House Study Bill 167 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON LUNDGREN) A BILL FOR An Act relating to insurance policy terms and public policy 1 considerations. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2191YC (1) 90 ko/rn
H.F. _____ Section 1. Section 509.3, Code 2023, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 3. a. A policy or policy form in 3 connection with a policy of group accident or health insurance, 4 or combination thereof, that is issued in this state shall 5 not contain a provision that is unjust, unfair, inequitable, 6 misleading, deceptive, encourages misrepresentation of the 7 policy, or that is otherwise contrary to public policy. 8 b. It shall be unlawful for a carrier to issue a policy, or 9 to use a policy form in connection with a policy, after notice 10 from the commissioner of insurance that the policy or policy 11 form violates paragraph a . 12 c. A carrier shall have twenty days after receipt of a 13 notice under paragraph b to request a hearing to contest 14 the commissioners notice. The hearing shall be conducted 15 pursuant to chapter 17A. If the hearing results in a decision 16 that affirms the commissioners notice, the decision shall 17 be provided to the carrier in writing and shall specify the 18 reasons for the decision. 19 Sec. 2. NEW SECTION . 513B.4C Filing requirement prior 20 approval. 21 1. a. A group policy of insurance against loss or expense 22 from sickness, or from the bodily injury or death by accident 23 of the insured, shall not be issued or delivered in this state 24 by a carrier until a copy of the policy has been filed with, and 25 approved by, the commissioner. 26 b. An application, rider, or endorsement shall not be used 27 in connection with a group policy under paragraph a until a 28 copy of the policy form has been filed with, and approved by, 29 the commissioner. 30 2. A filing under subsection 1 shall be deemed approved 31 unless disapproved by the commissioner within thirty days of 32 the date the filing is received by the commissioner. 33 Sec. 3. NEW SECTION . 513B.4D Filing disapproval. 34 1. a. The commissioner shall provide notice to a 35 -1- LSB 2191YC (1) 90 ko/rn 1/ 4
H.F. _____ carrier that has filed a policy form pursuant to section 1 513B.4C, subsection 1, if upon review of the policy form the 2 commissioner finds any of the following: 3 (1) The benefits provided are unreasonable in relation to 4 the premium charged. 5 (2) The policy form contains a provision that is unjust, 6 unfair, inequitable, misleading, deceptive, encourages 7 misrepresentation of the policy, or is otherwise contrary to 8 public policy. 9 b. The notice under paragraph a shall do all of the 10 following: 11 (1) Advise the carrier that the policy form does not comply 12 with this section, or with the rules adopted pursuant to 13 chapter 17 to implement and administer this section. 14 (2) Advise the carrier that it shall be unlawful for the 15 carrier to issue the policy form or to use the policy form in 16 connection with any policy. 17 (3) Provide the specific reasons for the commissioners 18 disapproval of the policy form. 19 2. A carrier shall have twenty days after receipt of a 20 notice under subsection 1 to request a hearing to contest 21 the commissioners notice. The hearing shall be conducted 22 pursuant to chapter 17A. If the hearing results in a decision 23 that affirms the commissioners notice, the decision shall 24 be provided to the carrier in writing and shall specify the 25 reasons for the decision. 26 Sec. 4. NEW SECTION . 513B.4E Withdrawal of approval. 27 1. The commissioner may, after opportunity for hearing, 28 withdraw the commissioners previous approval of a policy form 29 under section 513B.4C if the policy form is in violation of 30 section 513B.4D, subsection 1, paragraph a . The hearing shall 31 be conducted pursuant to chapter 17A. Notice to the carrier 32 of the hearing shall specify the matters to be considered at 33 the hearing. 34 2. It shall be unlawful for a carrier to issue a policy 35 -2- LSB 2191YC (1) 90 ko/rn 2/ 4
H.F. _____ form, or to use a policy form in connection with any group 1 policy, on or after the effective date of the commissioners 2 withdrawal of a previous approval of the policy form. 3 3. If a hearing results in a decision to withdraw a previous 4 approval of a policy form, the decision shall be provided to 5 the carrier in writing and shall specify the reasons for the 6 commissioners withdrawal of the prior approval. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanations substance by the members of the general assembly. 10 This bill relates to insurance policy terms and public 11 policy considerations. 12 The bill prohibits a policy or policy form (form) in 13 connection with a group accident or health insurance policy 14 (group policy) that is issued in this state from containing 15 a provision that is unjust, unfair, inequitable, misleading, 16 deceptive, encourages misrepresentation, or that is otherwise 17 contrary to public policy (contrary to policy). The bill 18 makes it unlawful for a carrier to issue a policy or to use 19 a form in connection with any group policy after notice from 20 the commissioner of insurance (commissioner) that the policy 21 or form violates the prohibition. A carrier has 20 days 22 after receipt of the notice to request a hearing to contest 23 the commissioners notice. The hearing shall be conducted 24 pursuant to Code chapter 17A and if it results in a decision 25 that affirms the commissioners notice, the decision shall be 26 provided to the carrier in writing and specify the reasons for 27 the decision. 28 A group policy of insurance against loss or expense from 29 sickness, or from the bodily injury or death by accident of 30 the insured (accident and health policy), shall not be issued 31 or delivered in this state by a carrier until a copy of the 32 policy has been filed with, and approved by, the commissioner. 33 Applications, riders, or endorsements shall not be used in 34 connection with the accident and health policy until a copy 35 -3- LSB 2191YC (1) 90 ko/rn 3/ 4
H.F. _____ of the policy form has been filed with, and approved by, 1 the commissioner. A filing shall be deemed approved unless 2 disapproved by the commissioner within 30 days. If upon review 3 of a form the commissioner finds that the benefits provided 4 are unreasonable in relation to the premium charged, or that 5 the form contains a provision contrary to public policy, the 6 commissioner shall provide notice to the carrier that advises 7 the carrier as detailed in the bill. The carrier has 20 8 days after receipt of the notice to request a hearing, to be 9 conducted pursuant to Code chapter 17A. The division permits 10 the commissioner, after opportunity for hearing, to withdraw 11 the commissioners previous approval of a form in circumstances 12 detailed in the bill. A carrier is prohibited from issuing a 13 form, or from using a form in connection with any group policy, 14 on or after the effective date of the commissioners withdrawal 15 of the previous approval. If a hearing results in a decision 16 to withdraw a previous approval, the decision shall be provided 17 to the carrier in writing. 18 -4- LSB 2191YC (1) 90 ko/rn 4/ 4