Iowa Regulation of Insurance
Nono's of Use of Credit Information
-use an insurance score that is calculated using income, sex, address, zip code, ethnic group, religion, marital status, race, or nationality of a consumer as a factor; -deny issuance, cancel, or refuse to renew a policy of personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factors independent of credit information; -base a consumer's renewal rates for personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factors independent of credit information; -take adverse action against a consumer solely because the consumer does not have a credit card account, without consideration of any other applicable underwriting factors independent of credit information; -consider an absence of credit information or an inability to calculate an insurance score unless the insurer -treats the consumer as if the consumer has neutral credit information -excludes the use of credit information as an underwriting factor and only uses other underwriting criteria. -take adverse action against a consumer based on credit information, unless the insurer uses a credit report issued or an insurance score calculated within 90 days before the date a personal insurance policy is first written or a renewal is issued.
An Insurer wishing to qualify as an eligible surplus lines insurer must:
1.Submit an application, including the name of an Iowa licensed resident producer qualified to write surplus lines insurance. 2. Maintain the greater of either minimum capital and surplus of $5Million or risk based capital and 3. Been active in operation for at least 3 years without significant changes in ownership or management. *also* on or before March 1st of each year, surplus lines producers must file an electronic report of all business written and any taxes due with the Division of Insurance. Surplus lines producers must also provide the following notice to the insureds within 30 days after the policy is issued: "This policy is issued pursuant to Iowa code chapter 5151...."
Order Cease and Desist
Commissioner can do this, order the company or person to cease and desist from the method, act, or practice. -$1,000 per violation, $10k max -$5,000 per violation, $50k max if known -suspension or recovation of the producer's license or insurer's cert of Authority. -payment of 10% interest on any overdue interest payment -full disclosure by the insurer of all policy terms and conditions to the policyowner. -payment of any applicable investigation costs and admin expenses. *A person who violates a cease and desist order may, after another hearing, be subject to the following additional penalties: -a fine of up to $10,000 for every violation -a suspension or revocation of the person's license.
Iowa Guaranty Association payment of claims
If a person has a covered claim against the association and also has coverage for that claim under another insurance policy, the claimant must first exhaust all coverage provided by the other insurance policy before presenting a claim to the association. Any amount payable on a covered claim by the association is reduced by the full applicable limits of the other insurance policy.
Hearings
If the Commissioner believes that anyone has been or is engaged in an unfair method of competition or an unfair or deceptive act or practice, the Commissioner will charge the person and set a date for a hearing on the matter. (Hearing must be held at least ten days after notice is given to the person. *if public welfare is threatened the Commissioner can order a company or person to cease and desist from a method of competition or an unfair or deceptive act or practice.* *at hearing person can defend themselves and say why they do not deserve the Cease and Desist order*
General Prohibitions.
No one can engage in any trade practices that the insurance code defines as an unfair method of competition or as an unfair or deceptive act or practice. A hearing before the commissioner will determine whether someone's conduct falls within the definition of an unfair method of competition or an unfair or deceptive trade practice.
Examination of Records
The Commissioner can examine anyone in the business of insurance in the state at anytime. The Department will review insurance companies for financial stability at least once every 5 years. If the Commissioner requests information from an insurer or producer during an examination, they must comply. Refusal to cooperate with the request can cause the certificate of authority for the insurer, to be lost. During an exam, can issue subpoenas, administer oaths, and take sworn testimony.
Penalties Amounts
after a hearing, if Commisioner determines they have engaged in these no-no's while selling insurance. the Commissioner can impose a penalty of up to $1,000 for every violation up to $10,000. If company/person should have known or knew, can be $5,000 per violation for a max of up to a total of $50,000 for all violations within a six-month period.
A notice or document may
be delivered electronically by an insurer to a policyholder if: 1. the policyowner has consented to electronic delivery, and 2.The policyowner is provided with a clear statement informing them of the right to have the notice or document provided in paper form and whether the policyowner's consent applies to a particular transaction or to other identified categories of documents that may be delivered by electronic means during the policy period. *A notice of cancellation, nonrenewal, or termination must be delivered by mail and should not be delivered by electronic means. However, a courtesy copy of a notice of them, may be delivered by electronic means.
Supervision, Rehabilitation, and Liquidation of Insurers
if the commissioner believes the insurance company is acting in a way that jeopardizes its financial solvency, then the commissioner can order the insurer to change its conduct to avoid insolvency. -gives them a list of requirements they must meet within 60 days because of the danger it poses to the public. -a person who violates a supervision order is subject to a fine of up to $10,000 If the insurer fails to meet the requirements for continued operations as a solvent business in Iowa, the Commissioner can ask the distract court to order the liquidation of the insurer for any of the following reasons: -any act that could or did place the insurer into rehabilitation -the insurer's insolvency -the insurer's condition is such that any continued operation of its business would be hazardous to the public, its policyholders, or its creditors.
Penalties for Acting Without a License
insurer or producer, or anyone acting without a license, who is found to have violated the regulations concerning licenseure can be ordered to cease and desist from the offending conduct and may be ordered to pay a fine. Disobeying C&D- penalty at least $3K up to $10k per violation -if the violations were willful, $5,000 for every violation up to $50k in total for 6months, plus license suspension or revocation. *acting as an insurance producer without the approriate license is a felony offense. A person convicted of a felony offense can be sentenced to a prison term.
Domestic Insurer
is an insurance company organized under the laws of Iowa
Foreign Insurer
is an insurance company organized under the laws of a jurisdiction other than Iowa and includes an alien insurer
Alien Insurer
is an insurance company organized under the laws of any country other than the United States or its states, districts, territories, and commonwealths.
Surplus Line Insurance
is any property and casualty insurance in Iowa that is placed through a surplus lines insurance producer with an eligible surplus lines insurer.
Prohibited Advertising
it is an unfair trade practice for anyone to use the existence of the Iowa Insurance Guaranty Association, or the protections the associations offers, for the purpose of selling insurance.
The Iowa Insurance Guaranty Asspciation
protects a policyholder or claimant if the insured's property and casualty insurer becomes insolvent and cannot pay its claims. *insurer has final order of liquidation, commissioner notifies the association of the existence of the insolvent insurer, the association steps into the insolvent insurer's place to pay certain claims.
Receivership
the state of an enterprise being placed under the control of a trustee, usually when it can't meet financial obligations.
Association Covered Claim Limits
they can pay certain covered claims and may satisfy this obligation by paying the claimant one of the following amounts: -the full amount of a covered claim for benefits under workers compensation insurance coverage -an amount greater than $100 but no more than $10,000 per policy for a covered claim for unearned premiums -an amount up to the lessor of the insolvent insured's policy limits or $500,000 per claim.
The Commissioner can investigate any insurance producer or company whenever he has reason to believe that
they have violated, is violating, or is about to violate the insurance code. Commissioner can seek a court order to -hold the person in contempt -order the person to appear before the Commissioner -issue an injunction which stops them from doing their job -assess a civil penalty -grant any other necessary or appropriate relief
Detection and Prevention of Insolvencies (IGA)
to aid in detecting and preventing insurer insolvencies, the associations board of directors, upon majority vote, may -make recommendations to the commisioner for the detection and prevention of insurer insolvencies, or -respond to the request by the Commissioner to discuss and make recommendations about the status of member insurers whose financial condition may be hazardous to policyholders or the public.
The State Insurance Commissioner does not
write the insurance laws embodied in the state's insurance code. He simply enforces them
