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House
File
911
-
Introduced
HOUSE
FILE
911
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
HSB
256)
A
BILL
FOR
An
Act
relating
to
matters
under
the
purview
of
the
department
1
of
insurance
and
financial
services
including
financial
2
literacy
and
exploitation,
tax
confidentiality,
health
3
insurance
rates,
health
savings
accounts,
insurer
4
withdrawals,
property
insurance,
and
service
contracts,
and
5
including
penalties.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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DIVISION
I
1
FINANCIAL
LITERACY
AND
FINANCIAL
EXPLOITATION
2
Section
1.
Section
502.410,
subsection
2,
Code
2025,
is
3
amended
to
read
as
follows:
4
2.
Agents.
The
fee
for
an
individual
is
forty
dollars
5
when
filing
an
application
for
registration
as
an
agent,
a
fee
6
of
forty
dollars
when
filing
a
renewal
of
registration
as
an
7
agent,
and
a
fee
of
forty
dollars
when
filing
for
a
change
of
8
registration
as
an
agent.
Of
each
forty-dollar
fee
collected,
9
ten
dollars
is
appropriated
to
the
securities
investor
10
education
and
financial
literacy
training
fund
established
11
under
financial
literacy
and
investor
education
fund
created
12
in
section
502.601,
subsection
5
546.14,
and
ten
dollars
is
13
appropriated
to
the
financial
exploitation
prevention
fund
14
created
in
section
546.15
.
If
the
filing
results
in
a
denial
15
or
withdrawal,
the
administrator
shall
retain
the
fee.
16
Sec.
2.
Section
502.601,
subsection
4,
Code
2025,
is
amended
17
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
18
following:
19
4.
Financial
literacy
and
investor
education.
Initiatives
20
involving
financial
literacy
and
investor
education
shall
21
comply
with
the
initiatives
in
section
546.14,
subsection
1,
22
and
section
546.15,
subsection
1.
23
Sec.
3.
Section
502.601,
subsection
5,
Code
2025,
is
amended
24
by
striking
the
subsection.
25
Sec.
4.
Section
505.7,
subsection
3,
Code
2025,
is
amended
26
to
read
as
follows:
27
3.
Forty
percent
of
the
nonexamination
Nonexamination
28
revenues
payable
to
the
division
of
insurance
or
the
department
29
of
revenue
in
connection
with
the
regulation
of
insurance
30
companies
or
other
entities
subject
to
the
regulatory
31
jurisdiction
of
the
division
shall
be
deposited
in
the
commerce
32
revolving
fund
created
in
section
546.12
and
shall
be
subject
33
to
annual
appropriation
to
the
division
for
its
operations
34
and
is
also
subject
to
expenditure
under
subsection
6
.
The
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remaining
nonexamination
revenues
payable
to
the
division
of
1
insurance
or
the
department
of
revenue
shall
be
deposited
in
2
the
general
fund
of
the
state.
3
Sec.
5.
Section
546.2,
subsection
4,
Code
2025,
is
amended
4
by
adding
the
following
new
paragraph:
5
NEW
PARAGRAPH
.
g.
To
identify
and
coordinate
appropriate
6
opportunities
for
collaboration
under
sections
546.14
and
7
546.15
with
the
chief
administrative
officers
of
each
division
8
and
each
chief
administrative
officer’s
respective
regulated
9
entities.
10
Sec.
6.
NEW
SECTION
.
546.14
Financial
literacy
and
investor
11
education
fund.
12
1.
The
director
shall
develop
and
implement
financial
13
literacy
and
investor
education
initiatives
for
the
public
by
14
providing
education
on
financial
topics,
including
but
not
15
limited
to
the
topics
required
to
be
offered
and
taught
for
16
grades
nine
through
twelve
under
section
256.11,
subsection
5,
17
paragraph
“k”
,
subparagraph
(1).
18
2.
A
financial
literacy
and
investor
education
fund
is
19
created
in
the
state
treasury
under
the
control
of
the
director
20
for
the
purposes
specified
in
subsection
1.
The
fund
shall
21
consist
of
any
moneys
appropriated
to
the
fund
by
the
general
22
assembly
and
any
other
moneys
available
and
obtained
or
23
accepted
by
the
department
for
placement
in
the
fund
including
24
all
of
the
following:
25
a.
Moneys
appropriated
to
the
fund
pursuant
to
section
26
502.410,
subsection
2.
27
b.
Notwithstanding
any
provision
of
law
to
the
contrary,
28
the
director
may,
at
the
director’s
discretion,
transfer
up
to
29
two
hundred
fifty
thousand
dollars
from
the
commerce
revolving
30
fund
created
in
section
546.12
to
complete
the
objectives
under
31
subsection
1.
32
c.
Notwithstanding
any
provision
of
law
to
the
contrary,
33
any
moneys
received
by
the
department
by
reason
of
civil
34
penalties
assessed
pursuant
to
chapter
502
may
be
deposited
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in
the
financial
literacy
and
investor
education
fund
at
the
1
discretion
of
the
director.
2
d.
The
director
may
collaborate
with
organizations
with
an
3
interest
in
financial
literacy
and
investor
education.
The
4
director
may
accept
a
grant
or
donation
to
be
placed
in
the
5
financial
literacy
and
investor
education
fund.
6
3.
Notwithstanding
any
provision
of
law
to
the
contrary,
7
moneys
in
the
financial
literacy
and
investor
education
fund
8
may
be
transferred
to
the
financial
exploitation
prevention
9
fund
in
section
546.15
at
the
discretion
of
the
director.
10
4.
Notwithstanding
section
12C.7,
subsection
2,
interest
or
11
earnings
on
moneys
in
the
fund
shall
be
credited
to
the
fund.
12
Notwithstanding
section
8.33,
moneys
appropriated
in
this
13
section
that
remain
unencumbered
or
unobligated
at
the
close
of
14
a
fiscal
year
shall
not
revert
but
shall
remain
available
for
15
expenditure
for
the
purposes
designated.
16
Sec.
7.
NEW
SECTION
.
546.15
Financial
exploitation
17
prevention
fund.
18
1.
The
director
shall
develop
and
implement
initiatives
to
19
accomplish
all
of
the
following:
20
a.
Educate
the
public
on
financial
exploitation.
21
b.
Assist
individuals
who
are
known,
suspected,
or
potential
22
victims
of
financial
exploitation.
23
c.
Conduct
investigations,
refer
investigations
to
other
law
24
enforcement,
and
assist
in
the
prosecution
of
persons
involved
25
in
financial
exploitation.
26
2.
A
financial
exploitation
prevention
fund
is
created
27
in
the
state
treasury
under
the
control
of
the
director
and
28
consists
of
any
moneys
appropriated
to
the
fund
by
the
general
29
assembly
for
the
purposes
of
subsection
1,
and
any
other
moneys
30
available
and
obtained
or
accepted
by
the
department
for
31
placement
in
the
fund
including
all
of
the
following:
32
a.
Moneys
appropriated
to
the
fund
pursuant
to
section
33
502.410,
subsection
2.
34
b.
Notwithstanding
any
provision
of
law
to
the
contrary,
the
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director
may,
at
the
director’s
discretion,
transfer
up
to
two
1
hundred
fifty
thousand
dollars
from
the
commerce
revolving
fund
2
to
complete
the
objectives
of
this
section.
3
c.
Notwithstanding
any
provision
of
law
to
the
contrary,
4
any
moneys
received
by
the
department
as
a
result
of
civil
5
penalties
assessed
pursuant
to
chapter
502
may
be
placed
into
6
the
financial
exploitation
prevention
fund
at
the
discretion
of
7
the
director.
8
d.
The
director
may
collaborate
with
organizations
with
an
9
interest
in
financial
exploitation
prevention
and
education.
10
e.
The
director
may
accept
a
grant
or
donation
to
be
placed
11
in
the
financial
exploitation
prevention
fund.
12
3.
Notwithstanding
section
12C.7,
subsection
2,
interest
or
13
earnings
on
moneys
in
the
fund
shall
be
credited
to
the
fund.
14
Notwithstanding
section
8.33,
moneys
appropriated
in
this
15
section
that
remain
unencumbered
or
unobligated
at
the
close
of
16
a
fiscal
year
shall
not
revert
but
shall
remain
available
for
17
expenditure
for
the
purposes
designated.
18
4.
a.
All
investigation
files,
investigation
reports,
19
and
all
other
investigative
information
in
the
possession
of
20
the
department
pursuant
to
this
section
shall
be
confidential
21
records
under
chapter
22,
except
as
specifically
provided
in
22
this
section,
and
shall
not
be
subject
to
release
by
discovery,
23
subpoena,
or
other
means
of
legal
compulsion
until
opened
for
24
public
inspection
by
the
department,
or
upon
the
consent
of
25
the
department,
or
until
a
court
of
competent
jurisdiction
26
determines,
after
notice
to
the
department
and
hearing,
27
that
the
department
will
not
be
unnecessarily
hindered
in
28
accomplishing
the
purposes
of
this
section
if
opened
for
public
29
inspection.
Investigative
information
in
the
possession
of
30
the
department
may
be
disclosed,
in
the
director’s
discretion,
31
to
appropriate
regulatory
or
law
enforcement
agencies
within
32
the
state,
another
state,
the
District
of
Columbia,
or
another
33
territory
or
country.
34
b.
The
director
may
share
documents,
materials,
or
other
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information,
including
confidential
and
privileged
documents,
1
materials,
or
other
information,
with
any
person
provided
2
that
the
recipient
agrees
to
maintain
the
confidential
3
and
privileged
status
of
the
document,
material,
or
other
4
information
pursuant
to
Iowa
law.
5
c.
The
director
may
receive
documents,
materials,
or
other
6
information,
including
confidential
and
privileged
documents,
7
materials,
or
other
information
from
any
person
and
shall
8
maintain
as
confidential
and
privileged
any
document,
material,
9
or
other
information
received
with
notice
or
the
understanding
10
that
it
is
confidential
or
privileged
under
the
laws
of
the
11
jurisdiction
that
is
the
source
of
the
document,
material,
or
12
other
information.
13
d.
The
director
may
enter
into
an
agreement
governing
the
14
sharing
and
use
of
documents,
materials,
or
other
information
15
consistent
with
this
section.
16
e.
An
investigator
or
other
staff
member
of
the
department
17
shall
not
be
subject
to
subpoena
in
a
civil
action
concerning
18
any
matter
of
which
the
department
investigator
or
other
staff
19
member
has
knowledge
pursuant
to
a
pending
or
continuing
20
investigation
conducted
by
the
department
pursuant
to
this
21
chapter.
22
Sec.
8.
TRANSFER
OF
MONEYS.
On
the
effective
date
of
this
23
division
of
this
Act,
any
unencumbered
and
unobligated
moneys
24
remaining
in
the
securities
investor
education
and
financial
25
literacy
training
fund
created
in
section
502.601
shall
be
26
transferred
to
the
financial
literacy
and
investor
education
27
fund
created
in
section
546.14,
as
enacted
in
this
division
of
28
this
Act.
29
DIVISION
II
30
TAX
ON
GROSS
PREMIUMS
——
CONFIDENTIALITY
31
Sec.
9.
Section
432.1,
Code
2025,
is
amended
by
adding
the
32
following
new
subsection:
33
NEW
SUBSECTION
.
7.
a.
A
tax
return
filed
under
this
34
section
shall
not
be
subject
to
inspection
under
chapter
22.
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It
shall
be
unlawful
for
any
present
or
former
officer
or
1
employee
of
the
state
to
willfully
or
recklessly
publish
any
2
tax
return
filed
under
this
section.
A
person
who
violates
3
this
paragraph
shall
be
guilty
of
a
serious
misdemeanor
and,
in
4
addition
to
any
other
penalty,
shall
be
dismissed
from
state
5
office
or
discharged
from
state
employment.
6
b.
This
section
shall
not
be
construed
to
prohibit
the
7
department
of
revenue
from
turning
over
information
and
tax
8
returns
in
the
department
of
revenue’s
possession
pursuant
9
to
this
subsection
to
duly
authorized
officers
of
the
United
10
States,
or
tax
officials
of
other
states,
pursuant
to
an
11
agreement
between
the
commissioner
of
insurance
and
any
of
the
12
following:
13
(1)
The
secretary
of
the
treasury
of
the
United
States,
or
14
the
secretary’s
delegate.
15
(2)
The
commissioner
of
insurance
of
another
state.
16
Sec.
10.
Section
432.1A,
Code
2025,
is
amended
by
adding
the
17
following
new
subsection:
18
NEW
SUBSECTION
.
8.
a.
A
tax
return
filed
under
this
19
section
shall
not
be
subject
to
inspection
under
chapter
22.
20
It
shall
be
unlawful
for
any
present
or
former
officer
or
21
employee
of
the
state
to
willfully
or
recklessly
publish
any
22
tax
return
filed
under
this
section.
A
person
who
violates
23
this
paragraph
shall
be
guilty
of
a
serious
misdemeanor
and,
in
24
addition
to
any
other
penalty,
shall
be
dismissed
from
state
25
office
or
discharged
from
state
employment.
26
b.
This
section
shall
not
be
construed
to
prohibit
the
27
department
of
revenue
from
turning
over
information
and
28
tax
returns
in
the
department’s
possession
pursuant
to
this
29
subsection
to
duly
authorized
officers
of
the
United
States,
or
30
tax
officials
of
other
states,
pursuant
to
an
agreement
between
31
the
commissioner
of
insurance
and
any
of
the
following:
32
(1)
The
secretary
of
the
treasury
of
the
United
States,
or
33
the
secretary’s
delegate.
34
(2)
The
commissioner
of
insurance
of
another
state.
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DIVISION
III
1
HEALTH
INSURANCE
RATE
INCREASES
——
PUBLIC
HEARINGS
2
Sec.
11.
Section
505.19,
subsection
2,
Code
2025,
is
amended
3
to
read
as
follows:
4
2.
The
commissioner
shall
may
hold
a
public
hearing
5
at
the
time
a
carrier
files
for
proposed
health
insurance
6
rate
increases
exceeding
the
average
annual
health
spending
7
growth
rate
as
provided
in
subsection
1
,
prior
to
approval
or
8
disapproval
of
the
proposed
rate
increases
for
that
carrier
by
9
the
commissioner.
10
DIVISION
IV
11
HEALTH
SAVINGS
ACCOUNTS
AND
QUALIFIED
HIGH-DEDUCTIBLE
HEALTH
12
PLANS
——
COST-SHARING
13
Sec.
12.
NEW
SECTION
.
509.3B
Health
savings
accounts
and
14
qualified
high-deductible
health
plans
——
cost-sharing.
15
If
a
copayment,
coinsurance,
or
deductible
paid
as
16
cost-sharing
by
an
enrollee
under
this
chapter
may
result
in
17
the
enrollee
becoming
ineligible
for
a
health
savings
account
18
associated
with
the
enrollee’s
qualified
high-deductible
19
health
plan
under
section
223
of
the
Internal
Revenue
Code,
20
the
cost-sharing
shall
apply
only
to
the
enrollee’s
qualified
21
high-deductible
health
plan
after
the
enrollee
satisfies
the
22
enrollee’s
minimum
deductible,
except
for
items
or
services
23
determined
to
be
preventive
care
under
section
223(c)(2)(C)
of
24
the
Internal
Revenue
Code.
25
Sec.
13.
NEW
SECTION
.
514A.3C
Health
savings
accounts
and
26
qualified
high-deductible
health
plans
——
cost-sharing.
27
If
a
copayment,
coinsurance,
or
deductible
paid
as
28
cost-sharing
by
an
enrollee
under
this
chapter
may
result
in
29
the
enrollee
becoming
ineligible
for
a
health
savings
account
30
associated
with
the
enrollee’s
qualified
high-deductible
31
health
plan
under
section
223
of
the
Internal
Revenue
Code,
32
the
cost-sharing
shall
apply
only
to
the
enrollee’s
qualified
33
high-deductible
health
plan
after
the
enrollee
satisfies
the
34
enrollee’s
minimum
deductible,
except
for
items
or
services
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determined
to
be
preventive
care
under
section
223(c)(2)(C)
of
1
the
Internal
Revenue
Code.
2
DIVISION
V
3
INSURANCE
COMPANY
WITHDRAWAL
REQUIREMENTS
4
Sec.
14.
NEW
SECTION
.
505.36
Insurer
——
withdrawal
5
requirements.
6
1.
Definitions.
As
used
in
this
section,
unless
the
context
7
otherwise
requires:
8
a.
“Commissioner”
means
the
commissioner
of
insurance.
9
b.
“Insurer”
means
an
insurance
company,
an
affiliate
of
10
an
insurance
company,
or
other
legal
entity
authorized
to
11
engage
in
the
business
of
insurance
in
this
state,
including
12
a
reciprocal
exchange,
an
interinsurance
exchange,
and
a
13
lloyd’s
plan.
“Insurer”
does
not
include
an
eligible
surplus
14
lines
insurer
under
chapter
515I,
a
county
mutual
insurance
15
association
under
chapter
518,
a
state
mutual
insurance
16
association
under
chapter
518A,
an
entity
offering
health
17
coverage,
or
an
entity
offering
accident
and
sickness
coverage.
18
2.
Exemption.
This
section
shall
not
apply
to
a
transfer
of
19
business
from
one
insurer
to
another
insurer
if
the
insurer
to
20
whom
the
business
is
being
transferred
is
all
of
the
following:
21
a.
Within
the
same
insurance
holding
company
system
as
the
22
insurer
from
whom
business
is
being
transferred.
23
b.
Authorized
to
engage
in
the
business
of
insurance
in
this
24
state.
25
c.
Not
a
reciprocal
or
interinsurance
exchange,
a
lloyd’s
26
plan,
a
state
mutual
insurance
association,
or
a
county
mutual
27
insurance
association.
28
3.
Withdrawal
plan
required.
29
a.
An
insurer
shall
file
a
withdrawal
plan
with
the
30
commissioner
in
any
of
the
following
circumstances:
31
(1)
The
insurer
intends
to
reduce
the
insurer’s
total
annual
32
premium
volume
in
the
state
by
fifty
percent
or
more.
33
(2)
The
insurer
intends
to
reduce
the
insurer’s
total
annual
34
premium
in
the
state
in
a
line
of
insurance
by
seventy-five
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percent
or
more.
1
(3)
The
insurer
intends
to
reduce
the
insurer’s
total
annual
2
premium
volume
in
the
state
in
a
line
of
private
passenger
3
automobile
insurance,
homeowners
insurance,
or
dwelling
4
property
insurance
by
fifty
percent
or
more.
5
b.
If
an
insurer
intends
to
restrict
writing
new
business
6
in
the
state,
but
not
to
an
extent
that
requires
the
insurer
7
to
file
a
plan
for
orderly
withdrawal
under
paragraph
“a”
,
the
8
insurer
shall
provide
prior
written
notice
to
the
commissioner
9
of
the
insurer’s
intent
to
restrict
writing
new
business
in
the
10
state.
11
4.
Withdrawal
plan.
12
a.
A
withdrawal
plan
filed
under
this
section
shall
provide
13
for
all
of
the
following:
14
(1)
The
insurer
fulfilling
all
contractual
obligations.
15
(2)
The
insurer
providing
service
to
all
policyholders
and
16
claimants.
17
(3)
The
insurer
meeting
all
statutory
obligations,
18
including
but
not
limited
to
payment
of
assessments
to
the
19
guaranty
fund
and
participation
in
an
assigned
risk
plan.
20
b.
A
withdrawal
plan
filed
pursuant
to
this
section
shall,
21
at
a
minimum,
include
all
of
the
following:
22
(1)
The
date
on
which
the
insurer
proposes
to
commence
23
execution
of
the
withdrawal
plan,
and
the
date
on
which
24
execution
of
the
withdrawal
plan
will
be
completed.
25
(2)
The
reason
for
withdrawal
for
each
line
of
insurance.
26
(3)
Each
policy
form
by
number,
and
all
of
the
following
27
information:
28
(a)
The
total
number
of
policyholders.
29
(b)
The
total
amount
of
premiums
impacted
for
each
line
of
30
insurance.
31
(4)
The
total
number
of
insurance
producers
impacted
for
32
each
line
of
insurance.
33
(5)
A
copy
of
the
notification
the
insurer
will
provide
to
34
each
impacted
insurance
producer.
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(6)
A
copy
of
the
notification
or
nonrenewal
the
insurer
1
will
provide
to
each
impacted
policyholder.
2
(7)
Details
regarding
the
insurer’s
fulfillment
of
3
contractual
obligations
to
the
insurer’s
policyholders
during
4
the
withdrawal.
5
(8)
Whether
replacement
coverage
will
be
provided
to
a
6
policyholder
and,
if
so,
the
insurer
shall
provide
all
of
the
7
following:
8
(a)
The
insurer’s
relationship
with
the
replacing
insurer.
9
(b)
The
underwriting
requirements
and
rates
that
will
be
10
used
to
underwrite
the
policyholder.
11
(9)
An
estimate
of
the
percentage
of
the
Iowa
market
12
affected
by
withdrawal.
13
(10)
Any
third-party
contracts
that
provide
for
continuity
14
of
coverage
for
policyholders.
15
(11)
A
list
of
the
lines
of
insurance
that
the
insurer
will
16
continue
to
offer
in
the
state.
17
5.
Commissioner
approval.
18
a.
Except
as
provided
in
paragraph
“b”
,
the
commissioner
19
shall
approve
a
withdrawal
plan
that
has
been
determined
to
20
meet
all
of
the
following
requirements:
21
(1)
The
withdrawal
plan
provides
a
minimum
of
one
hundred
22
eighty
calendar
days’
notice
to
the
commissioner.
23
(2)
The
withdrawal
plan
includes
notice
to
policyholders
as
24
required
by
chapter
515.
25
(3)
The
withdrawal
plan
complies
with
subsection
4.
26
b.
If
the
commissioner
finds
that
a
withdrawal
plan
does
27
not
comply
with
paragraph
“a”
,
the
commissioner
may
modify,
28
restrict,
limit,
or
deny
the
withdrawal
plan.
29
c.
An
insurer
may
request
a
hearing
within
thirty
calendar
30
days
of
the
commissioner’s
decision
to
modify,
restrict,
limit,
31
or
deny
the
insurer’s
withdrawal
plan.
A
hearing
under
this
32
paragraph
shall
be
held
within
sixty
calendar
days
of
the
33
insurer’s
request
unless
a
later
date
is
agreed
to
by
the
34
insurer
and
the
commissioner,
or
permitted
by
the
commissioner
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for
good
cause.
1
6.
Resumption
of
writing
insurance
after
withdrawal.
An
2
insurer
that
withdraws
from
writing
all
lines
of
insurance
3
in
the
state
shall
not,
without
prior
approval
of
the
4
commissioner,
resume
writing
insurance
in
the
state
for
a
5
minimum
of
five
years
from
the
date
of
completion
of
the
6
insurer’s
withdrawal.
7
7.
Remedies.
A
violation
of
this
section
shall
constitute
8
an
unfair
method
of
competition
and
unfair
or
deceptive
act
or
9
practice
under
section
507B.4.
10
8.
Rules.
The
commissioner
may
adopt
rules
pursuant
11
to
chapter
17A
as
necessary
to
administer
and
enforce
this
12
section.
13
Sec.
15.
Section
507B.4,
subsection
3,
Code
2025,
is
amended
14
by
adding
the
following
new
paragraph:
15
NEW
PARAGRAPH
.
v.
Improper
withdrawal
of
an
16
insurer.
Failure
of
an
insurer
to
comply
with
section
17
505.36.
As
used
in
this
paragraph,
“insurer”
means
the
same
as
18
defined
in
section
505.36,
subsection
1.
19
DIVISION
VI
20
REPLACEMENT
COST,
ACTUAL
CASH
VALUE,
AND
LINE
OF
SIGHT
21
Sec.
16.
NEW
SECTION
.
515.116
Line
of
sight.
22
1.
Definitions.
As
used
in
this
section,
unless
the
context
23
otherwise
requires:
24
a.
“Actual
cash
value”
means
the
replacement
cost
of
25
property
at
the
time
of
loss,
less
depreciation,
if
any.
26
b.
“Line
of
sight”
means
any
location
a
reasonable
person
27
would
stand,
on
the
ground
or
any
floor
of
an
insured’s
damaged
28
structure,
to
view,
without
obstruction
or
the
use
of
aerial
29
tools
or
technology,
the
damaged
area
of
the
interior
or
30
exterior
of
the
damaged
structure
from
a
reasonable
distance.
31
“Line
of
sight”
is
not
limited
to
a
view
of
the
insured’s
32
damaged
structure
from
the
location
at
which
the
damage
33
occurred.
34
c.
“Reasonable
distance”
means,
for
exterior
repair
or
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replacement,
a
vantage
point
approximately
thirty
feet
from
1
where
the
repair
or
replacement
is
to
occur.
A
“reasonable
2
distance”
for
interior
repair
or
replacement
means
a
vantage
3
point
approximately
five
feet
from
where
the
repair
or
4
replacement
is
to
occur.
Based
on
a
particular
property,
5
“reasonable
distance”
may
be
determined
to
be
greater
than
or
6
less
than
thirty
feet
for
exterior
repair,
or
greater
than
or
7
less
than
five
feet
for
interior
repair.
8
d.
“Reasonably
similar
appearance”
means
if,
within
a
line
9
of
sight,
a
person
viewing
the
repaired
or
replaced
property
10
would
find
the
property
to
resemble
the
property’s
preloss
11
condition.
Whether
a
replacement
results
in
a
reasonably
12
similar
appearance
is
a
fact-specific
determination
made
13
on
a
case-by-case
basis
considering
the
totality
of
the
14
circumstances.
15
e.
“Reasonably
similar
product”
means
a
product
of
like
16
kind,
quality,
color,
and
size.
“Reasonably
similar
product”
17
does
not
mean
an
exact
match.
18
2.
Replacement
cost.
For
an
insurance
policy
providing
19
for
the
adjustment
and
settlement
of
first-party
losses
based
20
on
replacement
cost,
unless
the
insurance
policy,
a
rider,
or
21
an
endorsement
specifically
provides
otherwise,
all
of
the
22
following
shall
apply:
23
a.
When
a
loss
requires
repair
or
replacement
of
a
product
24
or
part,
consequential
physical
damage
incurred
during
the
25
repair
or
replacement
of
the
product
or
part,
not
otherwise
26
excluded
by
the
policy,
shall
be
included
in
the
calculation
of
27
loss.
The
insured
shall
not
be
required
to
pay
for
betterment
28
or
other
costs,
except
for
any
applicable
deductible.
29
b.
When
a
loss
requires
replacement
of
a
product
and
the
30
product
to
be
replaced
remains
available
for
purchase,
the
31
identical
product
shall
be
used
to
repair
or
replace
the
32
damaged
product,
even
if
the
undamaged
existing
product
shows
33
discoloration
due
to
age
or
normal
wear
and
tear.
If
the
34
identical
product
is
not
available
for
purchase,
the
insurer
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shall
use
a
reasonably
similar
product
to
achieve
a
reasonably
1
similar
appearance.
2
3.
Actual
cash
value.
For
an
insurance
policy
providing
3
for
adjustment
and
settlement
of
first-party
losses
based
on
4
actual
cash
value,
unless
the
insurance
policy,
a
rider,
or
5
an
endorsement
specifically
provides
otherwise,
all
of
the
6
following
shall
apply:
7
a.
For
residential
fire
and
extended
coverage,
the
insurer
8
shall
determine
the
actual
cash
value.
The
insurer
shall
9
provide
a
copy
of
the
claim
file
worksheet
detailing
all
10
deductions
for
depreciation.
Upon
request
by
the
insured,
the
11
insurer
shall
provide
a
detailed
written
explanation
of
the
12
manner
in
which
depreciation
was
calculated.
13
b.
Where
the
insured’s
interest
is
limited
because
14
damaged
property
has
nominal
or
no
economic
value,
or
a
value
15
disproportionate
to
replacement
cost
less
depreciation,
a
16
determination
of
actual
cash
value
shall
not
be
required.
At
17
the
request
of
the
insured,
the
insurer
shall
provide
a
written
18
explanation
of
the
basis
for
limiting
the
amount
of
recovery,
19
the
amount
payable
under
the
policy,
and
the
manner
in
which
20
actual
cash
value
was
determined.
21
DIVISION
VII
22
SERVICE
COMPANIES,
SERVICE
CONTRACTS,
AND
LICENSES
23
Sec.
17.
Section
507B.4,
subsection
3,
Code
2025,
is
amended
24
by
adding
the
following
new
paragraph:
25
NEW
PARAGRAPH
.
v.
Service
contracts.
Failure
of
a
person
26
in
the
business
of
service
contracts
to
comply
with
chapter
27
523C.
28
Sec.
18.
Section
523C.1,
Code
2025,
is
amended
by
adding
the
29
following
new
subsections:
30
NEW
SUBSECTION
.
1A.
“Communicating
in
a
verifiable
manner”
31
means
communication
by
in-person
delivery,
email,
or,
if
there
32
is
an
auditable
record
of
the
communication,
by
telephone.
33
NEW
SUBSECTION
.
6A.
“Person”
means
an
individual
or
a
34
business
entity.
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NEW
SUBSECTION
.
12A.
“Service
contract
holder”
means
the
1
original
purchaser
of
a
service
contract
or
the
successor
in
2
interest
or
transferee
entitled
to
services
under
the
service
3
contract.
4
NEW
SUBSECTION
.
12B.
“Substitute
part”
means
a
part
that
is
5
not
issued
by
the
original
part
manufacturer,
including
but
not
6
limited
to
a
remanufactured
part,
an
aftermarket
part,
and
a
7
part
obtained
from
a
salvage
yard.
8
NEW
SUBSECTION
.
12C.
“Support
services”
means
a
person
that
9
provides
services
that
support,
or
a
person
that
works
under
10
the
direction
of,
a
licensed
service
company
in
connection
with
11
the
issuance,
offer
for
sale,
sale,
or
administration
of
a
12
service
contract
in
this
state,
including
but
not
limited
to
a
13
person
that
provides
marketing,
administrative,
or
technical
14
support
to
a
service
company.
15
Sec.
19.
Section
523C.1,
subsection
4,
Code
2025,
is
amended
16
to
read
as
follows:
17
4.
“Motor
vehicle”
means
any
vehicle
that
is
self-propelled
18
vehicle
and
subject
to
registration
under
chapter
321
or
19
chapter
321I
.
20
Sec.
20.
Section
523C.2,
Code
2025,
is
amended
by
striking
21
the
section
and
inserting
in
lieu
thereof
the
following:
22
523C.2
License
required.
23
1.
A
person
that
shall
be
contractually
obligated
to
the
24
service
contract
holder
under
the
terms
of
the
service
contract
25
shall
not
directly
or
indirectly
issue,
offer
for
sale,
or
26
sell
a
motor
vehicle
service
contract
or
residential
service
27
contract
in
this
state
unless
the
person
is
a
licensed
service
28
company.
29
2.
This
chapter
shall
not
apply
to
any
person
that
provides
30
support
services.
A
service
company
that
utilizes
support
31
services
shall
ensure
the
support
services’
compliance
with
the
32
issuance,
offer
for
sale,
or
sale
of
a
service
contract
under
33
this
chapter.
34
3.
A
service
company
shall
maintain
a
license
for
the
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duration
of
time
that
the
service
company
is
contractually
1
obligated
to
a
service
contract
holder
under
the
terms
of
a
2
service
contract.
3
4.
A
service
company
shall
report
to
the
commissioner
4
within
thirty
calendar
days
any
material
change
to
the
5
information
submitted
by
the
service
company
in
the
service
6
company’s
initial
license
application,
or
license
renewal
7
application,
including
a
change
in
the
service
company’s
8
contact
information,
ownership,
officers
or
directors
directly
9
responsible
for
the
provider’s
service
contract
business,
10
or
any
other
change
that
substantially
affects
the
service
11
company’s
operations
in
the
state.
12
5.
A
service
company
shall
report
to
the
commissioner
any
13
administrative
action
taken
against
the
service
company
in
14
another
jurisdiction
within
thirty
calendar
days
of
the
final
15
disposition.
The
report
shall
include
a
copy
of
the
order,
16
consent
to
the
order,
and
other
relevant
legal
documents.
17
6.
Within
thirty
calendar
days
of
the
initial
pretrial
18
hearing
date,
a
service
company
shall
report
to
the
19
commissioner
a
criminal
prosecution
in
any
jurisdiction
of
an
20
owner
with
more
than
a
ten
percent
ownership
stake,
an
officer,
21
or
a
director
directly
responsible
for
the
service
contract
22
business
of
the
service
company,
for
an
offense
involving
23
dishonesty
or
a
false
statement
including
but
not
limited
24
to
fraud,
theft,
misappropriation
of
funds,
falsification
25
of
documents,
deceptive
acts
or
practices,
or
other
related
26
offenses.
The
report
shall
include
a
copy
of
the
initial
27
complaint
filed,
the
order
resulting
from
the
hearing,
and
any
28
other
relevant
legal
documents.
29
Sec.
21.
Section
523C.3,
Code
2025,
is
amended
by
striking
30
the
section
and
inserting
in
lieu
thereof
the
following:
31
523C.3
Application
for
license.
32
1.
Application
for
a
license
as
a
service
company
33
shall
be
filed
with
the
commissioner
on
a
form
approved
34
by
the
commissioner
and
shall
include
all
of
the
following
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information:
1
a.
The
name
and
principal
address
of
the
applicant.
2
b.
The
state
of
incorporation
of
the
applicant.
3
c.
The
name
and
address
of
the
applicant’s
registered
agent
4
for
service
of
process
in
Iowa.
5
d.
The
legal
name
of
all
of
the
following:
6
(1)
Each
owner
of
the
service
company
that
has
a
greater
7
than
ten
percent
ownership
stake
in
the
service
company.
8
(2)
Each
officer
of
the
service
company.
9
(3)
Each
director
directly
responsible
for
the
business
of
10
the
service
company.
11
e.
A
certificate
of
good
standing
for
the
applicant
issued
12
by
the
secretary
of
state
and
dated
not
more
than
thirty
13
calendar
days
from
the
date
of
the
application.
14
f.
Evidence
of
compliance
with
section
523C.5.
15
g.
A
copy
of
each
motor
vehicle
service
contract
form
to
be
16
used,
issued,
or
offered
for
sale
in
this
state
by
the
service
17
company.
18
h.
A
copy
of
each
residential
service
contract
form
to
be
19
used,
issued,
or
offered
for
sale
in
this
state
by
the
service
20
company.
21
i.
A
national
association
of
insurance
commissioners’
22
biographical
affidavit
and
the
verification
of
the
biographical
23
affidavit
for
the
chief
executive
officer
and
chief
financial
24
officer
of
the
service
company,
or
for
the
individuals
in
25
the
equivalent
positions.
The
service
company
shall
use
a
26
third-party
vendor
from
a
list
of
vendors
approved
by
the
27
commissioner
to
verify
the
biographical
affidavits.
The
28
service
company
shall
pay
all
costs
associated
with
the
29
required
verifications.
30
j.
A
list
of
any
disciplinary
actions
taken
against
the
31
service
company,
or
any
of
the
service
company’s
owners,
32
officers,
or
directors
directly
responsible
for
the
provider’s
33
service
contract
business,
in
the
immediately
preceding
ten
34
years
by
a
regulatory
agency
or
state
attorney
general
in
any
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jurisdiction.
1
2.
The
application
shall
be
accompanied
by
all
of
the
2
following:
3
a.
A
license
fee
in
the
amount
of
five
hundred
dollars.
4
b.
A
fee
in
the
amount
of
thirty-five
dollars
for
each
motor
5
vehicle
service
contract
form
provided
pursuant
to
subsection
6
1,
paragraph
“g”
.
7
3.
If
the
application
for
a
service
company
license
contains
8
the
information
under
subsection
1,
is
accompanied
by
the
fees
9
under
subsection
2,
and
the
commissioner
has
not
denied
the
10
application
pursuant
to
section
523C.9,
the
commissioner
shall
11
issue
the
license
to
the
applicant.
12
4.
Fees
collected
under
this
section
shall
be
deposited
13
into
the
service
company
oversight
fund
as
provided
in
section
14
523C.24.
15
Sec.
22.
Section
523C.4,
Code
2025,
is
amended
by
striking
16
the
section
and
inserting
in
lieu
thereof
the
following:
17
523C.4
License
expiration
and
renewal.
18
1.
A
license
issued
under
this
chapter
shall
be
valid
for
a
19
period
of
one
year.
A
license
that
is
not
renewed
prior
to
the
20
expiration
date
shall
be
deemed
expired.
Prior
to
a
license
21
expiration
date,
and
if
a
renewal
application
was
submitted
at
22
least
fourteen
calendar
days
prior
to
the
license
expiration
23
date,
the
commissioner
may
extend
the
renewal
period
for
an
24
additional
thirty
calendar
days.
25
2.
An
application
for
license
renewal
shall
include
the
26
information
required
for
an
initial
license
as
described
in
27
section
523C.3,
subsection
1,
paragraphs
“a”
through
“f”
,
28
and
a
list
of
each
service
contract
form
the
service
company
29
continues
to
use,
offer
for
sale,
or
issue
in
the
state,
30
including
the
service
contract
form
name,
number,
and
the
date
31
the
form
was
last
revised.
32
3.
The
license
renewal
application
shall
be
accompanied
by
33
all
of
the
following:
34
a.
A
license
renewal
fee
in
the
amount
of
two
hundred
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dollars.
1
b.
A
fee
in
the
amount
of
three
percent
of
the
aggregate
2
amount
of
payments
the
service
company
received
for
the
sale
3
or
issuance
of
residential
service
contracts
in
this
state
4
during
the
period
beginning
on
the
date
the
service
company’s
5
license
was
issued
until
the
date
of
the
service
company’s
6
renewal
filing,
provided
that
such
fee
shall
be
no
less
than
7
one
hundred
dollars
and
no
greater
than
fifty
thousand
dollars.
8
c.
A
fee
in
the
amount
of
thirty-five
dollars
for
each
motor
9
vehicle
service
contract
form
filed
with
the
commissioner
that
10
the
service
company
continues
to
use,
offer
for
sale,
or
issue
11
in
the
state.
12
d.
The
number
of
motor
vehicle
service
contracts
and
the
13
number
of
residential
service
contracts
issued
during
the
14
immediately
preceding
calendar
year
by
the
service
company
in
15
this
state.
16
e.
The
number
of
motor
vehicle
service
contracts
and
the
17
number
of
residential
service
contracts
canceled
during
the
18
immediately
preceding
calendar
year
by
the
service
company
in
19
this
state.
20
f.
The
total
dollar
amount
of
refunds
issued
to
service
21
contract
holders
by
the
service
company
during
the
immediately
22
preceding
calendar
year
for
canceled
motor
vehicle
service
23
contracts
in
this
state,
and
the
total
dollar
amount
of
refunds
24
issued
to
service
contract
holders
by
the
service
company
25
during
the
immediately
preceding
calendar
year
for
canceled
26
residential
service
contracts
in
this
state.
27
g.
The
total
dollar
amount
of
motor
vehicle
service
contract
28
fees,
and
the
total
dollar
amount
of
residential
service
29
contract
fees,
collected
during
the
immediately
preceding
30
calendar
year
by
the
service
company
for
contracts
sold
in
this
31
state.
32
h.
The
number
of
claims
filed
with
the
service
company
33
for
motor
vehicle
service
contracts
in
this
state
during
34
the
immediately
preceding
calendar
year,
and
the
number
of
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claims
filed
with
the
service
company
for
residential
service
1
contracts
in
this
state
during
the
immediately
preceding
2
calendar
year.
3
i.
The
total
dollar
amount
of
claims
paid
by
the
service
4
company
for
motor
vehicle
service
contracts
sold
by
the
service
5
company
in
this
state
during
the
immediately
preceding
calendar
6
year,
and
the
total
dollar
amount
of
claims
paid
by
the
service
7
company
for
residential
service
contracts
sold
by
the
service
8
company
in
this
state
during
the
immediately
preceding
calendar
9
year.
10
j.
The
total
number
of
claims
during
the
immediately
11
preceding
calendar
year
for
motor
vehicle
service
contracts
12
in
this
state
that
did
not
result
in
repair,
replacement,
13
payment,
or
other
thing
of
value
to
the
service
contract
14
holder
by
the
service
company,
and
the
total
number
of
claims
15
during
the
immediately
preceding
calendar
year
for
residential
16
service
contracts
in
this
state
that
did
not
result
in
repair,
17
replacement,
payment,
or
other
thing
of
value
to
the
service
18
contract
holder
by
the
service
company.
19
k.
The
total
number
of
written
complaints
regarding
motor
20
vehicle
service
contracts
received
by
the
service
company
21
during
the
immediately
preceding
calendar
year,
and
the
22
total
number
of
written
complaints
regarding
residential
23
service
contracts
received
by
the
service
company
during
the
24
immediately
preceding
calendar
year,
including
complaints
25
received
directly
from
a
consumer,
indirectly
on
behalf
of
a
26
consumer
from
a
third
party
other
than
a
regulatory
agency,
and
27
from
a
regulatory
agency.
28
l.
The
number
of
lawsuits
filed
by
a
third
party
or
a
29
regulatory
agency,
against
the
service
company
during
the
30
immediately
preceding
calendar
year
regarding
service
contracts
31
issued,
offered
for
sale,
or
sold
by
the
service
company.
32
4.
If
the
license
renewal
application
complies
with
this
33
section,
and
the
commissioner
has
not
refused
to
renew
the
34
license
pursuant
to
section
523C.9,
the
commissioner
shall
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renew
the
license.
If
the
commissioner
refuses
renewal
of
a
1
license
pursuant
to
section
523C.9,
the
refusal
shall
be
in
2
writing
setting
forth
the
grounds
for
the
refusal.
3
5.
If
a
service
company
submits
a
license
renewal
4
application
after
the
license
has
expired,
the
service
company
5
shall
pay
a
reinstatement
fee
of
eight
hundred
dollars,
and
6
applicable
fees
pursuant
to
subsection
3.
7
6.
a.
A
service
company
whose
license
has
expired,
and
is
8
not
within
an
additional
thirty-day
extension
period
granted
9
by
the
commissioner
pursuant
to
section
523C.4,
subsection
1,
10
shall
not
offer,
extend,
or
renew
a
service
contract
until
the
11
service
company’s
license
has
been
renewed,
or
the
service
12
company
has
been
issued
a
new
license.
13
b.
If,
at
the
time
a
service
contract
is
issued
or
sold
in
14
this
state,
the
service
company
has
an
expired
license
that
is
15
not
within
an
additional
thirty-day
extension
period
granted
16
by
the
commissioner
pursuant
to
section
523C.4,
subsection
1,
17
the
service
contract
may
be
canceled
at
the
discretion
of
the
18
service
contract
holder.
If
a
service
contract
holder
chooses
19
to
cancel
a
service
contract,
the
full
purchase
price
of
the
20
service
contract,
less
any
claims
paid,
shall
be
refunded
to
21
the
service
contract
holder
within
thirty
calendar
days.
A
ten
22
percent
penalty
shall
be
added
each
month
to
the
refund
if
the
23
refund
is
not
paid
to
the
service
contract
holder
within
the
24
thirty
calendar
days.
25
Sec.
23.
Section
523C.7,
Code
2025,
is
amended
by
striking
26
the
section
and
inserting
in
lieu
thereof
the
following:
27
523C.7
Disclosure
to
service
contract
holders
——
contract
28
form
——
required
provisions.
29
1.
A
service
contract
shall
not
be
issued,
sold,
or
offered
30
for
sale
in
this
state
unless
the
service
company
does
all
of
31
the
following:
32
a.
Provides
a
receipt
for
the
purchase
of
the
service
33
contract
to
the
service
contract
holder.
34
b.
Provides
a
complete
sample
copy
of
the
service
contract
35
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to
the
consumer
prior
to
purchase.
A
service
company
may
1
comply
with
this
paragraph
by
providing
the
consumer
with
a
2
complete
electronic
sample
copy
of
the
service
contract,
or
3
directing
the
consumer
to
a
complete
sample
copy
of
the
service
4
contract
at
an
internet
site.
A
paper
copy
of
the
sample
5
service
contract
shall
be
provided
upon
the
request
of
the
6
consumer
at
the
expense
of
the
service
company.
7
c.
Provides
a
fully
executed
paper
or
electronic
copy
of
8
the
service
contract
to
the
service
contract
holder
within
ten
9
calendar
days
of
the
date
the
service
contract
holder
purchased
10
the
service
contract.
A
paper
copy
of
the
executed
service
11
contract
shall
be
provided
to
the
service
contract
holder
upon
12
request
of
the
service
contract
holder
at
the
expense
of
the
13
service
company.
14
2.
A
service
contract
issued,
sold,
or
offered
for
sale
15
in
the
state
shall
comply
with
all
of
the
following,
as
16
applicable:
17
a.
A
service
contract
shall
be
written
in
clear,
18
understandable
language
in
at
least
ten
point
type.
19
b.
(1)
A
service
contract
insured
by
a
reimbursement
20
insurance
policy
as
provided
in
section
523C.5,
subsection
1,
21
shall
include
a
statement
in
substantially
the
following
form:
22
Obligations
of
the
service
company
under
this
service
contract
23
are
guaranteed
under
a
reimbursement
insurance
policy.
If
the
24
service
company
fails
to
pay
or
provide
service
on
a
claim
25
within
sixty
days
after
proof
of
loss
has
been
filed
with
26
the
service
company,
the
service
contract
holder
is
entitled
27
to
make
a
claim
directly
against
the
reimbursement
insurance
28
policy.
29
(2)
A
service
contract
insured
by
a
reimbursement
insurance
30
policy
shall
conspicuously
state
the
name
and
address
of
the
31
issuer
of
the
reimbursement
insurance
policy
for
that
service
32
contract.
A
claim
against
a
reimbursement
insurance
policy
33
shall
also
include
a
claim
for
return
of
any
refund
due
in
34
accordance
with
paragraphs
“m”
and
“n”
.
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911
c.
A
service
contract
not
insured
under
a
reimbursement
1
insurance
policy
shall
contain
a
statement
in
substantially
the
2
following
form:
3
Obligations
of
the
service
company
under
this
service
contract
4
are
backed
by
the
full
faith
and
credit
of
the
service
company
5
and
are
not
guaranteed
under
a
reimbursement
insurance
policy.
6
d.
A
service
contract
shall
state
the
name
and
address
of
7
the
service
company
obligated
to
perform
services
under
the
8
contract,
and
shall
conspicuously
identify
the
service
company,
9
any
third-party
administrator,
and
the
service
contract
holder
10
to
the
extent
that
the
name
and
address
of
the
service
contract
11
holder
has
been
furnished.
The
identities
of
such
parties
12
shall
not
be
required
to
be
printed
on
the
contract
in
advance
13
and
may
be
added
to
the
contract
at
the
time
of
sale.
14
e.
A
service
contract
shall
clearly
state
the
total
purchase
15
price
of
the
service
contract
and
the
terms
under
which
the
16
service
contract
is
sold.
The
total
purchase
price
shall
not
17
be
required
to
be
printed
on
the
contract
in
advance
and
may
be
18
added
to
the
contract
at
the
time
of
sale.
19
f.
If
prior
approval
of
repair
work
is
required,
a
service
20
contract
shall
conspicuously
describe
the
procedure
for
21
obtaining
prior
approval
and
for
making
a
claim,
including
a
22
toll-free
telephone
number
for
claim
service,
and
the
procedure
23
for
obtaining
emergency
repairs
performed
outside
of
normal
24
business
hours.
25
g.
A
service
contract
shall
clearly
state
any
waiting
period
26
applicable
to
coverage
under
the
service
contract,
and
the
date
27
on
which
coverage
begins.
28
h.
A
service
contract
shall
clearly
state
the
existence
of
29
any
deductible
amount.
30
i.
A
service
contract
shall
specify
the
merchandise
31
or
services,
or
both,
to
be
provided
and
any
limitations,
32
exceptions,
or
exclusions.
33
j.
A
service
contract
shall
clearly
state
the
conditions
on
34
which
the
use
of
substitute
parts
or
services
will
be
allowed.
35
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911
Such
conditions
shall
comply
with
applicable
state
and
federal
1
laws.
2
k.
A
service
contract
shall
clearly
state
any
terms,
3
restrictions,
or
conditions
governing
the
transferability
of
4
the
service
contract.
5
l.
A
service
contract
shall
clearly
state
the
instructions
6
for
cancellation
of
the
service
contract
by
the
service
7
contract
holder.
Cancellation
instructions
shall
include
all
8
necessary
information
for
a
service
contract
holder
to
complete
9
a
cancellation.
Cancellation
instructions
shall
include
the
10
phone
number,
email
address,
or
mailing
address
necessary
for
11
the
cancellation
of
the
service
contract,
as
well
as
any
other
12
information
that
the
service
contract
holder
must
use
to
cancel
13
the
contract.
A
service
company
shall
accept
cancellation
of
a
14
service
contract
from
a
service
contract
holder
by
telephone,
15
email,
or
mail,
or
any
other
cost-effective
and
accessible
16
method
of
communication.
The
method
of
cancellation
utilized
17
by
a
service
company
for
the
cancellation
of
a
service
contract
18
shall
be
as
accessible
as
the
method
utilized
by
the
service
19
company
for
the
service
contract
holder
to
enter
into
the
20
service
contract.
21
m.
A
service
contract
shall
clearly
state
the
terms
and
22
conditions
governing
the
cancellation
of
the
contract
prior
23
to
the
termination
or
expiration
date
of
the
contract
by
the
24
service
company
or
the
service
contract
holder.
If
the
service
25
company
cancels
the
contract,
the
service
company
shall
mail
a
26
written
notice
of
termination
to
the
service
contract
holder
at
27
least
fifteen
calendar
days
before
the
date
of
the
termination.
28
Prior
notice
of
cancellation
by
the
service
company
shall
not
29
be
required
if
the
reason
for
cancellation
is
nonpayment
of
the
30
purchase
price,
a
material
misrepresentation
by
the
service
31
contract
holder
to
the
service
company
or
the
support
services
32
for
the
service
company,
or
a
substantial
breach
of
duty
by
the
33
service
contract
holder
relating
to
the
covered
product
or
use
34
of
the
covered
product.
The
notice
of
cancellation
shall
state
35
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the
effective
date
of
the
cancellation
and
the
reason
for
the
1
cancellation.
If
a
service
contract
is
canceled
by
the
service
2
company
for
any
reason
other
than
nonpayment
of
the
purchase
3
price,
the
service
company
shall
refund
the
service
contract
4
holder
in
an
amount
equal
to
one
hundred
percent
of
the
5
unearned
purchase
price
paid,
calculated
on
a
pro
rata
basis
6
based
upon
elapsed
time
or
mileage,
less
any
claims
paid.
The
7
service
company
may
also
charge
a
reasonable
administrative
fee
8
in
an
amount
no
greater
than
ten
percent
of
the
total
purchase
9
price.
A
ten
percent
penalty
shall
be
added
each
month
to
the
10
refund
if
the
refund
is
not
paid
to
the
service
contract
holder
11
within
thirty
calendar
days.
12
n.
(1)
A
service
contract
shall
permit
the
original
13
service
contract
holder
who
purchased
the
contract
to
cancel
14
the
service
contract
within
at
least
thirty
calendar
days
of
15
the
effective
date
of
the
service
contract,
provided
no
claims
16
have
been
paid
under
the
service
contract,
or
within
a
longer
17
period
of
time
as
permitted
under
the
service
contract.
If
18
a
claim
has
not
been
paid
under
the
service
contract
prior
19
to
cancellation
by
the
service
contract
holder,
the
service
20
contract
is
void
and
the
full
purchase
price
of
the
service
21
contract
shall
be
refunded
to
the
service
contract
holder.
A
22
ten
percent
penalty
shall
be
added
each
month
to
a
refund
if
23
the
refund
is
not
paid
to
the
service
contract
holder
within
24
thirty
calendar
days,
unless
the
service
contract
holder
fails
25
to
provide
the
information
required
by
the
service
contract
to
26
complete
the
cancellation.
27
(2)
If
the
service
contract
holder
cancels
the
service
28
contract
in
violation
of
subparagraph
(1),
the
service
company
29
shall
refund
the
service
contract
holder
an
amount
equal
to
one
30
hundred
percent
of
the
unearned
purchase
price
paid,
calculated
31
on
a
pro
rata
basis
based
upon
elapsed
time
or
mileage,
32
less
any
claims
paid.
The
service
company
may
also
charge
a
33
reasonable
administrative
fee
in
an
amount
no
greater
than
ten
34
percent
of
the
total
purchase
price.
A
ten
percent
penalty
35
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911
shall
be
added
each
month
to
a
refund
if
the
refund
is
not
paid
1
to
the
service
contract
holder
within
thirty
calendar
days
of
2
the
service
contract
cancellation
request,
unless
the
service
3
contract
holder
fails
to
provide
the
information
required
in
4
the
service
contract
to
complete
the
cancellation.
5
o.
A
service
contract
shall
set
forth
all
obligations
6
and
duties
of
the
service
contract
holder,
including
but
not
7
limited
to
the
duty
to
protect
against
any
further
damage,
and
8
the
obligation
to
follow
an
owner’s
manual
and
to
perform,
or
9
have
performed,
all
required
service
or
maintenance.
10
p.
A
service
contract
shall
clearly
state
if
the
contract
11
covers
or
excludes
consequential
damages
and
preexisting
12
conditions,
if
applicable.
A
service
contract
may,
but
is
not
13
required
to,
cover
damage
resulting
from
rust,
corrosion,
or
14
damage
caused
by
a
part
or
system
not
covered
under
the
service
15
contract.
16
q.
A
service
contract
shall
clearly
state
the
service
call
17
fee,
if
any,
charged
to
the
service
contract
holder.
18
r.
A
service
contract
shall
state
the
name
and
address
of
19
the
commissioner,
the
current
toll-free
telephone
number
of
the
20
division,
and
a
statement
that
a
consumer
may
file
a
complaint
21
with
the
division,
including
by
filing
a
complaint
on
the
22
division’s
internet
site.
23
s.
If
a
residential
service
contract
relates
to
heating,
24
cooling,
plumbing,
or
electrical
service,
and
the
claim
being
25
made
by
the
service
contract
holder
is
essential
to
the
health
26
and
safety
of
the
service
contract
holder
or,
if
applicable,
27
the
service
contract
holder’s
family,
the
service
company
shall
28
ensure
all
of
the
following:
29
(1)
Repair
or
replacement
of
the
essential
good
commences
30
within
forty-eight
hours
after
the
report
of
the
claim,
and
is
31
completed
as
soon
as
reasonably
practicable.
32
(2)
If
the
service
company
determines
that
the
service
33
company
cannot
complete
a
repair,
replacement,
or
service
34
within
three
calendar
days
after
the
report
of
the
claim,
35
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the
service
contract
holder
may
seek
an
outside
provider
to
1
complete
the
repair,
replacement,
or
service.
The
service
2
company
shall
cover
reasonable
costs
associated
with
a
repair,
3
replacement,
or
service
completed
by
an
outside
service
4
provider
up
to
the
maximum
dollar
amount
covered
by
the
service
5
contract.
6
(3)
Notice
is
provided
to
the
service
contract
holder
if
a
7
repair
cannot
practicably
be
completed
within
three
calendar
8
days
after
the
report
of
the
claim.
The
service
company
shall
9
provide
a
status
report
to
the
service
contract
holder
by
10
communicating
in
a
verifiable
manner
as
soon
as
practicable,
11
but
no
later
than
three
calendar
days
after
the
date
of
the
12
report
of
the
claim.
The
status
report
must
include
all
of
the
13
following:
14
(a)
A
list
of
all
required
repairs,
replacements,
or
15
services
and
the
estimated
cost
to
the
service
contract
holder.
16
(b)
The
primary
reason
the
required
repair,
replacement,
or
17
service
will
take
longer
than
three
calendar
days,
including
18
the
status
of
all
parts
required
for
the
repair,
replacement,
19
or
service.
20
(c)
The
current
estimated
length
of
time
to
complete
the
21
repair,
replacement,
or
service.
22
(d)
The
telephone
number
of
the
service
company
in
the
23
event
the
service
contract
holder
or
the
commissioner
wants
24
to
make
an
inquiry
concerning
the
claim,
and
a
commitment
by
25
the
service
company
to
respond
to
an
inquiry
no
later
than
one
26
business
day
after
the
date
the
inquiry
is
received.
27
(e)
A
statement
that
if
the
service
contract
holder
is
not
28
satisfied
with
the
manner
in
which
the
service
company
handles
29
the
claim
under
the
terms
of
service
contract,
the
service
30
contract
holder
may
file
a
complaint
with
the
division
pursuant
31
to
paragraph
“r”
.
32
(f)
A
notice
to
the
service
contract
holder
that
the
33
service
contract
holder
may
seek
an
outside
service
provider
34
to
complete
the
repair,
replacement,
or
service,
and
that
the
35
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40
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911
service
company
will
cover
reasonable
costs
associated
with
a
1
repair,
replacement,
or
service
completed
by
an
outside
service
2
provider
up
to
the
maximum
dollar
amount
covered
by
the
service
3
contract.
4
Sec.
24.
NEW
SECTION
.
523C.8
Service
contract
forms
——
5
fees.
6
1.
A
service
company
shall
file
with
the
division
an
7
accurate
copy
of
each
service
contract
form
prior
to
using
the
8
service
contract
form
for
the
sale
of
a
service
contract
in
9
this
state.
10
2.
At
the
time
of
filing
each
motor
vehicle
service
contract
11
form
with
the
division
a
service
company
shall
pay
a
fee
in
the
12
amount
of
thirty-five
dollars
for
each
motor
vehicle
service
13
contract
form.
14
3.
Notwithstanding
section
523C.7,
a
service
company
may
15
continue
to
use
a
service
contract
form
that
is
noncompliant
16
with
this
chapter
until
June
30,
2026,
provided
no
changes
are
17
made
to
the
service
contract
form
and
the
service
contract
form
18
was
filed
with
the
division
in
2024.
19
Sec.
25.
Section
523C.9,
Code
2025,
is
amended
by
striking
20
the
section
and
inserting
in
lieu
thereof
the
following:
21
523C.9
License
denial,
nonrenewal,
suspension,
or
revocation.
22
1.
The
commissioner
may
suspend
or
revoke
the
license
of,
23
deny
an
application
for
a
license
from,
or
refuse
to
renew
the
24
license
of,
a
service
company,
or
may
levy
a
civil
penalty
as
25
provided
in
section
523C.13
against
a
service
company,
for
any
26
of
the
following
reasons:
27
a.
The
service
company
violated
this
chapter,
a
lawful
28
order,
regulation,
or
subpoena.
29
b.
The
service
company
failed
to
pay
a
final
judgment
30
rendered
against
the
service
company
in
this
state
within
sixty
31
calendar
days
after
the
date
the
judgment
became
final.
32
c.
The
service
company,
without
just
cause,
refused
33
to
perform,
or
negligently
or
incompetently
performed,
a
34
service
required
to
be
performed
under
the
service
company’s
35
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service
contracts
and
the
refusal,
or
negligent
or
incompetent
1
performance,
has
occurred
with
such
frequency
as
to
indicate
2
the
general
business
practices
of
the
service
company
are
3
negligent
or
incompetent,
as
determined
by
the
commissioner.
4
d.
The
service
company
violated
section
523C.13.
5
e.
The
service
company
failed
to
demonstrate
financial
6
responsibility
pursuant
to
section
523C.5,
if
applicable.
7
f.
The
service
company
failed
to
maintain
a
corporate
8
certificate
of
good
standing
with
the
secretary
of
state.
9
g.
The
service
company
provided
incorrect,
misleading,
10
incomplete,
or
materially
untrue
information
in
the
service
11
company’s
license
application.
12
h.
The
service
company
obtained
or
attempted
to
obtain
a
13
license
through
misrepresentation
or
fraud.
14
i.
The
service
company
improperly
withheld,
misappropriated,
15
or
converted
any
money
or
property
received
in
the
course
of
16
business
as
a
service
company.
17
j.
The
service
company
intentionally
misrepresented
the
18
terms
of
an
actual
or
proposed
service
contract.
19
k.
Within
the
immediately
preceding
ten
years,
an
owner,
20
officer,
or
director
of
the
service
company
has
been
convicted
21
of
a
criminal
offense
involving
any
aspect
of
a
business
22
involving
securities,
commodities,
investments,
franchises,
23
insurance,
banking,
or
finance.
24
l.
An
owner,
officer,
or
director
of
the
service
company
25
has
been
convicted
of
a
criminal
offense
involving
dishonesty
26
or
a
false
statement,
including
but
not
limited
to
fraud,
27
theft,
misappropriation
of
funds,
falsification
of
documents,
28
deceptive
acts
or
practices,
or
other
related
offenses.
29
m.
The
service
company
admitted
to
committing,
or
was
found
30
to
have
committed,
any
unfair
trade
practice
or
fraud.
31
n.
The
service
company
used
fraudulent,
coercive,
32
or
dishonest
practices,
or
demonstrated
incompetence,
33
untrustworthiness,
or
financial
irresponsibility,
in
conducting
34
business
in
this
state
or
any
other
state.
35
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911
o.
The
service
company
had
a
service
company
license
or
its
1
equivalent,
denied,
suspended,
or
revoked
in
any
other
state,
2
province,
district,
or
territory.
3
p.
The
service
company
failed,
or
refused,
to
cooperate
in
4
an
investigation
conducted
by
the
commissioner
of
insurance.
5
2.
If
the
commissioner
suspends
or
revokes
the
license
of,
6
denies
the
application
for
licensure
of,
or
refuses
to
renew
7
the
license
of,
a
service
company
pursuant
to
this
section,
the
8
commissioner
shall
notify
the
service
company,
in
writing,
and
9
provide
the
reason
for
the
suspension,
revocation,
denial,
or
10
nonrenewal.
The
licensee
or
applicant
may
request
a
hearing
11
on
the
suspension,
revocation,
nonrenewal,
or
denial,
and
a
12
hearing
shall
be
conducted
according
to
section
507B.6.
13
Sec.
26.
Section
523C.12,
Code
2025,
is
amended
to
read
as
14
follows:
15
523C.12
Optional
examination
Examinations
.
16
The
commissioner
,
or
a
the
commissioner’s
designee
,
of
17
the
commissioner
may
make
an
examination
of
the
books
and
18
records
of
a
service
company,
including
records
involving
19
communications
with
service
contract
holders,
copies
of
20
contracts
and
records
of
claims
and
expenditures,
and
21
verify
its
records
related
to
the
service
company’s
assets,
22
liabilities,
and
reserves.
The
actual
costs
of
the
examination
23
shall
be
borne
by
the
service
company.
The
costs
of
an
24
examination
under
this
section
shall
not
exceed
an
amount
equal
25
to
ten
percent
of
the
service
company’s
reported
net
income
26
associated
with
doing
business
in
the
state
in
the
previous
27
immediately
preceding
fiscal
year.
28
Sec.
27.
Section
523C.13,
Code
2025,
is
amended
by
striking
29
the
section
and
inserting
in
lieu
thereof
the
following:
30
523C.13
Prohibited
acts
or
practices
——
penalty
——
violations
31
——
contracts
voided.
32
1.
A
service
company,
or
the
service
company’s
support
33
services,
that
offers
service
contracts
for
sale
in
this
state,
34
shall
not,
directly
or
indirectly,
represent
in
any
manner,
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whether
by
written
solicitation
or
telemarketing,
a
false,
1
deceptive,
or
misleading
statement
with
respect
to
any
of
the
2
following:
3
a.
The
service
company’s
affiliation
with
a
motor
vehicle
4
manufacturer
or
importer.
5
b.
The
validity
or
expiration
of
a
warranty.
6
c.
A
motor
vehicle
service
contract
holder’s
coverage
7
under
a
motor
vehicle
service
contract,
including
statements
8
suggesting
that
the
service
contract
holder
must
purchase
a
9
new
service
contract
in
order
to
maintain
coverage
under
the
10
existing
service
contract
or
warranty.
11
d.
Descriptions
of
the
service
contract
as
a
“policy”.
12
2.
A
licensed
service
company
which
offers
service
13
contracts
for
sale
in
this
state
shall
not,
directly
or
14
indirectly,
do
any
of
the
following:
15
a.
Fail
to
complete,
or
fail
to
ensure
the
completion
of,
a
16
repair,
maintenance,
replacement,
service,
or
indemnification
17
of
expenses
associated
with
a
covered
claim
within
a
reasonable
18
period
of
time.
19
b.
Create
or
use
any
advertising
that
does
not
include
the
20
name
of
the
licensed
service
company.
21
c.
Use
any
method
of
marketing
that
may
induce
the
purchase
22
of
a
service
contract
through
force,
fear,
or
threats,
whether
23
explicit
or
implied.
24
d.
Create
or
use
any
service
contract
marketing
materials
25
that
contain
incorrect
or
misleading
information.
26
e.
Use,
offer
for
sale,
or
issue
in
this
state
a
service
27
contract
form
that
has
not
been
submitted
as
part
of
a
license
28
application
pursuant
to
section
523C.3,
as
part
of
a
license
29
application
renewal
pursuant
to
section
523C.4,
or
submitted
30
to
the
division
during
the
service
company’s
current
license
31
period.
32
3.
The
commissioner
may
adopt
rules
pursuant
to
33
chapter
17A
that
regulate
service
contracts
to
prohibit
34
misrepresentation,
false
advertising,
defamation,
boycotts,
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coercion,
intimidation,
false
statements
and
entries,
and
1
unfair
discrimination
or
practices.
If
the
commissioner
finds
2
that
a
person
has
violated
rules
adopted
under
this
section,
3
the
commissioner
may
order
any
or
all
of
the
following:
4
a.
Payment
of
a
civil
penalty
of
not
more
than
one
thousand
5
dollars
for
each
act
or
violation,
not
to
exceed
an
aggregate
6
of
ten
thousand
dollars,
unless
the
person
knew
or
reasonably
7
should
have
known
the
person
was
in
violation
of
this
section,
8
in
which
case
the
civil
penalty
shall
be
not
more
than
five
9
thousand
dollars
for
each
act
or
violation,
not
to
exceed
an
10
aggregate
of
fifty
thousand
dollars
in
any
one
consecutive
11
six-month
period.
If
the
commissioner
finds
a
violation
of
12
this
section
was
directed,
encouraged,
condoned,
ignored,
13
or
ratified
by
the
employer
of
the
person
the
commissioner
14
may
assess
the
penalty
to
the
employer
and
not
the
person.
15
Any
civil
penalties
collected
under
this
subsection
shall
be
16
deposited
as
provided
in
section
505.7.
17
b.
Suspension
or
revocation
of
the
person’s
license,
if
the
18
person
knew
or
reasonably
should
have
known
the
person
was
in
19
violation
of
this
section.
20
4.
A
violation
of
this
chapter
shall
constitute
an
unlawful
21
practice
pursuant
to
section
714.16.
22
5.
A
person
shall
not
engage,
directly
or
indirectly,
in
any
23
unfair
method
of
competition,
or
an
unfair
or
deceptive
act
or
24
practice,
in
the
business
of
service
contracts.
Any
violation
25
of
this
chapter
constitutes
an
unfair
method
of
competition,
26
or
an
unfair
or
deceptive
act
or
practice.
If,
after
hearing,
27
the
commissioner
determines
that
a
person
has
engaged
in
an
28
unfair
method
of
competition
or
an
unfair
or
deceptive
act
or
29
practice,
the
provisions
of
sections
507B.6
through
507B.8
30
shall
apply.
31
Sec.
28.
Section
523C.22,
Code
2025,
is
amended
to
read
as
32
follows:
33
523C.22
Claim
procedures.
34
A
licensed
service
company
shall
promptly
provide
a
written
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explanation
to
the
service
contract
holder,
describing
the
1
reasons
for
denying
a
claim
or
for
the
offer
of
a
compromise
2
settlement,
based
on
all
relevant
facts
or
legal
requirements
3
and
referring
to
applicable
provisions
of
the
service
contract.
4
The
written
explanation
shall
provide
instructions
to
the
5
service
contract
holder
on
the
process
for
an
appeal,
second
6
review,
arbitration,
or
similar
provisions
included
in
the
7
contract,
as
well
as
information
on
how
to
file
a
complaint
8
with
the
division,
including
the
internet
site
on
which
to
9
locate
the
division’s
complaint
form.
10
Sec.
29.
Section
523C.23,
subsection
1,
paragraph
c,
Code
11
2025,
is
amended
by
striking
the
paragraph.
12
Sec.
30.
Section
523C.23,
subsection
2,
Code
2025,
is
13
amended
to
read
as
follows:
14
2.
Except
as
provided
in
section
523C.19
,
a
A
proceeding
15
instituted
under
this
chapter
shall
be
conducted
pursuant
to
16
chapter
17A
and
rules
adopted
by
the
commissioner
pursuant
to
17
chapter
17A
.
18
Sec.
31.
NEW
SECTION
.
523C.25
Confidentiality.
19
1.
Notwithstanding
chapter
22,
the
commissioner
shall
20
maintain
the
confidentiality
of
information
submitted
to
21
the
division
or
obtained
by
the
division
in
the
course
of
22
an
investigation,
examination,
or
inquiry
pursuant
to
this
23
chapter,
including
all
notes,
work
papers,
or
other
documents.
24
Information
obtained
by
the
commissioner
in
the
course
of
25
investigating
a
complaint
or
inquiry
may,
at
the
discretion
26
of
the
commissioner,
be
provided
to
the
service
company
that
27
is
the
subject
of
the
complaint
or
inquiry
and
the
consumer
28
who
filed
the
complaint
or
inquiry,
without
waiving
the
29
confidentiality
afforded
to
the
commissioner
or
to
any
other
30
person
by
this
section.
The
commissioner
may
disclose
or
31
release
information
that
is
otherwise
confidential
under
this
32
subsection
in
the
course
of
an
administrative
or
judicial
33
proceeding.
34
2.
Notwithstanding
subsection
1,
if
the
commissioner
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determines
that
it
is
necessary
in
the
public
interest,
the
1
commissioner
may
share
information
with
other
regulatory
2
authorities
or
government
agencies,
or
may
publish
service
3
company-related
data
or
information
collected
under
this
4
chapter.
Such
information
may
be
redacted
so
that
neither
5
personally
identifiable
information
nor
service
company
6
identifiable
information
is
made
available.
7
Sec.
32.
Section
714.16,
subsection
2,
Code
2025,
is
amended
8
by
adding
the
following
new
paragraph:
9
NEW
PARAGRAPH
.
r.
It
is
an
unlawful
practice
for
a
person
10
to
violate
chapter
523C.
11
Sec.
33.
REPEAL.
Section
523C.19,
Code
2025,
is
repealed.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
relates
to
matters
under
the
purview
of
the
16
department
of
insurance
and
financial
services
including
17
financial
literacy
and
exploitation,
tax
confidentiality,
18
health
insurance
rates,
health
savings
accounts,
insurer
19
withdrawals,
property
insurance,
and
service
contracts.
20
DIVISION
I
——
FINANCIAL
LITERACY
AND
FINANCIAL
EXPLOITATION.
21
Division
I
appropriates
$10
of
each
fee
collected
from
the
22
filing
of
an
application
as
an
agent
of
a
real
estate
broker
or
23
dealer
to
the
financial
literacy
and
investor
education
fund
24
(education
fund),
and
to
the
financial
exploitation
prevention
25
fund
(prevention
fund),
both
of
which
are
created
in
the
bill.
26
Initiatives
by
the
commissioner
of
insurance
(commissioner)
27
involving
financial
literacy
and
investor
education
shall
28
comply
with
the
requirements
of
the
bill.
29
Under
the
bill,
nonexamination
revenues
payable
to
the
30
insurance
division
(division)
or
the
department
of
revenue
31
(DOR)
in
connection
with
the
regulation
of
insurance
companies
32
shall
be
deposited
in
the
commerce
revolving
fund,
rather
than
33
40
percent
as
is
required
under
current
law.
The
director
of
34
the
department
of
insurance
and
financial
services
(director)
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shall
be
responsible
for
identifying
and
coordinating
1
appropriate
opportunities
for
collaboration
on
financial
2
literacy
and
exploitation
with
the
chief
administrative
3
officers
(CAO)
of
each
division
and
each
CAO’s
respective
4
regulated
entities.
5
The
bill
creates
the
education
fund
under
the
control
of
the
6
director.
The
director
shall
develop
and
implement
financial
7
literacy
and
investor
education
initiatives
for
the
public
8
by
providing
education
on
financial
topics,
including
topics
9
required
to
be
offered
and
taught
for
grades
9
through
12.
The
10
education
fund
consists
of
moneys
as
detailed
in
the
bill.
11
Notwithstanding
any
provision
of
law
to
the
contrary,
moneys
in
12
the
education
fund
may
be
moved
to
the
prevention
fund
at
the
13
discretion
of
the
director.
14
The
bill
creates
the
prevention
fund,
under
which
the
15
director
shall
develop
and
implement
initiatives
to
educate
16
the
public
on
financial
exploitation;
assist
individuals
17
who
are
known,
suspected,
or
potential
victims
of
financial
18
exploitation;
and
to
conduct
investigations,
refer
19
investigations
to
other
law
enforcement,
and
assist
in
the
20
prosecution
of
persons
involved
in
financial
exploitation.
The
21
prevention
fund
consists
of
moneys
as
detailed
in
the
bill.
22
All
investigation
files,
investigation
reports,
and
all
23
other
investigative
information
in
the
possession
of
the
24
department
of
insurance
and
financial
services
(department)
25
shall
be
confidential
and
shall
not
be
subject
to
release
by
26
discovery,
subpoena,
or
other
means
of
legal
compulsion
until
27
opened
for
public
inspection
by
the
department,
or
upon
the
28
consent
of
the
department,
or
until
a
court
determines
the
29
department
will
not
be
unnecessarily
hindered
if
opened
for
30
public
inspection.
Investigative
information
in
the
possession
31
of
the
department
may
be
disclosed,
shared,
or
received
in
32
the
circumstances
detailed
in
the
bill.
An
investigator
or
33
staff
member
of
the
department
shall
not
be
subject
to
subpoena
34
concerning
any
pending
or
continuing
investigation
conducted
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by
the
department.
1
On
the
effective
date
of
division
I
of
the
bill,
all
2
unencumbered
and
unobligated
moneys
remaining
in
the
securities
3
investor
education
and
financial
literacy
training
fund
in
Code
4
section
502.601
shall
be
transferred
to
the
education
fund.
5
DIVISION
II
——
TAX
ON
GROSS
PREMIUMS
——
CONFIDENTIALITY.
6
Under
division
II,
a
tax
return
filed
under
Code
section
7
432.1
(tax
on
gross
premiums
——
exclusions)
or
432.1A
(tax
on
8
premiums
——
captive
companies)
shall
not
be
open
to
inspection.
9
It
shall
be
unlawful
for
any
present
or
former
officer
or
10
employee
of
the
state
to
willfully
or
recklessly
publish
any
11
such
tax
return.
A
person
who
does
so
is
guilty
of
a
serious
12
misdemeanor
and,
in
addition
to
any
other
penalty,
shall
be
13
dismissed
from
office
or
discharged
from
employment.
A
serious
14
misdemeanor
is
punishable
by
confinement
for
no
more
than
one
15
year
and
a
fine
of
at
least
$430
but
no
more
than
$2,560.
The
16
bill
does
not
prohibit
the
DOR
from
turning
over
information
17
and
tax
returns
in
the
DOR’s
possession
to
duly
authorized
18
officers
of
the
United
States
or
tax
officials
of
other
states
19
pursuant
to
an
agreement.
20
DIVISION
III
——
HEALTH
INSURANCE
RATE
INCREASES
——
PUBLIC
21
HEARINGS.
Division
III
permits
the
commissioner
to
hold
a
22
public
hearing
at
the
time
a
carrier
files
for
proposed
health
23
insurance
rate
increases
exceeding
the
average
annual
health
24
spending
growth
rate,
rather
than
requiring
the
commissioner
to
25
hold
such
public
hearing
as
is
the
case
under
current
law.
26
DIVISION
IV
——
HEALTH
SAVINGS
ACCOUNTS
AND
QUALIFIED
27
HIGH-DEDUCTIBLE
HEALTH
PLANS
——
COST-SHARING.
Under
division
28
IV,
if
a
copayment,
coinsurance,
or
deductible
paid
as
29
cost-sharing
by
an
enrollee
in
an
individual
or
group
accident
30
or
health
insurance
plan
would
result
in
the
enrollee
becoming
31
ineligible
for
a
health
savings
account
associated
with
the
32
enrollee’s
qualified
high-deductible
health
plan
(HDHP),
the
33
cost-sharing
shall
apply
only
to
the
enrollee’s
qualified
HDHP
34
after
the
enrollee
satisfies
the
enrollee’s
minimum
deductible,
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except
for
items
or
services
determined
to
be
preventive.
1
DIVISION
V
——
INSURANCE
COMPANY
WITHDRAWAL
REQUIREMENTS.
2
Division
V
requires
an
insurer,
prior
to
withdrawing,
to
3
file
a
withdrawal
plan
(plan)
with
the
commissioner
if
the
4
insurer
intends
to
reduce
the
insurer’s
total
annual
premium
5
volume
in
the
state
by
50
percent
or
more,
intends
to
reduce
6
the
insurer’s
total
annual
premium
in
the
state
in
a
line
of
7
insurance
by
75
percent
or
more,
or
intends
to
reduce
the
8
insurer’s
total
annual
premium
volume
in
the
state
in
a
line
of
9
private
passenger
automobile
insurance,
homeowners
insurance,
10
or
dwelling
property
insurance
by
50
percent
or
more.
11
Withdrawal
requirements
do
not
apply
to
a
transfer
of
business
12
from
one
insurer
to
another
insurer
that
are
both
within
the
13
same
insurance
holding
company
system
if
the
insurer
to
whom
14
the
business
is
being
transferred
is
authorized
to
engage
in
15
the
business
of
insurance
in
the
state,
and
the
business
is
16
not
a
reciprocal
or
interinsurance
exchange,
a
lloyd’s
plan,
17
or
a
state
or
county
mutual
insurance
association.
“Insurer”
18
is
defined
in
the
bill.
19
If
the
plan
meets
all
of
the
requirements
as
described
in
20
the
bill,
the
commissioner
shall
approve
the
plan.
If
the
21
commissioner
finds
that
a
plan
does
not
meet
all
requirements,
22
the
commissioner
may
modify,
restrict,
limit,
or
deny
the
23
withdrawal
plan.
An
insurer
may
request
a
hearing
on
the
24
commissioner’s
decision
as
described
in
the
bill.
25
An
insurer
that
withdraws
from
writing
all
lines
of
26
insurance
in
the
state
shall
not,
without
prior
approval
27
of
the
commissioner,
resume
writing
insurance
in
the
state
28
for
a
minimum
of
five
years.
A
violation
of
the
withdrawal
29
requirements
constitutes
an
unfair
method
of
competition
and
30
unfair
or
deceptive
act
or
practice.
The
commissioner
may
31
adopt
rules
to
administer
and
enforce
division
V.
32
DIVISION
VI
——
REPLACEMENT
COST,
ACTUAL
CASH
VALUE,
AND
33
LINE
OF
SIGHT.
Division
VI
requires
for
an
insurance
policy
34
providing
for
the
adjustment
and
settlement
of
first-party
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losses
based
on
replacement
cost
when
a
loss
requires
repair
or
1
replacement
of
a
product
or
part,
consequential
physical
damage
2
shall
be
included
in
the
calculation
of
loss,
and
the
insured
3
shall
not
be
required
to
pay
for
betterment
or
other
costs,
4
except
for
any
deductible.
When
a
loss
requires
replacement
of
5
a
damaged
product
and
the
product
is
available
for
purchase,
6
the
identical
product
shall
be
used,
or
if
it
is
not
available,
7
the
insurer
shall
use
a
reasonably
similar
product.
8
For
a
policy
providing
for
adjustment
and
settlement
of
9
first-party
losses
based
on
actual
cash
value
(ACV),
for
10
residential
fire
and
extended
coverage,
the
insurer
shall
11
determine
the
ACV
and
shall
provide
a
copy
of
the
claim
file
12
worksheet.
13
For
an
insurance
policy
providing
for
the
adjustment
and
14
settlement
of
first-party
losses
based
on
ACV,
where
the
15
insured’s
interest
is
limited
because
damaged
property
has
16
nominal
or
no
economic
value,
or
a
value
disproportionate
to
17
replacement
cost
less
depreciation,
a
determination
of
ACV
18
shall
not
be
required.
19
DIVISION
VII
——
SERVICE
COMPANIES,
SERVICE
CONTRACTS,
20
AND
LICENSES.
Division
VII
prohibits
a
person
who
shall
be
21
contractually
obligated
to
a
service
contract
holder
under
the
22
terms
of
a
service
contract
from
issuing,
offering
for
sale,
or
23
selling
a
motor
vehicle
service
contract
or
residential
service
24
contract
in
the
state
unless
the
person
is
a
licensed
service
25
company.
The
requirements
of
the
bill
do
not
apply
to
any
26
person
who
provides
support
services.
27
A
service
company
shall
maintain
a
license
for
the
entirety
28
of
any
service
contract
that
the
service
company
has
entered.
29
A
service
company
shall
report
to
the
commissioner
within
30
30
calendar
days
any
material
change
to
the
information
submitted
31
in
the
initial
or
renewal
application.
32
An
application
for
a
license
as
a
service
company
shall
33
be
filed
with
the
commissioner
and
include
all
required
34
information
as
described
in
the
bill,
and
be
accompanied
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by
a
$500
license
fee
and
a
$35
fee
for
each
motor
vehicle
1
service
contract
form
provided
by
the
service
company
in
the
2
application.
A
license
shall
be
valid
for
one
year
and
shall
3
be
renewed
on
or
before
the
date
the
license
expires.
4
An
application
for
license
renewal
shall
include
the
5
information
required
for
an
initial
license,
a
list
of
6
each
service
contract
form,
and
the
information
and
fees
as
7
described
in
the
bill.
If
the
renewal
application
meets
the
8
requirements,
and
the
commissioner
has
not
refused
to
renew
9
the
license,
the
commissioner
shall
renew
the
license.
If
the
10
commissioner
denies
renewal,
the
denial
shall
be
in
writing.
11
If
a
service
company
fails
to
renew
their
license
on
or
12
before
the
final
day
of
the
license
period,
the
company’s
13
license
shall
be
deemed
expired.
Prior
to
a
license
expiration
14
date,
and
if
a
renewal
application
was
submitted
at
least
14
15
days
prior
to
the
license
expiration
date,
the
commissioner
may
16
extend
the
renewal
period
an
additional
30
calendar
days.
If
a
17
service
company
submits
an
application
or
renewal
application
18
after
the
license
has
expired,
the
service
company
shall
pay
a
19
$800
reinstatement
fee
and
shall
file
a
service
company
license
20
renewal
application,
including
payment
of
applicable
fees,
with
21
the
division.
Restrictions
on
a
service
company
whose
license
22
term
has
expired
are
detailed
in
the
bill.
23
A
service
contract
shall
not
be
issued,
sold,
or
offered
24
for
sale
unless
the
service
company
provides
a
receipt
for
25
the
purchase
of
the
service
contract
to
the
service
contract
26
holder
(holder),
provides
a
complete
sample
copy
of
the
service
27
contract
prior
to
purchase,
and
provides
a
completed
paper
or
28
electronic
copy
of
the
service
contract
to
the
holder
within
29
10
calendar
days
of
purchase.
A
paper
copy
of
the
sample
copy
30
of
the
service
contract,
or
the
service
contract,
shall
be
31
provided
upon
the
request
of
the
consumer
at
the
expense
of
the
32
service
company.
33
A
service
contract
issued,
sold,
or
offered
for
sale
in
34
the
state
shall
comply
with
all
of
the
requirements
described
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in
the
bill.
The
requirements
for
a
reimbursement
insurance
1
policy
that
relates
to
goods
that
are
essential
to
the
health
2
and
safety
of
the
service
contract
holder
are
detailed
in
the
3
bill.
4
A
service
company
shall
file
with
the
division
an
accurate
5
copy
of
each
service
contract
form
prior
to
using
the
service
6
contract
form
and,
at
the
time
of
filing
shall
pay
a
$35
fee
for
7
each
motor
vehicle
service
contract
form.
A
service
company
8
may
continue
to
use
a
noncompliant
service
contract
form
until
9
June
30,
2026,
provided
no
changes
are
made
to
the
form,
and
10
the
service
contract
form
was
filed
with
the
division
in
2024.
11
The
commissioner
may
suspend
or
revoke
the
license
of,
deny
12
an
application
for
license
from,
or
refuse
to
renew
the
license
13
of,
a
service
company,
or
may
levy
a
civil
penalty
against
a
14
service
company,
for
any
of
the
reasons
described
in
the
bill.
15
The
commissioner
shall
notify
the
service
company
in
writing
16
of
the
reason
for
the
suspension,
revocation,
nonrenewal,
or
17
denial.
The
licensee
or
applicant
may
request
a
hearing.
18
The
commissioner
may
make
examination
of
the
books
and
19
records
of
a
service
company.
The
actual
costs
of
the
20
examination
shall
be
borne
by
the
service
company,
not
to
21
exceed
10
percent
of
the
service
company’s
reported
net
income
22
associated
with
doing
business
in
the
state
in
the
immediately
23
preceding
fiscal
year.
24
A
service
company
that
offers
service
contracts
for
sale,
25
or
the
service
company’s
support
services,
shall
not
represent
26
in
any
manner
a
false,
deceptive,
or
misleading
statement
with
27
respect
to
the
service
company’s
affiliation
with
a
motor
28
vehicle
manufacturer
or
importer,
the
validity
or
expiration
of
29
a
warranty,
a
motor
vehicle
service
contract
holder’s
coverage
30
under
a
motor
vehicle
service
contract,
or
describing
the
31
service
contract
as
a
policy.
32
A
service
company
shall
not
engage
in
a
prohibited
act
or
33
practice
as
detailed
in
the
bill.
The
commissioner
may
adopt
34
rules
pursuant
to
Code
chapter
17A
which
regulate
service
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contracts
to
prohibit
specified
practices.
If
the
commissioner
1
finds
that
a
person
has
violated
such
rules,
the
commissioner
2
may
order
payment
of
a
civil
penalty
as
described
in
the
bill,
3
or
suspend
or
revoke
a
service
company’s
license.
A
person
4
shall
not
engage
in
any
unfair
method
of
competition,
or
an
5
unfair
or
deceptive
act
or
practice,
in
the
service
contract
6
business.
7
A
written
explanation
to
a
service
contract
holder
after
a
8
licensed
service
company
denies
a
claim
or
offers
a
compromise
9
settlement
shall
provide
instructions
to
the
service
contract
10
holder
on
appeals,
second
reviews,
arbitration,
or
similar
11
provisions
included
in
the
contract,
as
well
as
information
12
on
how
to
file
a
complaint
with
the
division,
including
the
13
internet
site
to
the
division’s
complaint
form.
14
The
commissioner
shall
maintain
the
confidentiality
of
15
information
submitted
to
the
division
or
obtained
by
the
16
division
in
the
course
of
an
investigation,
examination,
or
17
inquiry,
including
all
notes,
work
papers,
or
other
documents
18
and
the
information
as
described
in
the
bill.
The
commissioner
19
may
disclose
or
release
information
that
is
otherwise
20
confidential
in
the
circumstances
detailed
in
the
bill.
21
Such
information
may
be
redacted
so
that
neither
personally
22
identifiable
information
nor
service
company
identifiable
23
information
is
made
available.
24
The
division
repeals
Code
section
523C.19.
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