SF 346 – IID omnibus
SF 347 – Commercial breeders regulation
SF 348 – Portable electronics insurance sales, regulation
SF 349 – IID corporate governance annual disclosure
COMMITTEE ACTION:
SF 346/SSB 1086 is a recommendation by the Iowa Insurance Division (IID) of the Department of Commerce. The proposal includes technical updates, clarifying and conforming language, and non-controversial changes dealing with regulation of insurance, securities, pre-need contracts for cemetery and funeral home goods and services, and cemeteries. The provisions of this omnibus bill were widely circulated last year, with comments received from interested parties and stakeholders and changes made. The Committee unanimously approved an amendment proposed by IID because of a recent teleconference briefing between Iowa Economic Development Authority (IEDA) and insurance industry representatives. There is confusion within the industry over whether an investment in the Innovation Fund would be a legal investment under current Iowa law, and IEDA believes this could be a contributing issue in getting commitments from some in the industry. IID recommended a modification similar to that used to authorize investments in the fund of funds several years ago. The amendment applies to investment of funds provisions for life companies and for property and casualty companies by adding “an equity interest in any Innovation Fund as defined in section 15E.52.” [2/26: short form]
SF 347/SF 168 addresses regulation by the Iowa Department of Agriculture and Land Stewardship (IDALS) of commercial establishments that possess or control non-agricultural animals. Commercial establishments include animal shelters, pounds and research facilities that are required to obtain a certificate of registration; boarding kennels, commercial kennels and pet shops that are required to obtain a state license; and commercial breeders, dealers and public auctions that are required to obtain a state license or a permit if licensed by the U.S. Department of Agriculture (USDA).
Nationally, Iowa is the second-largest commercial dog-breeding state (with approximately 15,000 dogs) but of the top four, Iowa is the only one without state-level oversight of its 220 USDA-licensed facilities. In 2014, 47 percent if Iowa breeders were cited for violations of the U.S. Animal Welfare Act, and 36 percent do not carry a State Sales Tax permit.
The bill creates direct state oversight of USDA-licensed commercial establishments; updates definitions for animal shelters, rescues and sanctuaries; adjusts and modernizes fees to correlate with the industry and includes exemptions for small breeders (“hobby” breeders) and groomers, keeps current exemptions for hunting dogs, and maintains current laws regarding commercial breeders of greyhound dogs for pari-mutuel wagering at a racetrack.
The bill refers to each type of commercial establishment as a “class” and requires that a person operating one or more commercial establishments of the same class obtain a single license. The bill also creates four new types of licenses: (1) a license for grooming facilities; (2) a license for animal rescues; (3) a license for animal sanctuaries; and (4) a special type of commercial breeder’s license reserved for a small breeder, competitive show breeder or specialized breeder. The bill also recognizes animal foster care homes that temporarily maintain dogs or cats on behalf of animal rescues, animal shelters and pounds. The current fee system is replaced by one that includes the assessment of a base amount and the possible assessment of a scheduled amount based on class.
The updated fee structure will provide IDALS with two inspectors. The legislation includes creation of an Animal Rescue Remediation Fund under control of IDALS. The money from fees continues to be deposited in the current IDALS commercial establishment fund, and an amount is to be transferred to the remediation fund. The remediation fund will be used to help local law enforcement and communities pay for costs incurred by taxpayers in emergency rescue situations of animal neglect or abuse. Statewide groups that support the legislation include the Iowa Veterinary Medical Association, Animal Rescue League of Iowa and Iowa Voters for Companion Animals. [2/26: short form]
SF 348 /SSB 1156 regulates the sale of portable electronics insurance and sets licensure requirements for portable electronics vendors who offer such insurance. It defines “portable electronics” as devices that are personal, self-contained, easily carried by an individual, battery operated and used for a variety of specified purposes, as well as accessories or services related to the use of such devices. “Portable electronics insurance” is a contract providing coverage for the repair or replacement of portable electronics. Such insurance does not include a service contract or extended warranty or insurance covering a seller’s or manufacturer’s obligations under a warranty.
Persons cannot offer or sell portable electronics insurance unless they are licensed as insurance producers, are issued a portable electronics insurance license or are endorsees of the licensed vendor. The license, issued by the Insurance Commissioner, authorizes a portable electronics vendor and its endorsees (unlicensed employees or authorized representatives of the vendor) to offer or sell portable electronics insurance to consumers in connection with the sale of portable electronics, accessories or services.
A portable electronics vendor must file an application for a license to sell portable electronics insurance that includes a certificate by the insurer that the vendor is trustworthy and competent, and is accompanied by a fee of $50 for each endorsee at a location of the vendor, or $500 per location, whichever amount is less, with a maximum fee of $5,000 for vendors with multiple locations.
An endorsee of a licensed vendor may sell or offer portable electronics insurance under the authority of the vendor’s license if the endorsee is at least 18 years old; the vendor supplies a list with its license application of all locations at which insurance will be offered; the vendor provides for training of its endorsees about portable electronics insurance, ethical sales practices, required disclosures to prospective purchasers and re-training about new products at least every three years; and the vendor keeps a list of endorsees who have completed training.
Costs for the insurance must be itemized separately in any billing statement for the insurance. If the insurance is included with the purchase or lease of portable electronics and accessories or related services, the stand-alone cost for similar insurance must be disclosed on the consumer’s bill and in marketing materials available at the point of sale. The sale of portable electronics insurance to a customer through a “free-trial offer” is prohibited.
A licensed vendor cannot sell portable electronics insurance unless at the time of sale or enrollment in the insurance, or within a reasonable time after a telephone transaction, the vendor makes disclosures and provides written information to the prospective customer that includes material terms and conditions of coverage; describes the claims process; discloses additional information about the policy; and provides information about the vendor.
The vendor is prohibited from offering to sell or transacting any other types of insurance, and cannot advertise or represent itself or its endorsees as licensed insurers or property and casualty broker-agents. The vendor cannot pay an endorsee compensation based primarily on the number of customers that purchase portable electronics insurance, other than incidental compensation for those sales.
The Insurance Commissioner may adopt rules to implement and administer the new Code chapter, which takes effect January 1, 2016. [2/26: short form]
SF 349/SSB 1032 is an Iowa Insurance Division (IID) recommendation based on the National Association of Insurance Commissioners (NAIC) Model Act for Corporate Governance that requires insurers residing in Iowa to file annual disclosures. The disclosure will allow the IID to get a comprehensive understanding of the insurer’s governance structure, policies and practices.
The bill creates a new Code chapter, 521H, which requires certain insurers domiciled in the state, or the insurance group of which such an insurer is a member, to file a corporate governance annual disclosure by June 1 with the Insurance Commissioner, beginning in 2016. The disclosure must be signed by the insurer’s or insurance group’s chief executive officer or secretary attesting that the corporate practices described in the disclosure have been implemented and that a copy of the disclosure has been provided to the insurer’s or insurance group’s board of directors or the appropriate committee of the board. If an insurer is a member of an insurance group, the insurer must submit the disclosure to the insurance commissioner of the lead state of the insurance group as determined by procedures contained in NAIC’s financial analysis handbook. [2/26: short form]