Bill > HSB246

Introduced Session

This bill relates to the natural hazard mitigation financing program, the disaster recovery housing assistance program, the disaster recovery new housing program, post-loss assignments of benefits, and the licensing and regulation of adjusters, appraisers and umpires. DIVISION I —— NATURAL HAZARD MITIGATION FINANCING PROGRAM. The bill creates the natural hazard mitigation financing program (program) for the purpose of making loans available to eligible entities to finance all or part of the costs of a project. “Eligible entity” and “project” are defined in the bill. The program shall be a joint and cooperative undertaking of the department of homeland security and emergency management (HSEMD) and the Iowa finance authority (IFA). The bill creates a natural hazard mitigation revolving loan fund (fund) under the control of HSEMD, in consultation with IFA, consisting of moneys and program funding as detailed in the bill. HSEMD, in consultation with IFA, may establish and maintain funds or accounts necessary to carry out the purposes of the bill. Any moneys appropriated to HSEMD and IFA for purposes of paying the costs and expenses associated with the program S.F. _____ H.F. _____ shall be administered as determined by IFA. The funds or accounts are separate dedicated funds and accounts under the administration and control of IFA, and shall not be considered part of the general fund of the state, are not subject to appropriation for any other purpose by the general assembly, and in determining a general fund balance shall not be included in the general fund of the state, but shall remain in the funds and accounts maintained by HSEMD or IFA. IFA may provide for the issuance of bonds or notes as detailed in the bill. The duties of the director of HSEMD (director) are detailed in the bill. For the fiscal year beginning July 1, 2025, and each fiscal year thereafter, HSEMD may prepare and deliver intended use plans to, and enter into capitalization grant agreements with, the administrator of the United States federal emergency management agency and may accept capitalization grants for the fund. HSEMD, in consultation with IFA, shall establish fiscal controls and accounting procedures for the fund. HSEMD and IFA shall review each loan application to determine if the applicant is an eligible entity and qualifies for a loan. IFA, in cooperation with HSEMD, shall determine the interest rate and repayment terms for each loan under the program and shall enter into a loan agreement with each loan recipient. IFA may charge loan recipients fees and assess costs as necessary. Moneys in the fund shall be used for the primary purpose of making loans to eligible entities to finance eligible costs of projects in accordance with the intended use plans. The loan recipients and the purpose and amount of the loans shall be determined by the director. HSEMD, in consultation with IFA, shall adopt rules pursuant to Code chapter 17A to administer the division of the bill. The bill makes a conforming change to Code section 422.7. DIVISION II —— DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM. The bill requires a state of disaster emergency proclamation S.F. _____ H.F. _____ by the governor that authorizes disaster recovery housing assistance to specify if disaster recovery housing assistance is available to homeowners, renters, or both homeowners and renters. The bill defines “financial assistance” as assistance provided only from the funds, rights, and assets legally available to IFA and includes but is not limited to assistance in the form of grants, loans, and forgivable loans. Under the bill, IFA shall not use more than 5 percent of the moneys deposited into the disaster recovery housing assistance fund for administrative and program costs. Under current law, to be considered for financial assistance under the disaster recovery housing assistance program, a homeowner or renter must register for the disaster case advocacy program. Under the bill, a homeowner or renter is not required to register for the advocacy program to be considered for financial assistance under the disaster recovery housing assistance program. The bill makes conforming changes to Code section 16.57B. DIVISION III —— DISASTER RECOVERY NEW HOUSING PROGRAM. The bill defines “qualifying state disaster recovery new housing grant” (grant) as an award of a state disaster recovery new housing grant that was applied for between August 20, 2024, and December 31, 2024, and approved and issued by the economic development authority. A grant shall not be included in the computation of net income for federal income tax purposes. The division takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2024. DIVISION IV —— POST-LOSS ASSIGNMENT OF BENEFITS —— RESIDENTIAL CONTRACTOR. Under the bill, a violation of Code section 515.137 is an unfair method of competition and unfair or deceptive act or practice in the business of insurance. The bill defines “post-loss assignment” (assignment). The assignment must only assign the insurance proceeds a named S.F. _____ H.F. _____ insured is entitled to receive from the named insured’s insurer for the repair, replacement construction, or reconstruction of the named insured’s property. A residential contractor (contractor) shall not engage in conduct prohibited by the bill under an assignment by a named insured to the contractor under a property and casualty insurance policy. An assignment must include an itemized description containing the information detailed in the bill. An assignment shall not impair the interest of a mortgagee, and all mortgagees shall be named as a co-payee for the payment of benefits. An assignment shall only authorize a contractor to be named as a co-payee, along with the named insured and all mortgagees, for the payment of benefits. An assignment shall not prevent or inhibit an insurer from communicating with the named insured or a mortgagee. An electronic copy of a fully executed assignment shall be provided to a named insured and all mortgagees of the damaged residential real estate within five business days after execution. A contractor named in an assignment must cooperate with the insurer in a claim investigation. A named insured shall have the right to cancel an assignment without penalty or fee under the circumstances detailed in the bill. Any written contract, repair estimate, or work order prepared by a contractor to provide goods or services pursuant to an assignment shall include notice as provided in the bill which shall be signed by the named insured and sent to the named insured’s insurer prior to payment. For at least 72 hours following a catastrophic disaster, a residential contractor shall not enter into a contract with an insured that includes an assignment. If the severity of the catastrophic disaster has placed people under duress, as determined by the commissioner, the commissioner shall dispatch the consumer advocate and personnel to provide consumer S.F. _____ H.F. _____ guidance. The commissioner may extend the 72-hour period by an additional 72 hours after public hearing. An assignment entered into with a contractor shall be void if the contractor violates the bill. DIVISION V —— PUBLIC, INDEPENDENT, AND STAFF ADJUSTERS. The bill makes conforming changes to Code sections 507B.4, 522B.5A, and 522C.1. Under current law, the commissioner of insurance (commissioner) shall adopt rules as necessary to administer and enforce Code chapter 522C. Under the bill, the commissioner may adopt such rules. Under the bill, a person shall not act as, or represent that the person is, a public adjuster or an independent adjuster unless the person is licensed. A license as an adjuster is not required for a staff adjuster, an attorney when acting within their professional capacity as an attorney, or a person employed only for the purpose of obtaining facts surrounding a loss or to furnish technical assistance to a licensed adjuster. A person applying for an adjuster license shall complete an application as described in the bill. The commissioner may require a criminal history check for the applicant. Prior to approving an application for a resident adjuster license, a nonresident adjuster license, or a business entity’s or nonresident business entity’s application for a license for a resident public adjuster or resident independent adjuster, the commissioner shall find that the applicant meets the requirements detailed in the bill. If the commissioner does not renew a license or denies an application for a license, the commissioner shall notify the applicant or licensee and advise of the reason for the nonrenewal or denial. Within 30 calendar days of the date of the notice, the licensee or applicant may request a hearing on the nonrenewal or denial. Application fees for a license as an adjuster are detailed in the bill. The fee for an examination may be set by a S.F. _____ H.F. _____ third-party testing service and must be approved by the division of insurance (division). Prior to issuance of a license, an applicant shall secure evidence of financial responsibility (responsibility) through a surety bond (bond) as prescribed by the commissioner. The bond shall be executed and issued by an insurer authorized to issue bonds, and must meet the requirements of the bill. The division may request that an adjuster provide evidence of responsibility at any time. An adjuster shall immediately notify the division if the adjuster’s evidence of responsibility terminates or becomes impaired, and the adjuster’s license shall become inactive. An individual applying for a license shall pass a written examination, unless exempt, as described in the bill. A public adjuster shall not provide services to an insured until a written contract with the insured has been executed. The contract must meet all of the requirements detailed in the bill. No provisions in the contract shall be redacted in a copy of the contract submitted to the commissioner. If the insurer, no later than five calendar days after the date on which the insured’s loss is reported, either pays or commits in writing to pay the policy limits, the public adjuster shall inform the insured that the total amount of loss claimed by the insured may not be paid by the insured, and the adjuster is only entitled to reasonable compensation from the insured. Prior to execution of a contract, the public adjuster shall review the terms of the contract with the insured and provide a separate disclosure document that meets the requirements detailed in the bill. An original copy of a completed contract shall be provided to the public adjuster and kept by the insured. Within 72 hours of entering a contract with an insured, the public adjuster shall provide the insured’s insurer a notification letter. A contract between a public adjuster and an insured executed in violation of the bill shall not be enforceable. S.F. _____ H.F. _____ The required standards of conduct for, and duties of, an adjuster are detailed in the bill. An adjuster who fails to comply with the standards and duties shall be subject to penalties. The division may place on probation, suspend, revoke, or refuse to issue or renew an adjuster’s license, and may levy a civil penalty for any of the reasons enumerated in the bill. If the commissioner does not renew a license or denies an application for a license, the commissioner shall notify the adjuster or applicant and advise of the reason for the nonrenewal or denial. The adjuster or applicant may request a hearing within 30 days from the date of the notice. The commissioner may conduct an investigation of any suspected violation of the bill and may impose a penalty or remedy against any person who is under investigation for, or charged with, a violation even if the person’s license has been surrendered or has lapsed by operation of law. All complaint files, investigation files, other investigation reports, and other investigative information in the possession of the commissioner that relates to adjuster discipline are privileged and confidential, and may only be disclosed as described in the bill. On appeal by the adjuster, the commissioner shall transmit the entire record of the contested case to the reviewing court. Upon a determination by the commissioner, after a hearing, that an adjuster has violated a provision of the bill, the commissioner shall reduce the findings of the hearing to writing and deliver a copy to the adjuster. Upon a determination by the commissioner that an adjuster has engaged in any act or practice constituting a violation of the bill, the commissioner may take any of the civil actions described in the bill. A person acting as an adjuster without proper licensure, or an adjuster who willfully violates any provision of, or order issued under, Code chapter 522C is guilty of a class S.F. _____ H.F. _____ “D” felony. When the violation results in a loss of more than $10,000, the person or adjuster is guilty of a class “C” felony. An adjuster who steals, converts, or misappropriates funds that should be held in trust in a fiduciary capacity is guilty of a class “D” felony. When the violation results in a loss of more than $10,000, the adjuster is guilty of a class “C” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. A class “C” felony is punishable by confinement for no more than 10 years and a fine of at least $1,370 but not more than $13,660. The commissioner may refer evidence concerning violations of the bill to the attorney general or the county attorney who may institute criminal proceedings. Any contract that is entered into by an insured with a person who is not a licensed public adjuster shall be void, and the insured is not liable for the payment of any past or future services by the person under that contract or otherwise. An adjuster whose license has been revoked or suspended, or who forfeited a license, may apply to the commissioner for reinstatement or reissuance and submit to a criminal history check. An applicant shall not be eligible for reinstatement or reissuance until the applicant satisfies the requirements detailed in the bill. An application for reinstatement or reissuance shall allege facts as required by the bill, and the burden of proof is on the adjuster to establish such facts. An adjuster may request reinstatement of a suspended license prior to the end of the suspension term. If an order of revocation or suspension did not establish terms on which reinstatement or reissuance may occur, or if the license was forfeited, an initial application for reinstatement or reissuance shall not be made until at least one year from the date of the order. All proceedings on S.F. _____ H.F. _____ the application for reinstatement or reissuance shall be held in accordance with Code chapter 17A. If an adjuster’s ordered suspension period ends prior to the adjuster’s license expiration date, and the adjuster applies for reinstatement and meets all requirements, the division shall reinstate the license as soon as practicable but no earlier than the end of the suspension period. If an adjuster’s license is suspended beyond the adjuster’s license expiration date, the adjuster must apply for reissuance. A submission of voluntary forfeiture of a license shall be made to the commissioner pursuant to the requirements detailed in the bill. The commissioner may deny an application for reinstatement or reissuance, or bring an additional immediate action, if an adjuster has engaged in an additional violation of Code chapter 507B or 522C. The commissioner shall deny an adjuster’s application for license issuance, renewal, reinstatement, or reissuance; suspend a current license; or revoke a currently suspended license, upon receipt of a certificate of noncompliance from the child support recovery unit or the centralized collection unit of the department of revenue. DIVISION VI —— LICENSING AND REGULATION OF APPRAISERS AND UMPIRES. Under the bill, the commissioner may require a criminal history check on an applicant that applies for an initial license as an appraiser, or an umpire; or a renewal, reinstatement, or reissuance of a license if the license of an appraiser or an umpire has been revoked or suspended. The commissioner may adopt rules to administer this division of the bill. Under the bill, a person shall not act as, or represent that the person is, an appraiser or an umpire unless the person is licensed. A person applying for an appraiser or umpire license shall submit an application prescribed by the commissioner. To be S.F. _____ H.F. _____ eligible for licensure under the bill, a person shall meet all of the criteria detailed in the bill. A person who meets the requirements for licensure, unless otherwise denied licensure pursuant to the bill, shall be issued an appraiser license or an umpire license that is valid for two years. Applicable fees are detailed in the bill. An appraiser’s license and an umpire’s license shall contain the information described in the bill. An appraiser and an umpire shall be required to complete continuing education requirements, as prescribed by the division, to be eligible for license renewal or reinstatement. An appraiser and an umpire shall inform the division of a change of legal name or business address within 30 calendar days of the change. Failure to timely inform the division may result in a penalty. The division shall publish an appraiser list and an umpire list on the division’s internet site, and include all required information as detailed in the bill. Prior to approving a business entity’s application for a license as an appraiser, the commissioner shall find that the business entity has designated an individual appraiser to be responsible for the business entity’s compliance with the insurance laws and rules. An appraiser or an umpire may apply for reinstatement of an expired license up to one year after the license expiration date by meeting the requirements of the bill. An appraiser or an umpire who fails to apply for license reinstatement within one year must apply for a new license. An appraiser or an umpire who surrendered a license and stated an intent to exit the appraiser business may file a request to reactivate the license within 90 calendar days of the date the license was placed on inactive status. Each party to an appraisal shall be responsible for the party’s own appraiser’s fees and expenses, an equal share of all reasonable and necessary fees and expenses incurred by an S.F. _____ H.F. _____ umpire, and an equal share of all reasonable and necessary costs incurred in the course of conducting the appraisal. An appraiser or an umpire shall not charge any party on a basis dependent on the outcome of the written itemized award, or charge in a manner that relies on a barter arrangement, gift, favor, or in-kind exchange. Prior to the conclusion of an appraisal process, an appraiser or umpire shall not require, demand, or accept any fee unless the loss is being handled by the appraiser or umpire on a time-plus-expense basis. An appraiser or umpire shall not charge a fee if the appraiser or umpire abandons the appraisal prior to the umpire issuing a written itemized award. The required standards of conduct for, and duties of, an appraiser and an umpire are detailed in the bill. An appraiser or umpire who fails to comply with the standards and duties shall be subject to penalties. The process for an appraisal is detailed in the bill. The claimant and the insurer must both provide the other party with a list stating separately the actual cash value and the amount of claimed loss for each item at issue. Within 20 calendar days of receipt of a written demand for an appraisal, the claimant and the insurer shall each select an appraiser from the appraiser list. Upon selection, the appraiser shall attest that the appraiser is competent and disinterested with regards to the appraisal. Within 15 calendar days of the selection of appraisers, both appraisers shall agree on an umpire from the umpire list. A party or an appraiser may object to the umpire for good cause no later than five business days after the umpire has been selected. A replacement umpire shall then be selected by both appraisers from the umpire list. If both appraisers fail to agree on an umpire, the division shall randomly select an umpire from the umpire list and notify the parties. If either appraiser requests that an umpire be selected by a judge, a judge shall give deference to the randomly selected umpire from S.F. _____ H.F. _____ the umpire list by the division unless either the claimant or the insurer provides good cause for the judge to make an alternative selection. Within 45 calendar days from the date the umpire is selected, both appraisers shall appraise the loss and submit the appraiser’s actual cash value and amount of loss of each item to the umpire. Each appraiser shall also submit written authorization for the umpire to commence work. No later than 45 calendar days after receipt of the actual cash value and amount of loss, the umpire shall prepare and provide to the parties and each appraiser a written itemized award showing the actual cash value and amount of loss. All property insurance policies delivered, issued for delivery, continued, or renewed in this state on or after January 1, 2026, shall contain an appraisal clause that complies with the bill. An appraiser and umpire shall act with due diligence in achieving an appraisal award. A insurer’s payment of an appraisal award to an insured shall be subject to applicable policy terms and conditions, limits, and deductibles. Unless otherwise agreed on by the parties, an appraisal award shall be binding and paid by the insurer within 60 calendar days of the award being submitted to the insurer. An appraiser or umpire shall report to the commissioner any administrative action taken against the appraiser or umpire within 30 calendar days of the final disposition. Within 30 calendar days of the initial pretrial hearing date, an appraiser or umpire shall report to the commissioner any criminal prosecution of the appraiser or umpire. An appraiser or umpire who willfully fails to comply with such requirements is subject to penalty. An appraiser or umpire has a continuing duty and obligation to keep usual and customary records pertaining to appraisals in accordance with the requirements of the bill. An appraiser or umpire who willfully fails to comply with such requirements S.F. _____ H.F. _____ is subject to penalty. Whenever the commissioner believes that a person has been engaged or is engaging in a violation of the bill, and that a proceeding by the commissioner would be in the public interest, the commissioner shall issue and serve a statement of the charges and a notice of a hearing. The division may place on probation, suspend, revoke, or refuse to issue or renew an appraiser’s license or an umpire’s license, and may levy a civil penalty for any of the causes detailed in the bill. If the commissioner does not renew a license or denies an application for a license, the commissioner shall notify the applicant, appraiser, or umpire and advise of the reason for nonrenewal or denial. The applicant, appraiser, or umpire may request a hearing within 30 calendar days from the date of the notice. A hearing shall be conducted pursuant to the requirements detailed in the bill. The license of an umpire, an appraiser, or an appraiser business entity may be suspended, revoked, placed on probation, or refused if the commissioner finds that an umpire’s, appraiser’s, or appraiser business entity’s violation was known or should have been known by a partner, officer, or manager of the business entity and the violation was not reported to the commissioner and corrective action was not taken. In addition to, or in lieu of, denial, probation, suspension, or revocation of a license, an appraiser or umpire may be subject to a civil penalty. The commissioner may conduct an investigation and may enforce the provisions of the bill. All investigative information in the possession of the commissioner that relates to appraiser or umpire discipline is privileged and confidential, and may only be disclosed as described in the bill. On appeal by the appraiser or umpire, the commissioner shall transmit the entire record of the contested case to the reviewing court. Upon a determination by the commissioner, after hearing, that an appraiser or umpire S.F. _____ H.F. _____ has violated a provision of the bill, the commissioner shall reduce the findings of the hearing to writing and deliver a copy of the findings to the appraiser or umpire, and the commissioner may take any of the actions described in the bill. A person acting as an appraiser or an umpire without proper licensure, or an appraiser or an umpire who willfully violates any provision of, or an order issued under, the bill is guilty of a class “D” felony. When the violation results in a loss of more than $10,000, the person or adjuster is guilty of a class “C” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. A class “C” felony is punishable by confinement for no more than 10 years and a fine of at least $1,370 but not more than $13,660. The commissioner may refer such evidence concerning violations of the bill, or of the failure of a person to comply with the licensing requirements under the bill, to the attorney general or the district attorney who may institute criminal proceedings. An appraiser or an umpire whose license has been revoked or suspended by order, or who forfeited a license, may apply to the commissioner for reinstatement or reissuance, and submit to a criminal history check. All proceedings on the application for reinstatement or reissuance shall be held in accordance with Code chapter 17A. An order of reinstatement or reissuance shall be based on a written decision, and may impose such terms and conditions as the commissioner deems appropriate. If an appraiser’s or an umpire’s ordered suspension period ends prior to the appraiser’s or umpire’s license expiration date and the adjuster applies for reinstatement and meets all applicable requirements, the division shall reinstate the license as soon as practicable but no earlier than the end of the suspension period. If an appraiser’s or an umpire’s S.F. _____ H.F. _____ license is suspended beyond the license expiration date, the appraiser or umpire must apply for reissuance. A submission of voluntary forfeiture of a license shall be made in writing to the commissioner. The commissioner may deny an application for reinstatement or reissuance, or bring an additional immediate action, if an appraiser or an umpire has engaged in additional violations. The commissioner shall deny an appraiser’s or umpire’s application for license issuance, renewal, reinstatement, or reissuance; suspend a current license; or revoke a currently suspended license, upon receipt of a certificate of noncompliance from the child support recovery unit or the centralized collection unit of the department of revenue. DIVISION VII —— IOWA ECONOMIC EMERGENCY FUND. Under current law, moneys in the Iowa economic emergency fund may only be used pursuant to an appropriation by the general assembly, including for purposes of reducing or preventing an overdraft on or deficit in the general fund of the state. Each fiscal year, the bill appropriates up to 10 percent of the maximum balance of the Iowa economic emergency fund to the department of management for disaster response, disaster recovery activities, or disaster aid to citizens, at the direction of the governor, with the approval of the executive council, following a proclamation of disaster emergency. The bill allows the department of management to provide for an interdepartmental transfer of the moneys to another state entity for the purposes specified, notwithstanding the limitations and requirements of Code section 8.39, including notification of the general assembly. DIVISION VIII —— IOWA ECONOMIC EMERGENCY FUND —— APPROPRIATIONS. For FY 2024-2025, there is appropriated from the Iowa economic emergency fund to the economic development authority for deposit in the nuisance property remediation assistance fund $2 million. For FY 2024-2025, there is appropriated from the Iowa economic emergency fund to the Iowa S.F. _____ H.F. _____ finance authority for deposit in the disaster recovery housing assistance program fund $11.6 million. This division of the bill takes effect upon enactment.

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Other Sponsors (1)

Committee report approving bill, renumbered as HF 957. (on 03/13/2025)

Official Document