HF 484 – Boiler inspections
HF 489 – IID omnibus
FLOOR & COMMITTEE ACTION:
HF 484 adjusts certain boiler inspection requirements to enhance safety and energy efficiency. The bill:
• Requires unfired steam pressure vessels operating in excess of 15 pounds per square inch to have one internal and one external inspection within a two-year period with no two inspections to occur within a six-month period (rather than internal once every two years and external once a year).
• Requires low-pressure steam boilers to have one internal inspection and one external inspection within a two-year period with no two inspections to occur within a six-month period.
• Adds two new classes that are exempt from inspection requirements: 1) espresso coffee machines, cappuccino coffee machines or cleaning machines if the water capacity of the electric boiler is six gallons or less, and 2) continuous coil‐type hot water boilers used only for steam vapor cleaning.
• Codifies Iowa Workforce Development’s boiler inspection rules to reflect current practice regarding no inspection requirements for an object for which there is clear evidence that the manufacturer did not intend it to be operated at more than three pounds per square inch and the object is operating within that limit.
• Allows the State’s Boiler and Pressure Vessel Board to adopt rules establishing an internal inspection interval of up to four years for electric public utilities.
The bill takes effect upon enactment. It passed the House on a 96-0 vote. [Floor 4/10: 50-0; Committee 4/4: short form]
COMMITTEE ACTION:
HF 489 is based on recommendations by the Iowa Insurance Division (IID) of the Department of Commerce. In addition to technical Code changes, including providing consistent terminology and definitions within insurance policy language, the bill:
• Removes the Insurance Commissioner from the Advisory Council on Brain Injuries.
• Allows the Commissioner to adopt rules to provide for a definition of ‘place of business’ and ‘supervised person’ rather than the current method, which is determined by the Securities and Exchange Commission.
• Updates maximum fines that can be levied for securities violations.
• Specifies that failure to comply with a cease and desist order issued by the IID Securities Bureau can result in certain monetary and other penalties.
• Allows the IID to assess the costs of examining a regulated entity to ensure compliance with Iowa insurance laws.
• Provides that a plan for voluntary dissolution of an Iowa-licensed domestic mutual insurance company must be submitted to the Insurance Commissioner for approval at least 90 days before notice is provided to the company’s policyholders. Approval of the plan requires compliance with applicable laws and a determination by the Commissioner that it is fair and equitable to policyholders and the company.
• Allows for the board of directors of an insurance company to signal its review of an examination report by a notation in the meeting minutes, instead of requiring the filing of affidavits saying each member has received the report.
• Creates Code section to address liquidation of a domestic insurer that is covered under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act. The new section keeps the regulatory authority with the state instead of a federal regulator in these cases. This section would go into effect immediately.
• Revises the types of real property that a life insurance company can include in its legal reserves.
• Allows companies to allocate premiums to Iowa for employer-owned life insurance when that premium is not specifically allocated to another state. This will create the ability to count among assets when doing financial exams.
• Removes a provision that requires directors of mutual insurance companies be policyholders of the company, to allow non-members to serve as directors.
• Allows non-life insurance companies to invest in limited partnerships and limited liability companies. Requires that the interest shall not be acquired if the investment exceeds two percent of the capital and surplus of the company, OR if the investment plus the book value on the date of the investment of all limited partnership or limited liability company interests then held by the company exceeds ten percent of the capital and surplus of the company. For an investment to be allowed, the limited partnership or limited liability company must be audited annually by an independent auditor.
• Permits an insurance company, other than life, organized under the chapter or authorized to do business in the state to insure risks on an excess and aggregate limit basis. This will allow them to aggregate forms of payments rather than relying on individual payments.
• Changes language to more accurately conform to foreign insurance entities.
• Clarifies confusing Code language specifically regarding the process of notification for a non-renewal of commercial lines policies or contracts. Currently, an insured receives a non-renewal letter in cases where a ‘nonrenewal’ is not actually happening.
• Creates a separate, clearer provision of notification in the event that the insurer has an increase in premium rates of 25 per cent or more, an increase in the deductible of 25 per cent or more, or a material reduction in the limits of coverage of the policy or contract. The notification must come in the form of a letter of explanation at least 45 days prior to the expiration date of the policy of contract. As is the case for a non-renewal, if an insurer fails to meet the notice requirements, the named insured has the option of continuing the policy or contract for the remainder of the notice period plus an additional 30 days at the premium rate of the existing policy contract.
• Amends provisions for both county and state mutual insurance companies to allow them to include limited liability partnerships in their asset holdings.
• Includes fraternal insurance companies among entities using risk-based capital assessments.
• Revises the trend test used in insurance risk calculations to conform to National Association of Insurance Commissioners model.
• Adds language regarding the licensing of Public Adjusters to provide for enforcement authority in the use of cease and desist orders in cases where a public adjuster has been found to have violated the law. This language was inadvertently omitted when the licensing was created to clamp down on adjusters taking advantage of people who needed assistance from insurance companies after natural disasters.
• Corrects problematic language that currently lists the insured party as the person controlling an insurance contract under the dissolution of marriage portion of Code. The standard of insurance policies maintains that the owner of the policy actually possesses control. It corrects this inconsistency, ensuring the owner of the insurance policy maintains control over the policy through a marriage or dissolution rather than the insured.
The Committee unanimously adopted amendments to modify language pertaining to individuals who may serve on the board of a dental service corporation licensed as an insurance company under Chapter 514, and to strike three new sections regarding Funeral and Cemetery provisions. The sections: 1) add language to the Medicaid portion of Iowa Code stating that an insurance policy or annuity purchased to fund a pre-need contract for cemetery merchandise, funeral merchandise or funeral services shall be excluded as a resource for eligibility; 2) remove the current process for proceeds of an insurance-based pre-need contract in excess of the cost required for funeral and burial arrangements for individuals who receive state aid through the Medicaid program; and 3) require that the owner of the policy or annuity designate the Department of Human Services as the primary beneficiary for the proceeds of an insurance-based pre-need contract in excess of the cost required for funeral and burial arrangements for individuals who receive state aid through the Medicaid program, unless the primary beneficiary of the policy or annuity is the spouse or disabled child of the insured or annuitant. HF 489 passed the House on a 98-0 vote. [4/4: short form]