SF 2093 – Filing of mortgage or deed by transmitting utility
SF 2104 – Regulation of insurance holding companies
SF 2105 – Insurance omnibus
SF 2115 – Banking omnibus
COMMITTEE ACTION:
SF 2093 (SSB 3094) permits a transmitting utility (generation and transmission rural electric cooperatives) to file a mortgage or deed of trust (a.k.a. an indenture) in a more cost-effective and less cumbersome way. Currently, rural electric cooperatives (RECs) must file in every county where the utility has real property, and the costs can be significant when the documents may range from 100 to over 200 pages long. The original bill proposed an option of centralized filing with the Secretary of State. After discussions with representatives of the Iowa State Bar Association’s real estate section, country recorders, abstractors, bankers and the RECs, the Committee amended the bill to allow a transmitting utility to file the indenture document in one county recorder’s office and file a brief memorandum in each of the other counties in which the utility has real property. [1/30: short form]
SF 2104 (SSB 3090) is a recommendation by the Iowa Insurance Division (IID). A similar version was introduced last year but withdrawn after a lack of consensus among stakeholders. The IID is charged with examining holding companies for compliance and solvency assessments, and legislative action was requested because the increasing complexities of holding companies and their subsidiaries make it hard for Iowa regulators to track all assets and liabilities. Over the interim, the IID worked with carriers and found common ground. The bill modifies the existing Holding Company Chapter in Iowa Code, primarily by establishing a supervisory college of regulation, under the control of the home state, and by requiring an enterprise risk report so that not just the examined company—but also its upstream, downstream and parallel entities under that holding company—are subject to examination and assessment. Companies are required to self-disclose at-risk elements of the holding company. This is now going to be a National Association of Insurance Commissioners accreditation standard. Failing to meet this test would put Iowa insurers in jeopardy in their national operations. [2/4: short form]
SF 2105 (SSB 3091) is a recommendation by the Iowa Insurance Division (IID). The bill:
• Changes the status of the Division’s two law enforcement officers certified by the Iowa Law Enforcement Academy to the “Protection Classification” of the state retirement system applicable to other similar law enforcement personnel in state government.
• Extends the “look-back” period that the IID can use for disciplinary actions against licensed sellers of securities from one to two years, consistent with FINRA (Financial Industry Regulatory Authority) standards.
• Sets parameters regarding the percentage amount of required legal reserve of a company that can be in securities.
• Allows hedging transactions other than those defined as highly effective hedging transactions to be held as part of a company’s legal reserve but limits the extent of that allowance.
The bill also includes new Code language that allows the electronic posting and delivery of insurance policies and forms at the option of customers. This parallels changes that have occurred or are occurring in other states. The new sections allow the electronic delivery of insurance notices and documents, provide definitions, set parameters for the use of the method of delivery, and make the use of this process optional under the control of the customer. Similarly, it allows for the posting of insurance notices and documents, provides definitions, sets parameters and makes the use of this process optional under the control of the customer. It applies these changes to most types of insurance lines so that companies may offer this customer opt-in method of posting and delivery. [2/4: short form]
SF 2115 (SSB 3086) is a recommendation by the Banking Division of the Iowa Department of Commerce. It allows banks chartered by other states that have offices in Iowa to use the word “bank,” which reflects modern interstate banking practices. Currently, only Iowa state-chartered or national banks can use the word “bank.” At the request of the Iowa Bankers Association, an amendment was approved that repeals the minority shareholders discount provision for banks that was changed 12 years ago but has rarely been used. With the repeal, banks that engage in mergers or reverse stock splits would be treated as any other business corporation. The Division agrees with this repeal.
The bill also modifies provisions under the Division’s Professional Licensing Bureau. It streamlines business entity authorization and licensure requirements for the practice of architecture, based on recommendations by the Architectural Examining Board after discussions with various trade associations. The changes maintain the protections for the safety, health and welfare of the public, but place a more focused responsibility on registered architects working on behalf of business entities. The language is similar to that applicable to other professions regulated by the Bureau: engineers, land surveyors, landscape architects and interior designers. [2/4: short form]