SF 143 – ABD Criminal history background checks
SF 181 – Banking, Professional Licensing omnibus
SF 182 — Reinsurance provisions for domestic insurers
SF 183 – Credit Union omnibus
SF 189 — Risk management insurance regulation
SF 375 – Health insurance exchange
SF 376 – Architects, engineers civil liability immunity in declared disasters
SF 402 – Dental care service insurance coverage
FLOOR ACTION:
SF 143 allows the Alcoholic Beverages Division (ABD) of the Iowa Department of Commerce to conduct a national criminal history records check when it has reasonable cause to question the accuracy of information provided on a license or permit application. The National Crime Information Center (NCIC) is a computerized system maintained by the Federal Bureau of Investigation (FBI) that is available 24 hours a day to authorized federal, state and local law enforcement and criminal justice agencies. Non-criminal justice agencies may access NCIC for use in connection with licensing or employment if given federal or state authorization. Currently, the Iowa Racing and Gaming Commission, Iowa Real Estate Commission and Iowa Banking Division have access. This legislation adds the ABD to that authorization to request a check. If the ABD finds reasonable cause, it will forward the information to the Division of Criminal Investigation (DCI) of the Iowa Department of Public Safety. The DCI processes the request to the FBI, obtains the results and provides a hardcopy to ABD. All records are maintained as confidential and fingerprints are not retained by any of the agencies once the search is complete. The ABD pays for the costs associated with the NCIC checks. A majority of states already are authorized to access NCIC records prior to issuing a liquor licenses and permits. The bill also makes conforming changes to include “micro-distilled spirits permits” under the requirements and procedures for applications for liquor control licenses and wine and beer permits. [3/11: 46-0 (Anderson, Bertrand, Courtney, Houser absent)]
SF 181 incorporates recommendations by the Department of Commerce’s Banking Division and the Division’s Professional Licensing Bureau. Federal law recently changed to allow banks to pay interest on business demand deposit accounts. Currently, Iowa’s public funds law does not allow banks to pay interest on deposits of public funds that are in demand deposit accounts. Banks have historically used N.O.W. accounts as a way to pay interest in these situations, but with the change in federal law, it is appropriate to amend the deposit of public funds law to authorize the payment of interest on traditional demand deposit accounts. The bill amends provisions that currently prohibit a depository, defined as a bank or credit union in which public funds are deposited, from directly or indirectly paying interest to a public officer on a demand deposit of public funds, and prohibit a public officer from taking or receiving interest. The bill provides that a depository may pay interest to a public officer on deposits of public funds, and a public officer may take or receive it. The bill deletes a provision that the previous prohibition did not apply to interest on time certificates of deposit or savings accounts for public funds. Two years ago, changes were made to the legal lending limit law relating to corporate borrowing groups. After the changes, the same language is used in two different places in the lending limit law. This has created confusion. The bill streamlines the language to provide clarity both to the banks and to the State’s bank examiners. This change is consistent with safe and sound banking practices and in some cases could increase credit availability in the state. The bill also makes several similar modifications throughout Code chapters relating to those engaged in the businesses of debt management, money transmission, currency exchange and delayed deposit services. The Superintendent of Banking may authorize applicants and licensees to be licensed through a nationwide licensing system and to pay the corresponding system processing fees, and the Superintendent may establish by rule or order new requirements, such as requirements that applicants, including officers and directors and those who have control of the applicant, submit to fingerprinting and criminal history checks. The legislation also makes licensure expiration and renewal dates consistent as December 1 for renewal and either December 31 or January 1 (in the case of a delayed deposit services business) for expiration. Licenses that would otherwise have expired on or before the bill’s effective date of July 1, 2013, will remain in effect until the expiration date as modified by the bill. SF 181 includes updates to the Real Estate Appraiser Board, clarifies board member qualifications and the quorum requirement, and allows a member to serve for three rather than two consecutive three-year terms. It also authorizes criminal history background checks, through the Iowa Division of Criminal Investigation, as required by the Appraisal Qualifications Board for appraisers certified for federally related transactions as of January 1, 2015. This will not apply to currently licensed appraisers. To comply with federal regulations, the board needs this statutory authority to meet criteria for certification across the nation for federally related transactions. Iowa homebuyers, homeowners wishing to refinance and lenders would suffer substantial harm if Iowa fails to comply with the federal mandate and could no longer certify real estate appraisers eligible to appraise in connection with federally related transactions. Residential real estate lending in Iowa would virtually dry up. The Bureau will absorb the costs of the background checks. The bill also removes business entity registration with the Architectural Board. Current law requires authorization from the board before a business entity can offer or perform architectural services in Iowa, and that has proved burdensome, ineffective and unfair. This “red tape” requirement is replaced with rulemaking authority so the board can address public safety concerns more effectively and in a more flexible manner. Stakeholder groups have participated in developing proposed rules for this purpose and additional stakeholders will be consulted before formal rulemaking is begun. The new approach will be more fluid, will focus more responsibility on the architect, and will include a less regulatory approach to business entities that hire or otherwise retain or associate with architects. [3/11: 46-0 (Anderson, Bertrand, Courtney, Houser absent)]
SF 182, a recommendation by the Iowa Insurance Division (IID) of the Department of Commerce, updates Iowa’s antiquated law covering reinsurance, based on a model act by the National Association of Insurance Commissioners (NAIC). It includes provisions that allow a domestic insurer to cede reinsurance to an assuming insurer and receive credit for the cession as either an asset or a reduction from liability on account of the reinsurance ceded if certain requirements are met. Iowa is one of 15 states with pending legislation, and 11 states have already adopted the NAIC proposal. Provisions take effect January 1, 2014. [3/11: 46-0 (Anderson, Bertrand, Courtney, Houser absent)]
SF 183 is a recommendation by the Division of Credit Unions, Iowa Department of Commerce. It makes technical corrections and updates, condenses the dissolution process and adds “branch acquisition” as a type of permitted merger activity. It allows a CUSO (credit union service organization) to form as a limited liability company, in addition to the currently allowed limited partnerships or corporations. The statute governing limited liability companies did not exist when CUSOs were defined in Iowa law many years ago. SF 183 changes Code references to the “chief financial officer” now defined as an elected member of the board to “financial officer whose title is designated by the board.” This reflects current practice that the chief financial officer is typically an executive position serving in management of the credit union. [3/11: 46-0 (Anderson, Bertrand, Courtney, Houser absent)]
SF 189, a recommendation by the Iowa Insurance Division (IID) of the Department of Commerce, creates a new Code chapter that requires specified insurers domiciled in Iowa to maintain a risk management framework, complete an internal risk and solvency assessment, and file a summary report of the assessment with the Insurance Commissioner. The reports will be kept confidential. The provisions will apply to an estimated 17 “big player” companies in Iowa (insurers with annual premiums of $500 million or more and insurance groups of which domiciled insurers are members, with annual premiums of $1 billion or more). Most companies are eligible for exemption because their annual direct written premiums are less than $500 million. The proposal is based on a model act by the National Association of Insurance Commissioners, which will also provide a guidance manual. The bill will likely reduce the workload of State insurance examiners by allowing them to focus on specific areas of risk assessment identified through the confidential reports. The new Code chapter is applicable beginning January 1, 2015. [3/12: 48-0 (Courtney, Ernst absent)]
COMMITTEE ACTION:
SF 375/SF 72 creates an Iowa health benefit marketplace to facilitate the sale and purchase of qualified health benefit plans in Iowa by qualified individuals in the individual market and by qualified small employers in the small group market. The intent of this new Code chapter, 514M (Iowa Health Benefit Marketplace Act), is to reduce the number of uninsured individuals in this state, provide a transparent marketplace and consumer education, and help individuals access relevant federal and state programs, premium assistance tax credits, and cost-sharing reductions. To participate in the “small business health options program” component, an employer have an average of at least one and not more than 50 employees during the preceding calendar year and elects to make its full-time employees, and at the employer’s option, some or all of its part-time employees, eligible for one or more qualified health benefit plans offered through the component. A qualified employer must either have its principal place of business in this state and elect to provide health coverage through the marketplace to all of its eligible employees wherever employed, or elect to provide coverage through the marketplace to all of its eligible employees who are principally employed in this state. The marketplace will be a non-profit corporation operating statewide according to a plan established and approved by its board of directors in consultation with the Insurance Commissioner. The marketplace must include separate components, which facilitate the purchase of qualified health benefit plans by eligible individuals and small employers as described in Chapter 514M and the federal Patient Protection and Affordable Care Act, as amended. The marketplace may employ staff to carry out its duties but no employees of the marketplace may offer services, which require an insurance producer license. The marketplace also is authorized to contract with an eligible entity to fulfill any of its duties or responsibilities. The board is comprised of seven voting members appointed by the Governor for three-year, staggered terms with two representing the interests of small business; three representing the interests of consumers; one who is a licensed insurance producer; and one who is a health care provider. The voting members must be appointed by March 1, 2014. Five ex officio, non-voting members include four legislators (one each appointed by the House Speaker, House Minority Leader, Senate Majority and Minority leaders) and the secretary of the board. The voting members will appoint an executive director, subject to Senate confirmation, to supervise the administrative affairs and general management and operations of the marketplace, and appoint a secretary who keeps a record of the board proceedings, is the custodian of all books, documents and papers (including electronically submitted information) filed with the board, and of the minutes or journal of the board. The board may appoint other officers as necessary. The marketplace is required to make qualified health benefit plans that are effective on or before January 1, 2015, available to qualified individuals and qualified employers in Iowa. It is authorized to select entities licensed and qualified to act as navigators in accordance with the requirements of state and federal law to conduct public education activities, distribute fair and impartial information concerning enrollment in qualified health benefit plans, facilitate such enrollment, provide referrals to the appropriate federal or state entity for grievances, complaints or questions regarding an enrollee’s health benefit plan, and provide culturally and linguistically appropriate information to persons served by the marketplace. An entity licensed as a navigator is prohibited from engaging in any activities that require licensure as an insurance producer unless the entity is also licensed as an insurance producer [Code Chapter 522B]. The marketplace is authorized to certify a health benefit plan as a qualified health benefit plan if the plan meets specified criteria. The marketplace may charge assessments or user fees to health carriers that offer health benefit plans through the marketplace or otherwise generate the funding necessary to support the operation of the marketplace as provided in the marketplace’s plan of operation. The marketplace is required to publish the average costs of licensing, regulatory fees and any other payments required by the marketplace, as well as the administrative costs of the marketplace on an Internet site to educate consumers about the costs of operating the marketplace. No state funding can be appropriated or allocated for the operation or administration of the marketplace. Any assessments or user fees charged must provide for sharing the losses and expenses of the marketplace on an equitable and proportionate basis among health carriers in the state. In consultation with and subject to the approval of the board, the Commissioner is required to adopt rules to effectuate and administer the provisions of Chapter 514M. The board must establish an Advisory Council of stakeholders including representatives from the insurance industry, insurance producer organizations, consumer advocacy groups, labor unions, employers, health care providers, farmers and other interested parties. The Council will give input to the board regarding rules proposed by the Commissioner, the plan of operation for the marketplace and any other relevant topics. The marketplace must submit an annual report to the Commissioner, Governor, Legislature and the Auditor of State by January 15, which includes an accurate accounting of all the activities of the marketplace and all receipts and expenditures during the prior fiscal year. The report must describe how the operations and activities of the marketplace serve the interests of the state and further the purposes as delineated in Chapter 514M. The enactment of Chapter 514M and actions taken by the marketplace are not to be construed as preempting or superseding the authority of the Commissioner to regulate insurance in Iowa. The legislation contains transition provisions that require the new marketplace board to be appointed and meet on or before March 1, 2014, and in consultation with the Commissioner, begin plans to implement the transition of the functions and administration of the federally facilitated exchanges or state-partnership exchanges in operation in the state as of January 1, 2014. The marketplace must be operational and offer enrollment in qualified health benefit plans to qualified individuals and qualified employers in Iowa on or before October 1, 2014. The plans offered through the marketplace must be effective on January 1, 2015. The Commissioner is directed to transfer the functions and administration of the Iowa Insurance Information Exchange established in Code section 505.32 to the marketplace by January 1, 2015, and Code section 505.32 is repealed on that date. The bill takes effect January 1, 2014. [3/7: 9-6 (party-line)]
SF 376/SSB 1140 gives immunity from civil liability for registered architects and professional engineers who give assistance during a disaster emergency declared by the Governor or a major disaster declared by the President. When architectural, engineering, structural, electrical, mechanical or other design professional services are rendered in good faith, voluntarily and without compensation at the request of or with the approval of a national, state or local public official, law enforcement official, public safety official or building inspection official believed by the registered architect or professional engineer to be acting in an official capacity, the architect or engineer will not be liable for civil damages for any acts or omissions resulting from the services provided, unless such acts or omissions constitute recklessness or willful and wanton misconduct. Expense reimbursement for services performed is not considered compensation. [3/7: short form (Beall, Bolkcom, Hatch, Petersen, Wilhelm “no”)]
SF 402/SSB 1078 relates to insurance coverage for dental care services and, as amended by the Committee, addresses assignment of benefits and external review. Assignment of benefits assures that the insured and/or the patient will have the policy benefits applied against their oral health care costs. If a patient chooses an out-of-network dentist, the same amount of benefits will be paid resulting in no increased cost of care. A person who owns rights or benefits under a policy or contract of insurance that provides for coverage of dental care services must be allowed to assign any or part of that person’s rights and privileges under the policy or contract, including the right to designate a beneficiary and to have an individual policy or contract issued. The assignment is without prejudice to an insurer that makes a payment in good faith under the policy or contract before receiving notice of the assignment. If written proof of the assignment of benefits is presented to an insurer, health maintenance organization, managed care plan, health care plan, preferred provider organization or other third-party payer, the payment for coverage of dental care services must be made directly to the health care provider providing the services. This is not meant to prevent reconciliation of duplicate payments. The bill extends to dental patients the external review procedure that is currently in the Code for medical patients. A dental patient whose claim is denied would have the opportunity to have that claim reviewed by the Insurance Commissioner. The same patient protection criteria given to medical patients would apply: medical necessity, appropriateness of care, health care setting, level of care and effectiveness. The decisions of health carriers issuing a policy or certificate that includes coverage for dental care, or a policy or certificate that provides only dental care coverage would be subject to external review provisions. [3/7: short form]