Bill > SSB1194

Introduced Session

This bill relates to matters under the purview of the department of insurance and financial services including financial literacy and exploitation, tax confidentiality, health insurance rates, health savings accounts, insurer withdrawals, property insurance, and service contracts. DIVISION I —— FINANCIAL LITERACY AND FINANCIAL EXPLOITATION. Division I appropriates $10 of each fee collected from the filing of an application as an agent of a real estate broker or dealer to the financial literacy and investor education fund (education fund), and to the financial exploitation prevention fund (prevention fund), both of which are created in the bill. Initiatives by the commissioner of insurance (commissioner) involving financial literacy and investor education shall comply with the requirements of the bill. Under the bill, nonexamination revenues payable to the insurance division (division) or the department of revenue (DOR) in connection with the regulation of insurance companies shall be deposited in the commerce revolving fund, rather than 40 percent as is required under current law. The director of the department of insurance and financial services (director) S.F. _____ H.F. _____ shall be responsible for identifying and coordinating appropriate opportunities for collaboration on financial literacy and exploitation with the chief administrative officers (CAO) of each division and each CAO’s respective regulated entities. The bill creates the education fund under the control of the director. The director shall develop and implement financial literacy and investor education initiatives for the public by providing education on financial topics, including topics required to be offered and taught for grades 9 through 12. The education fund consists of moneys as detailed in the bill. Notwithstanding any provision of law to the contrary, moneys in the education fund may be moved to the prevention fund at the discretion of the director. The bill creates the prevention fund, under which the director shall develop and implement initiatives to educate the public on financial exploitation; assist individuals who are known, suspected, or potential victims of financial exploitation; and to conduct investigations, refer investigations to other law enforcement, and assist in the prosecution of persons involved in financial exploitation. The prevention fund consists of moneys as detailed in the bill. All investigation files, investigation reports, and all other investigative information in the possession of the department of insurance and financial services (department) shall be confidential and shall not be subject to release by discovery, subpoena, or other means of legal compulsion until opened for public inspection by the department, or upon the consent of the department, or until a court determines the department will not be unnecessarily hindered if opened for public inspection. Investigative information in the possession of the department may be disclosed, shared, or received in the circumstances detailed in the bill. An investigator or staff member of the department shall not be subject to subpoena concerning any pending or continuing investigation conducted S.F. _____ H.F. _____ by the department. On the effective date of division I of the bill, all unencumbered and unobligated moneys remaining in the securities investor education and financial literacy training fund in Code section 502.601 shall be transferred to the education fund. DIVISION II —— TAX ON GROSS PREMIUMS —— CONFIDENTIALITY. Under division II, a tax return filed under Code section 432.1 (tax on gross premiums —— exclusions) or 432.1A (tax on premiums —— captive companies) shall not be open to inspection. It shall be unlawful for any present or former officer or employee of the state to willfully or recklessly publish any such tax return. A person who does so is guilty of a serious misdemeanor and, in addition to any other penalty, shall be dismissed from office or discharged from employment. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but no more than $2,560. The bill does not prohibit the DOR from turning over information and tax returns in the DOR’s possession to duly authorized officers of the United States or tax officials of other states pursuant to an agreement. DIVISION III —— HEALTH INSURANCE RATE INCREASES —— PUBLIC HEARINGS. Division III permits the commissioner to hold a public hearing at the time a carrier files for proposed health insurance rate increases exceeding the average annual health spending growth rate, rather than requiring the commissioner to hold such public hearing as is the case under current law. DIVISION IV —— HEALTH SAVINGS ACCOUNTS AND QUALIFIED HIGH-DEDUCTIBLE HEALTH PLANS —— COST-SHARING. Under division IV, if a copayment, coinsurance, or deductible paid as cost-sharing by an enrollee in an individual or group accident or health insurance plan would result in the enrollee becoming ineligible for a health savings account associated with the enrollee’s qualified high-deductible health plan (HDHP), the cost-sharing shall apply only to the enrollee’s qualified HDHP after the enrollee satisfies the enrollee’s minimum deductible, S.F. _____ H.F. _____ except for items or services determined to be preventive. DIVISION V —— INSURANCE COMPANY WITHDRAWAL REQUIREMENTS. Division V requires an insurer, prior to withdrawing, to file a withdrawal plan (plan) with the commissioner if the insurer intends to reduce the insurer’s total annual premium volume in the state by 50 percent or more, intends to reduce the insurer’s total annual premium in the state in a line of insurance by 75 percent or more, or intends to reduce the insurer’s total annual premium volume in the state in a line of private passenger automobile insurance, homeowners insurance, or dwelling property insurance by 50 percent or more. Withdrawal requirements do not apply to a transfer of business from one insurer to another insurer that are both within the same insurance holding company system if the insurer to whom the business is being transferred is authorized to engage in the business of insurance in the state, and the business is not a reciprocal or interinsurance exchange, a lloyd’s plan, or a state or county mutual insurance association. “Insurer” is defined in the bill. If the plan meets all of the requirements as described in the bill, the commissioner shall approve the plan. If the commissioner finds that a plan does not meet all requirements, the commissioner may modify, restrict, limit, or deny the withdrawal plan. An insurer may request a hearing on the commissioner’s decision as described in the bill. An insurer that withdraws from writing all lines of insurance in the state shall not, without prior approval of the commissioner, resume writing insurance in the state for a minimum of five years. A violation of the withdrawal requirements constitutes an unfair method of competition and unfair or deceptive act or practice. The commissioner may adopt rules to administer and enforce division V. DIVISION VI —— REPLACEMENT COST, ACTUAL CASH VALUE, AND LINE OF SIGHT. Division VI requires for an insurance policy providing for the adjustment and settlement of first-party S.F. _____ H.F. _____ losses based on replacement cost when a loss requires repair or replacement of a product or part, consequential physical damage shall be included in the calculation of loss, and the insured shall not be required to pay for betterment or other costs, except for any deductible. When a loss requires replacement of a damaged product and the product is available for purchase, the identical product shall be used, or if it is not available, the insurer shall use a reasonably similar product. For a policy providing for adjustment and settlement of first-party losses based on actual cash value (ACV), for residential fire and extended coverage, the insurer shall determine the ACV and shall provide a copy of the claim file worksheet. For an insurance policy providing for the adjustment and settlement of first-party losses based on ACV, where the insured’s interest is limited because damaged property has nominal or no economic value, or a value disproportionate to replacement cost less depreciation, a determination of ACV shall not be required. DIVISION VII —— SERVICE COMPANIES, SERVICE CONTRACTS, AND LICENSES. Division VII prohibits a person who shall be contractually obligated to a service contract holder under the terms of a service contract from issuing, offering for sale, or selling a motor vehicle service contract or residential service contract in the state unless the person is a licensed service company. The requirements of the bill do not apply to any person who provides support services. A service company shall maintain a license for the entirety of any service contract that the service company has entered. A service company shall report to the commissioner within 30 calendar days any material change to the information submitted in the initial or renewal application. An application for a license as a service company shall be filed with the commissioner and include all required information as described in the bill, and be accompanied S.F. _____ H.F. _____ by a $500 license fee and a $35 fee for each motor vehicle service contract form provided by the service company in the application. A license shall be valid for one year and shall be renewed on or before the date the license expires. An application for license renewal shall include the information required for an initial license, a list of each service contract form, and the information and fees as described in the bill. If the renewal application meets the requirements, and the commissioner has not refused to renew the license, the commissioner shall renew the license. If the commissioner denies renewal, the denial shall be in writing. If a service company fails to renew their license on or before the final day of the license period, the company’s license shall be deemed expired. Prior to a license expiration date, and if a renewal application was submitted at least 14 days prior to the license expiration date, the commissioner may extend the renewal period an additional 30 calendar days. If a service company submits an application or renewal application after the license has expired, the service company shall pay a $800 reinstatement fee and shall file a service company license renewal application, including payment of applicable fees, with the division. Restrictions on a service company whose license term has expired are detailed in the bill. A service contract shall not be issued, sold, or offered for sale unless the service company provides a receipt for the purchase of the service contract to the service contract holder (holder), provides a complete sample copy of the service contract prior to purchase, and provides a completed paper or electronic copy of the service contract to the holder within 10 calendar days of purchase. A paper copy of the sample copy of the service contract, or the service contract, shall be provided upon the request of the consumer at the expense of the service company. A service contract issued, sold, or offered for sale in the state shall comply with all of the requirements described S.F. _____ H.F. _____ in the bill. The requirements for a reimbursement insurance policy that relates to goods that are essential to the health and safety of the service contract holder are detailed in the bill. A service company shall file with the division an accurate copy of each service contract form prior to using the service contract form and, at the time of filing shall pay a $35 fee for each motor vehicle service contract form. A service company may continue to use a noncompliant service contract form until June 30, 2026, provided no changes are made to the form, and the service contract form was filed with the division in 2024. The commissioner may suspend or revoke the license of, deny an application for license from, or refuse to renew the license of, a service company, or may levy a civil penalty against a service company, for any of the reasons described in the bill. The commissioner shall notify the service company in writing of the reason for the suspension, revocation, nonrenewal, or denial. The licensee or applicant may request a hearing. The commissioner may make examination of the books and records of a service company. The actual costs of the examination shall be borne by the service company, not to exceed 10 percent of the service company’s reported net income associated with doing business in the state in the immediately preceding fiscal year. A service company that offers service contracts for sale, or the service company’s support services, shall not represent in any manner a false, deceptive, or misleading statement with respect to the service company’s affiliation with a motor vehicle manufacturer or importer, the validity or expiration of a warranty, a motor vehicle service contract holder’s coverage under a motor vehicle service contract, or describing the service contract as a policy. A service company shall not engage in a prohibited act or practice as detailed in the bill. The commissioner may adopt rules pursuant to Code chapter 17A which regulate service S.F. _____ H.F. _____ contracts to prohibit specified practices. If the commissioner finds that a person has violated such rules, the commissioner may order payment of a civil penalty as described in the bill, or suspend or revoke a service company’s license. A person shall not engage in any unfair method of competition, or an unfair or deceptive act or practice, in the service contract business. A written explanation to a service contract holder after a licensed service company denies a claim or offers a compromise settlement shall provide instructions to the service contract holder on appeals, second reviews, arbitration, or similar provisions included in the contract, as well as information on how to file a complaint with the division, including the internet site to the division’s complaint form. The commissioner shall maintain the confidentiality of information submitted to the division or obtained by the division in the course of an investigation, examination, or inquiry, including all notes, work papers, or other documents and the information as described in the bill. The commissioner may disclose or release information that is otherwise confidential in the circumstances detailed in the bill. Such information may be redacted so that neither personally identifiable information nor service company identifiable information is made available. The division repeals Code section 523C.19.

Committee Categories

No sponsors listed

Other Sponsors (1)

Subcommittee recommends amendment and passage. (on 03/05/2025)

Official Document