General Assembly: 75 (1993 Regular GA) - Chapter 88 - Insurance regulation and workers’ compensation


Published: 1993-05-03

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.

CH. 88 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION

CHAPTER 88 INSURANCE REGULATION AND WORKERS' COMPENSATION

H.F. 495

170

AN ACT relating to regulation of insurance, including the authority of the division to regulate certain policies and contracts and the parties to such policies and contracts, establishing fees, and providing a penalty.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. Section 85.61, subsection 11, unnumbered paragraph 3, Code 1993, is amended to read as follows:

"Worker" or "employee" includes a basic emergency medical care provider as defined in section 147.1, ep an advanced emergency medical care provider as defined in section 147A.1, !! volunteer ambulance driver, or an emergency medical technician trainee, only if an agree- ment is reached between the baste ep aEi'laaeed emePgeaey medieal eare pPevideP such worker or employee and the employer for whom the volunteer services are provided that workers' compensation coverage under chapters 85, 85A, and 85B is to be provided by the employer. A basic or advanced emergency medical care provider who is a worker or employee under this paragraph is not a casual employee. "Volunteer ambulance driver" means!! person perform- !!!g services as !! volunteer ambulance driver at the request of the person in charge of!! fire department or ambulance service of!! municipality. "Emergency medical technician trainee" means !! person enrolled in and training for emergency medical technician certification.

Sec. 2. NEW SECTION. 87.23A INSURANCE TRADE PRACTICES COVERED. A workers' compensation coverage plan regulated under this chapter shall be considered

a person for purposes of chapter 507B.

Sec. 3. Section 505.7, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 7. The insurance division shall, by January 15 of each year, prepare

estimates of projected receipts, refunds, and reimbursements to be generated by the exami- nations function of the division during the calendar year in which the report is due, and such receipts, refunds, and reimbursements shall be treated in the same manner as repayment receipts, as defined in section 8.2, subsection 8, and shall be available to the division to pay the expenses of the division's examination function.

Sec. 4. Section 507B.4, subsection 1, Code 1993, is amended by adding the following new paragraph:

NEW PARAGRAPH. j. Is a misrepresentation, including any intentional misquote of premium rate, for the purpose of inducing or tending to induce the purchase of an insurance policy.

Sec. 5. Section 507C.3, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 6. Prepaid health care delivery plans which are regulated by the com-

missioner.

Sec. 6. Section 507C.14, subsection 3, Code 1993, is amended by striking the subsection.

Sec. 7. Section 507C.26, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 4. A person receiving property from an insurer or any benefit from

an insurer which is a fraudulent transfer under subsection 1 is personally liable for the prop- erty or benefit and shall account to the liquidator.

Sec. 8. Section 507C.42, subsections 3 and 4, Code 1993, are amended to read as follows: 3. CLASS 3. Claims under policies, including claims of the federal or any state or local govern-

ment, for losses incurred, including third-party claims, claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under

171 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION CH. 88

policies, and claims of a guaranty association or foreign guaranty association. Claims UBdeP aeaassessable pelieies for unearned premium. Claims under life insurance and annuity poli- cies, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of a loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. A payment by an employer to an employee is not a gratuity.

4. CLASS 4. PFemium Fefuads, elaims Claims of general creditors, including claims of ced- ing and assuming reinsurers in their capacity as such, and subrogation claims.

Sec. 9. Section 509A.14, subsection 2, Code 1993, is amended by striking the subsection.

Sec. 10. Section 509A.15, subsection 1, Code 1993, is amended to read as follows: 1. Within ninety days following the end of a fiscal year, the governing body of a self·insurance

plan of a political subdivision or a school corporation shall file with the commissioner of insur- ance a certificate of compliance! actuarial opinion, and an annual financial report. The eeFt.ffi- eate ef eemplia&ee filing shall be accompanied by a filiBg fee of one hundred dollars. ~penalty of fifteen dollars~~ shall be assessed for failure to comply with the ninety-day filing require- ment, except that the commissioner may waive the penalty upon !! showing that special cir- cumstances exist which justify the waiver. The certificate shall be signed and dated by the appropriate public official representing the governing body, and shall certify the following:

a. That the plan meets the requirements of this chapter and the applicable provisions of the Iowa administrative code.

b. That an actuarial opinion has been attached to the certificate which attests to the ade- quacy of reserves, rates, and financial condition of the plan. ~ aetuaFial epiRieft shall be issued by- a fellew ef the seeiety- ef aetuaFies. The actuarial opinion must include, but ~not limited to, !! brief commentary about the adequacy of the reserves, rates, and the financial condition of the plan,!! test of the prior year claim reserve,!! brief description of how the reserves were calculated, and whether or not the plan~ able to cover all reasonably anticipated expenses. The actuarial opinion shall be prepared, signed, and dated ~!!person who~!! member of the Ameri- can academy of actuaries. !! necessary, the actuary should assist the public body in preparing the annual financial report. The annual financial report shall be in !! format as prescribed ~ the commissioner.

c. That a written complaint procedure has been implemented. The certificate shall also list the number of complaints filed by participants under the written complaint procedure, and the percentage of participants filing written complaints, in the prior fiscal year.

d. That the governing body has contracted or otherwise arranged with a thlPd paPty- fuF. plaB- admiaistFatiea third-party administrator who holds !! current certificate of registration issued~ the commissioner pursuant to section 510.21, or with!! person not required to obtain the certificate as an administrator as defined in section 510.11, subsection !·

Sec.11. NEW SECTION. 510.5A UNFAIR COMPETITION OR UNFAIR AND DECEP- TIVE ACTS OR PRACTICES PROHIBITED.

A managing general agent is subject to chapter 507B relating to unfair insurance trade practices.

Sec.12. NEW SECTION. 510.23 UNFAIR COMPETITION OR UNFAIR AND DECEP- TIVE ACTS OR PRACTICES PROHIBITED.

An administrator is subject to chapter 507B relating to unfair insurance trade practices.

Sec. 13. NEW SECTION. 510A.6 PENALTIES. 1. If the commissioner believes that a controlling producer or any other person subject to

this chapter has not materially complied with this chapter, or any rule adopted or order issued pursuant to this chapter, after notice and opportunity to be heard, the commissioner may order the controlling producer to cease placing business with the controlled insurer. Additionally,

CH. 88 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION 172

if the commissioner finds that because of such noncompliance the controlled insurer or any policyholder of the controlled insurer has suffered any loss or damage, the commissioner may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policy- holder for recovery of compensatory damages for the benefit of the insurer or policyholder, or for other appropriate relief.

2. If an order for liquidation or rehabilitation' of the controlled insurer has been entered pursuant to chapter 507C, and the receiver appointed under that order believes that the con- trolling producer or any other person has not materially complied with this chapter, or any rule adopted or order issued pursuant to this chapter, and that the insurer suffered any loss or damage as a result of the noncompliance, the receiver may maintain a civil action for recov- ery of damages or other appropriate sanctions for the benefit of the insurer.

3. This section shall not be construed to affect or limit the right of the commissioner to impose any other penalties, as appropriate, which the commissioner is authorized to impose.

4. This section shall not be construed to affect or limit the rights of policyholders, claimants, creditors, or other third parties.

Sec. 14. NEW SECTION. 512B.21A REQUIRED RESERVES. A society incorporated on or after July 1, 1993, shall have in cash, or in securities which

are authorized for investment purposes for insurance companies pursuant to section 512B.21, surplus in an amount not less than five million dollars.

Sec.15. NEW SECTION. 513A.7 UNFAIR COMPETITION OR UNFAIR AND DECEP- TIVE ACTS OR PRACTICES PROHIBITED.

A third-party payor of health care benefits is subject to chapter 507B relating to unfair insur- ance trade practices.

Sec. 16. Section 514B.32, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 4. A health maintenance organization authorized under this chapter

shall be considered a person for purposes of chapter 507B.

Sec. 17. Section 515.81A, Code 1993, is amended to read as follows: 515.81A CANCELLATION OF COMMERCIAL LINES POLICIES OR CONTRACTS. 1. A commercial line policy or contract of insurance, except a policy or contract for crop

hail or multiperil crop insurance, which has not been previously renewed may be canceled by the insurer if it has been in effect for less than sixty days at the time notice of cancellation is mailed or delivered.

2. A commercial line policy or contract of insurance, except a policy or contract for crop hail or multiperil crop insurance, which has been renewed or which has been in effect for more than sixty days shall not be canceled unless at least one of the following conditions occurs:

a. Nonpayment of premium. b. Misrepresentation or fraud made by or with the knowledge of the insured in obtaining

the policy or contract, when renewing the policy or contract, or in presenting a claim under the policy or contract.

c. Actions by the insured which substantially change or increase the risk insured. d. Determination by the commissioner that the continuation of the policy will jeopardize

the insurer's solvency or will constitute a violation of the law of this or any other state. e. The insured has acted in a manner which the insured knew or should have known was

in violation or breach of a policy or contract term or condition. 3. A commercial line policy or contract of insurance, except a policy or contract for crop

hail or multiperil crop insurance, may be canceled at any time if the insurer loses reinsurance coverage which provides coverage to the insurer for a significant portion of the underlying risk insured and if the commissioner determines that cancellation because of loss of reinsur- ance coverage is justified. In determining whether a cancellation because of loss of reinsur- ance coverage is justified, the commissioner shall consider all of the following factors:

a. The volatility of the premiums charged for reinsurance in the market.

173 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION CH. 88

b. The number of reinsurers in the market. c. The variance in the premiums for reinsurance offered by the reinsurers in the market. d. The attempt by the insurer to obtain alternate reinsurance. e. Any other factors deemed necessary by the commissioner. 4. A commercial line policy or contract of insurance, except a policy or contract for crop

hail or multiperil crop insurance, shall not be canceled except by notice to the insured as provided in this subsection. A notice of cancellation shall include the reason for cancellation of the policy or contract. A notice of cancellation is not effective unless mailed or delivered to the named insured and a loss payee at least ten days prior to the effective date of cancellation, or if the cancellation is because of loss of reinsurance, at least thirty days prior to the effective date of cancellation. A post office department certificate of mailing to the named insured at the address shown in the policy or contract is proof of receipt of the mailing; however, such a cer- tificate of mailing is not required if cancellation is for nonpayment of premium.

Sec. 18. NEW SECTION. 515.130 REBATES PROHIBITED. An insurance company or an employee of the insurance company, or an agent, shall not pay,

allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to pur- chase or acquire insurance or after insurance has been effected, any rebate, discount, abate- ment, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue on the policy, or any valuable con- sideration or inducement, not specified in the policy, except to the extent provided for in an applicable filing. An insured named in a policy, or an employee of the insured, shall not know- ingly receive or accept, directly or indirectly, any rebate, discount, abatement, credit, or reduc- tion of premium, or any such special favor or advantage or valuable consideration or inducement.

This section shall not be construed to prohibit the payment of commissions or other com- pensation to duly licensed agents, or to prohibit any insurer from allowing or returning to its participating policyholders, members, or subscribers, dividends, savings, or unabsorbed premium deposits. As used in this section, "insurance" includes suretyship and "policy" includes bond.

Sec. 19. Section 515.147, Code 1993, is amended to read as follows: 515.147 BUSINESS WITH NONADMITTED INSURERS. This chapter does not prevent a licensed resident or nonresident agent of this state! quali-

fied to write excess and surplus lines insurance, from procuring insurance in certain nonad- mitted insurers if such insurance is restricted to the type and kind of insurance authorized by this chapter! excluding insurance authorized under section 515.48, subsection 5, paragraph "a", and the agent makes oath to the commissioner of insurance in the form prescribed by the commissioner that the agent has made diligent effort to place the insurance in authorized insurers and has either exhausted the capacity of all authorized insurers or has been unable to obtain the desired insurance in insurers licensed to transact business in this state. The procur- ing of a contract of insurance in a nonadmitted insurer makes the insurer liable for, and the agent shall pay, the taxes on the premiums as if the insurer were duly authorized to transact business in the state. A sworn report of all business transacted by agents of this state in nonad- mitted insurers shall be made to the commissioner of insurance on or before March 1 of each year for the preceding calendar year, on the form required by the commissioner of insur- ance. The report shall be accompanied by a remittance to cover the taxes on the premiums. An agent who makes the oath, pays the taxes on the premiums, and files the report has not writ- ten such contracts of insurance unlawfully, and is not personally liable for the contracts.

Sec. 20. Section 515A.4, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 9. If a hearing is requested pursuant to section 515A.6, subsection

7, a filing shall not take effect until thirty days after formal approval is given by the commis- sioner.

Sec. 21. Section 515A.16, Code 1993, is amended to read as follows:

CH. 88 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION 174

515A.16 REBATES PROHIBITED PREMIUMS. Ne An agent shall not knowingly charge, demand! or receive a premium for any policy of

insurance except in accordance with the provisions of this chapter. Ne iBsuPeio eP employee thePeof, aDd oo ageBt, shall pay-;- all6w, eP gi¥e, eP effep te pay-;- all6w, 61'- gi¥e, EliPeetly 61'- htdiPeetly, a& tm iadueemeat te iasuPa&ee eP afteF- iasuPa&ee has beeB- effeeted, tmy rebate, dis- eooBt-;- abateme&t, ePedit eP Peduetio& ef the pPemium ftiHRed hi a peliey ef iasuPa&ee, eP tmy special ffwap. eP adYa&tage hi the EliYideads eP ather- beaefits te aeepue thePeoa, eP tmy ¥alua- ble eo&sidePatioa eP iadueeme&t whateYeP, oot speeified hi the peliey ef iasuPa&ee, ffifeept te the ffleRt pPO'Iiaea feP hi tm applieable filiBg. Ne iRSUPea ftiHRed hi a- peHey ef iRS'UP&Ree, OOP tmy employee ef sueh iasuPed shall kao~viagly Peeei¥e eP aeeept, diPeetly eP iadiPeetly, tmy sueh rebate, Eliseouat, abateme&t, ePedit eP PeduetioR ef pPemium, 61'- tmy sueh specia-l ffwap. eP advaatage eP 'laluable eoasidePatioR 61'- i&dueeme&t.

Nothiag hi this seetHm sha-ll be eo&stPued a& pPohibitiag the paymeat ef eommissioas eP atfler. eompeasatioa te duly-lieeased ageftts.;- OOF- a-s pPohibitiag tmy iBsuPeio fFam allovli&g eP PettH'B- ffig te its paPtieipatiag polieyholdePs, membePs eP subsePibePs, EliYideads, sa-vi&gseP uaabsoPbed pPemium deposits. As used hi this seeti&ft the wePd "iasuPa&ee" iaeludes suPetyship aDd the wePd "poliey" iaeludes bood.

Sec. 22. Section 515B.2, subsection 3, Code 1993, is amended to read as follows: 3. a. "Covered claim" means an unpaid claim, including one for unearned premiums, which

arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if such insurer becomes an insolvent insurer after July 1, 1970, and one of the following conditions exists:

(1) The claimant or insured is a resident of this state at the time of the insured event. Other than an individual, the residence of the claimant or insured is the state in which its principal place of business is located.

(2) The claim is eae !! first ~ claim by an insured for damage to property permanently located in this state.

b. "Covered claim" does not include any amount as follows: (1) That is due any reinsurer, insurer, insurance pool, underwriting association, or other

group assuming insurance risks, as subrogation, contribution, or indemnity recoveries, or otherwise.

(2) That constitutes the portion of a claim that is within an insured's deductible or self-insured retention.

(3) That is a claim for unearned premium calculated on a retrospective basis, experience- rated plan, or premium subject to adjustment after termination of the policy.

(4) That is due an attorney, adjuster, or witness as fees for services rendered to the insol- vent insurer.

(5) That is a fine, penalty, interest, or punitive or exemplary damages. (6) That constitutes a claim under a policy issued by an insolvent insurer with a deductible

or self-insured retention of two hundred thousand dollars or more. However, such a claim shall be considered a covered claim, if as of the deadline set for the filing of claims against the insol- vent insurer of its liquidator, the insured is a debtor under 11 U.S.C. § 701 et seq.

(7) That would otherwise be !! covered claim, but ~ an obligation to or on behalf of!! person who has!! net worth, on the date of the occurrence giving rise to the claim, greater than that allowed !!I the guarantee fund law of the state of residence of the claimant, and which state has denied coverage to that claimant on that basis.

(8) That~ an obligation owed to or on behalf of an affiliate of, as defined in section 521A.1, an insolvent insurer.

Notwithstanding the subparagraphs of this lettered paragraph, a person is not prevented from presenting a noncovered claim to the insolvent insurer or its liquidator, but the nonco- vered claim shall not be asserted against any other person, including the person to whom benefits were paid or the insured of the insolvent insurer, except to the extent that the claim is outside the coverage of the policy issued by the insolvent insurer.

175 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION

Sec. 23. Section 515B.17, Code 1993, is amended to read as follows: 515B.17 TIMELY FILING OF CLAIMS.

CH. 88

Notwithstanding any other provision of this chapter, a covered claim shall not include any claim filed with the association after the final date set by the court for the filing of claims against the insolvent insurer or its receiver. Hewevep the asseeiatieB may wai¥e the PeqHiPemeBt ef this seetieft wlteB ift it& disePetieB the elaim was Bet timely pPeseBted due te eiPeHmsta&ees beyood the eeBtPel ef the pePS6ft fta¥iBg the elaim.

Sec. 24. Section 515C.7, Code 1993, is amended to read as follows: 515C.7 RATE-MAKING PROVISIONS. Mortgage guaranty insurance shall be subject to the provisions of chapter &leA 515F, for

the purposes of rate making.

Sec. 25. Section 515E.10, Code 1993, is amended by adding the following new unnumbered paragraph:

NEW UNNUMBERED PARAGRAPH. A risk retention group or purchasing group oper- ating under this chapter shall be considered a person for purposes of chapter 507B.

Sec. 26. Section 521A.3, subsection 4, Code 1993, is amended by adding the following new paragraph:

NEW PARAGRAPH. c. The commissioner may retain any attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff as may be reasonably neces- sary to assist the commissioner in reviewing the proposed merger or acquisition of control, the reasonable cost of which shall be paid by the acquiring party.

Sec. 27. Section 521A.5, subsection 1, paragraph a, subparagraph (5), Code 1993, is amended to read as follows:

(5) After ~ material transaction with an affiliate and after any dividends or distributions to shareholder affiliates, the insurer's surplus as regards policyholders shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.

Sec. 28. Section 521A.5, subsection 1, paragraphs b and c, Code 1993, are amended to read as follows:

b. A domestic insurer and a person in its holding company system shall not enter into any of the following transactions between each other involving amounts equal to or exceeding the lesser of fi¥e three percent of the a nonlife insurer's admitted assets or twenty-five percent of the surplus as regards policyholders with respect to nonlife insurers, and equal to or exceeding three percent of the insurer's admitted assets with respect to life insurers, each as of the next preceding December 31, unless the domestic insurer notifies the commissioner in writing of its intention to enter into the transaction at least thirty days prior to entering into the trans- action or within a shorter time permitted by the commissioner and the commissioner has not disapproved of the transaction within the time period:

(1) Sales. (2) Purchases. (3) Exchanges. (4) Loans or extensions of credit. (5) Guarantees. (6) Investments. (7) Loans or extensions of credit to a person who is not an affiliate, if the domestic insurer

makes the loans or extensions of credit with the agreement or understanding that the pro- ceeds of the transactions, in whole or in substantial part, are to be used to make loans or exten- sions of credit to, to purchase assets of, or to make investments in, an affiliate of the domestic insurer making the loans or extensions of credit.

c. A domestic insurer and a person in its holding company system shall not enter into any of the following transactions, unless the domestic insurer notifies the commissioner in writing of its intention to enter into the transaction at least thirty days prior to entering into the

CH. 88 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION 176

transaction or within a shorter time permitted by the commissioner and the commissioner has not disapproved of the transaction within the time period:

(1) All reinsurance agreements whleh ift the aggpegate willeP may~ as eensideratiea the Bet transfer ef assets te eP by the demestie iRsuPeP- ift an ameuat, as ef the Be*t preeediag Deeember 31-;- eJEeeediag twenty fh•e pereent ef statutory StH'pltJ& or modifications to such agree- ments in which the reinsurance premium or!!_ change in the insurer's liabilities equals or exceeds five percent of the insurer's surplus as regards policyholders, as of the next preceding Decem- ber 31, including those agreements which may require as consideration the transfer of assets from an insurer to !!_ nonaffiliate, !! an agreement or understanding exists between the insurer and nonaffiliate that ~ portion of such assets will be transferred to one or more affiliates of the insurer. - (2) A~gement agreements, service contracts, and all other cost-sharing arrangements involving at least one-half of one percent of the insurer's surplus as of the next preceding Decem- ber 31.

(3) Any material transactions specified by rule which the commissioner determines may adversely affect the interests of the domestic insurer's policyholders.

Sec. 29. Section 521A.5, subsection 2, Code 1993, is amended by adding the following new paragraph:

NEW PARAGRAPH. k. The quality of the company's earnings and the extent to which the reported earnings include extraordinary items.

Sec. 30. Section 521A.5, subsection 3, Code 1993, is amended by striking the subsection and inserting in lieu thereof the following:

3. DIVIDENDS AND OTHER DISTRIBUTIONS. a. A domestic insurer may declare and pay dividends to its shareholders only from earned

surplus. For the purposes of this paragraph, "earned surplus" means surplus as regards policyholders

less paid-in and contributed surplus, and may include a fair revaluation of assets by the board of directors that is reasonable under the circumstances. Assets revalued by the board of direc- tors cannot be included in earned surplus until thirty days after the commissioner has received notice of the revaluation and has approved the revaluation. The commissioner shall approve or disapprove the revaluation within thirty days after receiving notice of the revaluation unless for good cause the commissioner extends the approval period for an additional thirty days.

b. A domestic insurer shall not pay any extraordinary dividend or make any other extraor- dinary distribution to its shareholders until thirty days after the commissioner has received notice of the declaration of the dividend or distribution and has not disapproved such payment within the period, or until the time the commissioner has approved the payment within the thirty-day period.

For purposes of this paragraph, an "extraordinary dividend or distribution" includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve months exceeds the greater of the following:

(1) Ten percent of insurer's surplus as regards policyholders as of the thirty-first day of December next preceding.

(2) The net gain from operations of the insurer, if the insurer is a life insurer, or the net investment income, if the insurer is not a life insurer, for the twelve-month period ending the thirty-first day of December next preceding.

An extraordinary dividend or distribution does not include pro rata distributions of any class of the insurer's own securities.

c. A domestic insurer subject to registration under section 521A.4 shall report to the com- missioner all dividends to shareholders within five business days following the declaration of the dividends and not less than fourteen days prior to the payment of the dividends. This report shall also include a schedule setting forth all dividends or other distributions made within the previous twelve months.

177 LAWS OF THE SEVENTY -FIFTH G.A., 1993 SESSION CH. 89

d. Notwithstanding any other provision of law, a domestic insurer may declare an extraor- dinary dividend or distribution which is conditional upon the commissioner's approval of the dividend or distribution. Such declaration does not confer any rights upon shareholders until the commissioner has approved the payment of the dividend or distribution or the commis- sioner has not disapproved the payment within the thirty-day period as provided in paragraph "b".

Sec. 31. Section 521A.7, Code 1993, is amended to read as follows: 521A.7 CONFIDENTIAL TREATMENT. All information, documents and copies thereof obtained by or disclosed to the commissioner

or any other person in the course of an examination or investigation made pursuant to section 521A.6 and all information reported pursuant to seetioo sections 521A.4 and 521A.5, shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby, notice and opportu- nity to be heard, determines that the interests of policyholders, shareholders or the public will be served by the publication thereof, in which event the commissioner may publish all or any part thereof in such manner as the commissioner may deem appropriate.

Sec. 32. Section 522.2, Code 1993, is amended to read as follows: 522.2 TERM OF LICENSE. A license is valid for &&e yeap three years.

Sec. 33. WORKERS' COMPENSATION MARKET- MONITORING. The commissioner of insurance shall monitor the residual and assigned risks markets for workers' compensation coverage. The commissioner shall monitor, at a minimum, the effect of the residual and assigned risks markets on the volume of coverage written in the voluntary market.

Sec. 34. 1990 Iowa Acts, chapter 1234, section 76, as amended by 1991 Iowa Acts, chapter 213, section 35, and 1992 Iowa Acts, chapter 1162, section 51, is repealed.

Approved May 3, 1993

CHAPTER 89 PUBLIC BONDS AND OBLIGATIONS - RECORDS - LIMITATION OF ACTIONS

H.F. 579

AN ACT relating to the disposition of documents pertaining to the issuance of certain bonds or obligations.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. Section 76.10, Code 1993, is amended by adding the following new subsection: NEW SUBSECTION. 7. a. Records and documents pertaining to cancellation, transfer,

redemption, or replacement of public bonds or obligations shall be preserved by the issuer or its agent for a period of not less than eleven years. Thereafter, the records and documents may be destroyed by the issuer or its agent, preserving confidentiality as necessary.

b. An action with respect to the cancellation, transfer, redemption, or replacement of pub- lic bonds or obligations shall not be brought against an issuer, trustee, transfer agent, regis- trar, depository, paying agent, or other agent unless it is commenced within eleven years of the cancellation, transfer, redemption, or replacement of the bonds or obligations.