SSB 1130

This bill relates to various matters under the purview of the insurance division of the department of commerce. The bill is organized into seven divisions. DIVISION I —— UNIFORM SECURITIES.304A (expedited registration by filing for small issuers) is amended to provide that an issuer, and a person registering as an agent of the issuer, must pay the administrator a registration fee established by the administrator, rather than the set fee amounts of $100 (issuer) and $10 (person registering as an agent) required by current law. 321G (fees) is amended to change the nonrefundable fee for a registration statement filed by an offeror from $250 to an amount established by the administrator.410 (filing fees) is amended to change the broker-dealer filing fee for an application or renewal registration from $200 to an amount established by the administrator. In addition, the filing fee for registration or renewal as an agent is amended from $40 to an amount established by the administrator. Of the agent registration fees collected, percent are appropriated to the securities investor education and financial literacy training fund. Current law provides that $10 of every $40 fee collected goes to the fund. The filing fee for an investment adviser application or renewal registration is amended from $100 to an amount established by the administrator. The bill also amends the filing fees for an investment adviser representative application, renewal registration, and change of registration from $30 to an amount established by the administrator. _____ and an annual notice fee in an amount established by the administrator, rather than the $100 fee required under current law. DIVISION II —— INSURANCE.30 (service of process on the commissioner) to specify that the commissioner of insurance (commissioner) may set a reasonable fee for service made on the commissioner.4 (transactions where law not applicable) and provides that Code chapter 507A does not apply to a multiple employer welfare arrangement (MEWA) or a MEWA formed as an association health plan (AHP) that meets the requirements of Code chapter 513D.1 (association health plans) and replaces it with new provisions which detail the requirements for MEWAs and AHPs that offer a plan to, or that maintain a group health plan for, any resident of Iowa. “AHP” and “MEWA” are defined in the bill. The bill details the requirements of the annual filings with the commissioner required of registered AHPs and MEWAs. The bill provides that a MEWA that is recognized as tax-exempt under Internal Revenue Code section 501(c)(9), and that is registered with the commissioner prior to January 1, 2018, shall not be considered an AHP unless the MEWA affirmatively elects to be treated as an AHP.2 (rules and enforcement).7 (cease and desist orders) is amended to provide that a person who violates any order of the commissioner, rather than just a cease and desist order as is in current law, may, after notice and hearing be subject to a monetary penalty and suspension or revocation of the person’s license.2 (purpose) is amended by the bill to require that an insurance fraud bureau investigator be no more than years of age. Current law does not place an upper limit on the age for insurance fraud bureau investigators.2A (definitions) to include any corporation, association, partnership, or individual engaged in the business of insurance, including but not limited to a corporation, association, partnership, or individual that issues a policy of workers’ compensation, a self-insured business for purposes of workers’ compensation liability, or a group or self-insured plan. The bill specifically excludes a person required to be licensed to sell, solicit, or negotiate insurance pursuant to Code chapter 522B from the definition.8 (law enforcement authority) is amended by the bill to specify that an individual who is employed by the insurance division and is designated as a peace officer shall be considered a law enforcement officer and shall exercise the powers of a law enforcement officer as detailed in the bill.3 (license requirements)to change the application and renewal fees for a viatical settlement provider and a viatical settlement broker from $100 to an amount established by the administrator.15 (certification of self-insurance plans —— exemption) is amended to change the filing fee for the end of fiscal year filing of a governing body of a self-insurance plan of a political subdivision or a school corporation from $100 to an amount established by the commissioner. The current $15 per day penalty for late filings is changed to a late fee established by the commissioner.21 (certificate of registration) and also requires that an application for registration as a third-party administrator be accompanied by a filing fee as established by the commissioner. Current law does not require submission of a filing fee.7. Third-party administrators are subject to Code chapter 507B under current law.24 (fees from domestic and foreign companies) is amended to change specific dollar amounts for certain filing fees for foreign or domestic life insurance companies to fee amounts determined by the commissioner.24 (reports) and requires that the annual filing by fraternal benefit societies be accompanied by a fee established by the commissioner, rather than $50 as required by current law.25 (annual license —— renewal) and requires that for each license or renewal application a fraternal benefit society submit a fee established by the commissioner, rather than $50 as required by current law. The bill also changes the current administrative penalty of $500 for a late renewal filing to a late fee as established by the commissioner. The bill makes conforming changes to Code chapter 514G (long-term care insurance) and amends the Code chapter to change the terminology throughout the Code chapter from “independent review entity” to “independent review organization”.147 (fees) is amended to change filing fees for certain filings from specific dollar amounts to fees determined by the commissioner.10 to provide more specific requirements related to licensing requirements, fees, and penalties for advisory organizations.8 (licensing advisory organizations) to require licensing advisory organizations to submit a fee, determined by the commissioner, with their application for a license, and makes the license effective for three years, rather than the one year under current law. _____ to the definition of “insurer”.36 is amended to change the makeup of the membership of the governing committee that administers the FAIR plan.29, the insurer must notify the named insured that they may be eligible for basic property insurance through the FAIR plan, and the notice must accompany the notice of cancellation or the intent not to renew.4 (requirements for eligible surplus lines insurers) to allow a nonadmitted insurer seeking to qualify as an eligible surplus line insurer the option of demonstrating that the nonadmitted insurer has capital and surplus under the laws of the nonadmitted insurer’s domiciliary that equal the risk-based capital level requirements required by Iowa law. Current law requires the nonadmitted insurer to demonstrate that the nonadmitted insurer has capital and surplus under the laws of the nonadmitted insurer’s domiciliary that equal the greater of the minimum capital and surplus required under the laws of this state, or $15 million.12 (certificate of authority —— renewal —— penalties) is amended to change the annual renewal fee for a reciprocal or interinsurance insurer from $500 to be submitted to the treasurer of state, to an administrative fee as established by the commissioner to be paid to the commissioner.18 (articles of merger or consolidation) to change the fee for specific companies to file a plan to merge or consolidate from $50 to an amount established by the commissioner.7. _____ Current law requires the commissioner to deposit the penalties into the general fund of the state.5 (counter employee —— license fee) is amended to change the license fee for a counter employee from $50 to an amount established by the commissioner, and removes the cap of $1,000 per calendar year for all combined fees paid by any one rental company.5 (application for license) to change the application fee for a resident insurance producer license from $50 to an amount established by the commissioner.4 (application and fees) is amended to change the application fee for a portable electronics insurance license from a variable dollar amount to an amount established by the commissioner. The bill also removes the $5,000 cap on the total application fees that can be charged for the licensure of a portable electronics vendor with multiple locations.2 (definitions). DIVISION III —— CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SALES.204 (preneed seller annual reporting requirements) to require preneed sellers to file an annual report by April rather than the current date of April 1. The bill changes the filing fee for the report from $10 to an amount established by the commissioner. The bill allows the commissioner to impose a late fee for each day the report is late, up to a maximum of $500.7.501 (preneed sellers —— licenses) is amended to specify that preneed sellers’ licenses expire annually on April 30, rather than the current expiration date of April 15. The bill changes the filing fee for a multijurisdictional preneed seller’s license that is issued by another jurisdiction from $50 to an amount established by the commissioner.502 (sales agents —— licenses) to specify that sales agents’ licenses expire annually on April 30, rather than the current expiration date of April 15, and an agent must have fulfilled continuing education requirements to qualify for renewal.502A (sales agent annual reporting requirements) is amended to require sales agents to file an annual report by April 15, rather than the current date of April 1. The bill allows the commissioner to impose a late fee for each day that the annual report is late, up to a maximum of $500.7.601 (disclosures) and requires that all purchase agreements, including those delivered or executed by electronic means, identify a sales agent. Purchase agreements must also be reviewed by the sales agent and signed by the purchaser and seller. If a purchase agreement is for mortuary science services, the purchase agreement must also be signed by a person licensed to deliver funeral services.812 (insurance division regulatory fund) to allocate an amount established by the commissioner to the regulatory fund from the filing fees for each purchase agreement reported on a preneed seller’s annual report. Current law requires the commissioner to allocate $2 from each filing fee to the regulatory fund. The bill also removes the prohibition on an annual allocation to the regulatory fund if the current balance exceeds $500,000.814 (examination fee) is amended to change the examination fee for a seller’s annual report from $5, or other set dollar amount, to an amount established by the commissioner.807 (prosecutions for violations of law). DIVISION IV —— RESIDENTIAL AND MOTOR VEHICLE SERVICE CONTRACTS.3 (application for license) is amended to change the $500 fee for an application for a service company license to a fee established by the commissioner. The current fee of $50 for each motor vehicle service contract form submitted with an application is also changed to a fee as established by the commissioner.4 (license expiration and renewal) is amended to change the license renewal fee of $500 to a fee established by the commissioner. The bill amends the fee, based on the aggregate amount of payments a licensee received for the sale or issuance of residential service contracts in this state during the preceding fiscal year, from percent per contract to a percentage established by the commissioner by rule, and also removes the minimum and maximum dollar amount of fees that a licensee is required to submit. In addition, the bill amends the fee for each motor vehicle service contract form submitted with an application from $50 to a fee established by the commissioner.24 (service company oversight fund) is amended to allow the commissioner to establish the amount deposited in the service company oversight fund from all licensing, examination, renewal, and inspection fees collected under Code chapter 523C. The bill also removes the current $500,000 maximum cap on fees that may be deposited in the fund each fiscal year. DIVISION V —— RETIREMENT FACILITIES. _____ established by the commissioner. DIVISION VI —— IOWA CEMETERY ACT.102 (definitions) is amended to exclude specific cemeteries, under the jurisdiction and control of a cemetery commission that has jurisdiction and control over pioneer cemeteries, from the definition of “cemetery” for purposes of Code chapter 523I.213 (insurance division’s enforcement fund) is amended to remove the cap on the allocation to the insurance division’s enforcement fund of examination fees paid by perpetual cemeteries with their annual report. The bill requires the commissioner to deposit all of the examination fees in the enforcement fund.301 (disclosure requirements —— prices and fees) is amended to require cemeteries to disclose, prior to the sale of interment rights, whether opening and closing services are included in the purchase price. The bill also requires cemeteries to disclose all fees associated with disinterment services.309 (interment, relocation, or disinterment of remains) is amended to require cemeteries to disinter and relocate remains interred in a cemetery for the purpose of correcting an error made by the cemetery, unless the interested parties have a written agreement directing otherwise. The cemetery must bear all costs of the disinterment and relocation. Current law permits, but does not require, a cemetery to disinter and relocate such remains, and the cemetery is not required to bear the cost of disinterment and relocation. The bill also allows cemeteries to be held civilly and criminally liable for erroneously made interments. Current law exempts cemeteries from civil and criminal liability for erroneously made interments.808 (examination fee) to require an examination fee, established by the commissioner, for each certificate of interment rights issued during the period covered by a perpetual care cemetery’s annual report. _____ Under current law, the fee is $5 per certificate.813 (annual report by perpetual care cemeteries) to allow, rather than to require, the commissioner to impose a late penalty on a perpetual care cemetery that fails to timely file its annual report. DIVISION VII —— STATE INNOVATION WAIVER. The bill authorizes the commissioner to develop by rule a state innovation waiver (waiver) pursuant to section 1332 of the federal Patient Protection and Affordable Care Act, Pub. L. 111-148, and to submit an application on behalf of the state to the United States secretary of health and human services and the United States secretary of the treasury (secretaries) for the waiver. If a waiver is approved by the secretaries, the commissioner is authorized to implement the waiver in a manner consistent with applicable state and federal law. The bill authorizes the commissioner to adopt emergency rules to implement the waiver and the rules are to be effective immediately upon filing unless a later date is specified in the rules. Any rules that are adopted must also be published as a notice of intended action.