Bill Summary – FastDemocracy

House Study Bill 119 - Introduced
                                  SENATE/HOUSE FILE _____
                                  BY (PROPOSED DEPARTMENT OF
                                      COMMERCE/INSURANCE DIVISION
                                      BILL)
                            A BILL FOR
An Act relating to various matters under the purview of
  the insurance division of the department of commerce,
  providing fees, making an appropriation, and resolving
  inconsistencies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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                            DIVISION I
                        UNIFORM SECURITIES
    Section 1. Section 502.304A, subsection 3, paragraph g,
 Code 2021, is amended to read as follows:
    g. The issuer must pay to the administrator a fee of one
 hundred dollars established by the administrator by rule and
 is not required to pay the filing fee set forth in section
 502.305, subsection 2.
    Sec. 2. Section 502.304A, subsection 5, Code 2021, is
 amended to read as follows:
    5. Agent registration. In connection with an offering
 registered under this section, a person may be registered as
 an agent of the issuer under section 502.402 by the filing of
 an application by the issuer with the administrator for the
 registration of the person as an agent of the issuer and the
 paying of a fee of ten dollars established by the administrator
 by rule. Notwithstanding any other provision of this chapter,
 the registration of the agent shall be effective until
 withdrawn by the issuer or until the securities registered
 pursuant to the registration statement have all been sold,
 whichever occurs first. The registration of an agent shall
 become effective when ordered by the administrator or on the
 fifth business day after the agent’s application has been
 filed with the administrator, whichever occurs first, and the
 administrator shall not impose further conditions upon the
 registration of the agent. However, the administrator may
 deny, revoke, suspend, or withdraw the registration of the
 agent at any time as provided in section 502.412. An agent
 registered solely pursuant to this section is entitled to sell
 only securities registered under this section.
    Sec. 3. Section 502.321G, Code 2021, is amended to read as
 follows:
    502.321G Fees.
    The administrator shall charge a nonrefundable filing fee of
 two hundred fifty dollars established by the administrator by
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 rule for a registration statement filed by an offeror. The fee
 shall be deposited as provided in section 505.7.
    Sec. 4. Section 502.410, Code 2021, is amended to read as
 follows:
    502.410 Filing fees.
    1. Broker-dealers. A person shall pay a fee of two hundred
 dollars established by the administrator by rule when initially
 filing an application for registration as a broker-dealer
 and a fee of two hundred dollars when filing a renewal of
 registration as a broker-dealer. If the filing results in a
 denial or withdrawal, the administrator shall retain the fee.
    2. Agents. The fee for an individual is forty dollars
 when filing an application for registration as an agent, a
 fee of forty dollars when filing a renewal of registration
 as an agent, and a fee of forty dollars when or filing for a
 change of registration as an agent shall be established by the
 administrator by rule. Of each forty-dollar fee collected, ten
 dollars twenty-five percent is appropriated to the securities
 investor education and financial literacy training fund
 established under section 502.601, subsection 5. If the filing
 results in a denial or withdrawal, the administrator shall
 retain the fee.
    3. Investment advisers. A person shall pay a fee of one
 hundred dollars established by the administrator by rule when
 filing an application for registration as an investment adviser
 and a fee of one hundred dollars when filing a renewal of
 registration as an investment adviser. If the filing results
 in a denial or withdrawal, the administrator shall retain the
 fee.
    4. Investment adviser representatives.
    a. The fee for an individual is thirty dollars when filing
 an application for registration as an investment adviser
 representative, a fee of thirty dollars when filing a renewal
 of registration as an investment adviser representative, and a
 fee of thirty dollars or when filing a change of registration
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 as an investment adviser representative shall be the amount
 established by the administrator by rule. If the filing
 results in a denial or withdrawal, the administrator shall
 retain the fee.
    b. However, an An investment adviser representative is shall
 not be required to pay a filing fee if the investment adviser
 is a sole proprietorship or the substantial equivalent, and the
 investment adviser representative is the same individual as the
 investment adviser.
    5. Federal covered investment advisers. A federal covered
 investment adviser required to file a notice under section
 502.405 shall pay an initial fee of one hundred dollars and
 an annual notice fee of one hundred dollars in an amount
 established by the administrator by rule.
    6. Payment. A person required to pay a filing or notice
 fee under this section may transmit the fee through or to a
 designee as a permitted by the administrator by rule or by
 order provides issued by the administrator under this chapter.
    7. Deposit of fees. Except as otherwise provided in
 subsection 2, fees collected under this section shall be
 deposited as provided in section 505.7.
                            DIVISION II
                             INSURANCE
    Sec. 5. Section 505.30, subsection 2, Code 2021, is amended
 to read as follows:
    2. The commissioner may collect a reasonable fee,
 established by the commissioner by rule, each time service of
 process is made on the commissioner as set forth in subsection
 1 or as otherwise allowed by law. A fee collected by the
 commissioner under this subsection shall be used and is
 appropriated to the insurance division to offset the costs
 of the commissioner acting as agent or attorney for service
 of process. The party to a proceeding requesting service of
 process is entitled to recover the fee paid pursuant to this
 subsection and any rules adopted under this section as costs if
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 the party prevails in the proceeding.
    Sec. 6. Section 507A.4, subsection 9, Code 2021, is amended
 by striking the subsection and inserting in lieu thereof the
 following:
    9. Transactions involving a multiple employer welfare
 arrangement as defined in section 3 of the federal Employee
 Retirement Income Security Act of 1974, 29 U.S.C. §1002,
 paragraph 40, or a multiple employer welfare arrangement formed
 as an association health plan pursuant to 29 C.F.R. pt. 2510
 that complies with chapter 513D.
    Sec. 7. Section 507B.7, Code 2021, is amended to read as
 follows:
    507B.7 Cease and desist orders Orders and penalties.
    1. If, after hearing, the commissioner determines that a
 person has engaged in an unfair method of competition or an
 unfair or deceptive act or practice, the commissioner shall
 reduce the findings to writing and shall issue and cause to
 be served upon the person charged with the violation a copy
 of such findings, an order requiring such person to cease
 and desist from engaging in such method of competition, act,
 or practice, and the commissioner may at the commissioner’s
 discretion order any one or more of the following:
    a. Payment of a civil penalty of not more than one thousand
 dollars for each act or violation of this subtitle, but not
 to exceed an aggregate of ten thousand dollars, unless the
 person knew or reasonably should have known the person was in
 violation of this subtitle, in which case the penalty shall be
 not more than five thousand dollars for each act or violation,
 but not to exceed an aggregate penalty of fifty thousand
 dollars in any one six-month period. If the commissioner finds
 that a violation of this subtitle was directed, encouraged,
 condoned, ignored, or ratified by the employer of the person or
 by an insurer, the commissioner shall also assess a penalty to
 the employer or insurer.
    b. Suspension or revocation of the license of a person as
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 defined in section 507B.2, subsection 1, if the person knew or
 reasonably should have known the person was in violation of
 this subtitle.
    c. Payment of interest at the rate of ten percent per
 annum if the commissioner finds that the insurer failed to
 pay interest as required under section 507B.4, subsection 3,
 paragraph “p”.
    2. Until the expiration of the time allowed under section
 507B.8 for filing a petition for review if no such petition has
 been duly filed within such time, or, if a petition for review
 has been filed within such time, then until the transcript of
 the record in the proceeding has been filed in the district
 court, the commissioner may at any time, upon such notice and
 in such manner as the commissioner may deem proper, modify
 or set aside in whole or in part any order issued by the
 commissioner under this section.
    3. After the expiration of the time allowed for filing
 such a petition for review if no such petition has been duly
 filed within such time, the commissioner may at any time, after
 notice and opportunity for hearing, reopen and alter, modify,
 or set aside, in whole or in part, any order issued by the
 commissioner under this section, whenever in the commissioner’s
 opinion conditions of fact or of law have so changed as
 to require such action, or if the public interest shall so
 require.
    4. Any person who violates a cease and desist an order
 of the commissioner, and while such order is in effect, may,
 after notice and hearing and upon order of the commissioner,
 be subject at the discretion of the commissioner to any one or
 more of the following:
    a. A monetary penalty of not more than ten thousand dollars
 for each and every act or violation. A penalty collected
 under this lettered paragraph shall be deposited as provided
 in section 505.7.
    b. Suspension or revocation of such person’s license.
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    Sec. 8. Section 507E.2, Code 2021, is amended to read as
 follows:
    507E.2 Purpose Insurance fraud bureau.
    1. 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 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 any provision
 of the 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.
    2. An insurance fraud bureau investigator shall be no older
 than sixty-five years of age.
    Sec. 9. Section 507E.2A, subsection 2, Code 2021, is amended
 to read as follows:
    2. “Insurer” includes an insurer means 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 as described in section 87.4. “Insurer” does not include
 a person required to be licensed to sell, solicit, or negotiate
 insurance pursuant to chapter 522B.
    Sec. 10. Section 507E.8, Code 2021, is amended to read as
 follows:
    507E.8 Law enforcement authority.
    1. An individual employed by the division and designated as
 a peace officer shall be considered a law enforcement officer
 as that term is defined in section 80B.3, and shall exercise
 the powers of a law enforcement officer as follows:
    a. 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
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 an investigation pursuant to this chapter, an insurance fraud
 bureau investigator shall have the authority and status of a
 law enforcement officer pursuant to section 80B.3, subsection
 3.
    b. While conducting an investigation or engaged in an
 assignment authorized by this chapter or ordered by the
 commissioner.
    c. To protect life if a public offense is committed in the
 presence of the peace officer.
    d. While providing assistance to a law enforcement agency or
 another law enforcement officer.
    e. While providing assistance at the request of a member of
 the public.
    2. The laws Laws applicable to an arrest of an individual
 by a law enforcement officer of the state shall apply to an
 insurance fraud bureau investigator individual employed by
 the division and designated as a peace officer. An insurance
 fraud bureau investigator individual employed by the division
 and designated as a peace officer shall have the power to
 execute arrest warrants and search warrants, serve subpoenas
 issued for the examination, investigation, and trial of all
 offenses identified through 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 a provision of this chapter or a law of this
 state.
    Sec. 11. Section 508E.2, subsection 14, Code 2021, is
 amended to read as follows:
    14. “Viatical settlement broker” means a person, including
 a life insurance producer as provided for in section 508E.3,
 who, working exclusively on behalf of a viator and for a fee,
 commission, or other valuable consideration, offers or attempts
 to negotiate viatical settlement contracts between a viator
 and one or more viatical settlement providers or one or more
 viatical settlement brokers. Notwithstanding the manner in
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 which the viatical settlement broker is compensated, a viatical
 settlement broker is deemed to represent only the viator,
 and not the insurer or the viatical settlement provider, and
 owes a fiduciary duty to the viator to act according to the
 viator’s instructions and in the best interest of the viator.
 “Viatical settlement broker” does not include an attorney,
 certified public accountant, or a financial planner accredited
 by a nationally recognized accreditation agency who is retained
 to represent the viator and whose compensation is not paid
 directly or indirectly by the viatical settlement provider or
 purchaser.
    Sec. 12. Section 508E.3, subsections 2 and 3, Code 2021, are
 amended to read as follows:
    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. A viatical settlement provider or viatical settlement
 broker license term shall be three years and the license
 may be renewed upon payment of 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
 shall result in expiration of the license.
    Sec. 13. Section 509.1, subsection 9, Code 2021, is amended
 to read as follows:
    9. A policy of group health insurance coverage issued to an
 associated health plan a multiple employer welfare arrangement
 pursuant to section