Bill Text: IA HF426 | 2019-2020 | 88th General Assembly | Enrolled
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 HSB 92.) Effective date: 07/01/2020.
Spectrum: Committee Bill
Status: (Passed) 2020-07-31 - Fiscal note. [HF426 Detail]
Download: Iowa-2019-HF426-Enrolled.html
House
File
426
-
Enrolled
House
File
426
AN
ACT
RELATING
TO
THE
INSURANCE
FRAUD
BUREAU,
CRIMINAL
HISTORY
CHECKS
FOR
LICENSES
GRANTED
BY
THE
INSURANCE
DIVISION,
AND
RESOLVING
INCONSISTENCIES.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
502.604A,
Code
2019,
is
amended
to
read
as
follows:
502.604A
Limited
law
Law
enforcement
authority.
The
administrator
or
the
administrator’s
designee,
when
carrying
out
the
provisions
of
section
502.603
or
502.604
,
may
develop,
share,
and
receive
information
related
to
any
law
enforcement
purpose,
including
any
criminal
investigation.
The
administrator
or
designee
shall
not
have
the
authority
to
issue
criminal
subpoenas
or
make
arrests.
The
administrator
or
designee
shall
not
be
considered
a
peace
officer,
including
as
provided
in
chapter
801
.
An
insurance
fraud
bureau
investigator
shall
be
authorized
to
conduct
an
investigation
under
article
5
of
this
chapter
and
shall
have
law
enforcement
authority
pursuant
to
section
507E.8.
House
File
426,
p.
2
Sec.
2.
Section
507E.2,
Code
2019,
is
amended
to
read
as
follows:
507E.2
Purpose.
An
insurance
fraud
bureau
is
created
within
the
insurance
division.
Upon
a
reasonable
determination
by
the
division,
by
its
own
inquiries
or
as
a
result
of
complaints
a
complaint
filed
with
the
division,
that
a
person
has
engaged
in,
is
engaging
in,
or
may
be
engaging
in
an
act
or
practice
that
violates
this
chapter
or
any
other
provision
of
the
insurance
code
subject
to
the
jurisdiction
of
the
commissioner
,
the
division
may
administer
oaths
and
affirmations,
serve
subpoenas
ordering
the
attendance
of
witnesses,
and
collect
evidence
related
to
such
act
or
practice.
Sec.
3.
Section
507E.5,
subsection
5,
Code
2019,
is
amended
to
read
as
follows:
5.
An
insurance
fraud
bureau
investigator
or
other
staff
member
of
the
bureau
is
not
subject
to
subpoena
in
a
civil
action
concerning
any
matter
of
which
the
bureau
investigator
or
other
staff
member
has
knowledge
pursuant
to
a
pending
or
continuing
investigation
being
conducted
by
the
bureau
pursuant
to
this
chapter
.
Sec.
4.
Section
507E.8,
Code
2019,
is
amended
to
read
as
follows:
507E.8
Law
enforcement
officer
status
authority
.
1.
Bureau
investigators
For
purposes
of
an
arrest
resulting
from
a
criminal
violation
of
any
provision
of
the
code
subject
to
the
jurisdiction
of
the
commissioner
established
as
a
result
of
an
investigation
pursuant
to
this
chapter,
an
insurance
fraud
bureau
investigator
shall
have
the
power
authority
and
status
of
a
law
enforcement
officers
who
by
the
nature
of
their
duties
may
be
required
to
perform
the
duties
of
a
peace
officer
when
making
arrests
for
criminal
violations
established
as
a
result
of
their
investigations
pursuant
to
this
chapter
officer
pursuant
to
section
80B.3,
subsection
3
.
2.
The
general
laws
applicable
to
arrests
an
arrest
by
a
law
enforcement
officers
officer
of
the
state
also
apply
to
an
insurance
fraud
bureau
investigators
investigator
.
Bureau
investigators
An
insurance
fraud
bureau
investigator
shall
have
the
power
to
execute
arrest
warrants
and
search
warrants
House
File
426,
p.
3
for
the
same
criminal
violations
,
serve
subpoenas
issued
for
the
examination,
investigation,
and
trial
of
all
offenses
identified
through
their
investigations
the
course
of
an
investigation
conducted
pursuant
to
this
section
,
and
arrest
upon
probable
cause
without
warrant
a
person
found
in
the
act
of
committing
a
violation
of
the
provisions
a
provision
of
this
chapter
.
Sec.
5.
Section
508E.3,
Code
2019,
is
amended
to
read
as
follows:
508E.3
License
requirements.
1.
a.
A
person
shall
not
operate
as
a
viatical
settlement
provider
or
viatical
settlement
broker
without
first
obtaining
a
license
from
the
commissioner
of
the
state
of
residence
of
the
viator.
b.
(1)
A
life
insurance
producer
who
has
been
duly
licensed
as
a
resident
insurance
producer
with
a
life
line
of
authority
in
this
state
or
the
life
insurance
producer’s
home
state
for
at
least
one
year
immediately
prior
to
operating
as
a
viatical
settlement
broker
and
is
licensed
as
a
nonresident
producer
in
this
state
shall
be
deemed
to
meet
the
licensing
requirements
of
this
section
and
shall
be
permitted
to
operate
as
a
viatical
settlement
broker.
(2)
Not
later
than
thirty
days
from
the
first
day
of
operating
as
a
viatical
settlement
broker,
the
life
insurance
producer
shall
notify
the
commissioner
that
the
life
insurance
producer
is
acting
as
a
viatical
settlement
broker
on
a
form
prescribed
by
the
commissioner,
and
shall
pay
any
applicable
fee
of
up
to
one
hundred
dollars
as
provided
by
rules
adopted
by
the
commissioner.
The
notification
shall
include
an
acknowledgment
by
the
life
insurance
producer
that
the
life
insurance
producer
will
operate
as
a
viatical
settlement
broker
in
accordance
with
this
chapter
.
The
notification
shall
also
include
proof
that
the
life
insurance
producer
is
covered
by
an
errors
and
omissions
policy
for
an
amount
of
not
less
than
one
hundred
thousand
dollars
per
occurrence
and
not
less
than
one
hundred
thousand
dollars
total
annual
aggregate
for
all
claims
during
the
policy
period.
(3)
b.
The
An
insurer
that
issued
the
a
policy
being
viaticated
shall
not
be
responsible
for
any
act
or
omission
of
House
File
426,
p.
4
a
viatical
settlement
broker
or
viatical
settlement
provider
arising
out
of
or
in
connection
with
the
viatical
settlement
transaction,
unless
the
insurer
receives
compensation
for
the
placement
of
a
viatical
settlement
contract
from
the
viatical
settlement
provider
or
viatical
settlement
broker
in
connection
with
the
viatical
settlement
contract.
c.
A
person
licensed
as
an
attorney,
certified
public
accountant,
or
financial
planner
accredited
by
a
nationally
recognized
accreditation
agency
who
is
retained
to
represent
the
a
viator,
whose
compensation
is
not
paid
directly
or
indirectly
by
the
viatical
settlement
provider,
may
negotiate
a
viatical
settlement
contracts
contract
on
behalf
of
the
viator
without
having
to
obtain
a
license
as
a
viatical
settlement
broker.
2.
An
application
for
a
viatical
settlement
provider
or
viatical
settlement
broker
license
shall
be
made
to
the
commissioner
by
the
applicant
on
a
form
prescribed
by
the
commissioner,
and
the
application
shall
be
accompanied
by
a
fee
of
not
more
than
one
hundred
dollars
as
provided
by
rules
adopted
by
the
commissioner.
3.
The
A
viatical
settlement
provider
or
viatical
settlement
broker
license
term
shall
be
three
years
and
the
license
may
be
renewed
upon
payment
of
the
a
renewal
fee
of
not
more
than
one
hundred
dollars
as
provided
by
rules
adopted
by
the
commissioner.
A
failure
to
pay
the
fee
by
the
renewal
date
results
shall
result
in
expiration
of
the
license.
4.
An
applicant
shall
provide
information
on
forms
required
by
the
commissioner
and
shall
meet
all
requirements
pursuant
to
section
522B.5A
if
required
by
the
commissioner
.
The
commissioner
shall
have
the
authority
,
at
any
time,
to
require
the
an
applicant
to
fully
disclose
the
identity
of
all
stockholders,
partners,
officers,
members,
and
employees
,
and
the
.
The
commissioner
may,
in
the
exercise
of
the
commissioner’s
discretion,
refuse
to
issue
a
license
in
the
name
of
a
legal
entity
to
such
applicant
if
not
satisfied
that
any
officer,
employee,
stockholder,
partner,
or
member
thereof
,
or
employee
who
may
materially
influence
the
applicant’s
conduct
meets
the
standards
of
this
chapter
.
5.
A
license
issued
to
a
legal
entity
authorizes
all
House
File
426,
p.
5
partners,
officers,
members,
and
designated
employees
to
act
as
viatical
settlement
providers
or
viatical
settlement
brokers,
as
applicable,
under
the
license,
and
all
those
persons
shall
be
named
in
the
application
and
any
supplements
to
the
application.
6.
5.
Upon
the
filing
of
an
application
and
the
payment
of
the
license
fee,
the
commissioner
shall
make
an
investigation
of
investigate
each
applicant
and
issue
a
license
if
the
commissioner
finds
that
the
applicant
complies
with
all
of
the
following:
a.
If
a
viatical
settlement
provider,
has
provided
a
detailed
plan
of
operation.
b.
Is
competent
and
trustworthy
and
intends
to
act
in
good
faith
in
the
capacity
involved
by
the
license
applied
for.
c.
Has
a
good
business
reputation
and
has
had
experience,
training,
or
education
so
as
to
be
qualified
in
the
business
for
which
the
license
is
applied
for.
d.
If
a
legal
entity,
provides
a
certificate
of
good
standing
from
the
state
of
its
domicile.
e.
d.
If
a
viatical
settlement
provider
or
viatical
settlement
broker,
has
provided
an
antifraud
plan
that
meets
the
requirements
of
pursuant
to
section
508E.15,
subsection
7
.
7.
6.
The
commissioner
shall
not
issue
a
license
to
a
nonresident
applicant
unless
a
written
designation
of
an
agent
for
service
of
process
is
filed
and
maintained
with
the
commissioner
or
the
applicant
has
filed
with
the
commissioner
the
applicant’s
written
irrevocable
consent
that
any
action
against
the
applicant
may
be
commenced
against
the
applicant
by
service
of
process
on
the
commissioner.
If
an
applicant
files
such
consent,
service
of
process
made
on
the
commissioner
as
the
agent
for
service
of
process
shall
be
made
as
provided
in
section
505.30
.
8.
7.
A
viatical
settlement
provider
or
viatical
settlement
broker
shall
provide
to
the
commissioner
new
or
revised
information
about
officers,
ten-percent-or-more
stockholders,
partners,
directors,
members,
or
designated
employees
within
thirty
days
of
the
change.
9.
8.
An
individual
licensed
as
a
viatical
settlement
broker
shall
complete
on
a
triennial
basis
running
concurrent
House
File
426,
p.
6
with
the
license
term
twenty
credits
of
training
related
to
viatical
settlements
and
viatical
settlement
transactions,
as
required
by
the
commissioner
;
provided,
however,
that
a
life
insurance
producer
who
is
operating
as
a
viatical
settlement
broker
pursuant
to
subsection
1
,
paragraph
“b”
,
shall
not
be
subject
to
the
requirements
of
this
subsection
.
Any
person
failing
to
meet
the
requirements
of
this
subsection
shall
be
subject
to
the
penalties
imposed
by
the
commissioner.
10.
9.
Fees
collected
pursuant
to
this
section
shall
be
deposited
as
provided
in
section
505.7
.
Sec.
6.
Section
522B.5,
subsection
1,
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
A
person
applying
for
a
resident
insurance
producer
license
shall
make
application
to
the
commissioner
on
the
uniform
application
,
meet
all
requirements
pursuant
to
section
522B.5A,
and
declare
under
penalty
of
refusal,
suspension,
or
revocation
of
the
license
that
the
all
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:
Sec.
7.
NEW
SECTION
.
522B.5A
Criminal
history
check.
1.
In
determining
eligibility
for
licensure,
the
commissioner
is
authorized
to
require
an
applicant
pursuant
to
subsection
2
to
provide
to
the
commissioner
the
applicant’s
fingerprints
and
reasonable
fees
required
to
perform
a
state
criminal
history
check
through
the
department
of
public
safety,
division
of
criminal
investigation,
and
a
national
criminal
history
check
through
the
federal
bureau
of
investigation.
By
submitting
such
fingerprints,
the
applicant
authorizes
the
commissioner
to
do
all
of
the
following:
a.
Submit
the
applicant’s
fingerprints
to
the
department
of
public
safety,
division
of
criminal
investigation,
for
submission
to
the
federal
bureau
of
investigation
for
the
purpose
of
conducting
a
national
criminal
history
check.
b.
Receive
the
results
of
the
state
and
national
criminal
history
checks.
2.
The
commissioner
is
authorized
to
require
a
state
and
national
criminal
history
check
on
each
applicant
that
applies
for
any
of
the
following:
House
File
426,
p.
7
a.
An
initial
license
in
Iowa
as
a
resident
insurance
producer.
b.
An
initial
license
or
an
additional
line
of
authority
under
a
nonresident
insurance
producer
license
if
a
state
and
national
criminal
history
check
has
not
already
been
completed.
c.
A
renewal,
reinstatement,
or
reissuance
of
a
license
if
the
license
of
a
producer
has
been
revoked
or
suspended
pursuant
to
section
522B.11,
the
license
of
a
public
adjuster
has
been
revoked
or
suspended
pursuant
to
section
522C.6,
or
the
license
of
a
viatical
settlement
provider
or
viatical
settlement
broker
has
been
revoked
or
suspended
pursuant
to
section
508E.4.
d.
An
initial
license
as
a
viatical
settlement
provider
or
viatical
settlement
broker
in
this
state.
e.
An
initial
license
as
a
public
adjuster
in
this
state.
3.
The
commissioner
shall
require
an
applicant
pursuant
to
subsection
2
to
submit
a
full
set
of
fingerprints
and
any
other
required
identifying
information
to
the
commissioner
on
a
form
prescribed
by
the
department
of
public
safety.
4.
The
commissioner
may
contract
with
a
third-party
vendor
for
the
collection
and
transmission
of
an
applicant’s
fingerprints
for
the
purpose
of
conducting
a
state
and
national
criminal
history
check.
The
commissioner
may
agree
to
reasonable
fees
to
be
charged
by
the
third-party
vendor
and
may
require
such
reasonable
fees
to
be
paid
by
the
applicant
directly
to
the
third-party
vendor.
5.
The
results
of
a
criminal
history
check
conducted
pursuant
to
this
section
shall
not
be
considered
a
public
record
pursuant
to
chapter
22.
An
applicant’s
fingerprints
and
any
criminal
history
check
information
shall
not
be
subject
to
subpoena,
other
than
a
subpoena
issued
in
a
criminal
action
or
investigation,
shall
be
confidential
by
law
and
privileged,
and
shall
not
be
subject
to
discovery
or
be
admissible
in
evidence
in
a
private
civil
action.
Sec.
8.
Section
522C.5,
Code
2019,
is
amended
to
read
as
follows:
522C.5
Application
for
license.
1.
A
person
applying
for
a
public
adjuster
license
shall
make
application
on
a
uniform
individual
application
or
uniform
House
File
426,
p.
8
business
entity
application
as
prescribed
by
the
commissioner
pursuant
to
rules
adopted
under
chapter
17A
.
2.
In
determining
eligibility
for
licensure
under
this
chapter
,
the
commissioner
shall
is
authorized
to
require
a
criminal
history
check
pursuant
to
section
522B.5A
for
each
individual
applying
for
a
public
adjuster
license
to
submit
a
full
set
of
fingerprints
with
the
application.
The
commissioner
shall
also
require
and
for
each
individual
who
will
be
acting
as
a
public
adjuster
of
a
business
entity
applying
for
licensure
under
this
chapter
to
submit
a
full
set
of
fingerprints
for
each
individual
who
will
be
acting
as
a
public
adjuster
on
behalf
of
the
business
entity
.
The
commissioner
shall
conduct
a
state
and
national
criminal
history
record
check
on
each
applicant.
The
commissioner
is
authorized
to
submit
fingerprints
and
any
required
fees
to
the
state
department
of
public
safety,
the
state
attorney
general,
and
the
federal
bureau
of
investigation
for
the
performance
of
such
criminal
record
checks.
a.
The
commissioner
may
contract
for
the
collection,
transmission,
and
resubmission
of
fingerprints
required
under
this
section
and
may
contract
for
a
reasonable
fingerprinting
fee
to
be
charged
by
the
contractor
for
these
services.
Any
fees
for
the
collection,
transmission,
and
retention
of
fingerprints
submitted
pursuant
to
this
subsection
shall
be
paid
directly
to
the
contractor
by
the
applicant.
b.
The
commissioner
may
waive
submission
of
fingerprints
by
any
person
who
has
previously
furnished
fingerprints
if
those
fingerprints
are
on
file
with
the
central
repository
of
the
national
association
of
insurance
commissioners,
its
affiliates,
or
subsidiaries.
c.
The
commissioner
may
receive
criminal
history
record
information
concerning
an
applicant
that
was
requested
by
the
state
department
of
justice
directly
from
the
federal
bureau
of
investigation.
d.
The
commissioner
may
submit
electronic
fingerprint
records
and
necessary
identifying
information
to
the
national
association
of
insurance
commissioners,
its
affiliates,
or
subsidiaries
for
permanent
retention
in
a
centralized
repository
whose
purpose
is
to
provide
state
insurance
House
File
426,
p.
9
commissioners
with
access
to
fingerprint
records
in
order
to
perform
criminal
history
record
checks.
______________________________
PAT
GRASSLEY
Speaker
of
the
House
______________________________
CHARLES
SCHNEIDER
President
of
the
Senate
I
hereby
certify
that
this
bill
originated
in
the
House
and
is
known
as
House
File
426,
Eighty-eighth
General
Assembly.
______________________________
MEGHAN
NELSON
Chief
Clerk
of
the
House
Approved
_______________,
2020
______________________________
KIM
REYNOLDS
Governor
