to
maintain
their
confidentiality.
16
Confidential
records
may
be
disclosed
to
the
national
17
association
of
insurance
commissioners
,
the
international
18
association
of
insurance
supervisors,
and
the
bank
for
19
international
settlements,
provided
that
the
association
20
certifies
associations
and
the
bank
certify
by
written
21
statement
that
the
confidentiality
of
the
records
will
be
22
maintained.
23
Sec.
9.
Section
507B.4,
Code
2011,
is
amended
by
adding
the
24
following
new
subsection:
25
NEW
SUBSECTION
.
20.
Refund
of
unearned
premium.
Failure
of
26
an
issuer
of
a
Medicare
supplement
policy
to
adjust
coverage
27
dates
to
terminate
coverage
on
the
date
that
coincides
with
28
the
effective
date
of
a
policy
or
contract
providing
any
29
hospital,
medical,
prescription
drug,
or
other
health
care
30
benefits
pursuant
to
42
U.S.C.
ch.
7,
subch.
XVIII,
Part
C,
31
commonly
known
as
Medicare
Part
C,
pursuant
to
Tit.
XVIII
of
32
the
federal
Social
Security
Act,
or
any
regulations
issued
33
pursuant
thereto,
and
to
refund
any
unearned
premium
to
the
34
insured
based
on
that
revised
termination
date,
where
the
35
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policyholder
or
contract
holder
provides
written
notice
to
the
1
issuer
that
the
policyholder
or
contract
holder
desires
to
2
terminate
the
policy
or
contract
and
provides
documentation
3
substantiating
that
the
policyholder
or
contract
holder
has
4
coverage
commonly
known
as
Medicare
Part
C.
This
subsection
5
shall
not
be
construed
to
require
a
refund
of
premium
for
any
6
period
of
time
in
excess
of
five
years
prior
to
the
date
that
7
written
notice
is
provided
to
an
issuer.
8
Sec.
10.
NEW
SECTION
.
507C.17A
Rehabilitation
or
9
liquidation
of
a
domestic
insurer
covered
under
the
federal
10
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act.
11
1.
The
provisions
of
this
section
apply
in
accordance
12
with
Tit.
II
of
the
federal
Dodd-Frank
Wall
Street
Reform
and
13
Consumer
Protection
Act,
Pub.
L.
No.
111-203,
12
U.S.C.
§
5301
14
et
seq.,
with
respect
to
a
domestic
insurer
that
is
a
covered
15
financial
company,
as
that
term
is
defined
under
12
U.S.C.
§
16
5381.
17
2.
The
commissioner
may
petition
the
district
court
for
an
18
order
of
rehabilitation
or
liquidation
of
a
domestic
insurer
19
pursuant
to
this
section
on
any
of
the
following
grounds:
20
a.
Upon
a
determination
and
notification
given
by
the
21
secretary
of
the
treasury
of
the
United
States,
in
consultation
22
with
the
president
of
the
United
States,
that
the
insurer
is
23
a
covered
financial
company
satisfying
the
requirements
of
24
12
U.S.C.
§
5383(b),
and
the
board
of
directors,
or
a
body
25
performing
similar
functions
of
a
board
of
directors,
of
the
26
insurer
acquiesces
or
consents
to
the
appointment
of
a
receiver
27
pursuant
to
12
U.S.C.
§
5382(a)(1)(A)(i)
with
such
consent
28
to
be
considered
as
consent
to
an
order
of
rehabilitation
or
29
liquidation.
30
b.
Upon
an
order
of
the
United
States
district
court
for
31
the
District
of
Columbia
under
12
U.S.C.
§
5382(a)(1)(A)(iv)(I)
32
granting
the
petition
of
the
secretary
of
the
treasury
of
33
the
United
States
concerning
the
insurer
under
12
U.S.C.
§
34
5382(a)(1)(A)(i).
35
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c.
A
petition
by
the
secretary
of
the
treasury
of
the
United
1
States
concerning
the
insurer
is
granted
by
operation
of
law
2
under
12
U.S.C.
§
5382(a)(1)(A)(v).
3
3.
Notwithstanding
any
other
provision
of
law
to
the
4
contrary,
after
notice
to
the
insurer,
a
district
court
5
may
grant
an
order
of
rehabilitation
or
liquidation
within
6
twenty-four
hours
after
the
filing
of
such
a
petition
pursuant
7
to
this
section.
8
4.
If
the
district
court
does
not
make
a
determination
on
a
9
petition
for
an
order
of
rehabilitation
or
liquidation
filed
by
10
the
commissioner
pursuant
to
this
section
within
twenty-four
11
hours
after
the
filing
of
the
petition,
the
order
shall
be
12
deemed
granted
by
operation
of
law
upon
the
expiration
of
the
13
twenty-four-hour
period.
14
a.
At
the
time
that
an
order
is
deemed
granted
under
this
15
subsection,
the
provisions
of
this
chapter
shall
be
deemed
16
to
be
in
effect,
and
the
commissioner
shall
be
deemed
to
be
17
affirmed
as
receiver
and
to
have
all
of
the
applicable
powers
18
provided
by
this
chapter,
regardless
of
whether
an
order
has
19
been
entered
by
the
district
court.
20
b.
If
an
order
is
deemed
granted
by
operation
of
law
under
21
this
subsection,
the
district
court
shall
expeditiously
enter
22
an
order
of
rehabilitation
or
liquidation
that
does
all
of
the
23
following:
24
(1)
Is
effective
as
of
the
date
that
the
order
is
deemed
25
granted
by
operation
of
law.
26
(2)
Conforms
to
the
provisions
for
rehabilitation
or
27
liquidation
of
an
insurer
contained
in
this
chapter,
as
28
applicable.
29
5.
An
order
of
rehabilitation
or
liquidation
made
pursuant
30
to
this
section
shall
not
be
subject
to
a
stay
or
injunction
31
pending
appeal.
32
6.
Nothing
in
this
section
shall
be
construed
to
supersede
33
or
impair
any
other
power
or
authority
of
the
commissioner
or
34
the
district
court
under
this
chapter.
35
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Sec.
11.
Section
507E.5,
subsection
2,
Code
2011,
is
amended
1
to
read
as
follows:
2
2.
The
commissioner
may
share
documents,
materials,
or
3
other
information,
including
confidential
and
privileged
4
documents,
materials,
or
other
information,
with
other
5
state,
federal,
and
international
regulatory
agencies,
with
6
the
national
association
of
insurance
commissioners
and
its
7
affiliates
or
subsidiaries,
and
with
local,
state,
federal,
and
8
international
law
enforcement
authorities,
provided
that
the
9
recipient
agrees
to
maintain
the
confidential
and
privileged
10
status
of
the
document,
material,
or
other
information,
11
pursuant
to
Iowa
law.
12
Sec.
12.
Section
511.8,
subsection
14,
Code
Supplement
13
2011,
is
amended
to
read
as
follows:
14
14.
Urban
real
estate
and
personal
property.
15
a.
Personal
or
real
property
or
both
located
within
the
16
United
States
or
the
Dominion
of
Canada,
other
than
real
17
property
used
or
to
be
used
primarily
for
agricultural,
18
horticultural,
ranching
or
mining
purposes,
which
produces
19
income
or
which
by
suitable
improvement
will
produce
income.
20
However,
personal
property
acquired
under
this
subsection
shall
21
be
acquired
for
the
purpose
of
entering
into
a
contract
for
22
the
sale
or
for
a
use
under
which
the
contractual
payments
23
may
reasonably
be
expected
to
result
in
the
recovery
of
the
24
investment
and
an
investment
return
within
the
anticipated
25
useful
life
of
the
property.
Legal
title
to
the
real
property
26
may
be
acquired
subject
to
a
contract
of
sale.
27
b.
“Real
property”
as
used
in
this
subsection
includes
a
all
28
of
the
following:
29
(1)
A
leasehold
of
real
estate
,
an
.
30
(2)
An
undivided
interest
in
a
leasehold
of
real
estate
,
and
31
an
.
32
(3)
An
undivided
interest
in
the
fee
title
of
real
estate.
33
(4)
A
controlling
membership,
partnership,
shareholder,
or
34
trust
interest
in
any
entity
created
solely
for
the
purpose
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of
owning
and
operating
any
of
the
interests
described
in
1
subparagraph
(1),
(2),
or
(3),
if
the
entity
is
expressly
2
limited
to
that
purpose
within
its
organizational
documents.
3
c.
Investments
under
this
subsection
are
not
eligible
in
4
excess
of
ten
percent
of
the
legal
reserve.
5
Sec.
13.
Section
511.8,
subsection
19,
Code
Supplement
6
2011,
is
amended
to
read
as
follows:
7
19.
Other
foreign
government
or
corporate
obligations.
8
a.
Bonds
or
other
evidences
of
indebtedness,
not
to
9
include
currency,
issued,
assumed,
or
guaranteed
by
a
foreign
10
government
other
than
Canada,
or
by
a
corporation
incorporated
11
under
the
laws
of
a
foreign
government
other
than
Canada.
Such
12
governmental
obligations
must
be
valid,
legally
authorized
13
and
issued,
and
on
the
date
of
acquisition
have
predominantly
14
investment
qualities
and
characteristics
as
provided
by
15
rule.
Such
corporate
obligations
must
meet
the
qualifications
16
established
in
subsection
5
for
bonds
and
other
evidences
of
17
indebtedness
issued,
assumed,
or
guaranteed
by
a
corporation
18
incorporated
under
the
laws
of
the
United
States
or
Canada.
19
Foreign
investments
authorized
by
this
subsection
are
not
20
eligible
in
excess
of
twenty
twenty-five
percent
of
the
21
legal
reserve
of
the
life
insurance
company
or
association.
22
Investments
in
obligations
of
a
foreign
government,
other
23
than
Canada
and
,
the
United
Kingdom,
and
foreign
governments
24
rated
AAA
by
Standard
and
Poor’s
division
of
McGraw-Hill
25
companies,
inc.,
or
Aaa
by
Moody’s
investors
services,
inc.,
26
are
not
eligible
in
excess
of
two
percent
of
the
legal
reserve
27
in
the
securities
of
foreign
governments
of
any
one
foreign
28
nation.
Investments
in
obligations
of
the
United
Kingdom
are
29
not
eligible
in
excess
of
four
percent
of
the
legal
reserve.
30
Investments
in
obligations
of
foreign
governments
rated
either
31
AAA
by
Standard
and
Poor’s
division
of
McGraw-Hill
companies,
32
inc.,
or
Aaa
by
Moody’s
investors
services,
inc.,
are
not
33
eligible
in
excess
of
five
percent
of
the
legal
reserve.
34
Investments
in
a
corporation
incorporated
under
the
laws
of
a
35
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foreign
government
other
than
Canada
are
not
eligible
in
excess
1
of
two
percent
of
the
legal
reserve
in
the
securities
of
any
2
one
foreign
corporation.
3
b.
Eligible
investments
in
foreign
obligations
under
this
4
subsection
are
limited
to
the
types
of
obligations
specifically
5
referred
to
in
this
subsection
.
This
subsection
in
no
way
6
limits
or
restricts
investments
in
Canadian
obligations
and
7
securities
specifically
authorized
in
other
subsections
of
this
8
section
.
9
c.
This
subsection
shall
not
authorize
investment
in
10
evidences
of
indebtedness
issued,
assumed,
or
guaranteed
by
a
11
foreign
government
which
engages
in
a
consistent
pattern
of
12
gross
violations
of
human
rights.
13
Sec.
14.
Section
511.8,
subsection
23,
Code
Supplement
14
2011,
is
amended
by
adding
the
following
new
paragraph:
15
NEW
PARAGRAPH
.
g.
For
securities
loaned
pursuant
to
this
16
subsection
that
are
included
in
the
legal
reserve
of
the
life
17
insurance
company
or
association,
the
collateral
received
for
18
the
loaned
securities
shall
not
be
eligible
for
inclusion
in
19
the
legal
reserve.
20
Sec.
15.
Section
511.40,
Code
2011,
is
amended
by
adding
the
21
following
new
subsection:
22
NEW
SUBSECTION
.
5.
a.
The
gross
amount
of
premiums
23
received
by
a
life
insurance
company
or
association
for
an
24
employer-owned
life
insurance
contract
which
has
not
been
25
allocated
to
another
state
shall
be
allocated
to
this
state
26
for
purposes
of
section
432.1,
subsection
1,
if
either
of
the
27
following
is
applicable:
28
(1)
The
contract
is
issued
or
delivered
in
this
state.
29
(2)
The
company
or
association
is
domiciled
in
this
state.
30
b.
To
the
extent
that
premiums
are
allocated
to
this
state
31
pursuant
to
paragraph
“a”
,
the
provisions
of
section
505.14
are
32
not
applicable
to
those
premiums.
33
c.
As
used
in
this
subsection,
“employer-owned
life
34
insurance
contract”
means
a
policy
which
provides
coverage
on
35
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a
life
for
which
the
employer
has
an
insurable
interest
under
1
this
section
or
a
similar
provision
of
the
laws
of
another
2
state
and
the
policy
is
owned
by
either
the
employer
or
a
trust
3
established
by
the
employer
for
the
benefit
of
the
employer
or
4
the
employer’s
active
or
retired
employees.
5
Sec.
16.
Section
514.4,
Code
2011,
is
amended
to
read
as
6
follows:
7
514.4
Directors.
8
1.
At
least
two-thirds
of
the
directors
of
a
hospital
9
service
corporation,
medical
service
corporation,
dental
10
service
corporation,
or
pharmaceutical
or
optometric
service
11
corporation
subject
to
this
chapter
shall
be
at
all
times
12
subscribers
and
not
more
than
one-third
of
the
directors
13
shall
be
providers
as
provided
in
this
section
.
The
board
of
14
directors
of
each
corporation
shall
consist
of
at
least
nine
15
members.
16
2.
A
subscriber
director
is
a
director
of
the
board
of
17
a
corporation
who
is
a
subscriber
and
who
is
not
a
provider
18
of
health
care
pursuant
to
section
514B.1,
subsection
7
,
a
19
person
who
has
material
financial
or
fiduciary
interest
in
the
20
delivery
of
health
care
services
or
a
related
industry,
an
21
employee
of
an
institution
which
provides
health
care
services,
22
or
a
spouse
or
a
member
of
the
immediate
family
of
such
a
23
person.
However,
a
subscriber
director
of
a
dental
service
24
corporation
may
be
an
employee,
officer,
director,
or
trustee
25
of
a
hospital
or
other
entity
that
does
not
have
a
provider
26
contract
with
the
dental
service
corporation.
A
subscriber
27
director
of
a
hospital
or
medical
service
corporation
shall
be
28
a
subscriber
of
the
services
of
that
corporation.
29
3.
A
provider
director
of
a
corporation
subject
to
this
30
chapter
shall
be
at
all
times
a
person
who
has
a
material
31
financial
interest
in
or
is
a
fiduciary
to
or
an
employee
32
of
or
is
a
spouse
or
member
of
the
immediate
family
of
a
33
provider
having
a
contract
with
such
corporation
to
render
to
34
its
subscribers
the
services
of
such
corporation
or
who
is
a
35
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hospital
trustee.
1
4.
A
director
may
serve
on
a
board
of
only
one
corporation
2
at
a
time
subject
to
this
chapter
.
3
5.
The
commissioner
of
insurance
shall
adopt
rules
pursuant
4
to
chapter
17A
to
implement
the
process
of
the
election
of
5
subscriber
directors
of
the
board
of
directors
of
a
corporation
6
to
ensure
the
representation
of
a
broad
spectrum
of
subscriber
7
interest
on
each
board
and
establish
criteria
for
the
selection
8
of
nominees.
The
rules
shall
provide
for
an
independent
9
subscriber
nominating
committee
to
serve
until
the
composition
10
of
the
board
of
directors
meets
the
percentage
requirements
11
of
this
section
.
Once
the
composition
requirements
of
this
12
section
are
met,
the
nominations
for
subscriber
directors
13
shall
be
made
by
the
subscriber
directors
of
the
board
under
14
procedures
the
board
establishes
which
shall
also
permit
15
nomination
by
a
petition
of
at
least
fifty
subscribers.
The
16
board
shall
also
establish
procedures
to
permit
nomination
of
17
provider
directors
by
petition
of
at
least
fifty
participating
18
providers.
A
member
of
the
board
of
directors
of
a
corporation
19
subject
to
this
chapter
shall
not
serve
on
the
independent
20
subscriber
nominating
committee.
The
nominating
committee
21
shall
consist
of
subscribers
as
defined
in
this
section
.
The
22
rules
of
the
commissioner
of
insurance
shall
also
permit
23
nomination
of
subscriber
directors
by
a
petition
of
at
least
24
fifty
subscribers,
and
nomination
of
provider
directors
25
by
a
petition
of
at
least
fifty
participating
providers.
26
These
petitions
shall
be
considered
only
by
the
independent
27
nominating
committee
during
the
duration
of
the
committee.
28
Following
the
discontinuance
of
the
committee,
the
petition
29
process
shall
be
continued
and
the
board
of
directors
of
the
30
corporation
shall
consider
the
petitions.
The
independent
31
subscriber
nominating
committee
is
not
subject
to
chapter
17A
.
32
The
nominating
committee
shall
not
receive
per
diem
or
expenses
33
for
the
performance
of
their
duties.
34
6.
Population
factors,
representation
of
different
35
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geographic
regions,
and
the
demography
of
the
service
area
of
1
the
corporation
subject
to
this
chapter
shall
be
considered
2
when
making
nominations
for
the
board
of
directors
of
a
3
corporation
subject
to
this
chapter
.
4
7.
A
corporation
serving
states
in
addition
to
Iowa
shall
be
5
required
to
implement
this
section
only
for
directors
who
are
6
residents
of
Iowa
and
elected
as
board
members
from
Iowa.
7
Sec.
17.
Section
514E.1,
Code
2011,
is
amended
by
adding
the
8
following
new
subsection:
9
NEW
SUBSECTION
.
12A.
“HIPIOWA-FED”
means
the
limited
10
liability
company
organized
by
the
association
for
the
11
purposes
of
administering
the
state
of
Iowa
temporary
high-risk
12
insurance
pool
program
pursuant
to
a
contract
with
the
United
13
States
department
of
health
and
human
services.
14
Sec.
18.
Section
514E.2,
subsection
2,
Code
2011,
is
amended
15
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
16
following:
17
2.
a.
The
board
of
directors
of
the
association
shall
18
consist
of
seven
voting
members
and
seven
nonvoting
members.
19
The
voting
members
shall
be
appointed
by
the
governor,
subject
20
to
confirmation
by
the
senate.
The
governor
shall
designate
21
one
voting
member
as
chairperson
and
one
as
vice
chairperson.
22
b.
The
voting
members
of
the
board
of
directors
shall
be
23
appointed
by
the
governor
as
follows:
24
(1)
Two
persons
who
represent
the
interests
of
small
25
business
from
nominations
made
to
the
governor
by
nationally
26
recognized
groups
that
represent
the
interests
of
small
27
business.
28
(2)
Two
persons
who
represent
the
interests
of
consumers
29
from
nominations
made
to
the
governor
by
nationally
recognized
30
groups
that
represent
the
interests
of
consumers.
31
(3)
One
person
who
is
an
insurance
producer
licensed
under
32
chapter
522B.
33
(4)
One
person
who
is
a
health
care
actuary
or
economist
34
with
expertise
in
health
insurance.
35
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(5)
One
person
who
is
a
health
care
provider.
1
c.
The
nonvoting
members
are
as
follows:
2
(1)
The
commissioner
or
the
commissioner’s
designee.
3
(2)
The
director
of
human
services
or
the
director’s
4
designee.
5
(3)
The
director
of
public
health
or
the
director’s
6
designee.
7
(4)
Four
members
of
the
general
assembly,
one
appointed
8
by
the
speaker
of
the
house
of
representatives,
one
appointed
9
by
the
minority
leader
of
the
house
of
representatives,
10
one
appointed
by
the
majority
leader
of
the
senate,
and
one
11
appointed
by
the
minority
leader
of
the
senate.
12
d.
Meetings
of
the
board
of
directors
shall
be
held
at
13
the
call
of
the
chairperson
or
upon
the
request
of
at
least
14
two
voting
members.
Four
voting
members
shall
constitute
a
15
quorum
and
the
affirmative
vote
of
four
voting
members
shall
be
16
necessary
for
any
action
taken
by
the
board.
17
e.
The
voting
members
of
the
board
of
directors
shall
be
18
appointed
for
staggered
terms
of
three
years
within
sixty
19
days
after
the
effective
date
of
this
section
of
this
Act
and
20
by
December
15
of
each
year
thereafter.
The
initial
terms
21
of
the
voting
members
of
the
board
shall
be
staggered
at
the
22
discretion
of
the
governor.
A
voting
member
of
the
board
is
23
eligible
for
reappointment.
The
governor
shall
fill
a
vacancy
24
on
the
board
in
the
same
manner
as
the
original
appointment
for
25
the
remainder
of
the
term.
26
f.
Members
of
the
board
may
be
reimbursed
from
the
moneys
27
of
the
association
for
expenses
incurred
by
them
as
members,
28
but
shall
not
be
otherwise
compensated
by
the
association
for
29
their
services.
30
Sec.
19.
Section
514E.2,
subsection
4,
Code
2011,
is
amended
31
to
read
as
follows:
32
4.
a.
The
plan
of
operation
may
provide
that
the
powers
33
and
duties
of
the
association
may
be
delegated
to
a
person
who
34
will
perform
functions
similar
to
those
of
the
association.
35
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2293
A
delegation
under
this
section
takes
effect
only
upon
the
1
approval
of
both
the
board
of
directors
and
the
commissioner.
2
The
commissioner
shall
not
approve
a
delegation
unless
3
the
protections
afforded
to
the
insured
are
substantially
4
equivalent
to
or
greater
than
those
provided
under
this
5
chapter
.
6
b.
A
delegation
made
to
a
person
pursuant
to
this
subsection
7
shall
be
subject
to
annual
review
by
the
government
oversight
8
standing
committees
of
the
general
assembly.
Within
sixty
9
days
after
the
effective
date
of
this
section
of
this
Act
10
and
annually
thereafter,
any
person
to
whom
the
powers
and
11
duties
of
the
association
have
been
delegated
pursuant
to
this
12
subsection
shall
submit
a
report
to
the
government
oversight
13
committees
setting
forth
the
following:
14
(1)
The
scope
of
the
functions
performed
by
the
person.
15
(2)
Any
contractual
provisions
between
the
person
and
the
16
association
or
between
the
person
and
any
other
entity
on
17
behalf
of
the
association.
18
(3)
An
accounting
of
the
activities
and
services
performed
19
by
the
person
on
behalf
of
the
association.
20
(4)
An
accounting
of
all
payments
made
to
the
person
by
the
21
association,
including
but
not
limited
to
an
itemization
of
the
22
services
rendered
and
the
amount
of
each
payment
apportioned
to
23
the
performance
of
each
activity
or
service.
24
(5)
Any
other
information
requested
by
the
board
of
25
directors
of
the
association,
the
commissioner
of
insurance,
or
26
the
government
oversight
committees.
27
Sec.
20.
Section
514E.2,
Code
2011,
is
amended
by
adding
the
28
following
new
subsection:
29
NEW
SUBSECTION
.
5A.
The
association
shall
accept
30
third-party
payment
of
premiums
for
an
individual
enrolled
in
31
health
insurance
coverage
from
the
association.
32
Sec.
21.
Section
514E.2,
subsection
7,
Code
2011,
is
amended
33
by
adding
the
following
new
paragraph:
34
NEW
PARAGRAPH
.
0b.
Following
the
close
of
each
calendar
35
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2293
year,
HIPIOWA-FED
shall
determine
the
net
premiums
and
1
payments,
the
expenses
of
administration,
and
the
incurred
2
losses
of
the
program
for
the
year.
HIPIOWA-FED
shall
certify
3
the
amount
of
any
net
loss
for
the
preceding
calendar
year
to
4
the
commissioner
of
insurance
and
director
of
revenue
and
to
5
the
United
States
department
of
health
and
human
services.
In
6
the
event
that
additional
federal
funding
is
not
provided
to
7
HIPIOWA-FED
to
offset
the
loss,
the
loss
shall
be
assessed
by
8
the
association
on
behalf
of
HIPIOWA-FED
to
all
members
of
the
9
association
in
proportion
to
their
respective
shares
of
total
10
health
insurance
premiums
or
payments
for
subscriber
contracts
11
received
in
Iowa
during
the
second
preceding
calendar
year,
or
12
with
paid
losses
in
the
year,
coinciding
with
or
ending
during
13
the
calendar
year
or
on
any
other
equitable
basis
as
provided
14
in
the
plan
of
operation
of
the
association
or
as
required
by
15
the
United
States
department
of
health
and
human
services.
In
16
sharing
losses,
the
association,
on
behalf
of
HIPIOWA-FED,
may
17
abate
or
defer
in
any
part
the
assessment
of
a
member,
if,
in
18
the
opinion
of
the
board
of
the
association,
payment
of
the
19
assessment
would
endanger
the
ability
of
the
member
to
fulfill
20
its
contractual
obligations.
The
association,
on
behalf
21
of
HIPIOWA-FED,
may
also
provide
for
an
initial
or
interim
22
assessment
against
members
of
the
association
if
necessary
to
23
assure
the
financial
capability
of
HIPIOWA-FED
to
meet
the
24
incurred
or
estimated
claims
expenses
or
operating
expenses
of
25
the
temporary
high-risk
insurance
pool
program
until
the
next
26
calendar
year
is
completed.
Net
gains,
if
any,
must
be
held
at
27
interest
to
offset
future
losses
or
allocated
to
reduce
future
28
premiums.
29
Sec.
22.
Section
514E.2,
Code
2011,
is
amended
by
adding
the
30
following
new
subsections:
31
NEW
SUBSECTION
.
12A.
The
association
shall
be
considered
a
32
governmental
body
for
purposes
of
chapter
21
and
a
government
33
body
for
purposes
of
chapter
22.
A
person
to
whom
the
34
association
delegates
the
duties
and
powers
of
the
association
35
-14-
SF
2293
(5)
84
av/nh/jh
14/
21
S.F.
2293
shall
be
considered
a
governmental
body
for
purposes
of
chapter
1
21
and
a
government
body
for
purposes
of
chapter
22
to
the
2
extent
that
the
person
carries
out
the
powers
and
duties
of
the
3
association.
4
NEW
SUBSECTION
.
12B.
HIPIOWA-FED
shall
be
considered
a
5
governmental
body
for
purposes
of
chapter
21
and
a
government
6
body
for
purposes
of
chapter
22.
A
person
to
whom
the
duties
7
and
powers
of
the
limited
liability
company
are
delegated
shall
8
be
considered
a
governmental
body
for
purposes
of
chapter
9
21
and
a
government
body
for
purposes
of
chapter
22
to
the
10
extent
that
the
person
carries
out
the
powers
and
duties
of
the
11
limited
liability
company.
12
Sec.
23.
Section
514E.7,
subsection
5,
paragraph
d,
Code
13
2011,
is
amended
by
striking
the
paragraph.
14
Sec.
24.
Section
514J.103,
subsection
1,
Code
Supplement
15
2011,
is
amended
to
read
as
follows:
16
1.
Except
as
provided
in
subsection
2
,
this
chapter
shall
17
apply
to
all
health
carriers
,
including
health
carriers
issuing
18
a
policy
or
certificate
that
provides
coverage
for
dental
care
.
19
Sec.
25.
Section
514J.103,
subsection
2,
paragraph
a,
Code
20
Supplement
2011,
is
amended
to
read
as
follows:
21
a.
A
policy
or
certificate
that
provides
coverage
only
for
a
22
specified
disease,
specified
accident
or
accident-only,
credit,
23
disability
income,
hospital
indemnity,
long-term
care,
dental
24
care,
vision
care,
or
any
other
limited
supplemental
benefit.
25
Sec.
26.
Section
515.26,
Code
2011,
is
amended
to
read
as
26
follows:
27
515.26
Directors.
28
The
affairs
of
a
company
organized
as
provided
by
this
29
chapter
shall
be
managed
by
a
number
of
directors,
of
not
less
30
than
five
nor
more
than
twenty-one.
In
the
case
of
a
mutual
31
company,
all
such
directors
shall
be
policyholders.
32
Sec.
27.
Section
515.69,
subsection
1,
Code
2011,
is
amended
33
to
read
as
follows:
34
1.
A
stock
insurance
company
organized
under
or
by
the
35
-15-
SF
2293
(5)
84
av/nh/jh
15/
21
S.F.
2293
laws
of
any
other
state
or
foreign
government
for
the
purpose
1
specified
in
this
chapter
,
shall
not,
directly
or
indirectly,
2
take
risks
or
transact
business
of
insurance
in
this
state
3
unless
the
company
has
two
and
one-half
million
dollars
of
4
actual
paid-up
capital,
and
a
surplus
in
cash
or
invested
in
5
securities
authorized
by
law
of
not
less
than
two
and
one-half
6
million
dollars,
possesses
the
actual
amount
of
capital
and
7
surplus
required
of
any
company
organized
pursuant
to
this
8
chapter,
or
if
the
company
is
a
mutual
insurance
company,
the
9
actual
amount
of
surplus
required
of
any
mutual
insurance
10
company
organized
pursuant
to
this
chapter,
exclusive
of
assets
11
deposited
in
a
state,
territory,
district,
or
country
for
the
12
special
benefit
or
security
of
those
insured
in
that
state,
13
territory,
district,
or
country.
14
Sec.
28.
Section
515.136,
Code
2011,
is
amended
to
read
as
15
follows:
16
515.136
Value
of
building
——
liability.
17
The
insurance
company
or
association
issuing
such
policy
may
18
show
the
actual
value
of
said
property
at
date
of
policy,
and
19
any
depreciation
in
the
value
thereof
before
the
loss
occurred;
20
but
the
said
An
insurance
company
or
association
shall
be
21
liable
for
the
actual
value
of
the
property
insured
at
the
date
22
of
the
loss,
unless
such
value
exceeds
the
amount
stated
in
the
23
policy.
24
Sec.
29.
Section
515A.7,
subsection
1,
paragraph
b,
25
subparagraph
(5),
Code
2011,
is
amended
to
read
as
follows:
26
(5)
An
insurer
may
adopt
a
scheduled
or
schedule
rating
plan
27
providing
for
credits
or
debits
in
an
amount
not
exceeding
the
28
maximum
modification
allowed
as
set
forth
by
the
commissioner
29
by
rule.
This
amount
shall
be
in
addition
to
the
permitted
30
deviations
set
forth
in
subparagraphs
(1)
through
(4).
31
Sec.
30.
Section
518.14,
subsection
4,
paragraph
f,
32
unnumbered
paragraph
1,
Code
2011,
is
amended
to
read
as
33
follows:
34
Common
stocks,
common
stock
equivalents,
mutual
fund
35
-16-
SF
2293
(5)
84
av/nh/jh
16/
21
S.F.
2293
shares,
securities
convertible
into
common
stocks
or
common
1
stock
equivalents,
or
preferred
stocks
issued
or
guaranteed
2
by
a
corporation
incorporated
under
the
laws
of
the
United
3
States
or
a
state,
or
the
laws
of
Canada
or
a
province
of
4
Canada
,
or
limited
partnerships
publicly
traded
on
a
nationally
5
established
stock
exchange
in
the
United
States
.
Aggregate
6
investments
in
nondividend
paying
stocks
shall
not
exceed
five
7
percent
of
surplus.
8
Sec.
31.
Section
518A.12,
subsection
4,
paragraph
f,
9
unnumbered
paragraph
1,
Code
2011,
is
amended
to
read
as
10
follows:
11
Common
stocks,
common
stock
equivalents,
mutual
fund
12
shares,
securities
convertible
into
common
stocks
or
common
13
stock
equivalents,
or
preferred
stocks
issued
or
guaranteed
14
by
a
corporation
incorporated
under
the
laws
of
the
United
15
States
or
a
state,
or
the
laws
of
Canada
or
a
province
of
16
Canada
,
or
limited
partnerships
publicly
traded
on
a
nationally
17
established
stock
exchange
in
the
United
States
.
Aggregate
18
investments
in
nondividend
paying
stocks
shall
not
exceed
five
19
percent
of
surplus.
20
Sec.
32.
Section
521E.1,
subsection
4,
unnumbered
paragraph
21
1,
Code
2011,
is
amended
to
read
as
follows:
22
“Domestic
insurer”
means
an
insurance
company
domiciled
in
23
this
state
and
licensed
to
transact
the
business
of
insurance
24
under
chapter
508
,
512B,
515
,
or
520
,
except
that
it
shall
not
25
include
any
of
the
following:
26
Sec.
33.
Section
521E.1,
subsection
4,
paragraph
b,
Code
27
2011,
is
amended
by
striking
the
paragraph.
28
Sec.
34.
Section
521E.1,
subsections
6
and
7,
Code
2011,
are
29
amended
to
read
as
follows:
30
6.
“Foreign
insurer”
means
an
insurance
company
not
31
domiciled
in
this
state
which
is
licensed
to
transact
the
32
business
of
insurance
in
this
state
under
chapter
508
,
512B,
33
515
,
or
520
.
34
7.
“Life
and
health
insurer”
means
an
insurance
company
35
-17-
SF
2293
(5)
84
av/nh/jh
17/
21
S.F.
2293
licensed
under
chapter
508
,
a
fraternal
benefit
society
1
organized
under
chapter
512B,
or
a
licensed
property
and
2
casualty
insurer
writing
only
accident
and
health
insurance
3
under
chapter
515
.
4
Sec.
35.
Section
521E.3,
subsection
1,
paragraph
a,
5
subparagraph
(2),
Code
Supplement
2011,
is
amended
to
read
as
6
follows:
7
(2)
For
a
life
and
health
insurer,
the
insurer’s
8
total
adjusted
capital
is
greater
than
or
equal
to
its
9
company-action-level
risk-based
capital
but
less
than
the
10
product
of
its
authorized-control-level
risk-based
capital
and
11
two
and
one-half
three
,
and
has
a
negative
trend.
12
Sec.
36.
Section
522C.6,
Code
2011,
is
amended
by
adding
the
13
following
new
subsection:
14
NEW
SUBSECTION
.
3.
a.
A
licensed
public
adjuster
who,
15
after
hearing,
is
found
to
have
violated
this
chapter
or
any
16
rule
adopted
or
order
issued
pursuant
to
this
chapter,
may
17
be
ordered
to
cease
and
desist
from
engaging
in
the
conduct
18
resulting
in
the
violation
and
may
be
assessed
a
civil
penalty
19
as
provided
in
section
505.7A.
20
b.
A
person
who,
after
hearing,
is
found
to
have
violated
21
this
chapter
by
acting
as
a
public
adjuster
without
proper
22
licensure
may
be
ordered
to
cease
and
desist
from
engaging
in
23
the
conduct
resulting
in
the
violation
and
may
be
assessed
a
24
civil
penalty
according
to
the
provisions
of
chapter
507A.
25
c.
If
a
person
has
engaged,
is
engaging,
or
is
about
to
26
engage
in
any
act
or
practice
constituting
a
violation
of
27
this
chapter
or
any
rule
adopted
or
order
issued
pursuant
to
28
this
chapter,
the
commissioner
may
issue
a
summary
order
that
29
includes
a
brief
statement
of
findings
of
fact,
conclusions
of
30
law,
and
policy
reasons
for
the
order,
and
that
directs
the
31
person
to
cease
and
desist
from
engaging
in
the
act
or
practice
32
constituting
the
violation
and
that
may
assess
a
civil
penalty
33
or
take
other
affirmative
action
as
in
the
judgment
of
the
34
commissioner
is
necessary
to
assure
that
the
person
complies
35
-18-
SF
2293
(5)
84
av/nh/jh
18/
21
S.F.
2293
with
the
requirements
of
this
chapter
as
provided
in
chapter
1
507A.
2
d.
If
a
person
does
not
comply
with
an
order
issued
pursuant
3
to
this
subsection,
the
commissioner
may
petition
a
court
of
4
competent
jurisdiction
to
enforce
the
order.
The
court
shall
5
not
require
the
commissioner
to
post
a
bond
in
an
action
or
6
proceeding
under
this
subsection.
If
the
court
finds,
after
7
notice
and
opportunity
for
hearing,
that
the
person
is
not
in
8
compliance
with
an
order,
the
court
may
adjudge
the
person
to
9
be
in
civil
contempt
of
the
order.
The
court
may
impose
a
civil
10
penalty
against
the
person
for
contempt
in
an
amount
not
less
11
than
three
thousand
dollars
but
not
greater
than
ten
thousand
12
dollars
for
each
violation
and
may
grant
any
other
relief
that
13
the
court
determines
is
just
and
proper
in
the
circumstances.
14
Sec.
37.
Section
598.20A,
Code
2011,
is
amended
to
read
as
15
follows:
16
598.20A
Beneficiary
revocation
——
life
insurance.
17
1.
Except
as
preempted
by
federal
law,
if
a
decree
of
18
dissolution,
annulment,
or
separate
maintenance
is
issued
after
19
an
insured
the
policy
owner
of
an
insurance
contract
insuring
20
the
policy
owner’s
own
life
has
designated
the
insured’s
policy
21
owner’s
spouse
or
one
or
more
relatives
of
the
insured’s
policy
22
owner’s
spouse
as
a
beneficiary
under
a
life
insurance
policy
23
in
effect
on
the
date
of
the
decree,
a
provision
in
the
life
24
insurance
policy
making
such
a
designation
is
voided
by
the
25
issuance
of
the
decree
unless
any
of
the
following
apply:
26
a.
The
decree
designates
the
insured’s
policy
owner’s
former
27
spouse
or
one
or
more
relatives
of
the
insured’s
policy
owner’s
28
spouse
as
beneficiary.
29
b.
After
issuance
of
the
decree,
the
insured
policy
owner
30
executes
a
designation
of
beneficiary
form
provided
by
the
31
insurance
company
naming
the
insured’s
policy
owner’s
former
32
spouse
or
one
or
more
relatives
of
the
insured’s
policy
owner’s
33
former
spouse
as
beneficiary.
34
c.
The
insured
policy
owner
and
the
insured’s
policy
owner’s
35
-19-
SF
2293
(5)
84
av/nh/jh
19/
21
S.F.
2293
former
spouse
remarry.
1
2.
If
a
beneficiary
designation
is
not
effective
pursuant
to
2
subsection
1
,
the
benefits
or
proceeds
of
the
life
insurance
3
policy
are
payable
to
an
alternate
beneficiary,
or
if
there
is
4
no
alternate
beneficiary,
to
the
estate
of
the
insured
policy
5
owner
.
6
3.
An
insurer
who
pays
benefits
or
proceeds
of
a
life
7
insurance
policy
to
a
beneficiary
under
a
designation
that
is
8
void
pursuant
to
subsection
1
is
not
liable
for
payment
to
an
9
alternative
beneficiary
as
provided
under
subsection
2
unless
10
both
of
the
following
apply:
11
a.
At
least
ten
days
prior
to
payment
of
the
benefits
12
or
proceeds
of
the
life
insurance
policy
to
the
designated
13
beneficiary,
the
insurer
receives
written
notice
at
the
home
14
office
of
the
insurer
that
the
designation
of
the
beneficiary
15
is
not
effective
pursuant
to
subsection
1
.
16
b.
The
insurer
has
failed
to
interplead
the
benefits
or
17
proceeds
of
the
life
insurance
policy
in
a
court
of
competent
18
jurisdiction
in
accordance
with
the
rules
of
civil
procedure.
19
4.
This
section
does
not
limit
the
right
of
a
beneficiary
20
to
seek
recovery
from
any
person
or
entity
that
erroneously
21
receives
or
collects
the
benefits
or
proceeds
from
a
life
22
insurance
policy.
23
5.
This
section
does
not
affect
the
right
of
an
insured’s
24
former
a
policy
owner’s
spouse
to
assert
an
ownership
interest
25
in
a
life
insurance
policy
insuring
the
life
of
the
policy
26
owner
that
is
not
disclosed
to
the
insured’s
policy
owner’s
27
spouse
prior
to
the
decree
of
dissolution,
annulment,
or
28
separate
maintenance
and
that
is
not
addressed
by
the
decree.
29
6.
For
purposes
of
this
section
,
“relative
of
the
insured’s
30
policy
owner’s
spouse”
means
a
person
who
is
related
to
the
31
insured’s
policy
owner’s
former
spouse
by
blood,
adoption,
32
or
affinity,
and
who,
subsequent
to
a
decree
of
dissolution,
33
annulment,
or
separate
maintenance,
ceases
to
be
related
to
the
34
insured
policy
owner
by
blood,
adoption,
or
affinity.
35
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S.F.
2293
Sec.
38.
REQUEST
FOR
AMENDMENT
OF
CONTRACT
PROVISIONS
1
BY
HIPIOWA-FED.
Within
thirty
days
after
enactment
of
the
2
sections
of
this
Act
amending
sections
514E.1
and
514E.2,
3
HIPIOWA-FED,
the
limited
liability
company
organized
by
4
the
Iowa
comprehensive
health
insurance
association
for
the
5
purpose
of
administering
the
state
of
Iowa
temporary
high-risk
6
insurance
pool
program
pursuant
to
a
contract
with
the
United
7
States
department
of
health
and
human
services,
shall
request
8
that
the
United
States
department
of
health
and
human
services
9
amend
the
requirements
of
the
contract
between
HIPIOWA-FED
10
and
the
department
to
allow
HIPIOWA-FED
to
accept
third-party
11
payment
of
premiums
for
an
individual
enrolled
in
the
program.
12
Sec.
39.
EFFECTIVE
UPON
ENACTMENT.
The
following
13
provision
or
provisions
of
this
Act,
being
deemed
of
immediate
14
importance,
take
effect
upon
enactment:
15
1.
The
section
of
this
Act
enacting
section
507C.17A.
16
2.
The
section
of
this
Act
amending
section
514E.1.
17
3.
The
sections
of
this
Act
amending
section
514E.2.
18
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