Bill Text: IA SSB1207 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to requirements for domestic surplus lines insurers.
Spectrum: Committee Bill
Status: (N/A - Dead) 2019-03-05 - Subcommittee recommends passage. [SSB1207 Detail]
Download: Iowa-2019-SSB1207-Introduced.html
Senate
Study
Bill
1207
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
CHAPMAN)
A
BILL
FOR
An
Act
relating
to
requirements
for
domestic
surplus
lines
1
insurers.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
515I.2,
Code
2019,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
6A.
“Domestic
surplus
lines
insurer”
means
3
a
domestic
insurer
that
has
been
authorized
by
the
commissioner
4
pursuant
to
chapter
515I
to
do
business
as
a
domestic
surplus
5
lines
insurer
with
which
a
surplus
lines
insurance
producer
may
6
place
surplus
lines
insurance.
7
Sec.
2.
Section
515I.2,
subsection
7,
Code
2019,
is
amended
8
to
read
as
follows:
9
7.
“Eligible
surplus
lines
insurer”
means
either
any
of
the
10
following:
11
a.
A
nonadmitted
insurer
that
has
filed
an
application
with
12
the
commissioner
and
been
approved
for
placement
of
surplus
13
lines
insurance
and
appears
on
the
Iowa
listing
of
nonadmitted
14
companies.
15
b.
A
nonadmitted
insurer
domiciled
outside
of
the
United
16
States
that
is
listed
on
the
quarterly
listing
of
alien
17
insurers
maintained
by
the
national
association
of
insurance
18
commissioners.
19
c.
A
domestic
surplus
lines
insurer
authorized
by
the
20
commissioner.
21
Sec.
3.
Section
515I.3,
Code
2019,
is
amended
to
read
as
22
follows:
23
515I.3
Placement
of
surplus
lines
insurance
business
with
24
nonadmitted
insurers
and
domestic
surplus
lines
insurers
.
25
1.
Surplus
lines
insurance
may
be
placed
by
a
surplus
lines
26
insurance
producer
with
a
nonadmitted
insurer
or
domestic
27
surplus
lines
insurer
only
if
all
of
the
following
requirements
28
are
met:
29
a.
The
proposed
nonadmitted
insurer
or
domestic
surplus
30
lines
insurer
is
an
eligible
surplus
lines
insurer.
31
b.
The
proposed
nonadmitted
insurer
or
domestic
surplus
32
lines
insurer
is
authorized
to
write
the
type
of
insurance
33
sought
in
this
state
in
its
domiciliary
jurisdiction.
34
c.
Unless
otherwise
exempt
from
this
requirement,
after
a
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diligent
search
the
full
amount
or
type
of
insurance
cannot
be
1
obtained
from
an
admitted
insurer.
2
d.
All
other
requirements
of
this
chapter
are
met.
3
2.
a.
In
addition
to
the
full
amount
of
gross
premiums
4
charged
by
the
nonadmitted
insurer
or
domestic
surplus
lines
5
insurer
for
the
insurance
on
which
a
premium
tax
is
imposed
6
for
surplus
lines
insurance
for
which
the
insured’s
home
state
7
is
Iowa,
a
surplus
lines
insurance
producer
shall
collect
and
8
pay
to
the
state
of
Iowa
the
appropriate
amount
of
premium
tax
9
as
provided
in
section
432.1
for
surplus
lines
insurance.
The
10
commissioner
shall
adopt
rules
to
specify
the
use
of
credits
or
11
deductions
that
may
be
applied
to
the
premium
tax.
12
b.
The
tax
on
any
portion
of
the
premium
unearned
at
the
13
termination
of
the
surplus
lines
insurance
that
has
been
14
credited
by
the
state
shall
be
returned
to
the
policyholder
15
directly
by
the
surplus
lines
insurance
producer.
The
surplus
16
lines
insurance
producer
is
prohibited
from
rebating,
for
any
17
reason,
any
part
of
the
tax.
18
3.
This
section
shall
not
apply
to
a
person
properly
19
licensed
as
an
insurance
producer,
who,
for
a
fee
and
pursuant
20
to
a
written
agreement,
is
engaged
solely
to
offer
advice,
21
counsel,
opinion,
or
service
to
an
insured
with
respect
to
22
the
benefits,
advantages,
or
disadvantages
promised
under
23
any
proposed
or
in-force
policy
of
insurance
if
the
person
24
does
not,
directly
or
indirectly,
participate
in
the
sale,
25
solicitation,
or
negotiation
of
insurance
on
behalf
of
the
26
insured.
27
4.
Insurance
placed
under
this
section
shall
be
valid
and
28
enforceable
as
to
all
parties.
29
Sec.
4.
NEW
SECTION
.
515I.4A
Requirements
for
domestic
30
surplus
lines
insurers.
31
1.
An
insurer
that
is
domiciled
in
this
state
may
apply
32
to
the
commissioner
for
licensure
as
a
domestic
surplus
lines
33
insurer
if
all
of
the
following
requirements
are
met:
34
a.
The
insurer
possesses
policyholder
surplus
of
the
greater
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of
either
fifteen
million
dollars
or
three
hundred
percent
of
1
authorized-control-level
risk-based
capital
pursuant
to
chapter
2
521E.
3
b.
The
insurer
is
an
eligible
surplus
lines
insurer
in
at
4
least
one
jurisdiction
other
than
this
state.
5
c.
The
board
of
directors
of
the
insurer
has
passed
a
6
resolution
seeking
approval
as
a
domestic
surplus
lines
insurer
7
in
this
state
and
stating
that
the
insurer
shall
only
write
8
surplus
line
business.
The
resolution
shall
not
be
amended
9
without
approval
of
the
commissioner.
10
d.
The
commissioner
has
approved
the
insurer
as
a
domestic
11
surplus
lines
insurer
in
this
state.
12
2.
For
the
purposes
of
the
federal
Nonadmitted
and
13
Reinsurance
Reform
Act
of
2010,
15
U.S.C.
§8201
et
seq.,
14
a
domestic
surplus
lines
insurer
shall
be
considered
a
15
nonadmitted
insurer
as
the
term
is
referenced
in
the
Act,
with
16
respect
to
risks
insured
in
this
state.
17
3.
A
domestic
surplus
lines
insurer
shall
be
deemed
18
an
eligible
surplus
lines
insurer
and
is
subject
to
all
19
requirements
of
this
chapter
that
are
applicable
to
an
eligible
20
surplus
lines
insurer.
A
domestic
surplus
lines
insurer
is
21
authorized
to
write
any
kind
of
insurance
that
a
nonadmitted
22
insurer
not
domiciled
in
this
state
is
eligible
to
write.
23
4.
Notwithstanding
any
other
provision
of
law
to
the
24
contrary,
a
policy
or
contract
issued
in
this
state
by
a
25
domestic
surplus
lines
insurer
shall
be
subject
to
taxes
26
assessed
on
a
surplus
lines
policy
or
contract
issued
by
a
27
nonadmitted
insurer,
including
the
premium
tax
on
surplus
lines
28
insurance,
but
shall
not
be
subject
to
other
taxes
levied
on
an
29
admitted
insurer,
whether
domestic
or
foreign.
30
5.
A
policy
or
contract
issued
by
a
domestic
surplus
lines
31
insurer
is
not
a
policy
or
contract
for
which
coverage
is
32
provided
under
the
Iowa
insurance
guaranty
association
pursuant
33
to
chapter
515B
or
the
Iowa
life
and
health
insurance
guaranty
34
association
pursuant
to
chapter
508C.
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6.
All
financial
and
solvency
requirements
imposed
in
this
1
state
upon
a
domestic
admitted
insurer
are
applicable
to
a
2
domestic
surplus
lines
insurer
unless
a
domestic
surplus
lines
3
insurer
is
specifically
exempted
from
such
requirements.
4
7.
A
policy
or
contract
issued
by
a
domestic
surplus
lines
5
insurer
in
this
state
is
exempt
from
all
requirements
imposed
6
in
this
state
relating
to
insurance
rating
plans,
policy
or
7
contract
forms,
policy
or
contract
cancellation
and
nonrenewal,
8
or
premiums
charged
to
the
insured
in
the
same
manner
and
to
9
the
same
extent
as
a
policy
or
contract
issued
by
a
nonadmitted
10
insurer
domiciled
in
another
state.
11
EXPLANATION
12
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
13
the
explanation’s
substance
by
the
members
of
the
general
assembly.
14
This
bill
establishes
requirements
for
domestic
surplus
15
lines
insurers
in
the
state.
A
“domestic
surplus
lines
16
insurer”
is
an
insurer
that
is
domiciled
in
this
state
and
has
17
been
authorized
by
the
insurance
commission
to
do
business
as
18
a
domestic
surplus
lines
insurer
with
which
a
surplus
lines
19
insurance
producer
may
place
surplus
lines
insurance.
The
bill
20
specifies
requirements
that
a
nonadmitted
insurer
domiciled
in
21
this
state
must
meet
to
be
considered
a
domestic
surplus
lines
22
insurer.
23
A
domestic
surplus
lines
insurer
is
considered
a
nonadmitted
24
insurer
as
that
term
is
used
in
the
federal
Nonadmitted
25
and
Reinsurance
Reform
Act
of
2010.
A
domestic
surplus
26
lines
insurer
that
has
been
authorized
by
the
commissioner
27
is
an
eligible
surplus
lines
insurer
and
is
subject
to
all
28
requirements
of
Code
chapter
515I
that
are
applicable
to
an
29
eligible
surplus
lines
insurer.
A
domestic
surplus
lines
30
insurer
is
authorized
to
write
any
kind
of
insurance
that
a
31
nonadmitted
insurer
not
domiciled
in
this
state
is
eligible
to
32
write.
33
Notwithstanding
any
other
provision
of
law
to
the
contrary,
34
a
policy
or
contract
issued
in
this
state
by
a
domestic
surplus
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lines
insurer
is
subject
to
the
same
taxes
as
are
assessed
on
a
1
policy
or
contract
issued
by
a
nonadmitted
insurer,
including
2
the
premium
tax
on
surplus
lines
insurance,
but
is
not
subject
3
to
other
taxes
levied
on
an
admitted
insurer,
whether
domestic
4
or
foreign.
A
policy
or
contract
issued
by
a
domestic
surplus
5
lines
insurer
is
not
subject
to
the
jurisdiction
of
the
Iowa
6
insurance
guaranty
association
pursuant
to
Code
chapter
515B
7
or
the
Iowa
life
and
health
insurance
guaranty
association
8
pursuant
to
Code
chapter
508C.
9
All
financial
and
solvency
requirements
imposed
in
this
10
state
upon
a
domestic
admitted
insurer
are
applicable
to
a
11
domestic
surplus
lines
insurer
unless
a
domestic
surplus
lines
12
insurer
is
specifically
exempted
from
such
requirements.
The
13
bill
exempts
a
policy
or
contract
issued
by
a
domestic
surplus
14
lines
insurer
from
all
requirements
imposed
in
this
state
15
relating
to
insurance
rating
plans,
policy
or
contract
forms,
16
policy
or
contract
cancellation
and
nonrenewal,
and
premiums
17
charged
to
the
insured
in
the
same
manner
and
to
the
same
18
extent
as
a
policy
or
contract
issued
by
a
nonadmitted
insurer
19
domiciled
in
another
state.
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