Bill Text: IA SF331 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to the insurance fraud bureau, criminal history checks for licenses granted by the insurance division, and resolving inconsistencies. (Formerly SSB 1151.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2019-03-13 - Withdrawn. S.J. 615. [SF331 Detail]
Download: Iowa-2019-SF331-Introduced.html
Senate
File
331
-
Introduced
SENATE
FILE
331
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
SSB
1151)
A
BILL
FOR
An
Act
relating
to
the
insurance
fraud
bureau,
criminal
history
1
checks
for
licenses
granted
by
the
insurance
division,
and
2
resolving
inconsistencies.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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331
Section
1.
Section
502.604A,
Code
2019,
is
amended
to
read
1
as
follows:
2
502.604A
Limited
law
Law
enforcement
authority.
3
The
administrator
or
the
administrator’s
designee,
when
4
carrying
out
the
provisions
of
section
502.603
or
502.604
,
may
5
develop,
share,
and
receive
information
related
to
any
law
6
enforcement
purpose,
including
any
criminal
investigation.
7
The
administrator
or
designee
shall
not
have
the
authority
to
8
issue
criminal
subpoenas
or
make
arrests.
The
administrator
9
or
designee
shall
not
be
considered
a
peace
officer,
including
10
as
provided
in
chapter
801
.
An
insurance
fraud
bureau
11
investigator
shall
be
authorized
to
conduct
an
investigation
12
under
article
5
of
this
chapter
and
shall
have
law
enforcement
13
authority
pursuant
to
section
507E.8.
14
Sec.
2.
Section
507E.2,
Code
2019,
is
amended
to
read
as
15
follows:
16
507E.2
Purpose
Insurance
fraud
bureau
.
17
1.
An
insurance
fraud
bureau
is
created
within
the
insurance
18
division.
Upon
a
reasonable
determination
by
the
division,
19
by
its
own
inquiries
or
as
a
result
of
complaints
a
complaint
20
filed
with
the
division,
that
a
person
has
engaged
in,
is
21
engaging
in,
or
may
be
engaging
in
an
act
or
practice
that
22
violates
this
chapter
or
any
other
provision
of
the
insurance
23
code
subject
to
the
jurisdiction
of
the
commissioner
,
the
24
division
may
administer
oaths
and
affirmations,
serve
subpoenas
25
ordering
the
attendance
of
witnesses,
and
collect
evidence
26
related
to
such
act
or
practice.
27
2.
The
commissioner
shall
dedicate
a
minimum
of
two
28
insurance
fraud
bureau
investigators
to
the
investigation
of
29
suspected
workers’
compensation
fraud.
30
Sec.
3.
Section
507E.5,
subsection
5,
Code
2019,
is
amended
31
to
read
as
follows:
32
5.
An
insurance
fraud
bureau
investigator
or
other
staff
33
member
of
the
bureau
is
not
subject
to
subpoena
in
a
civil
34
action
concerning
any
matter
of
which
the
bureau
investigator
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or
other
staff
member
has
knowledge
pursuant
to
a
pending
or
1
continuing
investigation
being
conducted
by
the
bureau
pursuant
2
to
this
chapter
.
3
Sec.
4.
Section
507E.8,
Code
2019,
is
amended
to
read
as
4
follows:
5
507E.8
Law
enforcement
officer
status
authority
.
6
1.
Bureau
investigators
For
purposes
of
an
arrest
resulting
7
from
a
criminal
violation
of
any
provision
of
the
Code
subject
8
to
the
jurisdiction
of
the
commissioner
established
as
a
result
9
of
an
investigation
pursuant
to
this
chapter,
an
insurance
10
fraud
bureau
investigator
shall
have
the
power
authority
and
11
status
of
a
law
enforcement
officers
who
by
the
nature
of
their
12
duties
may
be
required
to
perform
the
duties
of
a
peace
officer
13
when
making
arrests
for
criminal
violations
established
as
a
14
result
of
their
investigations
pursuant
to
this
chapter
officer
15
pursuant
to
section
80B.3,
subsection
3
.
16
2.
The
general
laws
applicable
to
arrests
an
arrest
by
a
17
law
enforcement
officers
officer
of
the
state
also
apply
to
18
an
insurance
fraud
bureau
investigators
investigator
.
Bureau
19
investigators
An
insurance
fraud
bureau
investigator
shall
20
have
the
power
to
execute
arrest
warrants
and
search
warrants
21
for
the
same
criminal
violations
,
serve
subpoenas
issued
for
22
the
examination,
investigation,
and
trial
of
all
offenses
23
identified
through
their
investigations
the
course
of
an
24
investigation
conducted
pursuant
to
this
section
,
and
arrest
25
upon
probable
cause
without
warrant
a
person
found
in
the
act
26
of
committing
a
violation
of
the
provisions
a
provision
of
this
27
chapter
.
28
Sec.
5.
Section
508E.3,
Code
2019,
is
amended
to
read
as
29
follows:
30
508E.3
License
requirements.
31
1.
a.
A
person
shall
not
operate
as
a
viatical
settlement
32
provider
or
viatical
settlement
broker
without
first
obtaining
33
a
license
from
the
commissioner
of
the
state
of
residence
of
34
the
viator.
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b.
(1)
A
life
insurance
producer
who
has
been
duly
licensed
1
as
a
resident
insurance
producer
with
a
life
line
of
authority
2
in
this
state
or
the
life
insurance
producer’s
home
state
for
3
at
least
one
year
immediately
prior
to
operating
as
a
viatical
4
settlement
broker
and
is
licensed
as
a
nonresident
producer
in
5
this
state
shall
be
deemed
to
meet
the
licensing
requirements
6
of
this
section
and
shall
be
permitted
to
operate
as
a
viatical
7
settlement
broker.
8
(2)
Not
later
than
thirty
days
from
the
first
day
of
9
operating
as
a
viatical
settlement
broker,
the
life
insurance
10
producer
shall
notify
the
commissioner
that
the
life
insurance
11
producer
is
acting
as
a
viatical
settlement
broker
on
a
form
12
prescribed
by
the
commissioner,
and
shall
pay
any
applicable
13
fee
of
up
to
one
hundred
dollars
as
provided
by
rules
adopted
14
by
the
commissioner.
The
notification
shall
include
an
15
acknowledgment
by
the
life
insurance
producer
that
the
life
16
insurance
producer
will
operate
as
a
viatical
settlement
broker
17
in
accordance
with
this
chapter
.
The
notification
shall
also
18
include
proof
that
the
life
insurance
producer
is
covered
by
an
19
errors
and
omissions
policy
for
an
amount
of
not
less
than
one
20
hundred
thousand
dollars
per
occurrence
and
not
less
than
one
21
hundred
thousand
dollars
total
annual
aggregate
for
all
claims
22
during
the
policy
period.
23
(3)
b.
The
An
insurer
that
issued
the
a
policy
being
24
viaticated
shall
not
be
responsible
for
any
act
or
omission
of
25
a
viatical
settlement
broker
or
viatical
settlement
provider
26
arising
out
of
or
in
connection
with
the
viatical
settlement
27
transaction,
unless
the
insurer
receives
compensation
for
the
28
placement
of
a
viatical
settlement
contract
from
the
viatical
29
settlement
provider
or
viatical
settlement
broker
in
connection
30
with
the
viatical
settlement
contract.
31
c.
A
person
licensed
as
an
attorney,
certified
public
32
accountant,
or
financial
planner
accredited
by
a
nationally
33
recognized
accreditation
agency
who
is
retained
to
represent
34
the
a
viator,
whose
compensation
is
not
paid
directly
or
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indirectly
by
the
viatical
settlement
provider,
may
negotiate
a
1
viatical
settlement
contracts
contract
on
behalf
of
the
viator
2
without
having
to
obtain
a
license
as
a
viatical
settlement
3
broker.
4
2.
An
application
for
a
viatical
settlement
provider
5
or
viatical
settlement
broker
license
shall
be
made
to
the
6
commissioner
by
the
applicant
on
a
form
prescribed
by
the
7
commissioner,
and
the
application
shall
be
accompanied
by
a
8
fee
of
not
more
than
one
hundred
dollars
as
provided
by
rules
9
adopted
by
the
commissioner.
10
3.
The
A
viatical
settlement
provider
or
viatical
11
settlement
broker
license
term
shall
be
three
years
and
the
12
license
may
be
renewed
upon
payment
of
the
a
renewal
fee
of
not
13
more
than
one
hundred
dollars
as
provided
by
rules
adopted
by
14
the
commissioner.
A
failure
to
pay
the
fee
by
the
renewal
date
15
results
shall
result
in
expiration
of
the
license.
16
4.
An
applicant
shall
provide
information
on
forms
17
required
by
the
commissioner
and
shall
meet
all
requirements
18
pursuant
to
section
522B.5A
if
required
by
the
commissioner
.
19
The
commissioner
shall
have
the
authority
,
at
any
time,
to
20
require
the
an
applicant
to
fully
disclose
the
identity
of
21
all
stockholders,
partners,
officers,
members,
and
employees
,
22
and
the
.
The
commissioner
may,
in
the
exercise
of
the
23
commissioner’s
discretion,
refuse
to
issue
a
license
in
the
24
name
of
a
legal
entity
to
such
applicant
if
not
satisfied
that
25
any
officer,
employee,
stockholder,
partner,
or
member
thereof
,
26
or
employee
who
may
materially
influence
the
applicant’s
27
conduct
meets
the
standards
of
this
chapter
.
28
5.
A
license
issued
to
a
legal
entity
authorizes
all
29
partners,
officers,
members,
and
designated
employees
to
act
as
30
viatical
settlement
providers
or
viatical
settlement
brokers,
31
as
applicable,
under
the
license,
and
all
those
persons
32
shall
be
named
in
the
application
and
any
supplements
to
the
33
application.
34
6.
5.
Upon
the
filing
of
an
application
and
the
payment
of
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the
license
fee,
the
commissioner
shall
make
an
investigation
1
of
investigate
each
applicant
and
issue
a
license
if
the
2
commissioner
finds
that
the
applicant
complies
with
all
of
the
3
following:
4
a.
If
a
viatical
settlement
provider,
has
provided
a
5
detailed
plan
of
operation.
6
b.
Is
competent
and
trustworthy
and
intends
to
act
in
good
7
faith
in
the
capacity
involved
by
the
license
applied
for.
8
c.
Has
a
good
business
reputation
and
has
had
experience,
9
training,
or
education
so
as
to
be
qualified
in
the
business
10
for
which
the
license
is
applied
for.
11
d.
If
a
legal
entity,
provides
a
certificate
of
good
12
standing
from
the
state
of
its
domicile.
13
e.
d.
If
a
viatical
settlement
provider
or
viatical
14
settlement
broker,
has
provided
an
antifraud
plan
that
meets
15
the
requirements
of
pursuant
to
section
508E.15,
subsection
7
.
16
7.
6.
The
commissioner
shall
not
issue
a
license
to
a
17
nonresident
applicant
unless
a
written
designation
of
an
18
agent
for
service
of
process
is
filed
and
maintained
with
the
19
commissioner
or
the
applicant
has
filed
with
the
commissioner
20
the
applicant’s
written
irrevocable
consent
that
any
action
21
against
the
applicant
may
be
commenced
against
the
applicant
by
22
service
of
process
on
the
commissioner.
If
an
applicant
files
23
such
consent,
service
of
process
made
on
the
commissioner
as
24
the
agent
for
service
of
process
shall
be
made
as
provided
in
25
section
505.30
.
26
8.
7.
A
viatical
settlement
provider
or
viatical
settlement
27
broker
shall
provide
to
the
commissioner
new
or
revised
28
information
about
officers,
ten-percent-or-more
stockholders,
29
partners,
directors,
members,
or
designated
employees
within
30
thirty
days
of
the
change.
31
9.
8.
An
individual
licensed
as
a
viatical
settlement
32
broker
shall
complete
on
a
triennial
basis
running
concurrent
33
with
the
license
term
twenty
credits
of
training
related
to
34
viatical
settlements
and
viatical
settlement
transactions,
as
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required
by
the
commissioner
;
provided,
however,
that
a
life
1
insurance
producer
who
is
operating
as
a
viatical
settlement
2
broker
pursuant
to
subsection
1
,
paragraph
“b”
,
shall
not
be
3
subject
to
the
requirements
of
this
subsection
.
Any
person
4
failing
to
meet
the
requirements
of
this
subsection
shall
be
5
subject
to
the
penalties
imposed
by
the
commissioner.
6
10.
9.
Fees
collected
pursuant
to
this
section
shall
be
7
deposited
as
provided
in
section
505.7
.
8
Sec.
6.
Section
522B.5,
subsection
1,
unnumbered
paragraph
9
1,
Code
2019,
is
amended
to
read
as
follows:
10
A
person
applying
for
a
resident
insurance
producer
license
11
shall
make
application
to
the
commissioner
on
the
uniform
12
application
,
meet
all
requirements
pursuant
to
section
522B.5A,
13
and
declare
under
penalty
of
refusal,
suspension,
or
revocation
14
of
the
license
that
the
all
statements
made
in
the
application
15
are
true,
correct,
and
complete
to
the
best
of
the
individual’s
16
knowledge
and
belief.
Before
approving
the
application,
the
17
commissioner
shall
find
all
of
the
following:
18
Sec.
7.
NEW
SECTION
.
522B.5A
Criminal
history
check.
19
1.
In
determining
eligibility
for
licensure,
the
20
commissioner
is
authorized
to
require
an
applicant
pursuant
to
21
subsection
2
to
provide
to
the
commissioner
the
applicant’s
22
fingerprints
and
reasonable
fees
required
to
perform
a
state
23
criminal
history
check
through
the
department
of
public
safety,
24
division
of
criminal
investigation,
and
a
national
criminal
25
history
check
through
the
federal
bureau
of
investigation.
By
26
submitting
such
fingerprints,
the
applicant
authorizes
the
27
commissioner
to
do
all
of
the
following:
28
a.
Submit
the
applicant’s
fingerprints
to
the
department
29
of
public
safety,
division
of
criminal
investigation,
for
30
submission
to
the
federal
bureau
of
investigation
for
the
31
purpose
of
conducting
a
national
criminal
history
check.
32
b.
Receive
the
results
of
the
state
and
national
criminal
33
history
checks.
34
2.
The
commissioner
is
authorized
to
require
a
state
and
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national
criminal
history
check
on
each
applicant
that
applies
1
for
any
of
the
following:
2
a.
An
initial
license
in
Iowa
as
a
resident
insurance
3
producer.
4
b.
An
initial
license
or
an
additional
line
of
authority
5
under
a
nonresident
insurance
producer
license
if
a
state
and
6
national
criminal
history
check
has
not
already
been
completed.
7
c.
A
renewal,
reinstatement,
or
reissuance
of
a
license
8
if
the
license
of
a
producer
has
been
revoked
or
suspended
9
pursuant
to
section
522B.11,
the
license
of
a
public
adjuster
10
has
been
revoked
or
suspended
pursuant
to
section
522C.6,
or
11
the
license
of
a
viatical
settlement
provider
or
viatical
12
settlement
broker
has
been
revoked
or
suspended
pursuant
to
13
section
508E.4.
14
d.
An
initial
license
as
a
viatical
settlement
provider
or
15
viatical
settlement
broker
in
this
state.
16
e.
An
initial
license
as
a
public
adjuster
in
this
state.
17
3.
The
commissioner
shall
require
an
applicant
pursuant
to
18
subsection
2
to
submit
a
full
set
of
fingerprints
and
any
other
19
required
identifying
information
to
the
commissioner
on
a
form
20
prescribed
by
the
department
of
public
safety.
21
4.
The
commissioner
may
contract
with
a
third-party
22
vendor
for
the
collection
and
transmission
of
an
applicant’s
23
fingerprints
for
the
purpose
of
conducting
a
state
and
24
national
criminal
history
check.
The
commissioner
may
agree
25
to
reasonable
fees
to
be
charged
by
the
third-party
vendor
and
26
may
require
such
reasonable
fees
to
be
paid
by
the
applicant
27
directly
to
the
third-party
vendor.
28
5.
The
results
of
a
criminal
history
check
conducted
29
pursuant
to
this
section
shall
not
be
considered
a
public
30
record
pursuant
to
chapter
22.
An
applicant’s
fingerprints
and
31
any
criminal
history
check
information
shall
not
be
subject
to
32
subpoena,
other
than
a
subpoena
issued
in
a
criminal
action
or
33
investigation,
shall
be
confidential
by
law
and
privileged,
and
34
shall
not
be
subject
to
discovery
or
be
admissible
in
evidence
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in
a
private
civil
action.
1
Sec.
8.
Section
522C.5,
Code
2019,
is
amended
to
read
as
2
follows:
3
522C.5
Application
for
license.
4
1.
A
person
applying
for
a
public
adjuster
license
shall
5
make
application
on
a
uniform
individual
application
or
uniform
6
business
entity
application
as
prescribed
by
the
commissioner
7
pursuant
to
rules
adopted
under
chapter
17A
.
8
2.
In
determining
eligibility
for
licensure
under
this
9
chapter
,
the
commissioner
shall
is
authorized
to
require
10
a
criminal
history
check
pursuant
to
section
522B.5A
for
11
each
individual
applying
for
a
public
adjuster
license
to
12
submit
a
full
set
of
fingerprints
with
the
application.
The
13
commissioner
shall
also
require
and
for
each
individual
who
14
will
be
acting
as
a
public
adjuster
of
a
business
entity
15
applying
for
licensure
under
this
chapter
to
submit
a
full
16
set
of
fingerprints
for
each
individual
who
will
be
acting
17
as
a
public
adjuster
on
behalf
of
the
business
entity
.
The
18
commissioner
shall
conduct
a
state
and
national
criminal
19
history
record
check
on
each
applicant.
The
commissioner
is
20
authorized
to
submit
fingerprints
and
any
required
fees
to
the
21
state
department
of
public
safety,
the
state
attorney
general,
22
and
the
federal
bureau
of
investigation
for
the
performance
of
23
such
criminal
record
checks.
24
a.
The
commissioner
may
contract
for
the
collection,
25
transmission,
and
resubmission
of
fingerprints
required
under
26
this
section
and
may
contract
for
a
reasonable
fingerprinting
27
fee
to
be
charged
by
the
contractor
for
these
services.
Any
28
fees
for
the
collection,
transmission,
and
retention
of
29
fingerprints
submitted
pursuant
to
this
subsection
shall
be
30
paid
directly
to
the
contractor
by
the
applicant.
31
b.
The
commissioner
may
waive
submission
of
fingerprints
32
by
any
person
who
has
previously
furnished
fingerprints
if
33
those
fingerprints
are
on
file
with
the
central
repository
34
of
the
national
association
of
insurance
commissioners,
its
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affiliates,
or
subsidiaries.
1
c.
The
commissioner
may
receive
criminal
history
record
2
information
concerning
an
applicant
that
was
requested
by
the
3
state
department
of
justice
directly
from
the
federal
bureau
4
of
investigation.
5
d.
The
commissioner
may
submit
electronic
fingerprint
6
records
and
necessary
identifying
information
to
the
national
7
association
of
insurance
commissioners,
its
affiliates,
8
or
subsidiaries
for
permanent
retention
in
a
centralized
9
repository
whose
purpose
is
to
provide
state
insurance
10
commissioners
with
access
to
fingerprint
records
in
order
to
11
perform
criminal
history
record
checks.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
relates
to
the
insurance
fraud
bureau
and
criminal
16
history
checks
for
licenses
granted
by
the
insurance
division.
17
The
bill
clarifies
that
the
insurance
fraud
bureau
has
the
18
authority
to
conduct
investigations
in
all
areas
under
the
19
jurisdiction
of
the
insurance
commissioner
and
also
clarifies
20
the
law
enforcement
authority
of
an
insurance
fraud
bureau
21
investigator.
The
bill
requires
the
commissioner
to
dedicate
22
a
minimum
of
two
insurance
fraud
bureau
investigators
to
the
23
investigation
of
suspected
workers’
compensation
fraud.
24
The
bill
authorizes
the
commissioner
to
require
new
25
applicants
licensed
under
the
commissioner’s
jurisdiction
to
26
submit
fingerprints.
The
bill
does
not
apply
to
current
Iowa
27
producers
in
good
standing.
28
The
bill
authorizes
the
commissioner
to
require
a
state
29
and
national
criminal
history
check
on
each
applicant
that
30
applies
for
an
initial
license
in
Iowa
as
a
resident
insurance
31
producer,
an
initial
license
or
an
additional
line
of
authority
32
under
a
nonresident
insurance
producer
license
if
a
state
33
and
national
criminal
history
check
has
not
already
been
34
completed,
an
initial
license
as
a
viatical
settlement
provider
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or
a
viatical
settlement
broker
in
the
state,
and
an
initial
1
license
as
a
public
adjuster
in
the
state.
In
addition,
2
the
commissioner
may
require
a
state
and
national
criminal
3
history
check
for
a
producer,
a
public
adjuster,
or
a
viatical
4
settlement
provider
or
viatical
settlement
broker
that
applies
5
for
a
renewal,
reinstatement,
or
reissuance
of
a
license
that
6
has
been
revoked
or
suspended.
7
The
bill
provides
that
by
submitting
fingerprints
an
8
applicant
is
authorizing
the
commissioner
to
submit
the
9
fingerprints
to
the
department
of
public
safety
for
a
state
10
criminal
history
check
and
for
submission
to
the
federal
bureau
11
of
investigation
for
a
national
criminal
history
check.
The
12
applicant
is
also
authorizing
the
commissioner
to
receive
the
13
results
of
the
state
and
national
criminal
history
check.
14
The
bill
authorizes
the
commissioner
to
contract
with
15
a
third-party
vendor
for
the
collection
and
submission
of
16
applicants’
fingerprints.
The
commissioner
may
agree
to
17
reasonable
fees
to
be
charged
by
the
vendor
and
may
require
18
the
fee
to
be
paid
by
an
applicant
directly
to
the
third-party
19
vendor.
20
The
bill
provides
that
the
results
of
an
applicant’s
21
criminal
history
check
are
not
a
public
record
under
Code
22
chapter
22.
An
applicant’s
fingerprints
and
criminal
history
23
check
are
only
subject
to
a
subpoena
issued
in
a
criminal
24
action
or
investigation,
shall
be
confidential
by
law
and
25
privileged,
and
are
not
subject
to
discovery
or
admissible
in
26
a
private
civil
action.
27
The
bill
requires
any
person
operating
as
either
a
viatical
28
settlement
provider
or
viatical
settlement
broker
to
be
29
licensed
and
no
longer
allows
an
exception
for
a
life
insurance
30
producer
licensed
for
at
least
one
year
as
a
resident
producer
31
in
this
state,
or
the
producer’s
home
state,
to
operate
as
32
a
viatical
settlement
broker.
The
bill
no
longer
permits
a
33
license
to
be
issued
to
a
legal
entity,
as
is
currently
allowed
34
by
law,
to
operate
as
either
a
viatical
settlement
provider
or
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