Bill Text: IA SSB1119 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to certificates of insurance, including penalties and effective date and applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2017-02-23 - Subcommittee recommends passage. [SSB1119 Detail]
Download: Iowa-2017-SSB1119-Introduced.html
Senate
Study
Bill
1119
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
ANDERSON)
A
BILL
FOR
An
Act
relating
to
certificates
of
insurance,
including
1
penalties
and
effective
date
and
applicability
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
515.115
Certificates
of
insurance
1
——
penalty.
2
1.
As
used
in
this
section,
unless
the
context
otherwise
3
requires:
4
a.
“Certificate
of
insurance”
means
a
document
or
5
instrument,
regardless
of
how
the
document
or
instrument
is
6
titled
or
described,
that
is
prepared
or
issued
by
an
insurer
7
or
insurance
producer
as
evidence
of
property
and
casualty
8
insurance
coverage.
“Certificate
of
insurance”
does
not
include
9
a
policy
of
insurance,
insurance
binder,
policy
endorsement,
or
10
automobile
insurance
identification
or
information
card.
11
b.
“Commercial
real
estate
transaction”
means
a
non-recourse
12
commercial
lending
transaction
in
which
the
underlying
property
13
serves
as
the
primary
collateral
securing
the
borrower’s
14
repayment
of
the
loan
and
the
borrower
or
any
of
the
borrower’s
15
members,
partners,
or
shareholders,
or
any
person
related
16
to
the
borrower
or
the
borrower’s
members,
partners,
or
17
shareholders,
does
not
bear
the
economic
risk
of
loss
in
the
18
event
of
a
payment
default
under
the
terms
of
the
commercial
19
lending
transaction.
20
c.
“Insurance
producer”
means
a
person
required
to
be
21
licensed
pursuant
to
chapter
522B
to
sell,
solicit,
or
22
negotiate
property
and
casualty
insurance.
23
d.
“Insurer”
means
a
property
and
casualty
insurance
company
24
regulated
under
this
chapter.
25
e.
“Person”
means
the
same
as
defined
in
section
4.1.
26
2.
a.
The
commissioner
of
insurance
shall
prohibit
the
use
27
of
a
certificate
of
insurance
form
if
the
form
is
either
of
the
28
following:
29
(1)
Unfair,
misleading,
or
deceptive,
or
violates
public
30
policy.
31
(2)
Violates
any
law,
including
any
rule
adopted
by
the
32
commissioner
of
insurance
pursuant
to
chapter
17A.
33
b.
A
certificate
of
insurance
is
not
a
policy
of
insurance
34
and
does
not
affirmatively
or
negatively
amend,
extend,
35
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or
alter
the
coverage
afforded
by
the
policy
to
which
the
1
certificate
of
insurance
makes
reference.
A
certificate
of
2
insurance
shall
not
confer
on
any
person
new
or
additional
3
rights
beyond
what
the
referenced
policy
of
insurance
expressly
4
provides.
5
c.
Notwithstanding
any
provision
of
this
chapter
to
the
6
contrary,
or
any
language
on
a
certificate
of
insurance
7
that
states
that
the
form
is
for
“information
only”,
a
8
binder
delivered
together
with
a
certificate
of
insurance
in
9
connection
with
a
commercial
real
estate
transaction
shall
10
be
valid
and
may
be
relied
upon
by
the
borrower
or
by
the
11
borrower’s
lender
as
evidence
of
insurance,
including
in
a
12
private
civil
action
or
an
administrative
proceeding,
until
13
the
delivery
of
the
insurance
policy
to
the
borrower
or
14
the
cancellation
of
the
binder
pursuant
to
section
515.125,
15
515.126,
or
515.127.
16
3.
a.
A
person
shall
not
do
any
of
the
following:
17
(1)
Prepare,
issue,
request,
or
require
the
issuance
of
a
18
certificate
of
insurance
that
contains
any
false
or
misleading
19
information
concerning
the
policy
of
insurance
to
which
the
20
certificate
of
insurance
makes
reference.
21
(2)
Prepare,
issue,
request,
or
require
the
issuance
of
22
a
certificate
of
insurance
that
purports
to
affirmatively
or
23
negatively
amend,
extend,
or
alter
the
coverage
provided
by
the
24
policy
of
insurance
to
which
the
certificate
of
insurance
makes
25
reference.
26
b.
A
certificate
of
insurance
shall
not
warrant
that
the
27
policy
of
insurance
referenced
in
the
certificate
of
insurance
28
complies
with
the
insurance
or
indemnification
requirements
29
of
a
contract
and
the
inclusion
of
a
contract
number
or
30
description
within
a
certificate
of
insurance
shall
not
be
31
interpreted
as
warranting
compliance
with
such
requirements.
32
4.
A
person
is
entitled
to
notice
of
cancellation,
33
nonrenewal,
or
material
change
concerning
a
policy
of
insurance
34
or
to
any
similar
notice
concerning
a
policy
of
insurance
35
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only
if
the
person
has
such
rights
to
notice
under
the
terms
1
of
the
policy
of
insurance
or
any
endorsement
to
the
policy
2
of
insurance.
The
terms
and
conditions
of
a
person’s
right
3
to
notice
are
governed
by
the
policy
of
insurance
or
the
4
endorsement
and
shall
not
be
altered
by
a
certificate
of
5
insurance.
6
5.
a.
The
provisions
of
this
section
are
applicable
to
all
7
certificates
of
insurance
issued
in
connection
with
property,
8
operations,
or
risks
located
in
this
state,
regardless
of
9
where
the
policyholder,
insurer,
insurance
producer,
or
person
10
requesting
or
requiring
the
issuance
of
a
certificate
of
11
insurance
is
located.
12
b.
A
certificate
of
insurance
or
any
other
document
or
13
correspondence
prepared,
issued,
requested,
or
required
in
14
violation
of
this
section
is
null
and
void.
15
6.
The
commissioner
of
insurance
may
do
all
of
the
16
following:
17
a.
Examine
and
investigate
the
activities
of
any
person
that
18
the
commissioner
reasonably
believes
has
been
or
is
engaged
in
19
an
act
or
practice
prohibited
under
this
section.
20
b.
Enforce
the
provisions
of
this
section,
including
the
21
authority
to
issue
orders
to
cease
and
desist,
and
to
impose
a
22
penalty
in
an
amount
of
five
hundred
dollars
per
violation
to
23
be
collected
in
the
name
of
the
state
for
deposit
as
provided
24
in
section
505.7.
25
c.
Adopt
rules
pursuant
to
chapter
17A
to
administer
this
26
section.
27
Sec.
2.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
28
immediate
importance,
takes
effect
upon
enactment.
29
Sec.
3.
APPLICABILITY.
This
Act
applies
to
certificates
of
30
insurance
prepared,
issued,
requested,
or
required
beginning
31
ninety
days
after
the
effective
date
of
this
Act.
32
EXPLANATION
33
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
34
the
explanation’s
substance
by
the
members
of
the
general
assembly.
35
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_____
This
bill
relates
to
certificates
of
insurance
and
includes
1
penalties
and
effective
date
and
applicability
provisions.
2
The
bill
provides
that
a
“certificate
of
insurance”
is
a
3
document
or
instrument,
regardless
of
how
it
is
described,
that
4
is
prepared
or
issued
by
an
insurer
or
insurance
producer
as
5
evidence
of
property
and
casualty
insurance.
The
commissioner
6
of
insurance
is
directed
to
prohibit
the
use
of
a
certificate
7
of
insurance
that
is
unfair,
misleading,
or
deceptive,
or
that
8
violates
any
law
or
a
rule
adopted
by
the
commissioner.
9
A
certificate
of
insurance
is
not
a
policy
of
insurance
and
10
cannot
affirmatively
or
negatively
amend,
extend,
or
alter
11
coverage
or
confer
additional
rights
to
be
provided
by
an
12
insurance
policy.
13
The
bill
provides
that
notwithstanding
any
other
provision
14
of
Code
chapter
515
to
the
contrary,
or
any
language
on
15
a
certificate
of
insurance
that
states
the
form
is
for
16
“information
only”,
a
binder
delivered
together
with
a
17
certificate
of
insurance
in
connection
with
a
commercial
real
18
estate
transaction
shall
be
valid
and
may
be
relied
upon
by
the
19
borrower
or
by
the
borrower’s
lender
as
evidence
of
insurance,
20
including
in
a
private
civil
action
or
an
administrative
21
proceeding,
until
the
delivery
of
the
insurance
policy
to
22
the
borrower
or
the
cancellation
of
the
binder
pursuant
to
23
the
notice
requirements
contained
in
Code
sections
515.125
24
through
515.127.
The
bill
defines
a
“commercial
real
estate
25
transaction”
as
a
non-recourse
commercial
lending
transaction
26
in
which
the
underlying
property
serves
as
the
primary
27
collateral
securing
the
borrower’s
repayment
of
the
loan
and
28
the
borrower
or
any
of
the
borrower’s
members,
partners,
or
29
shareholders
or
any
person
related
to
any
of
those
persons,
30
does
not
bear
the
economic
risk
of
loss
in
the
event
of
a
31
payment
default
under
the
terms
of
the
commercial
lending
32
transaction.
33
The
bill
prohibits
a
person
from
preparing,
issuing,
34
requesting,
or
requiring
the
issuance
of
a
certificate
of
35
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insurance
that
contains
false
or
misleading
information
1
about
the
policy
of
insurance
or
purports
to
affirmatively
or
2
negatively
amend,
extend,
or
alter
the
policy’s
coverage.
A
3
certificate
of
insurance
shall
not
warrant
that
the
policy
4
of
insurance
referenced
in
the
certificate
complies
with
the
5
insurance
or
indemnification
requirements
of
a
contract
and
the
6
inclusion
of
a
contract
number
or
description
in
a
certificate
7
of
insurance
shall
not
be
interpreted
as
warranting
such
8
compliance.
9
A
person
is
entitled
to
notice
of
cancellation,
nonrenewal,
10
or
material
changes
in
an
insurance
policy
or
any
other
similar
11
notice
concerning
the
policy
only
if
the
person
has
such
rights
12
under
the
terms
of
the
policy
or
the
policy
endorsement.
These
13
rights
cannot
be
altered
by
a
certificate
of
insurance.
14
The
provisions
of
the
bill
are
applicable
to
all
15
certificates
of
insurance
issued
in
connection
with
property,
16
operations,
or
risks
located
in
this
state,
regardless
of
17
where
the
policyholder,
insurer,
insurance
producer,
or
person
18
requesting
or
requiring
the
issuance
of
a
certificate
of
19
insurance
is
located.
A
certificate
of
insurance
or
any
other
20
document
or
correspondence
prepared,
issued,
requested,
or
21
required
in
violation
of
the
bill’s
provisions
is
null
and
22
void.
23
The
commissioner
of
insurance
may
examine
and
investigate
24
the
activities
of
any
person
the
commissioner
reasonably
25
believes
has
been
or
is
engaged
in
an
act
or
practice
26
prohibited
under
the
bill;
enforce
the
provisions
of
the
bill
27
including
issuance
of
cease
and
desist
orders
and
imposition
of
28
a
penalty
of
$500
per
violation;
and
adopt
rules
pursuant
to
29
Code
chapter
17A
to
administer
the
bill.
30
The
bill
takes
effect
upon
enactment
and
is
applicable
31
to
certificates
of
insurance
prepared,
issued,
requested,
or
32
required
beginning
90
days
after
the
effective
date
of
the
33
bill.
34
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