Bill Summary – FastDemocracy

Senate File 409 - Introduced
                                  SENATE FILE 409
                                  BY COMMITTEE ON COMMERCE
                                  (SUCCESSOR TO SSB 1150)
                            A BILL FOR
An Act relating to value-added products or services offered by
  insurers or producers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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    Section 1. Section 507B.4, subsection 2, Code 2023, is
 amended to read as follows:
    2. a. For purposes of subsection 3, paragraphs “k”, “l”,
 and “m”, “personal lines property and casualty insurance” means
 insurance sold to individuals and families primarily for
 noncommercial purposes as provided in chapter 522B.
    b. For purposes of subsection 3, paragraph “i”, subparagraph
 (2), subparagraph division (d), “customer” means a policyholder,
 potential policyholder, certificate holder, potential
 certificate holder, an insured, potential insured, or an
 applicant.
    Sec. 2. Section 507B.4, subsection 3, paragraph i,
 subparagraph (2), unnumbered paragraph 1, Code 2023, is amended
 to read as follows:
    Nothing in paragraph “g” or subparagraph Subparagraphs (1)
 of this and (3), and paragraph “i” “g”, shall not be construed
 as including within the definition of to include any of the
 following practices in the definition of unfair discrimination
 or rebates any of the following practices:
    Sec. 3. Section 507B.4, subsection 3, paragraph i,
 subparagraph (2), Code 2023, is amended by adding the following
 new subparagraph division:
    NEW SUBPARAGRAPH DIVISION. (d) The offer or provision, at
 no or reduced cost, by an insurer or producer by or through
 an employee, affiliate, or third-party representative, of a
 value-added product or service that is not specified in the
 policy of insurance if the value-added product or service that
 is offered or provided meets all of the following criteria:
    (i) The product or service relates to the policy of
 insurance.
    (ii) The product or service is designed primarily to
 accomplish at least one of the following:
    (A) Provide loss mitigation or loss control.
    (B) Reduce the customer’s claim costs or claim settlement
 costs.
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                                S.F. 409
    (C) Provide the customer with education regarding liability
 risks, or the risk of loss to persons or property.
    (D) Monitor or assess risk, identify sources of risk, or
 develop strategies for eliminating or reducing risk.
    (E) Enhance the customer’s health.
    (F) Enhance the customer’s financial wellness through
 education or financial planning services.
    (G) Provide the customer with post-loss services.
    (H) Incentivize behavioral changes to improve the health
 of, or to reduce the risk of death or disability of, a
 customer.
    (I) Assist in the administration of employee or retiree
 benefit insurance coverage.
    (iii) The cost to the insurer or producer offering or
 providing the product or service to a customer must be
 reasonable in comparison to the customer’s premiums and
 insurance coverage for the policy class.
    (iv) If the insurer or producer provides the product or
 service offered, the insurer or producer shall ensure that the
 customer is provided with contact information for customer
 service or technical support personnel who can assist the
 customer with questions regarding the product or service.
    (v) The availability of the value-added product or service
 shall be based on documented objective criteria and the
 value-added product or service must be offered to all customers
 in a nondiscriminatory manner. The documented objective
 criteria shall be maintained by the insurer or producer and
 provided to the commissioner upon request. If an insurer
 or producer does not have sufficient documented objective
 criteria, but has a good-faith belief that the product or
 service meets the criteria under subparagraph subdivision (ii),
 the insurer or producer may offer or provide the product or
 service in a nondiscriminatory manner to customers as part of
 a pilot program or a test program for up to one year. Prior
 to launching the pilot program or test program, the insurer or
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                                         S.F. 409
  producer must notify the commissioner. If the commissioner
  does not object to the pilot program or test program within
  twenty-one calendar days from the date of notice, the insurer
  or producer may proceed with the pilot program or test program.
     (vi) The commissioner may adopt rules pursuant to chapter
  17A to administer this subparagraph division.
                            EXPLANATION
         The inclusion of this explanation does not constitute agreement with
         the explanation’s substance by the members of the general assembly.
    This bill relates to value-added products or services
 offered by insurers or producers.
    The bill excludes value-added products or services (product
 or service) offered or provided (offered), at no or reduced
 cost, by an insurer or producer (insurer) that is not specified
 in the policy of insurance (policy) from the definition of
 unfair discrimination or of rebate under Code section 507B.4,
 if the product or service that is offered relates to the policy
 that is offered and is designed primarily to accomplish at
 least one of the criteria detailed in the bill.
    The cost to the insurer of offering the product or service to
 a customer must be reasonable in comparison to the customer’s
 premiums and insurance coverage for the policy class.
 “Customer” is defined in the bill as a policyholder, potential
 policyholder, certificate holder, potential certificate holder,
 an insured, a potential insured, or an applicant.
    If the insurer provides the product or service offered, the
 insurer shall ensure that the customer is provided with contact
 information for customer service or technical support personnel
 who can assist the customer with questions. The availability
 of the product or service shall be based on documented
 objective criteria and the product or service must be offered
 to all customers in a nondiscriminatory manner. The documented
 criteria shall be maintained by the insurer and provided to the
 commissioner of insurance upon request. If an insurer does
 not have sufficient objective criteria, but has a good-faith
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                                S.F. 409
 belief that the product or service meets the criteria specified
 in the bill, the insurer may offer or provide the product or
 service in a nondiscriminatory manner to customers as part
 of a pilot or test program for up to one year. Prior to
 launching the pilot or test program, the insurer must notify
 the commissioner. If the commissioner does not object to the
 pilot or test program within 21 calendar days from the date of
 notice, the insurer may proceed with the pilot or test program.
    The commissioner of insurance may adopt rules to administer
 the section of the bill amending Code section 507B.4(3)(i)(2).
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Statutes affected: 
Introduced: 507B.4