Bill Text: IA SF2248 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to service of process made on the commissioner of insurance as the agent or attorney for service of process for regulated individuals and entities and resolving inconsistencies. (Formerly SSB 3130.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2018-03-13 - Withdrawn. S.J. 664. [SF2248 Detail]
Download: Iowa-2017-SF2248-Introduced.html
Senate File 2248 - Introduced SENATE FILE BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3130) (COMPANION TO HF 2236 BY COMMITTEE ON COMMERCE) A BILL FOR 1 An Act relating to service of process made on the commissioner 2 of insurance as the agent or attorney for service of process 3 for regulated individuals and entities and resolving 4 inconsistencies. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5321SV (2) 87 ko/rj PAG LIN 1 1 Section 1. Section 502.611, Code 2018, is amended to read 1 2 as follows: 1 3 502.611 Service of process. 1 4 1. Signed consent to service of process. A consent to 1 5 service of process required by this chapter must be signed 1 6 and filed in the form required by a rule or order under this 1 7 chapter. A consent appointing the administratortheas a 1 8 person's agent for service of process in a noncriminal action 1 9 or proceeding against the person, or the person's successor or 1 10 personal representative under this chapter or a rule adopted 1 11 or order issued under this chapter after the consent is filed, 1 12 has the same force and validity as if the service of process 1 13 were made personally on the person filing the consent. A 1 14 person that has filed a consent complying with this subsection 1 15 in connection with a previous application for registration or 1 16 notice filing need not file an additional consent. 1 17 2. Conduct constituting appointment of agent for service of 1 18 process. If a person, including a nonresident of this state, 1 19 engages in an act, practice, or course of business prohibited 1 20 or made actionable by this chapter or a rule adopted or order 1 21 issued under this chapter and the person has not filed a 1 22 consent to service of process under subsection 1, the act, 1 23 practice, or course of business constitutes the appointment of 1 24 the administrator as the person's agent for service of process 1 25 in a noncriminal action or proceeding against the person or the 1 26 person's successor or personal representative. 1 27 3. Procedure for service of process.ServiceIf service of 1 28 process is made on the administrator under subsection 1 or 2 1 29mayit shall be madeby providing a copy of the process to the 1 30 office of the administratoras provided in section 505.30, but 1 31itis not effective unless all of the following apply: 1 32 a. The plaintiff, which may be the administrator, shall 1 33 promptlysendssend notice of the service of process and a 1 34 copy of the service of process, return receipt requested,by 1 35 certified mail to the defendant or respondent at the address 2 1 set forth in the consent to service of process or, if a consent 2 2 to service of process has not been filed,atto the defendant's 2 3 or respondent's last knownaddress, or takes other reasonable 2 4 steps to give noticeprincipal place of business. 2 5 b. The plaintifffilesshall file an affidavit of compliance 2 6 with this subsection in the action or proceeding on or before 2 7 the return day of the service of process, if any, or within 2 8 the time that the court, or the administrator in a proceeding 2 9 before the administrator, allows. 2 10 4. Service of process in an administrativeproceedings 2 11proceeding or civilactionsaction by administrator. Service of 2 12 process pursuant to subsection 3 may be used in a proceeding 2 13 before the administrator or by the administrator in a civil 2 14 action in which the administrator is the moving party. 2 15 5. Opportunity to defend. If process is served under 2 16 subsection 3, the court, or the administrator in a proceeding 2 17 before the administrator, shall order continuances as are 2 18 necessary or appropriate to afford the defendant or respondent 2 19 reasonable opportunity to defend. 2 20 Sec. 2. Section 505.30, Code 2018, is amended to read as 2 21 follows: 2 22 505.30 Service of process== feemade on the commissioner as 2 23 agent or attorney for service of process == rules and fee. 2 24 1. The commissionerof insurance, pursuant tomay adopt 2 25 rulesadoptedpursuant to chapter 17A,setting forth procedures 2 26 related to service of process made on the commissioner as 2 27 agent or attorney for service of process for an individual or 2 28 entity within the jurisdiction of the commissioner. The rules 2 29 shall apply when the individual or entity is required by law 2 30 to appoint the commissioner to serve, is required by law to 2 31 consent to have the commissioner serve, is deemed by law to 2 32 have appointed or to have consented to have the commissioner 2 33 serve, or elects to appoint or consents to have the 2 34 commissioner serve as agent or attorney for service of process. 2 35 2. The commissioner may collect a reasonable fee each 3 1 time service of process isservedmade on the commissioner 3 2 asallowed by lawset forth in subsection 1 or as otherwise 3 3 allowed by law.FeesA fee collected by the commissioner 3 4 under thissectionsubsection shall be used andareis 3 5 appropriated to the insurance division to offset the costs 3 6 ofreceiving such service of processthe commissioner acting 3 7 as agent or attorney for service of process. The party to a 3 8 proceedingcausingrequesting service of process is entitled to 3 9 recoverthisthe fee paid pursuant to this subsection and any 3 10 rules adopted under this section as costs if the party prevails 3 11 in the proceeding. 3 12 3. The commissioner shall maintain for ninety days a record 3 13 of each service of process made on the commissioner pursuant 3 14 to this section, including the date each service of process 3 15 is made on the commissioner, the date each service of process 3 16 is forwarded by mail by the commissioner to the defendant 3 17 or respondent, and the date each certificate of service is 3 18 submitted electronically to the court. The records may be 3 19 maintained electronically. 3 20 Sec. 3. Section 507A.5, Code 2018, is amended to read as 3 21 follows: 3 22 507A.5 Proscribed acts binding on insurer. 3 23 1.NoA person or insurer shall not directly or indirectly 3 24 perform anyof the actsact of doing an insurance business as 3 25 defined in this chapter except as provided by and in accordance 3 26 with the specific authorization by statute. However, should 3 27anyan unauthorized person or insurer performanyan act of 3 28 doing an insurance business as set forth in this chapter, it 3 29 shall be equivalent to and shall constitute an irrevocable 3 30 appointment by such person or insurer, binding upon the 3 31 person, the person's executor or administrator, or successor 3 32 in interest if a corporation, of the commissioner of insurance 3 33 or the commissioner's successor in office, to be the true and 3 34 lawful attorney upon whom may be served all lawful process in 3 35 any action, suit or proceeding in any court arising out of 4 1 doing an insurance business in this state or instituted by 4 2 or on behalf of an insured or beneficiary arising out ofany4 3 suchactsan act of doing an insurance business, except in an 4 4 action, suit, or proceeding by the commissioner of insurance 4 5 or by the state.AnyAn act of doing an insurance business by 4 6anyan unauthorized person or insurer shall be signification of 4 7 its agreement that such service of process is of the same legal 4 8 force and validity as personal service of process in this state 4 9 upon such person or insurer. 4 10 2. Service of process made upon the commissioner as the 4 11 attorney for service of process shall be madeby delivering to 4 12 and leaving with the commissioner of insurance or some person 4 13 in apparent charge of the commissioner's office two copies 4 14 thereof and the payment to the commissioner of such fees as 4 15 may be prescribed by lawas provided in section 505.30.The 4 16 commissioner of insurance shall forthwith forward by certified 4 17 mail one of the copies of such process to the defendant at the 4 18 last known principal place of business and shall keep a record 4 19 of all process so served.Such service of process shall be 4 20 sufficient to provide notice if all of the following apply: 4 21 a.AThe plaintiff or plaintiff's attorney sends a copy of 4 22 the service of processis sentby certified mail within ten 4 23 days thereafterby certified mail by plaintiff or plaintiff's 4 24 attorneyto the defendant at the defendant's last known 4 25 principal place of business. 4 26 b. The defendant's receipt or a receipt issued by the post 4 27 office showing the name of the sender of thelettercertified 4 28 mail and the name and address of the person to whom theletter 4 29certified mail is addressed and an affidavit by the plaintiff 4 30 or plaintiff's attorneyshowing aattesting to compliance 4 31herewithwith this subsection are filed with the clerk of the 4 32 court in whichsuchthe action is pending on or before the date 4 33 the defendant is required to appear or within such further time 4 34 as the court may allow. 4 35 3. Service of process in any such action, suit, or 5 1 proceeding shall in addition to the manner as provided in 5 2 this chapter be valid ifservedmade uponanya person within 5 3 this state who, in this state on behalf of such insurer, 5 4 is soliciting insurance, making, issuing, or delivering 5 5 any contract of insurance, or collecting or receiving any 5 6 premium, membership fee, assessment, or other consideration for 5 7 insurance, and if all of the following apply: 5 8 a.AThe plaintiff or plaintiff's attorney sends a copy 5 9 of such service of processis sentby certified mail within 5 10 ten days thereafterby certified mail by the plaintiff or 5 11 plaintiff's attorneyto the defendant at the defendant's last 5 12 known principal place of businessof the defendant. 5 13 b. The defendant's receipt, orthea receipt issued by 5 14 the post office showing the name of the sender of theletter 5 15certified mail and the name and address of the person to whom 5 16 thelettercertified mail is addressed, and an affidavitofby 5 17 the plaintiff or plaintiff's attorneyshowing aattesting to 5 18 complianceherewithwith this subsection are filed with the 5 19 clerk of the court in which such action is pending on or before 5 20 the date the defendant is required to appear or within such 5 21 further time as the court may allow. 5 22 4.NoA plaintiff shall not be entitled to a judgment by 5 23 default under this chapter until the expiration of thirty 5 24 days from the dateof the filing ofon which the plaintiff or 5 25 plaintiff's attorney files the affidavit of compliance. 5 26 5. Nothing in this section shall limit or abridge the right 5 27 to serve any process, notice, or demand upon any insurer in any 5 28 other manner now or hereafter permitted by law. 5 29 Sec. 4. Section 508E.3, subsection 7, Code 2018, is amended 5 30 to read as follows: 5 31 7. The commissioner shall not issue a license to a 5 32 nonresident applicant unless a written designation of an 5 33 agent for service of process is filed and maintained with the 5 34 commissioner or the applicant has filed with the commissioner 5 35 the applicant's written irrevocable consent that any action 6 1 against the applicant may be commenced against the applicant by 6 2 service of process on the commissioner. If an applicant files 6 3 such consent, service of process made on the commissioner as 6 4 the agent for service of process shall be made as provided in 6 5 section 505.30. 6 6 Sec. 5. Section 511.28, Code 2018, is amended to read as 6 7 follows: 6 8 511.28 Service of process. 6 9Any notice or process, with three copies of the notice 6 10 or process, may be mailed to the commissioner at Des Moines, 6 11 Iowa, in a certified mail letter addressed to the commissioner 6 12 by the commissioner's official title. The commissioner 6 13 shall acknowledge service on behalf of the defendant foreign 6 14 insurance company by writing, giving the date of receipt of 6 15 the notice or process, and shall return the notice or process 6 16 in a certified mail letter to the clerk of the court in which 6 17 the suit is pending, addressed to the clerk by the clerk's 6 18 official title, and shall also mail a copy, with a copy of the 6 19 commissioner's acknowledgment of service written thereon, in a 6 20 certified mail letter addressed to the person or corporation 6 21 named or designated by such company in the written instrument. 6 22 Notice or process received prior to 10 a.m. shall be forwarded 6 23 the same working day. Notice or process received after 10 a.m. 6 24 shall be forwarded the next working day. A fee of fifteen 6 25 dollars must accompany the request for notice or process.6 26 Service of process made on the commissioner as the agent for 6 27 service of process shall be made as provided in section 505.30. 6 28 Sec. 6. Section 512B.33, Code 2018, is amended to read as 6 29 follows: 6 30 512B.33 Service of process. 6 31 1. A society authorized to do business in this state shall 6 32 file in the office of the commissioner a power of attorney 6 33 and an agreement in writing that service of process in any 6 34 action or proceeding against the society may be served on the 6 35 commissioner and shall be of the same legal force and validity 7 1 as if served upon the society, and that the authority shall 7 2 continue in force so long as any liability remains outstanding 7 3 in this state.CopiesA copy of the power of attorney, 7 4 certified by the commissioner, shall be deemed sufficient 7 5 evidence of the appointment and shall be admitted in evidence 7 6 with the same force and effect as the original. 7 7 2. Service of processshall only be made upon the 7 8 commissioner, or if absent, upon the person in charge of 7 9 the commissioner's officemade on the commissioner as the 7 10 agent for service of process shall be made as provided in 7 11 section 505.30.Service shall be made in triplicate and shall 7 12 constitute sufficient service upon the society. When legal 7 13 process against a society is served upon the commissioner, the 7 14 commissioner shall promptly forward one of the duplicate copies 7 15 by registered mail, prepaid, directed to the secretary or 7 16 corresponding officer of the society.A society shall not be 7 17 required to file its answer, pleading, or defense in less than 7 18 thirty days from the dateof mailing the copy of the service 7 19 to a societythe commissioner sends a copy of the service of 7 20 process to the society by certified mail as provided in section 7 21 505.30. Legal process shall not beservedmade upon a society 7 22 except in the manner provided in this section. 7 23 Sec. 7. Section 514.2A, Code 2018, is amended to read as 7 24 follows: 7 25 514.2A Service of process. 7 26 A nonprofit health service corporation authorized to 7 27 do business in this state shall file in the office of the 7 28 commissioner a power of attorney and an agreement in writing 7 29 that service of process in any action or proceeding against 7 30 the corporation may beservedmade on the commissioner and 7 31 shall be of the same legal force and validity as ifservedmade 7 32 upon the corporation, and that the authority shall continue 7 33 in force so long as any liability remains outstanding in this 7 34 state.CopiesA copy of the power of attorney, certified by 7 35 the commissioner, shall be deemed sufficient evidence of the 8 1 appointment and shall be admitted in evidence with the same 8 2 force and effect as the original. Service of process made on 8 3 the commissioner as the attorney for service of process shall 8 4 be made as provided in section 505.30. 8 5 Sec. 8. Section 515.77, Code 2018, is amended to read as 8 6 follows: 8 7 515.77 Service of process. 8 8 Any notice or service of process, with three copies of the 8 9 notice or process, may be mailed to the commissioner at Des 8 10 Moines, Iowa, in a certified mail letter addressed to the 8 11 commissioner by the commissioner's official titlemade on the 8 12 commissioner as agent for service of process shall be made as 8 13 provided in section 505.30.The commissioner shall acknowledge 8 14 service on behalf of the defendant foreign insurance company by 8 15 writing, giving the date of receipt of the notice or process, 8 16 and shall return the notice or process in a certified mail 8 17 letter to the clerk of the court in which the suit is pending, 8 18 addressed to the clerk by the clerk's official title, and 8 19 shall also mail a copy, with a copy of the commissioner's 8 20 acknowledgment of service written thereon, in a certified 8 21 mail letter addressed to the person or corporation named or 8 22 designated by such company in the written instrument. Notice 8 23 or process received prior to 10:00 a.m. shall be forwarded the 8 24 same working day. Notice or process received after 10:00 a.m. 8 25 shall be forwarded the next working day. A fee of fifteen 8 26 dollars must accompany the request for notice or process.8 27 Sec. 9. Section 515E.3, Code 2018, is amended to read as 8 28 follows: 8 29 515E.3 Risk retention groups organized in this state. 8 30 To be organized as a risk retention group in this state, 8 31 the group must be organized and licensed as a liability 8 32 insurance company authorized by the insurance laws of this 8 33 state. Except as provided elsewhere in this chapter, a risk 8 34 retention group organized in this state must comply with all 8 35 of the laws, rules, and requirements applicable to a liability 9 1insurersinsurer organized in this state. Additionally, a 9 2 risk retention group organized in this state must comply with 9 3 section 515E.4. These requirements do not exempt a risk 9 4 retentiongroupsgroup from a duty imposed by any other law or 9 5 rule of the state. Before it may offer insurance in any state, 9 6eacha risk retention group shall also submit for approval to 9 7 the commissioner of insurance of this state a plan of operation 9 8 or a feasibility study, and revisions of the plan or study,9 9 within ten days of any change. The name under which a risk 9 10 retention group may be chartered and licensed shall be a brief 9 11 description of its membership followed by the phrase "risk 9 12 retention group" and, unless its membership consists solely of 9 13 insurers, shall not include the terms "insurance", "mutual", 9 14 "reciprocal", or any similar term.AllA risk retentiongroups 9 15group chartered in this state shall file with the division 9 16 and the national association of insurance commissioners an 9 17 annual statement blank prepared in accordance with instructions 9 18 prescribed by the commissioner. All financial information 9 19 reflected in the annual statement shall be kept and prepared in 9 20 accordance with accounting practices and procedures prescribed 9 21 by the commissioner. The commissioner may adopt by reference 9 22 the annual statement handbook and the accounting practices and 9 23 procedures manual of the national association of insurance 9 24 commissioners. 9 25 A risk retention group organized in this state shall file 9 26 in the office of the commissioner a power of attorney and an 9 27 agreement in writing that service of process in any action 9 28 or proceeding against the society may beservedmade on the 9 29 commissioner and shall be of the same legal force and validity 9 30 as ifservedmade upon the society, and that the authority 9 31 shall continue in force so long as any liability remains 9 32 outstanding in this state. Copies of the power of attorney, 9 33 certified by the commissioner, shall be deemed sufficient 9 34 evidence of the appointment and shall be admitted in evidence 9 35 with the same force and effect as the original. Service of 10 1 process made on the commissioner as the attorney for service of 10 2 process shall be made as provided in section 505.30. 10 3 Sec. 10. Section 516E.12, Code 2018, is amended to read as 10 4 follows: 10 5 516E.12 Service of process. 10 6 The commissioner shall be theagentattorney for service of 10 7 process upon a provider, a service company,ora third=party 10 8 administratorand, or an issuer of a reimbursement insurance 10 9 policy. Service of process made on the commissioner as the 10 10 agent for service of process shall be made as provided in 10 11 section 505.30. 10 12 Sec. 11. Section 520.6, Code 2018, is amended to read as 10 13 follows: 10 14 520.6Manner of serviceService of process. 10 15Three copies of such process shall be served and the 10 16 commissioner of insurance shall file one copy, forward one copy 10 17 to said attorney, and return one copy with the commissioner's 10 18 admission of service.Service of process made on the 10 19 commissioner as the agent for service of process shall be made 10 20 as provided in section 505.30. 10 21 Sec. 12. Section 521A.3, subsection 7, Code 2018, is amended 10 22 to read as follows: 10 23 7. Jurisdiction == consent to service of process. The 10 24 district court is hereby vested with jurisdiction overevery 10 25a person that is not a resident, is not domiciled, or is 10 26 not authorized to do business in this statewhothat files 10 27 a statement with the commissioner under this section, and 10 28 over all actions involvingsuchthe person arising out of 10 29 violations of this section, andeach suchthe person shall be 10 30 deemed to have performed acts equivalent to and constituting 10 31 an appointment bysuch athe person of the commissioner to be 10 32 the person's true and lawful attorney upon whom may beserved 10 33made all lawful process, notice, or demand in any action, suit, 10 34 or proceeding arising out ofviolationsa violation of this 10 35 section.CopiesA copy of all such lawful process, notice, or 11 1 demand shall beservedmade on the commissioner as the attorney 11 2 for service of process as provided in section 505.30and 11 3 transmitted by registered or certified mail by the commissioner 11 4 to such person at the person's last known address. 11 5 Sec. 13. NEW SECTION. 521B.107 Service of process made on 11 6 the commissioner as the agent for service of process. 11 7 Service of process made on the commissioner as the agent for 11 8 service of process shall be made as provided in section 505.30. 11 9 Sec. 14. NEW SECTION. 521C.13 Service of process made on 11 10 the commissioner as the agent for service of process. 11 11 Service of process made on the commissioner as the agent for 11 12 service of process shall be made as provided in section 505.30. 11 13 Sec. 15. NEW SECTION. 523A.802A Service of process made on 11 14 the commissioner as the agent for service of process. 11 15 Service of process made on the commissioner as the agent for 11 16 service of process shall be made as provided in section 505.30. 11 17 Sec. 16. Section 523C.20, Code 2018, is amended to read as 11 18 follows: 11 19 523C.20 Consent to service of process. 11 20 If a person engages in conduct subject to regulation under 11 21 this chapter, the conduct shall constitute the appointment 11 22 of the commissioner of insurance as the person's attorney 11 23 to receive service ofany lawfulprocess in a noncriminal 11 24 proceeding against the person, a successor, or personal 11 25 representative, which grows out of that conduct, with the same 11 26 force and validity as ifservedmade personally. Service of 11 27 process made on the commissioner as the attorney for service of 11 28 process shall be made as provided in section 505.30. 11 29 Sec. 17. Section 523C.21, Code 2018, is amended to read as 11 30 follows: 11 31 523C.21 Service of process. 11 32 The commissioner shall be the agent for service of process 11 33 upon a service company. Service of process made on the 11 34 commissioner as the agent for service of process shall be made 11 35 as provided in section 505.30. 12 1 Sec. 18. Section 523I.102, subsection 1, Code 2018, is 12 2 amended to read as follows: 12 3 1. "Authorized to do business within this state" means a 12 4 person licensed, registered, or subject to regulation by an 12 5 agency of the state of Iowaor who has filed a consent to 12 6 service of process with the commissioner for purposes of this 12 7 chapter. 12 8 EXPLANATION 12 9 The inclusion of this explanation does not constitute agreement with 12 10 the explanation's substance by the members of the general assembly. 12 11 This bill relates to service of process made on the 12 12 commissioner of insurance as the agent or attorney for service 12 13 of process for regulated entities and individuals. 12 14 Code section 505.30 (insurance division) is amended and 12 15 provides that the commissioner may adopt rules for the process 12 16 by which service of process shall be made upon the commissioner 12 17 as the agent or attorney for service of process for a regulated 12 18 entity or individual. The commissioner shall also retain for 12 19 90 days a record of each service of process made, the time 12 20 served, the date the commissioner mails the service of process 12 21 to the defendant or respondent and the date each certificate 12 22 of service is filed with the court. No change is made to the 12 23 commissioner's ability to collect a reasonable fee for each 12 24 process made on the commissioner. 12 25 Code sections 508E.3(7) (viatical settlement contracts), 12 26 520.6 (reciprocal or interinsurance contracts), and 523C.20 and 12 27 523C.21 (residential service contracts) are amended to provide 12 28 that service of process on the commissioner as the agent or 12 29 attorney for service of process shall be made as provided in 12 30 Code section 505.30. 12 31 Code sections 502.611 (uniform securities Act), 507A.5 12 32 (unauthorized insurers), 512B.33 (fraternal benefit societies), 12 33 514.2A (nonprofit health service corporations), 515E.3 (risk 12 34 retention groups and purchasing groups), 516E.12 (motor vehicle 12 35 service contracts), and 521A.3(7) (insurance holding company 13 1 systems) are amended to provide that service of process on the 13 2 commissioner as the agent or attorney for service of process 13 3 shall be made as provided in Code section 505.30 and to make 13 4 technical changes for enhanced readability and consistency. 13 5 Code sections 511.28 (life insurance companies and 13 6 associations) and 515.77 (insurance other than life) are 13 7 amended to provide that service of process on the commissioner 13 8 as the agent for service of process shall be made as 13 9 provided in Code section 505.30. In addition, the $15.00 13 10 fee required for service of process on the commissioner is 13 11 stricken, allowing for a reasonable fee to be collected by the 13 12 commissioner as provided in Code section 505.30. 13 13 New Code sections 521B.107 (credit for reinsurance), 521C.13 13 14 (reinsurance intermediaries), and 523A.802A (cemetery and 13 15 funeral merchandise and funeral services) require that service 13 16 of process on the commissioner as the agent for service of 13 17 process shall be made as provided in Code section 505.30. 13 18 Code section 523I.201(1) (Iowa cemetery Act) is amended to 13 19 remove the commissioner as an agent for service of process. LSB 5321SV (2) 87 ko/rj