| LAWS OF THE 2001 REGULAR SESSION OF THE SEVENTY-NINTH GENERAL ASSEMBLY OF THE STATE OF IOWA |
Section 1. Section 272C.1, subsection 6, paragraph z, Code 2001, is amended to read as follows:
z. The commissioner of insurance in licensing insurance
agents
producers pursuant to chapter
522
522B, except those
agents
producers authorized to sell only credit
life and credit accident and
health
insurance or crop
insurance.
Sec. 2. Section 272C.3, subsection 2, paragraph a, Code 2001, is amended to read as follows:
a. Revoke a license, or suspend a license either until further order of the board or for a specified period,
upon any of the grounds specified in section 147.55, 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13,
542B.21, 542C.21, 543B.29, 544A.13, 544B.15, or 602.3203 or chapter 151, 155,
507B, or 522
522B, as applicable,
or upon any other grounds specifically provided for in this chapter for revocation of the license of a
licensee subject to the jurisdiction of that board, or upon failure of the licensee to comply with a decision of the
board imposing licensee discipline;
Sec. 3. Section 272C.4, subsection 6, Code 2001, is amended to read as follows:
6. Define by rule acts or omissions which are grounds for revocation or suspension of a license under
section 147.55, 148.6, 148B.7, 152.10, 153.34, 154A.24, 169.13, 455B.191, 542B.21, 542C.21, 543B.29,
544A.13, 544B.15, or 602.3203 or chapter 151, 155,
507B, or 522
522B, as applicable, and to define by rule acts
or omissions which constitute negligence, careless acts or omissions within the meaning of section
272C.3, subsection 2, paragraph "b", which licensees are required to report to the board pursuant to section
272C.9, subsection 2;
Sec. 4. Section 422.45, subsection 27, paragraph d, subparagraph (3), Code 2001, is amended to read as follows:
(3) "Insurance company" means an insurer organized or operating under chapter 508, 514, 515, 518,
518A, 519, or 520, or authorized to do business in Iowa as an insurer or
a licensed insurance agent
an
insurance producer under chapter
522
522B.
Sec. 5. Section 502.102, subsection 11, paragraph d, Code 2001, is amended to read as follows:
d. As used in this subsection, "compensation" does not include a commission, fee, or a combination of
a commission and a fee, which is paid to an insurance
agent
producer licensed under chapter
522
522B, if the insurance
agent
producer receives the commission, fee, or the combination of a commission and a fee, for
the sale of insurance as regulated pursuant to Title XIII, subtitle 1.
Sec. 6. Section 502.304, subsection 1, paragraph e, Code 2001, is amended to read as follows:
e. Is the subject of an order of the administrator denying, suspending, or revoking registration as a
broker-dealer, agent, investment adviser, investment adviser representative, or insurance
agent
producer;
Sec. 7. Section 508A.5, Code 2001, is amended to read as follows:
508A.5 OTHER PROVISIONS APPLICABLE.
Except for section 508.37 and section 509.2, subsection 1, and except as otherwise
provided in this chapter, all pertinent provisions of chapters 508, 509,
511, and 522
522B
shall apply to separate accounts and contracts relating thereto. Any individual variable life
insurance contract, delivered or issued for delivery in this state, shall contain nonforfeiture
provisions appropriate to such a contract. Any group variable life insurance contract, delivered
or issued for delivery in this state, shall contain a grace provision appropriate to such a
contract. The reserve liability for variable contracts shall be established in accordance
with actuarial procedures that recognize the variable nature of the benefits provided and
any mortality guarantees.
Sec. 8. Section 511.4, Code 2001, is amended to read as follows:
511.4 ADVERTISEMENTS — WHO DEEMED AGENT.
The provisions of sections 515.122 to
515.126
section 515.125 shall apply to life
insurance companies and associations.
Sec. 9. Section 515.125, Code 2001, is amended to read as follows:
515.125 AGENT — SPECIFIC
DEFINITION
AGENCY RELATIONSHIP.
Any officer, agent
insurance
producer, or representative of an insurance company doing business in
this state who may solicit insurance, procure applications, issue policies, adjust losses, or transact the
business generally of such companies, shall be held to be the agent of such insurance company with authority to
transact all business within the scope of the
agent's employment
agency
relationship, anything in the application,
policy, contract, bylaws, or articles of incorporation of such company to the contrary notwithstanding.
Sec. 10. Section 516A.1, unnumbered paragraph 2, Code 2001, is amended to read as follows:
However, the named insured may reject all of such coverage, or reject the uninsured motor vehicle
(hit-and-run motor vehicle) coverage, or reject the underinsured motor vehicle coverage, by written rejections signed
by the named insured. If rejection is made on a form or document furnished by an insurance company or
insurance agent
producer, it shall be on a separate sheet of paper which contains only the rejection and
information directly related to it. Such coverage need not be provided in or supplemental to a renewal policy if the
named insured has rejected the coverage in connection with a policy previously issued to the named insured by
the same insurer.
Sec. 11. Section 521A.2, subsection 1, paragraph b, Code 2001, is amended to read as follows:
b. Acting as an insurance broker or as an insurance
agent
producer for its parent or for any of its
parent's insurer subsidiaries or intermediate insurer subsidiaries.
Sec. 12. Section 522A.3, subsection 1, Code 2001, is amended to read as follows:
1. Notwithstanding the provisions of chapter
522
522B, the commissioner may issue a limited license to
a rental company that has complied with the requirements of this chapter. The limited license shall authorize
the limited licensee to offer or sell insurance with the rental of vehicles.
Sec. 13. Section 523H.1, subsection 3, paragraph c, Code 2001, is amended to read as follows:
c. "Franchise" also does not include any contract under which a petroleum retailer or petroleum
distributor is authorized or permitted to occupy leased marketing premises, which premises are to be employed
in connection with the sale, consignment, or distribution of motor fuel under a trademark which is owned
or controlled by a refiner which is regulated by the federal Petroleum Marketing Practices Act, 15 U.S.C. §
2801 et seq. The term "refiner" means any person engaged in the refining of crude oil to produce motor fuel,
and includes any affiliate of such person. "Franchise" also does not include a contract entered into by any
person regulated under chapter 123, 322, 322A, 322B, 322C, 322D, 322F,
522
522B, or 543B, or a contract
establishing a franchise relationship with respect to the sale of construction equipment, lawn or garden equipment,
or real estate.
Sec. 14. Section 514B.19, Code 2001, is amended to read as follows:
514B.19 REGULATION OF AGENTS
INSURANCE PRODUCERS.
The commissioner may, after notice and hearing, promulgate such reasonable rules
under the provisions of chapter
522
522B that are necessary to provide for the licensing of
agents
insurance
producers who engage in solicitation or enrollment for a health
maintenance organization.
Sec. 15. NEW SECTION. 522B.1 DEFINITIONS.
As used in this chapter, unless the context otherwise requires:
1. "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
2. "Commissioner" means the commissioner of insurance.
3. "Home state" means the District of Columbia and any state or territory of the United States in which an insurance producer maintains the producer's principal place of residence or principal place of business and is licensed to act as an insurance producer.
4. "Insurance" means any of the lines of authority an insurer is authorized to sell in this state.
5. "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
6. "Insurer" means a person engaged in the business of insurance who is licensed under chapter 508, 512B, 515, or 520.
7. "License" means a document issued pursuant to this chapter by the commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. A license by itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurer.
8. "Limited lines insurance" means any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to section 522B.6, subsection 2, paragraphs "a" through "f", and any other line of insurance that the commissioner may deem it necessary to recognize for the purposes of complying with section 522B.7, subsection 4.
9. "Limited lines producer" means a person authorized by the commissioner to sell, solicit, or negotiate limited lines insurance.
10. "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
11. "Person" means an individual or a business entity.
12. "Producer database" means the national database of insurance producers maintained by the national association of insurance commissioners, its affiliates, or subsidiaries.
13. "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurer.
14. "Solicit" or "solicitation" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
15. "Terminate" means the cancellation of the relationship between an insurance producer and the insurer or the termination of an insurance producer's authority to transact insurance.
16. "Uniform application" means the current version of the national association of insurance commissioners uniform application for resident and nonresident insurance producer licensing.
17. "Uniform business entity application" means the current version of the national association of insurance commissioners uniform business entity application for resident and nonresident business entities.
Sec. 16. NEW SECTION. 522B.2 LICENSE REQUIRED.
1. A person shall not sell, solicit, or negotiate insurance in this state for any line of insurance unless the person is licensed as an insurance producer for that line of insurance as provided in this chapter.
2. A person offering to the public, for a fee or commission, to engage in the business of offering any advice, counsel, or service with respect to the benefits, advantages, or disadvantages promised under any policy of insurance must also be licensed as an insurance producer.
Sec. 17. NEW SECTION. 522B.3 EXCEPTIONS TO LICENSING.
1. Nothing in this chapter shall be construed to require an insurer to obtain an insurance producer license. For the purposes of this section, "insurer" does not mean an officer, director, employee, subsidiary, or affiliate of the insurer.
2. A license as an insurance producer shall not be required of any1 the following:
a. An officer, director, or employee of an insurer or of an insurance producer, provided that the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this state, and one of the following applies:
(1) The activities of the officer, director, or employee are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance.
(2) The function of the officer, director, or employee relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance.
(3) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance.
b. A person who performs any of the following services and who is not paid a commission for the performance of such service:
(1) Secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance.
(2) Secures and furnishes information for the purpose of enrolling individuals under plans, issuing certificates under plans, or otherwise assisting in administering plans.
(3) Performs administrative services related to mass marketed property and casualty insurance.
c. An employer or association, or an officer, director, or employee of such employer or association, or the trustees of an employee trust plan, to the extent that such employer, association, officer, director, employee, or trustee is engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as such employer, association, officer, director, employee, or trustee is not in any manner compensated, directly or indirectly, by the insurer issuing the contracts.
d. An employee of an insurer, or an organization employed by an insurer, who engages in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who is not individually engaged in the sale, solicitation, or negotiation of insurance.
e. A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, provided that the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this state.
f. A person who is not a resident of this state who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that that person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state.
g. A salaried full-time employee who counsels or advises the employee's employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, provided that the employee does not sell or solicit insurance or receive a commission.
h. A licensed attorney providing surety bonds incident to the attorney's practice.
i. A person selling transportation tickets of a common carrier of persons or property when that person also sells, in connection with and related to the transportation ticket, a trip and accident insurance policy or an insurance policy on personal effects being carried as baggage.
Sec. 18. NEW SECTION. 522B.4 APPLICATION FOR EXAMINATION.
1. A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to section 522B.8. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and regulations of this state. The commissioner shall adopt rules pursuant to chapter 17A related to development and conduct of the examination.
2. The commissioner may make arrangements, including contracting with an outside testing service or other appropriate entity, for administering examinations and collecting fees.
3. An individual applying for an examination shall remit a nonrefundable fee as established by rule of the commissioner.
4. An individual who fails to appear for the examination as scheduled or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.
Sec. 19. NEW SECTION. 522B.5 APPLICATION FOR LICENSE.
1. A person applying for a resident insurance producer license shall make application to the commissioner on the uniform application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall find all of the following:
a. The individual is at least eighteen years of age.
b. The individual has not committed any act that is a ground for denial, suspension, or revocation as set forth in section 522B.11.
c. The individual has paid the license fee of fifty dollars.
d. The individual has successfully passed the examinations for the lines of authority for which the person has applied.
e. In order to protect the public interest, the individual has the requisite character and competence to receive a license as an insurance producer.
2. A business entity acting as an insurance producer may elect to obtain an insurance producer license. Application shall be made using the uniform business entity application. Prior to approving the application, the commissioner shall find both of the following:
a. The business entity has paid the appropriate fees.
b. The business entity has designated a licensed producer responsible for the business entity's compliance with the insurance laws and rules of this state.
3. The commissioner may require any documents reasonably necessary to verify the information contained in an application.
Sec. 20. NEW SECTION. 522B.6 LICENSE.
1. A person who meets the requirements of sections 522B.4 and 522B.5, unless otherwise denied licensure pursuant to section 522B.11, shall be issued an insurance producer license. An insurance producer license is valid for three years.
2. An insurance producer may qualify for a license in one or more of the following lines of authority:
a. Life insurance providing coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.
b. Accident and health or sickness insurance providing coverage for sickness, bodily injury, or accidental death, and may include benefits for disability income.
c. Property insurance providing coverage for the direct or consequential loss or damage to property of any kind.
d. Casualty insurance providing coverage against legal liability, including that for death, injury, or disability, or damage to real or personal property.
e. Variable life and variable annuity products insurance providing coverage provided under variable life insurance contracts and variable annuities.
f. Personal lines property and casualty insurance sold to individuals and families primar-ily for noncommercial purposes.
g. Excess and surplus lines insurance provided by certain nonadmitted insurers pursuant to section 515.147.
h. Credit insurance, including credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing a credit obligation and that the commissioner determines should be designated a form of credit insurance.
i. Any other line of insurance permitted under state law or by rule.
3. An insurance producer license remains in effect unless revoked or suspended as long as all required fees are paid and continuing education requirements for resident individual insurance producers are met by any applicable due date.
4. An individual insurance producer who allows the producer's license to lapse, within twelve months from the due date of the renewal fee, may have the same license reinstated without the necessity of passing a written examination upon the payment of a reinstatement fee as specified by rule of the commissioner. Such reinstatement fee shall be in addition to the required renewal fee.
5. A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance may request a waiver of those procedures. Such insurance producer may also request a waiver of any examination requirement or any other penalty or sanction imposed for failure to comply with renewal procedures.
6. The license shall contain the licensee's name, address, personal identification number, and the date of issuance, the lines of authority, the expiration date, and any other information the commissioner deems necessary.
7. A licensee shall inform the commissioner by any means acceptable to the commissioner of a change of address within thirty days of the change. Failure to timely inform the commissioner of a change in legal name or address may result in a penalty as specified in section 522B.17.
8. In order to assist with the commissioner's duties, the commissioner may contract with a nongovernmental entity, including the national association of insurance commissioners or any affiliate or subsidiary the national association of insurance commissioners oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing, that the commissioner deems appropriate.
Sec. 21. NEW SECTION. 522B.7 NONRESIDENT LICENSING.
1. Unless denied licensure pursuant to section 522B.11, a nonresident person shall receive a nonresident insurance producer license if all of the following apply:
a. The person is currently licensed as an insurance producer and is in good standing in the person's home state.
b. The person has submitted the proper request for licensure and has paid the required fees.
c. The person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the person's home state, or in lieu of such application, a completed uniform application.
d. The person's home state awards nonresident insurance producer licenses to residents of this state on the same basis.
2. The commissioner may verify the insurance producer's licensing status through the producer database.
3. A nonresident insurance producer who moves from one state to another state or a resident insurance producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty days of the change of legal residence. No fee or license application is required. The certification may be obtained through the producer database.
4. Notwithstanding any other provision of this chapter, a person licensed as a limited lines insurance producer in the person's home state shall receive a nonresident limited lines insurance producer license, pursuant to subsection 1, granting the same scope of authority as granted under the license issued by such person's home state.
Sec. 22. NEW SECTION. 522B.8 EXEMPTION FROM EXAMINATION.
1. An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state shall not be required to complete an examination. This exemption is only available if the person is currently licensed in that other state or if the request for licensure is received within ninety days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state. The certification may be obtained through the producer database.
2. A person licensed as an insurance producer in another state who moves to this state shall make application within ninety days of establishing legal residence to become a resident licensee pursuant to section 522B.5. An examination shall not be required of that person to obtain an insurance producer license for any line of authority previously held in the prior state except where the commissioner determines otherwise by regulation.
Sec. 23. NEW SECTION. 522B.9 ASSUMED NAMES.
An insurance producer doing business under any name other than the insurance producer's legal name is required to notify the commissioner prior to using the assumed name.
Sec. 24. NEW SECTION. 522B.10 TEMPORARY LICENSING.
1. The commissioner may issue a temporary insurance producer license for a period not to exceed one hundred eighty days without requiring an examination if the commissioner deems that the temporary license is necessary for the servicing of an insurance business in the following cases:
a. To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled, to allow adequate time for the sale of the insurance business owned by the insurance producer, for the recovery or return of the insurance producer to the business, or for the training and licensing of new personnel to operate the insurance producer's business.
b. To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license.
c. To the designee of a licensed insurance producer entering active service in the armed forces of the United States.
d. In any other circumstance where the commissioner deems that the public interest will best be served by the issuance of a temporary license.
2. The commissioner may by order limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The commissioner may require the temporary licensee to have a suitable sponsor who is a licensed insurance producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The commissioner may by order revoke a temporary license if the interest of insureds or the public is endangered. A temporary license shall not continue after the owner or the personal representative disposes of the business.
Sec. 25. NEW SECTION. 522B.11 LICENSE DENIAL, NONRENEWAL, OR REVOCATION.
1. The commissioner may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license or may levy a civil penalty as provided in section 522B.17 for any one or more of the following causes:
a. Providing incorrect, misleading, incomplete, or materially untrue information in the license application.
b. Violating any insurance laws, or violating any regulation, subpoena, or order of the commissioner or of a commissioner of another state.
c. Obtaining or attempting to obtain a license through misrepresentation or fraud.
d. Improperly withholding, misappropriating, or converting any moneys or properties received in the course of doing insurance business.
e. Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance.
f. Having been convicted of a felony.
g. Having admitted or been found to have committed any unfair insurance trade practice or fraud.
h. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.
i. Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory.
j. Forging another's name to an application for insurance or to any document related to an insurance transaction.
k. Improperly using notes or any other reference material to complete an examination for an insurance license.
l. Knowingly accepting insurance business from an individual who is not licensed.
m. Failing to comply with an administrative or court order imposing a child support obligation.
n. Failing to comply with an administrative or court order related to repayment of loans to the college student aid commission.
o. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.
p. Failing or refusing to cooperate in an investigation by the commissioner.
2. If the commissioner does not renew a license or denies an application for a license, the commissioner shall notify the applicant or licensee and advise, in writing, the licensee or applicant of the reason for the nonrenewal of the license or denial of the application for a license. The licensee or applicant may request a hearing on the nonrenewal or denial. A hearing shall be conducted according to section 507B.6.
3. The license of a business entity may be suspended, revoked, or refused if the commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by a partner, officer, or manager acting on behalf of the business entity and the violation was not reported to the commissioner and corrective action was not taken.
4. In addition to, or in lieu of, any applicable denial, suspension, or revocation of a license, a person, after hearing, may be subject to a civil penalty as provided in section 522B.17.
5. The commissioner may enforce the provisions and impose any penalty or remedy authorized by this chapter and chapter 507B against any person who is under investigation for, or charged with, a violation of either chapter even if the person's license has been surrendered or has lapsed by operation of law.
Sec. 26. NEW SECTION. 522B.12 COMMISSIONS.
1. An insurer or insurance producer shall not pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under this chapter and is not so licensed.
2. A person shall not accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under this chapter and is not so licensed.
3. Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in this state if the person was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation and was so licensed at that time.
4. An insurer or insurance producer may pay or assign a commission, service fee, brokerage, or other valuable consideration to an insurance agency or to a person who does not sell, solicit, or negotiate insurance in this state, unless the payment would violate chapter 507B or section 515.130.
Sec. 27. NEW SECTION. 522B.13 APPOINTMENTS.
1. An individual insurance producer who acts as an agent of an insurer must be appointed by that insurer. An insurance producer who is not acting as an agent of an insurer need not be appointed. A business entity is not required to be appointed.
2. The appointing insurer, for the purpose of appointing an insurance producer as its agent, shall file, in a format approved by the commissioner, a notice of appointment within thirty days from the date the agency contract is executed or the first insurance application is submitted.
3. An insurer shall pay an appointment fee, in the amount and method of payment set forth by rule of the commissioner, for each insurance producer appointed by the insurer.
4. An insurer shall remit a renewal appointment fee in the manner and amount as set forth by rule of the commissioner.
Sec. 28. NEW SECTION. 522B.14 NOTIFICATION TO COMMISSIONER OF TERMINATION — PENALTIES.
1. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with an insurance producer shall notify the commissioner within thirty days following the effective date of the termination, using a format prescribed by the commissioner, if the reason for termination is one of the reasons set forth in section 522B.11, or the insurer has knowledge the insurance producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities set forth in section 522B.11. Upon request of the commissioner, the insurer or authorized representative of the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the insurance producer.
2. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with an insurance producer for any reason not set forth in section 522B.11, shall notify the commissioner within thirty days following the effective date of the termination, using a format prescribed by the commissioner. Upon request of the commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination.
3. The insurer or the authorized representative of the insurer shall promptly notify the commissioner using a format prescribed by the commissioner, if, upon further review or investigation, the insurer or authorized representative of the insurer discovers additional information that would have been reportable to the commissioner pursuant to subsection 1, had the insurer then known of its existence.
4. Within fifteen days after making the notification required by this section, the insurer shall mail a copy of the notification to the insurance producer at the insurance producer's last known address. If the insurance producer is terminated for any of the reasons set forth in section 522B.11, the insurer shall provide a copy of the notification to the insurance producer at the insurance producer's last known address by restricted certified mail, as defined in section 618.15, or by overnight delivery using a nationally recognized carrier.
5. Within thirty days after the insurance producer has received the original or additional notification, the insurance producer may file written comments concerning the substance of the notification with the commissioner. The insurance producer, by the same means, shall simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the commissioner's record and accompany every copy of a report distributed or disclosed for any reason about the insurance producer, as permitted under subsection 8.
6. In the absence of actual malice, an insurer, the authorized representative of the insurer, an insurance producer, the commissioner, or an organization of which the commissioner is a member and that compiles the information and makes it available to other commissioners or regulatory or law enforcement agencies shall not be subject to civil liability. A civil cause of action of any nature shall not arise against any of these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the commissioner from an insurer or insurance producer; or a statement by a terminating insurer or insurance producer to an insurer or insurance producer limited solely and exclusively to whether a termination for cause under subsection 1 was reported to the commissioner, provided that the propriety of any termination for cause under subsection 1 is certified in writing by an officer or authorized representative of the insurer or insurance producer terminating the relationship.
In any action brought against a person that may have immunity under this section for making any statement required by this section or providing any information relating to any statement that may be requested by the commissioner, the party bringing the action shall plead specifically in any allegation that this section does not apply because the person making the statement or providing the information did so with actual malice. This section shall not abrogate or modify any existing statutory or common law privileges or immunities.
7. Any document, material, or other information in the control or possession of the insurance division that is furnished by an insurer, insurance producer, or an employee or agent of such insurer or insurance producer acting on behalf of the insurer or insurance producer, or obtained by the commissioner in an investigation pursuant to this section are considered confidential records and shall not be subject to subpoena, or subject to discovery, or admissible in evidence in any private civil action. However, the commissioner is authorized to use such document, material, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's duties.
Neither the commissioner nor any person who received any document, material, or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential document, material, or information subject to this section.
8. The commissioner may share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection 7 with other state, federal, and international regulatory agencies, with the national association of insurance commissioners, its affiliates or subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information.
The commissioner may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the national association of insurance commissioners, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.
The commissioner may enter into agreements governing sharing and use of information consistent with this subsection.
9. A waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall not occur as a result of disclosure to the commissioner or sharing of information received under this section.
10. Nothing in this chapter shall prohibit the commissioner from releasing information regarding final, adjudicated actions that are considered public records subject to examination and copying under chapter 22 to a database or other clearinghouse service maintained by the national association of insurance commissioners, or an affiliate or subsidiary of the national association of insurance commissioners.
11. An insurer, the authorized representative of the insurer, or an insurance producer that fails to report as required under this section, or that is found to have reported with actual malice by a court of competent jurisdiction, after notice and hearing, may have its license or certificate of authority suspended or revoked and may be fined2 as provided in section 522B.17.
Sec. 29. NEW SECTION. 522B.15 RECIPROCITY.
1. The commissioner shall waive any requirements for a nonresident license applicant with a valid license from such applicant's home state, except for the requirements imposed by section 522B.7, if the applicant's home state awards nonresident licenses to residents of this state on the same basis.
2. A nonresident insurance producer's satisfaction of the producer's home state's continuing education requirements for licensed insurance producers shall constitute satisfaction of this state's continuing education requirements if the nonresident insurance producer's home state recognizes the satisfaction of its continuing education requirements imposed upon insurance producers from this state on the same basis.
Sec. 30. NEW SECTION. 522B.16 REPORTING OF ACTIONS.
An insurance producer shall report to the commissioner any administrative action taken against the insurance producer in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter. This report shall include a copy of the order, consent to the order, or other relevant legal documents.
Within thirty days of the initial pretrial hearing date, an insurance producer shall report to the commissioner any criminal prosecution of the insurance producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.
Sec. 31. NEW SECTION. 522B.17 PENALTY.
An insurer or insurance producer who, after hearing, is found to have violated this chapter may be assessed a civil penalty pursuant to chapter 507B.
A person found, after hearing, to have acted as an agent of an insurer or otherwise selling, soliciting, or negotiating insurance in this state, or offering to the public advice, counsel, or services with regard to insurance who is not properly licensed is subject to penalty according to the provisions of chapter 507A.
Sec. 32. NEW SECTION. 522B.18 RULES.
The commissioner may adopt reasonable rules according to chapter 17A as are necessary or proper to carry out the purposes of this chapter.
Sec. 33. Section 536.26, unnumbered paragraph 1, Code 2001, is amended to read as follows:
A licensee shall not, directly or indirectly, sell or offer for sale any life, or accident
and health insurance in connection with a loan made under this chapter except as and to
the extent authorized by this section. Life, accident and health insurance, or any of them,
may be written by a licensed insurance
agent
producer upon or in connection with any loan
for a term not extending beyond the final maturity date of the loan contract but only upon
one obligor on any one loan contract.
Sec. 34. Section 536A.23, subsection 3, Code 2001, is amended to read as follows:
3. Require any borrower to purchase insurance from the lender as a condition for obtaining a loan.
However, an industrial loan company may collect from the borrower, at the option of the borrower, and transmit
the premiums charged for insuring real or personal property used by the borrower as security for a loan
and provided that such insurance is obtained from a licensed insurance
agent
producer for an insurance
company authorized to do business in Iowa; and the premiums charged for insuring the life of one party on the loan in
an amount not to exceed the total amount of the note or contract, including cash advance, interest and
service charge, provided that no licensee shall require that the contract of life insurance be outstanding for more
than the unpaid balance of the indebtedness and provided that such insurance is obtained from a licensed
insurance agent
producer for an insurance company authorized to do business in Iowa; and an industrial loan
company may receive and transmit the premiums charged for accident and health insurance on the borrower,
provided such insurance bears a reasonable relationship to the existing hazards or risk of loss, and the aggregate
benefits of which shall not exceed the approximate amount of the contractual payments on the loan outstanding at
the time of loss, and provided that such insurance is obtained from a licensed
agent
producer for an
insurance company authorized to do business in Iowa. However, all life insurance rates in connection with
industrial loans shall be subject to the rules and regulations of the insurance commissioner of the state of Iowa.
Sec. 35. Section 537.3207, Code 2001, is amended to read as follows:
537.3207 FORM OF INSURANCE PREMIUM LOAN AGREEMENT.
An agreement pursuant to which an insurance premium loan is made shall contain
the names of the insurance agent or
broker
producer negotiating each policy or contract and of the insurer
issuing each policy or contract, the number and inception date of, and premium for, each policy or contract, the date
on which the term of the loan begins, and a clear and conspicuous notice that each policy or contract may
be canceled if payment is not made in accordance with the agreement. If a policy or contract has not been
issued when the agreement is signed, the agreement may provide that the insurance
agent or broker
producer
may insert the appropriate information in the agreement and, if they do so, shall furnish the information promptly
in writing to the insured.
Sec. 36.
1. Sections 512B.31, 515.123, 515.124, and 515.126, Code 2001, are repealed.
2. Chapter 522, Code 2001, is repealed.
3. Chapter 523F, Code 2001, is repealed.
Sec. 37. EFFECTIVE DATE. This Act takes effect January 1, 2002.
Approved March 28, 2001
1 According to enrolled Act
2 See chapter 176, §72 herein
Updated: 23-Oct-2001 03:39 PM
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