SF 619 — A bill for an act modifying provisions applicable to certain service contract providers regulated by the commissioner of insurance, providing fees, making penalties applicable, making an appropriation, and including effective date provisions. (Formerly SSB 1223, SF 595.) Effective 5-16-19.

A persperson onwho whdoes onot dmanufacture oes no t m an ufac ture or prodproduce ucmotor evehicles, mbut otowho rlicenses v eh icle s, b ut w ho lice ns es the use oof fthe thperson’s etrade pname ersor onlabel 'to traanother deperson nampursuant e o r la be l to ana othwritten ercontract, pwho ersothen nsells pumotor rsuavehicles ntunder tthe atrade wname ritte n co ntra ct, who n ame or lablabel el of the thlicensor. en se lls m otor v eh icle s u nd er th e t ad e lic en so r.

-M6. o t r v ehic le s erv ice co ntra ct- m ea ns a co n t act or ag reem e nt s old fo r se pa rate co n side ratio n for a s pe cific d ura tion th at un derta ke s to pe rform the re pa ir, re plac em e nt, nific ation fo r o r m ain tena nce of a m o tor v eh icle , o r in de m su ch re pa ir, re plac em e nt, o r m a inten anc e, for the op era tion o r s truc tu ral failu re o f a m otor ve hicle du e to a de fec t in m ater ials, w orkm a nship, or no rm al w ear and tea r, w it o r w ith out ad ditio n al p rov isio ns for th e in cid en tal pay m ent in dem n ity u nd er lim it d circu m sta nc es, inclu din g bu t o f n ot li ited to m otor ve hic le to w ing, re nta l, e m ergen cy road s erv ice , an d ro ad ha zard p rote ctio n.

-M“Motor ovehicle torservice vcontract” ehicmeans lea scontract ervor iceagreement csold onfor traseparate ct-consideration for a lspecific oduration incthat lundertakes dto esperform athe crepair, onreplacement, tracor tmaintenance of a motor vehicle, or agreindemnification emfor ensuch trepair, soreplacement, ldor maintenance, for sthe epoperation arateor cstructural onfailure sideof ratioa nmotor forvehicle due to a sdefect pein cifmaterials, icworkmanship, dor uranormal tionwear thand attear, prowith vidor eswithout Sadditional enaprovisions tefor Fthe ileincidental 619payment ,of pindemnity .under limited circumstances, including but not limited to motor vehicle towing, rental, emergency road service, and road hazard protection.

3“Motor fovehicle rservice contract” also includes a nycontract ofor theagreement fosold llofor winseparate gconsideration sfor erva icespecific sduration othat rprovides pSenate rodFile uc619, ts:p.

3 for any of the following services or products:

TThe herepair rep air or repreplacement l cem ent of mmotor otorvehicle vetires hicor lwheels tirthat esare odamaged r w he els th a t ar e d am aged as a resresult ult of cocontact ntawith ctroad whazards, ithincluding robut adnot hlimited aza rds , in clud ing b ut no t lim ite d to ppotholes, orocks, thowood les,debris, rometal cksparts, ,glass, wplastic, oodcurbs, mor etalcomposite pascraps. rts, g lass , p la stic , c urb s, o r c om p osite d eb ris, sc rap s.

TThe heremoval rof mdents ov al o f d ents or crecreases as es on a mmotor otovehicle runder v eh icle un de r a proprocess cesthat sdoes th a t do es not use ppaint ainor taffect othe rexisting apaint ffecfinish, t th e ex istin g p ain t fin ish , and wwithout ithosanding, utbonding, sanor dinreplacing g,motor bonvehicle dinbody g,panels. o r rep lacin g m otor v eh icle bod y p an els.

TThe herepair rep air or repreplacement l cem ent of mmotor otorvehicle vewindshields hiclethat w in dsh ields th at are damdamaged a ged as a reresult suof ltcontact owith froad chazards. on tac t w ith roa d h az ard s.

TThe hereplacement replacof emmotor evehicle ntkeys oor f m o t r v eh icle ke ys o r key fobfobs s i th e ev en t th at suc h d ev i e beco m es in opthe eraevent blethat ,such lodevice stbecomes ,inoperable, olost, ror stostolen. le n.

AAny nyother oservice the r s erv ice or proproduct duapproved ctby appthe rovecommissioner. d b y t e co m m issio ner.

''“Premium” remmeans ithe mNconsideration mpaid ean s th e c on sid era tion p aid to an insuinsurer refor r fo r a reimreimbursement buinsurance rsempolicy. e nt in su ran ce po licy .

=J-7. 8 .

'R8. ecor d- m ean s th e sa me as de fiae d ia sec tioa 5 16 E.l in form ation sto red o r p rese rve d in any m edium , i clu din g in an e lectr on ic or pap er form a t.

A“Record” -rmeans ecothe rdsame -as incdefined ludin essection bu516E.1 tinformation isstored nor otpreserved limin itedany tomedium, doincluding cumin ents, boo ks, pu b lica ti n s, a cc ou nts, co rres pon de nc e, m em o randa , ag reem ents , co m pute r file s, film , m ic rofilm , ph oto grap hs , an delectronic aor udpaper iformat. o r v isu al tap es.

-RA eim“record” buincludes rsembut entis innot surlimited an ce p o licy - m eans a c o ntra ctu al lia b ility i su ran ce po licy issu ed to adocuments, sebooks, rvicpublications, eaccounts, comcorrespondence, panymemoranda, thagreements, atcomputer efiles, ithefilm, rmicrofilm, pphotographs, rovand ideaudio s r im bu rsem en t to a serv ice co m pany un der the term s o f in sure d ser vic e c on tra cts issu ed or sovisual ldtapes b y t e se rv ice com pa ny o r, in the ev en t of no np erform a nce by the se rv ice com p any, pa ys, on be ha l of the s erv ice com p any, al l co ve red co ntr actu al ob liga tion s inc urre d by the se rvic e com pan y u nde r th e t rm s o f th e insu red s erv ice co n trac ts iss ue d o r s old by th e s erv ice co m pany .

-R9. ese £ve ace ett t ag £e em eB t-m e aas a a a ~re eme at ea tered paa y a ad a d ep osito ry tt der ia to eetw e ea a lice as ed se rvic e com s ectio a 52 3 C .l.

9-.“Reimbursement insurance policy” means a contractual liability insurance policy issued to a service company that either provides reimbursement to a service company under the terms of insured service contracts issued or sold by the service company or, in the event of nonperformance by the service company, pays, on behalf of the service company, all covered contractual obligations incurred by the service company under the terms of the insured service contracts issued or sold by the service company.

18. 0.

-R“Reserve esaccount iagreement” enmeans tialan seragreement viceentered cointo nbetween trac t- m eans a colicensed ntraservice ctcompany o r ag reem ent b etw een a re sid en tial cus t m er and a servdepository iceunder cosection m523C.11 pany w hich u nd erta kes , fo r a pr ede term in ed fee an d fo r a sp e cifie d S ena te File 619 , p .

49. an y p er i d of ti e, to serv ic e, m ainta in, re pa ir, &f.

r10. epl ace ~ o r ind em n ify e xp ense s fo r all or any p art of the o pe ratio na l or str uc tu ral com p on ents, ap plian ce s, or ele ctr ica l, m ech an i al, plu m bin g, h ea ting , c oo ling , o r a ir-co n ditio nin g sys t m s o f p rop erty co fttaiaiftg Bo t m ore t aft £o tt aw elliftg re sid en tia l ttaits in th e s tate w hich fa ils du e to n orm al we ar o r te ar or in he ren t d efe ct.

""R“Residential esidservice entialcontract” sermeans vicea cocontract ntraor ctNagreement alsbetween oa incresidential lcustomer deand s a coservice ntracompany ctwhich wundertakes, hich pro vid es for thea sepredetermined rvfee iceand ,for rea pspecified air,Senate repFile l619, cemp. ent , o r m ain tena nce of pr op erty fo r da ma ge resu ltin g from p ow er ak age , an d acc ide nta l da m age.

su4 rgany es,period rooof ftime, leto --&oservice, 1maintain, 1.repair, or replace, or indemnify expenses for all or any part of the operational or structural components, appliances, or electrical, mechanical, plumbing, heating, cooling, or air-conditioning systems of residential property containing not more than four dwelling units in the state which fails due to normal wear or tear or inherent defect.

-s“Residential ervservice icecontract” comalso panyincludes N m ea ns a pecontract rsonwhich wprovides hofor issttesthe aftaservice, perepair, r£oreplacement, rmor s,maintenance oof rproperty afor rraftgedamage sresulting tofrom ppower er£esurges, rmroof ,leakage, isand caccidental ondamage trac. tua lly ob liga ted to pe rform ser vic es pu rsua nt to a m oto r v eh icle ser vic e c on tra ct o r re sid en tia l se rvic e co ntra ct.

ean10. s a m otor ve hic l s erv ice .

-ser11. vice co ntra ctN m c on trac t o r re sid en tia l se rvic e co ntra ct.

-wa“Service rrancompany” tyNmeans m eans a sperson tatemwho eissues ntand madperforms, e s ole ly by t e m a nu factu rer, im p orter , or searranges lleto rperform, o f p rop erty o r se rv ices w itho ut co ns ide ratio n, tha t is ncontractually otobligated neto goperform tiatedservices opursuant r se pa rate d fro m l to the sa le of the th e s ale o f th e p rod uc t and is in cid en ta p rod uc t, an d th a tmotor guvehicle araservice ntecontract es inde m nity fo r d efe ctiv e p a rts, m e cha nical or eleresidential ctservice ricacontract. l b reak dow n , an d la bo r o r o the r re m ed i l m e asur es, s uch as re pa ir o r re plac em en t o f th e p ro per t o r re p etitio n of se rvic es.

re12. ad as S ec.

“Service contract” means a motor vehicle service contract or residential service contract.

13.

“Warranty” means a statement made solely by the manufacturer, importer, or seller of property or services without consideration, that is not negotiated or separated from the sale of the product and is incidental to the sale of the product, and that guarantees indemnity for defective parts, mechanical or electrical breakdown, and labor or other remedial measures, such as repair or replacement of the property or repetition of services.

Sec.

SSection ectio523C.2, nCode 5232019, Cis .amended to read as follows:

,523C.2 CLicense oderequired. 20 19, is am end ed to fo llow s:

3C1. .

LA icenperson seshall reqnot uireissue d.a, offer for sale, or sell a motor vehicle service contract or residential service contract or undertake or arrange to perform services pursuant to a residential service contract in this state unless the person is a corporation or other form of organization approved by the commissioner by rule and is a licensed as a service company under this chapter .

A2. pe rson s ha ll n ot issu e a , o ffe r fo r sa le, or se ll a m o t r v eh icle se rvic e c on tra ct o r r esid e ntia l s erv ice co n trac t a e r ttftaertak e o r a rraa ge to pe r£orm serv ice s pttrstaftt to r esi ae atia l s erv ice eo fttract in th is s tate u nle ss the pe rson is a co rpo ratio ft or oth er £orm 0 £ o rgaft i~ati oa app rove d by t e co fffftisiofter by rtte afta is a lice ns ed as a serv ice co mp any u nde r th is ch ap ter.

ireThe mlicensure enrequirements tsof othis fchapter thshall isnot chapply apto terany sperson hwho allprovides nsupport otservices .or works under the direction of a licensed service company in connection with the issuance, offer for sale, or sale of a service contract in this state, including but not limited to a person Senate File 619, p.

T5 he lice nsu re req u a pp l to an y p ers on who pprovides rovmarketing, idesadministrative, su pp ort ser vic es or wtechnical osupport. rks u nd er th e dire ctio n of a lic en sed s erv ice com p any in con n ection w ith the iss ua nc e, offe r f or sa le, or sale o f a se rvic e c on trac t in th is sta te , in clu din g b ut no t lim ite d to a p erso n Se nate F ile 6 19, p .

5Sec. w ho p rov ide s m arke ting , ad m inis tra tive , or tec hn ica l su pp ort .

S ec.

SSection ectio523C.3, nCode 522019, 3C .3, C od e 2 019 , is amamended en ded to rearead das afollows: s fo llow s:

3C523C.3 .Application for license.

A1. p plic ation fo r lic en se.

AApplication pfor plic ation fo r a liclicense en se as a serservice viccompany eshall c om pany sh a ll be mmade ade to and filefiled dwith w ith the cocommissioner mon mforms issionapproved erby othe ncommissioner form s a pp rove d ner and sshall hainclude llall inof cluthe defollowing ainformation: ll o f th e follow i g by th e c om m issio in form ation :

TThe hename namand eprincipal anaddress d p rin cip a l ad dre ss of the apapplicant. p lican t.

TThe hestate staof teincorporation oof fthe incapplicant. orp ora tion o f th e ap plic an t.

TThe hename namand eaddress anof dthe aapplicant’s ddregistered resagent sfor oservice fof thprocess ewithin apIowa. plic an t's reg iste red a ge nt fo r s erv ice o f p roc ess w ithin Io wa .

A cecertificate rtif ica te of gogood odstanding stan din g for ththe eapplicant aissued ppby licathe ntsecretary issu ed h e s ec reta ry of stastate te and ddated atednot nmore otthan mthirty odays reprior th an th irty d ays by t p rior to ththe edate dof atethe oapplication. f th e a pp lic atio n.

EEvidence vidof enccompliance ewith osection f523C.5. c om p la nce w ith sec tion 5 23 C.S .

A copcopy yof o f each mmotor otovehicle rservice vcontract eh icle se rvic e co ntra ct form to bbe eused us ed or issuissued ed in ththis isstate, sta te , if aapplicable. pp lica ble .

A copcopy yof o f each reresidential sidservice econtract ntia l s erv ice co n trac t form to be uused sed or issuissued ed in ththis isstate, sta te , if aapplicable. pp lica ble .

TThe heapplication apshall plic atio n sh all be accoaccompanied m pa nied by alall lof othe ffollowing: th e fo llow in g:

A cecertificate rtif ica te of §ogood odstanding staad ift§ for tfiethe aapplicant ppissued licaftt isstted by ththe esecretary sof ecstate retaand rydated efnot stamore tethan aftthirty ddays atedprior n et m e re th an th irty d ays p rio r to tfiethe ddate ateof ethe fapplication. tfie a p plic atio n.

A sttretysurety bbond, ond , a cocopy py of tfethe rereceipt ce ipt from ththe etreasurer treaof sttrerstate othat f s tate th at a cash ddeposit ephas osbeen itmade, ha s b een m ade, or a copy oof f a ccustodial tsagreement tod ial a §ree m en t as proprovided vid ed in sesection ctio523C.5. n 52 3C .

~A cocopy py of tiethe mmost ostrecent recfinancial enstatement, tincluding fiHbalance aHsheets cand ialrelated sstatements tatemof enincome, t, iH clttdiH § b alaH ce sh ee ts aftd rela ted s t tem e fts o f iH com e, of tfithe aapplicant, ppprepared licain at,accordance prewith pagenerally redaccepted iaaccounting acprinciples, cordaudited aa ee w it § ea era lly acc ep ted ae cettn tia~ pr ifteip lesr attd it d by a ccertified erpublic tifieaccountant dand pttbdated lcnot aemore eettnthan tanttwelve remonths tprior aH tw e l e m onths p rier to the ddate ateof ef the aHapplication. d date d ne t m o a pp lica to ft.

e.d.

AAn faffidavit aof ffidan avauthorized itofficer efof aathe attthoservice ri2ecompany dstating o ffic e r o f tfie s erv ice co m pany st atin ~ the nttmnumber berof econtracts fissued c on tra cts isstted by tfiethe sservice ervcompany icein eem paH y iH the prpreceding ececalendar diHyear, ~ cale nd ar ye ar, and ststating atithat a~the thanet tworth t e a et w o rth of the seservice rviccompany esatisfies comthe panrequirements yof ssection ati523C.6 sfie. s tfi re ~ttir ement s o f s ectio n 52 3C .6.

SSenate en ate File 619619, ,p. p .

6 e-.e.

aa. .

A licelicense ns e fee in the amamount oof unttwo o f -ewe five hhundred undfifty reddollars. fift y d olla rs.

If apapplicable, p licab le, a fee in the amamount oof untfifty odollars ffor feach iftymotor dvehicle oservice llarscontract fo r e ach m otor ve hic le serv ice c on trac t form subsubmitted m itted in an apapplication p lica to n as proprovided vid ed in susubsection bse1, ctioparagraph n“f”. 1 , p ara grap h -fN .

If ththe eapplication acontains ppthe licarequired tioninformation cand on tain s th e req uire d info rm atio n a nd aBd if is accaccompanied om pa nied by the itemitems sset sforth et f orth in ssubsection ub sec tion 2, thand eif Bthe etnet wworth orthrequirements reqe irem eB ts of secsection tioft523C.6 523C .6 are sasatisfied, tisf ied , as evevidenced ideBby cethe daudited bfinancial ystatements, ththe ecommissioner aedshall itedissue fiB aB c ial statem e B ts, t e com m i si ne r sh a ll iss ue the liclicense. en se .

If ththe e form oof fapplication a pp lica tion is nnot otproperly pcompleted ropor erly co m plete d o r if ththe erequired reqaccompanying uireddocuments aare ccomnot pfurnished any ing doc um en t ar e n ot furn ish ed or in proproper peform, rthe focommissioner rshall ,not thissue ethe clicense omand mshall issiogive nerthe shapplicant allwritten nnotice otof isthe suegrounds thfor e licen se an d sh all g ive th e a pp lica nt w ritten n otic e o f th e grou nd s fo r not issuissuing ingthe thlicense. e lice ns e.

A nonotice ticeof olicense fdenial liceshall n se de nia l sh all be accaccompanied om pa nied by a rerefund fun d of fifty ercepercent nt of the fee susubmitted bmwith itethe dapplication. w ih th e a pp lica tion .

p 4.

F ees co llec ted un de r th is sec tion s ha ll b e d ep osite d a s p rov i ed in se ctio n 50 5.7 523 C .

SFees ec.collected under this section shall be deposited as provided in section 505.7 523C.24.

Sec.

SSection ectio523C.4, nCode 5232019, Cis .amended to read as follows:

,523C.4 CLicense odeexpiration 20and 19,renewal. is am ende d to re ad as fo llow s:

3C1. .

LEach icenlicense seissued exunder pirathis tochapter nshall expire on June 30 next be valid for a period of one year and renshall ewbe al.renewed by August 31 of each year following the date of issuance.

EIf achthe liceservice nscompany emaintains iin sueforce dthe unsurety derbond thdescribed isin csection ha523C.5 pterand shif allits exlicense pireis Oftnot JHsubject feto 30or ftunder xtsuspension bor erevocation vunder alidsection fo523C.9, rits alicense pshall eriodbe orenewed fby othe necommissioner yeaupon rreceipt anby dthe shcommissioner allon beor renbefore ewthe edexpiration bydate Auof gua strenewal 31application ofaccompanied eacby hthe yitems earequired rby fosection ll523C.3, wsubsection ing2 th, eparagraphs da“b”, t“c”, o“d”, fand iss“e”, uaand ncsection e.523C.15.

If2. the se rvic e com paB y m aiB taiB s i fo ree th e ser ety bo nd de scrib ed in se ctio n 523 C.5 and if it s lic en se is no t se b j ct to or end er sesp en sioft o r re vo ca to n end er see tioft ner upoB 23C .9, its lice B se sh all be reft we d by th e c om m issio re ce ipt BJ the co m m issioftef O f O f ee fOf'e t e ex pira tioft E lat o f a ren ew al a pp lica tion a ccom p anied ey th e ie m s req eired e y • ,,,, " " '" ' .=.' "" se ct1•oa 52 3C .3, s ebse ct1o ft 2 , pa ra~r aph s b , c , d 1 anu e , afte sec tion 5 23C .15 .

AAn napplication afor pprenewal licashall tioninclude fo r rene w al sh a ll in clud e the infinformation ormrequired afor tionan reinitial qulicense ired fo r a n i ni tia l lice ns e as desdescribed crib ed in sesection ctio523C.3, nsubsection 5 23 C.3 , su b sec to n 1.

T3. he rene w al a pp lica tion s ha ll be ac com p anied by a ll o f th e follow i g:

The renewal application shall be accompanied by all of the following:

A licelicense nsrenewal efee renein wthe alamount fe e i th e am oun t of fivfive ehundred hdollars. un dred d o llars .

SenatSenate eFile F ile 619, p.

7 bb. .

IIf fapplicable, appl i cable, a fee iin n the amount of three percent of the aggregate amount of payments the licensee received for the sale or issuance of reresidential sid e n tia l service contracts in ththis isstate s ta te during the preceding fisfiscal c a l year, provided ththat at such fee shshall a ll be no leless ss than one hundred ddollars o llars and no greater than ffifty if ty thousand ddollars. o lla rs.

If applicable, a fee in the amount of ffifty ifdollars ty d o llars for each motor vehicle service contract form submitted in a renewal application as provided in section 523C.3, subsection 1, paragraph ''f-“f”. .

a.d.

Information regarding the number of motor vehicle service contracts or reresidential sid e n tia l service contracts issued during the preceding fisfiscal c a l year, the number canceled or expired during the preceding fisfiscal c a l year, the number in eeffect ffeat c t a t the end of the preceding fisfiscal c a l year, and the amount of service contract fees received during the preceding fisfiscal c a l year.

IIf f the commissioner denies renewal of the licenlicense, se, the denial shshall a ll be in wwriting ritingsetting se ttin g forth the grounds for denial and shshall a ll be accompanied by a refund of ffifty if ty percent of the license renewal fee.

In addition to the annual license renewal requirements as provided in ththis issection, sectio n , a licensee shshall a ll report to the commissioner any mmaterial aterial change in informinformation ation submitted by the licensee in iits tinitial slicense i n i t i a l licen se application which has not been reported to the commissioner, including a change in contact informinformation, ation, a change in ownership, or any other change which susubstantially baffects stan tially a ffe c ts the liclicensee’s e n se e 's operations in ththis isstate. s ta te .

Section 523C.5, Code 2019, is amended by strikstriking in g the section and ininserting sertin g in lielieu u thereof the following:

523C.5 Financial responsibility ~—— demonstration requirements.

In order to assure the fafaithful ith fu l performance of a service company'scompany’s obligations to iits t s contract holders in ththis isstate, s ta te , a licensed service company shshall a ll demonstrate finfinancial anresponsibility cial resp o n sib ility to the commissioner by satisfysatisfying in g one of the following, as evidenced by the service company:

Insuring aall l l motor vehicle service contracts and reresidential sid e n tia l service contracts offered for sale in ththis isstate sSenate ta te S en ate File 619619, ,p. p .

8 ununder de r a reimreimbursement buinsurance rsempolicy ethat ntcomplies inwith susection ranc523C.6. e po licy th at c om p lies w ith se ctio n 52 3C .

DDoing oingboth b oth of the fofollowing: ll w ing :

MMaintaining aintain ing a fundfunded edreserve reaccount servfor e acco un t fo r the seservice rviccompany’s eobligations counder many panissued y's o b lg atio n s u nde r an y issu ed and ooutstanding utstaservice ndcontracts ing se rv i e co n trac ts in ththis isstate, sta te , in an amamount ono untless nthan oforty lepercent ss tha n for t p erce nt of grogross ssconsideration coreceived, nsid era tion re ce ived , less claclaims impaid, sfor pthe aidsale , fo r th e s ale of aall llservice secontracts rvissued iceand co ntr acts iss ue d a nd in forcforce e in this ststate. ate .

The rereserve servaccount eshall acco un t s ha ll be susubject b j ct to exaexamination m ina to n and revreview iewby bthe ycommissioner. th e com m i sione r.

PPlacing lacin g in trutrust stwith wthe itcommissioner th e com m issio ner a ffinancial inasecurity ncdeposit ial se cu rity d ep osit in an aamount m oun t no lesless sthan tfive anpercent fivof ethe pegross rcenconsideration treceived o f th e g ros s c on sid era to n rec eiv ed by the seservice rvcompany, iceless comclaims ppaid, any,for lethe ss claim s p aid, fo r th e sale oof fall amotor llvehicle mservice ocontracts torand vresidential ehservice iclecontracts seissued rvic e ce co n trac ts a nd res ide n tial serv ice c on trac ts i sue d and in foforce r in ththis isstate, stabut te,not bu t n ot less ththan antwenty-five twthousand endollars, ty-fivconsisting e tho usan d do lla rs, co n sistin g of one of the fofollowing: llow in g:

(1(1) )Cash. C a sh.

(2(2) )Securities Seof cuthe ritietype seligible ofor fdeposit th e ty pe e ligib le fo r d ep os it by ininsurers surauthorized ers au tho rize d to trantransact sabusiness ct bu sine ss in this sstate. tate .

(3(3) )Certificates C ertif ica tes of dedeposit. po sit.

(4(4) ) A susurety rebond tyissued bby ondan issauthorized uesurety dcompany. b y a n a uth oriz ed su rety co m pany .

(5(5) )Another Aform n othe r fo r of sesecurity cu rity as preprescribed scrby ithe edcommissioner bby yrule. th e co m m ission er b y r ule .

D3. oin g b oth of the fo llow in g:

Doing both of the following:

MMaintaining, aintaon inin g, o n its own or totogether gewith t er w ith a pparent arecompany, nt co m pany , a mminimum iimnet umworth n et w orth or stocstockholders’ khequity oof ldeone rs'hundred emillion qudollars ity o f o ne h und red m illion d o llars or mmore. ore.

UUpon ponrequest reqfrom uethe stcommissioner, froproviding meither: th e c om m iss i ne r, pr ov i ing e ith er:

(1(1) ) A cocopy py of the seservice rvcompany’s icefinancial comstatements. pan y's fin an cia l s tatem en ts.

(2(2) ) If the seservice rviccompany’s efinancial comstatements p any ' fin an cia l sta tem e nts are cconsolidated onwith solidthose ateof d w ih th ose o f its pparent arecompany, nt com pa ny, a cocopy py of the pparent arecompany’s ntmost comrecent p any ' m ost r ece nt form 110-K 0-K or form 20-F filefiled dwith wthe ithfederal thsecurities e fed era l s ec urit ies and exexchange chacommission ngewithin co m m ission w ithin the lalast stcalendar ntyear, comor pan y d oes no t f ile w ith c alen da r y ea r, o r if ththe eparent pcompany aredoes thnot efile fedwith erathe lfederal ssecurities ec uritie s and exexchange chacommission, nge co m m ission , a copcopy yof othe fparent thcompany’s eaudited pfinancial arestatements ntshowing com p any ' au dite d f ina nc ial state m en ts sh ow ing a nenet tworth wof oat rtleast oone fhundred amillion tdollars. le as t on e h un dred m illio n do llar s.

If the seservice rvcompany’s icefinancial cstatements omare paconsolidated ny'swith finathose nc ial state m en ts a re co ns olida ted w ith tho se of SSenate en ate File 619619, ,p. p .

9 iits tsparent pcompany, are nt com pan y, the seservice rvicompany ceshall comalso panprovide y s ha ll a lsocopy pro vid e a co py of a wwritten rittenagreement agby reemthe eparent ntcompany bguaranteeing ythe thobligations eof pthe arservice entcompany comunder pamotor nyvehicle gservice uacontracts ranand teeinresidential gservice thcontracts eissued oand boutstanding ligaby tithe nservice scompany o f th e serv ice co m pany un der m otor ve hic le se rv ice co ntr acts an d r esid e ntia l s erv ice co n t acts iss ue d a nd h e s erv ice com p any in this sstate. tate .

oSec. utsta nd ing by t S ec.

SSection ectio523C.6, nCode 5232019, Cis .amended by striking the section and inserting in lieu thereof the following:

,523C.6 CReimbursement odeinsurance 20policy 19,requirements is—— aminsurer endequalifications. d b y s trikin g th e s ec tion an d in se rtin g in lieu th ere of the fo ll w in g:

3C1. .

RRequirements. eim bu r em ent in sur anc e p olic y re qu ie m en ts ~ in sure r q ua lifica tion s.

emA enreimbursement tinsurance inspolicy urainsuring ncea pmotor olicyvehicle service contract or residential service contract issued, sold, or offered for sale in suthis ringstate .shall provide for all of the following:

R equ irem en ts.

A re i burs a m otor ve hic le s erv ice co n trac t or re sid en tial se rvic e c on trac t iss ue d, so ld, or offe red fo r sale in th is sta te sh all p rov ide for a ll o f th e follo w ing :

TThe hereimbursement reiminsurance bupolicy rsemshall enobligate t in sura nc e p olic y sh all ob liga te the binsurer ehathat lfissued insuch supolicy rer th at i sue d suc h p olic y to reimreimburse bu rse or pay on obehalf fof ththe eservice scompany erv ice com p any anycovered cosums verethat d sum s th at the seservice rvcompany i e co mp any is leglegally allyobligated o b lg ate d to pay accaccording ord ing to ththe eterms teof rmthe scontract oor, f th e co ntra ct o r, in the evevent en t of nononperformance np erform an ce by the seservice rviccompany, eprovide co m pany , p rov ide the seservice rvwhich i e w hich the seservice rviccompany e com pan y is lelegally gaobligated lly ob liga ted to peperform rformaccording acc ord ing to the termterms sof othe fservice thcontract, ewhich sshall erv ice co n trac t, w hich sh a ll be coconspicuously nspstated icu ou sly state d in the rereimbursement iinsurance burspolicy. em en t ins uran ce p olic y.

TThe hereimbursement reiminsurance bupolicy rsemshall enentitle t in sura nc e p o li y sh all en title a sservice ervcontract iceholder co n t act ho lde r to mmake ake a cclaim laimdirectly dagainst ire ctly a ga inst the ininsurance supolicy ranc e po licy if the seservice rvcompany ifails e com pan y f ails to ppay ayor oprovide rservice p ro vide s erv ice on a claim wwithin ihsixty indays sixafter typroof dayof sloss a fte r p roo f o f lo ss is ffiled iledwith w ith the seservice rvcompany. ice com p any.

TThe heinsurer insthat ureissued r th at issu ed a reimreimbursement binsurance ursempolicy eshall ntbe ideemed su ran ce po licy s ha ll b e d eem ed to hhave avereceived rethe ceivpremiums edupon ththe epayment pof remthe itotal mpurchase sprice uof pon the paservice ymcontract en t o f th e tot al purc ha se p ric e o f th e ser vice c on trac t by ththe eservice scontract ervholder. ice co n trac t ho ld er.

T2. erm in ation .

ATermination. s a p plic ab le, a n in su rer th at issu ed a re im bu rsem en t ins ura nc e p olic y sh all not term i ate th e p olic y u nle ss a w ritten no tice h as b een re ceiv ed by the c om m ission er tice s ha ll a nd by eac h a pp lica ble se rvic e c om pan y.

TheAs napplicable, oan finsurer ixthat theissued d ate of term in atio n a treimbursement ainsurance dpolicy ateshall nonot eaterminate rliethe rpolicy thunless an ten d ays a fterwritten renotice cehas iptbeen ofreceived by the nocommissioner ticeand by theach eapplicable cservice omcompany. m iss i ne r.

TThe henotice teshall rmfix in ation o f a reim b ursem ent insu ran ce po licy sh a ll n ot redu ce the isdate suof er'stermination reat sp on sib ility fo r a sedate rvicno eearlier cthan onten tradays ctafter Sereceipt naof tthe Fnotice ileby 6the 19,commissioner. p.

10The isstermination uedof b y a nreimbursement ininsurance supolicy redshall senot rvicreduce ethe comissuer’s panyresponsibility pfor riora toservice thcontract eSenate dFile ate619, ofp. te rm ina tion .

In10 deissued mby nificaan tiinsured nservice orcompany subprior rogto ationthe .date of termination.

Th3. is s ec ti n do es n ot p rev en t or lim it the rig h t o f an in su rer tha t iss ue d a reim b urse m ent insu ran ce po licy to se ek ind em nifica tion from or su bro ga tion ag ain st a s erv ice com pa ny if t e ins ure r p ays or is o blig ated to p ay a se rv ice co ntra ct ho lder sum s tha t th e se rvic e com pan y w as ob liga ted to pay p ursu an t to th e p rov isio ns o f a serv ice c on trac t o r p ursu an t to a co ntra ctu al agre em en t.

eIndemnification miumor tasubrogation. x l iab ility .

PThis aymsection endoes tsnot foprevent ror thlimit ethe puright rchaof sean pricinsurer ethat 4.issued a reimbursement insurance policy to seek indemnification from or subrogation against a service company if the insurer pays or is obligated to pay a service contract holder sums that the service company was obligated to pay pursuant to the provisions of a service contract or pursuant to a contractual agreement.

Pr4. o f a ser vice c on trac t by a se rvic e c on tra ct h old er sh all be ex em pt fro m prem ium tax .

HPremium o we ver, p rem ium s s ha ll b e s ub jec t to prem ium tax .liability.

Payments for the purchase price of a service contract by a service contract holder shall be exempt from premium tax.

However, premiums shall be subject to premium tax.

QQualifications uof alificainsurer. tion s o f in su rer.

AAn ninsurer inissuing su rer issu in g a poreimbursement licyinsurance upolicy ndeunder rthis thchapter isshall chbe apauthorized, terregistered, s ha ll b e reim b urse m ent insu ran ce au th oriz ed , re gis tere d, or othotherwise erwpermitted iseto ptransact ermbusiness itte d t tr an sac t b usin ess in ththis isstate staand teshall ameet ndone sh all m eet o ne of the follofollowing wrequirements: ing re qu i em e nts:

AAt tthe thtime ethe timpolicy e th e p olic y is filed wwith iththe thcommissioner, eand ccontinuously omthereafter, m iss i ne r, in sure r m ainta ins su rplu s an d c on tinu ou sly the reinsurer aftemaintains r,surplus the as to ppolicyholders olicy ho lde rs and papaid-in idcapital -inof caat pitaleast lfifteen omillion fdollars aand tannually lefiles ascopies t fifte en m illio n do llar s a nd ann u ally file s cop ies of the ininsurer’s sufinancial restatements, r'snational finassociation anof cinsurance icommissioners lannual sstatement, tatemand enactuarial ts,certification, nif atiorequired naand lfiled a sso cia tion o f in surathe ncinsurer’s estate co m m issio ners ann ua l sta tem e nt, and ac tu aria l c er tifica tio n , if te of dodomicile. m icile .

re qu ired an d f iled in th e ins ur er's sta b.

AAt tthe thtime ethe tmpolicy e th e p olic y is filed wwith ihthe thcommissioner e c om m issio ner and ccontinuously onthereafter, ti uo us ly the reainsurer ftedoes r,all thof ethe insfollowing: ure r d oes a ll o f th e f ollow in g:

(1(1) )Maintains Msurplus ain tains su rplu s as to ppolicyholders oand lcpaid-in yhcapital old ers an d p aid -in c ap ital of lesless sthan tfifteen anmillion fiftedollars ebut nat mleast illion d o la rs bu t a t le as t ten mmillion iliodollars. n do lla rs.

(2(2) )Demonstrates D em o nstrates to the ssatisfaction atisof facthe tioncommissioner othat f th e com m i si ne r th at the ininsurer sumaintains rer m ain tains a raratio tio of nenet twritten wpremiums, rittewherever nwritten, p rem ium s, w h erev er w r itten , to susurplus rp lus as to popolicyholders licyand hopaid-in ldecapital rs an d p aid -in c ap ita l of nonot tgreater gthan reathree ter tha n th re e to oone. ne.

s(3) coFiles piescopies anannually nu ally of the ininsurer’s sufinancial restatements, r'snational fassociation inaof ncinsurance ialcommissioners (3annual )statement, Fand ileactuarial scertification, tatem en ts, n atio na l a sso cia tion o f in sura nc e c om m issio ners a nn ual statem en t, an d a ctu a rial ce rtific a tion , if reqrequired uireand dfiled a nd f iled in ththe einsurer’s insstate ur er's sta te of dodomicile. m icile.

SSec. ec.

SSection ec523C.7, toCode n2019, 52 3C .7, C ode 20 19, is amamended endby edstriking bSenate yFile s619, trikp. ing Se nate F ile 61 9, p .

11 ththe esection sand ecinserting ti n an d in se rtin g in lieu ththereof ere of the fofollowing: lo w ing :

3C523C.7 .Disclosure to service contract holders —— contract form —— required provisions.

D isc losu re to s erv ice co ntra ct h ol d er s ~ c on trac t form ~ re qu ired pr ov ision s.

A mmotor otorvehicle veservice hiccontract le s erv ice co n trac t or reresidential sidservice encontract tialshall senot rvicbe eissued, insold, th is c on trac t sh a ll no t b e iss ue d, so ld, or offeoffered redfor fo r sale stin atethis ustate nlesunless sthe thservice ecompany servdoes iceall co mp any do es a ll of the fofollowing: lo w ing :

PProvides rov ides a recreceipt eipfor t fo r the pupurchase rch ase of the seservice rviccontract e co n trac t to the sservice ervcontract iceholder. co n t act ho lde r.

PProvides rov ides a copcopy yof othe fservice thcontract e serv ice c on trac t to th e s erv ice fte r the coservice ncontract tracholder twithin ho lde r w ith in a rereasonable asoperiod naof bletime peafter riodthe odate f tim e a d ate of pupurchase rcha se of the seservice rviccontract. e c o ntra ct.

PProvides rov ides a comcomplete pletesample samcopy pleof copthe yterms o f t e term s and coconditions n dition s of the seservice rviccontract eto cothe ntraservice ctcontract tholder thprior e ser vic e c on trac t h olde r p rio r to ththe edate dof atepurchase. o f p urch as e.

A sservice ervcompany icemay comcomply pawith nythis mparagraph ay co m ply w ith th is para gra ph by proproviding vidthe ingservice thcontract eholder swith erv ice co n trac t h olde r w ith a comcomplete psample letecopy samof plethe copterms yor oconditions fof ththe eservice termcontract, s or codirecting ndthe itoservice ncontract sholder o f th e s erv ice co n trac t, o r d irec ting t e ser vic e c on trac t h old er to aan ninternet insite tecontaining rne t s ite co nta inin g a cocomplete msample pletecopy samof pthe leterms cand opyconditions of ththe eservice tecontract. rm s a nd co nd iti n s o f th e serv ice c on trac t.

A mmotor otorvehicle veservice hiccontract le s erv ice co n trac t or reresidential sidservice encontract tialissued, sesold, rvic e c on trac t iss ue d, so ld, or offeoffered redfor fosale r s ale in ththis isstate stashall tecomply shwith all coof mthe plyfollowing, w ith a ll o f th e follo w ing , as aapplicable: pp licab le:

A seservice rviccontract eshall cbe onwritten tra ct s ha ll b e w r itt n in cleclear, arunderstandable ,language u nd ersta nd able lan gu age in at leleast asteight eigpoint htfont. po int fo nt.

((1) ) A sservice ervcontract iceinsured co n trac t ins ure d by a reimreimbursement binsurance ursepolicy m ent in sura nc e p o lc y as proprovided vide d in secsection tion523C.5, 5subsection 23C1, .5,shall suinclude bse ctio n 1 , l in clud e a sstatement tatem e nt in susubstantially bsthe tanfollowing tiallyform: th e follow in g form :

sObligations ha l O b ligatio ns of the sservice ervcompany iceunder comthis paservice nycontract uare ndguaranteed erunder t his se rvic e c on trac t a rereimbursement ginsurance uapolicy. ran teed un der a reim bu rsem e nt in sura nc e p o licy .

IIf fthe thservice ecompany sfails erv ice com p any fa ils to pay or proprovide vidservice e s erv ice on a cclaim lwithin imsixty wdays ithafter inproof s ixty d ays a fter pro of ofloss loshas sbeen hfiled aswith beethe nservice fcompany, iledthe wservice ithcontract thholder e serv ice co m pany , th e s erv ice co n trac t ho lde r is eentitled ntitle d to mmake ake a cclaim laimdirectly dagainst ire ctly a ga ins t the rereimbursement iinsurance bursepolicy. m en t ins uran ce p olic y.

ent(2) insu ran ce (2 ) A sservice ervcontract iceinsured coby n trac t ins ure d b y a reimreimbursement binsurance ursepolicy mshall pconspicuously olicstate ythe shname all con spic uo usly s tate th e n ame and aaddress dd ress of the isissuer suof erthe oreimbursement finsurance tpolicy efor reimthat bservice ursemcontract. e nt in su ran ce po licy fo r th at se rvic e c on tra ct.

A cclaim laimagainst a gareimbursement insinsurance tpolicy ashall reimalso buinclude rsem e nt in sur anc e p o li y s ha ll a lsoclaim incfor ludreturn e a cla im fo r r etu rn of any refurefund nddue du e in SeSenate naFile t619, Fp. ile 6 19, p .

112 2accordance acwith cordparagraphs an“k” ceand w“l”. it p arag rap hs "" ' an d ""1".

A serservice viccontract enot cinsured onunder tra ct n ot insu red u nde r a reimreimbursement binsurance ursempolicy eshall ntcontain in sura nc e p olic y sh all co ntain a statestatement m en t in susubstantially b sta ntia lly the fofollowing llform: w ing fo rm :

OObligations b lg atio ns of the seservice rvcompany iceunder comthis panservice ycontract uare ndbacked er th is se rvic e co n trac t ar e b ack ed by the fufull ll faith aand ndcredit cre d it of the sservice ervcompany ice com p any and are nnot otguaranteed guunder aran teed u nde r a reimreimbursement buinsurance rsempolicy. e nt in su ran ce p olic y.

A serservice viccontract eshall cstate onthe traname ctand saddress ha ll s tate th e nam e an d a dd ress of ththe eservice scompany ervobligated ice com p any ob liga ted to peperform rformservices sunder ervthe icecontract, sand ushall ndconspicuously eridentify ththe eservice ccompany, onany tracthird-party t,administrator, aand nd sh all con sp i uo us l id en tify th e s erv ice co m pany , an y th ird -p arty a dm inis t ato r, an d the seservice rviccontract eholder c on tra ct h old er to ththe eextent ethat xtethe ntname thaand taddress thof e nam e an d a dd ress o f the sservice ervcontract iceholder cohas n t act h olde r h as been fufurnished. rn i he d.

TThe heidentities ideof nsuch titiesparties oare fnot surequired ch pa rtie s a re n ot r equ ired to bbe eprinted p rinte d on the cocontract n trac t in adadvance van ce and mmay a be adadded ded to the ccontract onat tracthe ttime aof tsale. th e tim e o f sa le.

A serservice viccontract eshall cclearly onstate trathe cttotal spurchase haprice llof c lea rly sta te the toservice tacontract l pu rch ase p rice o f th e s erv ice co n t act and ththe eterms teunder rmwhich sthe uservice ndcontract er w h i h th e se rv i e co ntra ct is sosold. l .

ThThe etotal topurchase taprice l p urch ase p rice is nonot trequired re qu ired to be pprinted rinte d on the cocontract ntr act in advadvance ancand e a nd may be adadded ded to ththe econtract cat onthe tractime tof asale. t th e tm e o f sa le .

If pprior riorapproval ap pro va l of rerepair pawork ir w ork is reqrequired, u i ed , a serservice viccontract eshall cconspicuously ondescribe trac t sh a ll co ns picu ou sly de scrib e the proprocedure cedfor ureobtaining foprior rapproval oand btafor imaking ina gclaim, pincluding rio r a pptoll-free rovtelephone alnumber a nd for m aking a claim ,service, inand cludthe ingprocedure afor toobtaining ll-femergency reerepairs tperformed lepoutside honof enormal numbusiness behours. r fo r c laim s erv ice , an d t e pro ced ure fo r o b t inin g em erg ency re pa irs perfo rm ed ou tsid e o f norm al b usin ess h ou rs.

A seservice rviccontract eshall cclearly ostate ntrathe ctexistence sof haany lldeductible camount. lea rly sta te th e e xiste nc e o f an y d ed u ctible am o unt.

A seservice rviccontract eshall cspecify othe ntramerchandise ctor sservices, haor llboth, s pe cify th e m e rcha nd i e o r s erv ice s, o r b oth , to bbe eprovided pand rovany idedlimitations, anexceptions, dor aexclusions. ny lim ita tio ns , e xc eptio ns , o r e xc l sio ns .

A seservice rviccontract eshall coclearly ntrastate ctthe shconditions all c lea rly st ate th e c on ditiowhich nsthe on w hic h th e use of susubstitute bsparts tituor teservices pwill ar ts o r s erv ice s w il be allowallowed. e d.

SSuch uchconditions coshall ndcomply itionwith sapplicable sstate h all c om ply w ith a pp lica ble sta te and fefederal delaws. ral law s.

A seservice rviccontract eshall coclearly ntrastate ctany shterms, allrestrictions, c lea rly s tate an y te rm s, r es trictio n s, or coconditions ndgoverning itionthe stransferability gof ov ern i g the traservice ncontract. sfe rab ility o f th e serv ice c on tra ct.

SeSenate naFile t619, Fp. ile 61 9, p .

A serservice viccontract eshall cclearly onstate trathe ctterms sand haconditions llgoverning c lea rly sta te the termcancellation sof an d co n dition s go vern ing th e c an ce llatio n o f the cocontract ntraprior ct prio r to ththe etermination teor rmexpiration indate ationof othe rcontract e xp iratio n da te o f th e co ntra ct by the seservice rvcompany ior ethe comservice pancontract yholder. o r th e serv ice c on trac t h old er.

If ththe eservice scompany ervcancels icethe cecontract, comthe paservice nycompany sshall hamail ll m a ilwritten anotice com p any can ce ls th e co ntra ct, the s erv i w ritte n no tice of termtermination ina to n to the seservice rvcontract iceholder coat ntraleast ctfifteen hodays lderbefore athe tdate leof asthe ttermination. fifte en day s b efo re t e da te o f th e term i atio n.

PPrior riornotice nof oticcancellation e o f c an ce llatio n by the seservice rviccompany e c om pany is nonot trequired re qu ired if ththe ereason re aso n for cacancellation nc ella tion is nononpayment npa ym ent of the bypurchase theprice, se rvic e p urch ase p rice , a mmaterial amisrepresentation teriaby lthe mservice isrecontract preholder se ntatio n c on trac t h olde r to ththe eservice servcompany ice co mp any or its adadministrator, m in istra tor, or a susubstantial bsbreach tan tial brea ch of duduties ties by ththe eservice scontract ervholder icerelating co n trac t ho lde r re latin g to ththe ecovered cproduct oveor red pro du ct o r its useuse. .

The nnotice oticeof ocancellation fshall cstate anthe ceeffective ladate tionof sthe hacancellation lland sthe tatereason thfor ethe effecancellation. ctiv e da te o f th e ca nc ellatio n an d th e reas on fo r th e can c ellatio n .

If a seservice rviccontract e co ntra ct is cacanceled nc eled by the sservice ervcompany ice com pa ny for any rereason asonother othan thenonpayment r th an no npa ym ent of the pupurchase rchprice, asethe pservice ricecompany ,shall threfund ethe sservice ervcontract iceholder co mp any sh all re fun d th e ser vic e c on trac t h old er in aan namount aequal m ount eq ual to one hhundred undpercent redof pethe rcenunearned tpurchase oprice fpaid, thcalculated e une arne d pur cha se p ric e p aid , c alc ula ted on a pro rarata tabasis babased sis base d upon eelapsed ltime psor edmileage, timless e o r m ie age , le ss any claclaims impaid. s p aid .

The seservice rviccompany emay comalso panycharge m ay a lsoreasonable chadministrative arg e a re aso na ble ad m in istrativ e fee in an amamount ouno ntgreater nthan oten gpercent rea ter tha n te n p erc ent of the tototal tapurchase lprice. pu rch ase p rice .

1.l.

(1) A sservice ervcontract iceshall copermit nthe tracoriginal tservice shcontract aholder llthat pepurchased rm it th e o rig in al s erv ice co ntr act ho lde r th at pu rcha sed the ccontract on trac t to ccancel ancand elreturn an d retu rn the seservice rvcontract iwithin e co ntra ct w ithin at lealeast sttwenty twdays entyof dathe ysdate oof fmailing th e d ate o f m a iin g the seservice rviccontract e co ntra ct to tthe eservice sercontract vicholder eor cwithin on trac t h old er o r w ih in at lealeast st ten dadays ysafter adelivery fteof rthe dservice elivcontract ery o f th e serv ice c on trac t if ththe eservice scontract erv ice co n trac t is dedelivered liveat redthe atime tof thsale e tm e o f sa le of the seservice rviccontract, e co ntra ct, or wwithin ithin a lonlonger gerperiod p erio d of tmtime e as ppermitted ermunder ittedthe uservice ndcontract. er th e serv ice c on tra ct.

If no cclaim laimhas h as been mmade adeunder un der the seservice rviccontract eprior co ntra ct prio r to its rreturn, etu rn, the seservice rvcontract ice co ntr act is vovoid iand a nd the fufull llpurchase pprice urcof hathe seservice pcontract riceshall o f th e serv ice c on trac t sh a ll be refurefunded nd ed to the seservice rvcontract iceholder. d ded ea ch c on trac t h old er.

A ten ppercent ercepenalty ntshall pebe naadded lteach smonth ha ll b e a m o nth to a refurefund ndthat th at is nonot tpaid p aid to a sservice ervcontract iceholder cowithin nthirty tdays actof hothe ldereturn r w ith in thi rty da ys of tthe eservice retucontract rn o f th e s erv ice co n trac t to the sservice ervcompany. ice com p any .

(2) If the seservice rvcontract iholder ecancels co ntra ct ho lder ca nc els the seservice rvicSenate eFile Sen619, atep. F ile 61 9, p .

14 cocontract ntroutside ac t o utsid e of the apapplicable plictime ab le tm e as proprovided vid ed in susubparagraph bp arag rap h (1) or afteafter r a claclaim im is mmade adeunder und er the seservice rviccontract, ethe cservice oncompany tracshall t,refund ththe eservice servcontract iceholder co m pany sh all refu nd th e s erv ice co n trac t h olde r in an amamount oequal unt equ al to oone nehundred hupercent ndre d p erc en t of the ununearned earnpurchase edprice pupaid, rchcalculated aseon p rice pa id, ca lcu late d o n a pro rrata atabasis bbased asisupon baelapsed sedtime up on elap sed tim e or mmileage, ileagless e,any lesclaims spaid. a ny claim s pa id.

TThe heservice secompany rvicmay e com pan y m ay also ccharge harg e a rereasonable asoadministrative na ble ad m in istrativ e fee in an amamount ouno ntgreater nthan oten gpercent reaof terthe thatotal npurchase teprice. n pe rcen t o f th e tota l p urc ha se p rice .

A serservice viccontract eshall cset on trac t s ha ll s et forth aall ll of the oobligations bligand atioduties ns an d d u te s of the seservice rviccontract eholder, cincluding obut ntranot ctlimited h o l er , in clud ing b ut no t lim ite d to the duduty ty to pprotect roagainst tec t ag a i st any fufurther rthedamage, rand damthe agobligation e, an d th e ob liga tion to fofollow ll w a n o w ne r' m an ualowner’s omanual ror anany yother orequired thservice er re qu ired se rvic e or mmaintenance. ainte nan ce.

trac t s ha ll c lea rly sta te w heth er o r n ot n.

A serservice viccontract eshall cclearly onstate thwhether eor cnot onthe tracontract ctprovides pfor rovor ideexcludes sconsequential fodamages ror opreexisting rconditions, e xc lude s c on seq u entia l dam a ges o r p ree xistin g co n ditio ns, if apapplicable. plic ab le.

A serservice vicecontract cmay, onbut trac t m ay, bu t is nonot trequired reto, qucover ireddamage toresulting , c ov er d am age res ultin g from rusrust, t,corrosion, co rro sio n, or damdamage agecaused ca used by a papart rtor osystem rwhich sis ystemnot whcovered ichunder isthe notservice acontract. ct.

co ve red un der the se rvic e co ntr o.

A seservice rviccontract eshall cclearly onstate tra ct s ha ll c lea rly sta te the fefee, e, if anyany, ,charged ch arg ed on the seservice rviccontract eholder co ntra ct ho l er for mmaking akin g a seservice rviccall. e c all .

A seservice rviccontract eshall cstate onthe traname ctand saddress ha ll s tate th e nam e an d a dd ress of ththe ecommissioner. c om m iss i ne r.

SSec. ec.

SSection ectio523C.9, nCode 5232019, Cis .amended to read as follows:

,523C.9 CSuspension odeor 20revocation 19,of islicense. am ende d to re ad as fo llow s:

3C1. .

SIn uspaddition ento sithe nlicense orevocation rprovisions rof evosection ca523C.5, the The commissioner may suspend or revoke or refuse to nrenew the license of lica enservice secompany .for any of the following grounds:

IRa. a dd itioa to tfie lic ea se re vo catio n ~re visi ons o f m ay susp end o r rev ok e o r s ectio a 52 3C .S, tfie The co m m ission er re fus e to r new th e lice nse o f a se rvic e c om pany fo r a ny of the fo llow in g g rou nd s:

i1T1. 1 .

TThe heservice secompany rvicviolated e c om pany v iola ted a lawlawful fuorder l ord er of the cocommissioner m m ission er or aany nyprovision proof visthis ionchapter. o f th is ch ap ter.

bb. .

22. .

TThe heservice secompany rvicfailed e c om pany fa iled to ppay ay any finfinal aljudgment judrendered gmagainst en t re nd ered a ga inst it in ththis isstate swithin tatesixty wdays ithafter inthe sixjudgment tybecame dfinal. ays a fter th e ju dgm e nt be cam e f ina l.

ec. .

3 .

The se rvic e c om pany ha s w ith ou t ju st cau se refu sed to p erform or ne glig en tly or inco m p eten tl p erform e d serv ice s Se na t F ile 6 19, p .

15 re qu ired to be pe rform ed u nde r it s Fe sid en tial s erv ice co n trac ts a nd the re fu sal, or ne glig en t o r in com p eten t pe rform a nce ha s o ccu rred w ith suc h frequ en cy , as th e co m m ission er d ete rm ine s, a s to in d icate th e g en era l b usin ess ac tice s o f th e serv ice co m pany .

p r d.- 4 .

T he serv ice co m pany v i late d se ctio n 523 C .

eThe .service company has without just cause refused to perform or negligently or incompetently performed services Senate File 619, p.

515 .required to be performed under its residential service contracts and the refusal, or negligent or incompetent performance has occurred with such frequency, as the commissioner determines, as to indicate the general business practices of the service company.

Td. he ser vice co m pany fa iled to m a intain th e n et wo Fth F equ iFed by se ctio n 523 C.6 de m on strate fin an cia l re sp o ns i ility p ursu an t to se ctio n 523 C .

aile4. d to m ain tain the F eseF ve f.

TThe heservice scompany eFviolated vicesection com523C.13. p any f ac cou nt Fe quiF ed by sec tion 5 23 €.11 .

g-.e.

65. .

TThe heservice servcompany icfailed e co m pany fa iled to mmaintain athe intainnet itsworth crequired orpby osection rate523C.6 cdemonstrate ertfinancial ificaresponsibility tepursuant ofto gosection od523C.5 stan. din g w ih th e s ec reta ry of sta te.

f.

The service company failed to maintain the reserve account required by section 523C.11.

g.

6.

The service company failed to maintain its corporate certificate of good standing with the secretary of state.

If ththe elicense licof en se o f a seFservice viccompany e co m pany is teFterminated munder inasection t523C.5 dbecause a intain bo nd , th e un deF se ctio n 523 C.S be cau se of failufailure Fe to mmaintain cobond, mthe mcommissioner ishall sigive neFwritten snotice ha ll ~ ive w F ite n no tice of teFtermination m iaa tioa to the seservice Fvcompany. iee com pa ny.

ThThe enotice nshall oticinclude ethe sheffective alldate incluof dethe thtermination. e e ffe ctiv e da te o f th e te Fm i atio n.

SSec. ec.

SSection ectio523C.12, nCode 5232019, Cis .amended to read as follows:

2,523C.12 COptional odexamination. e 2 019 , is am en ded to read a s fo ll w s:

3CThe .commissioner or a designee of the commissioner may make an examination of the books and records of a service company, including copies of contracts and records of claims and expenditures, and verify its assets, liabilities, and reserves.

2The Oactual ptioncosts alof exthe amexamination inshall ationbe .borne by the service company.

ThThe ecosts cof oman mexamination issionunder erthis orsection ashall dnot esigexceed nee o f th e c om m issio ner may m ake an exaamount mequal inato titen npercent of the boservice okscompany’s andreported renet coincome rds of a s erv ice co m pany , in cludthe ingprevious cfiscal opyear. ies of co ntra cts and re co rds of claim s an d e xp en ditu res , an d v er ify its as se ts, lia bi litie s, and re se rve s.

TheSec. ac tua l c os ts o f th e exa m ina to n sh all b e b orn e by th e s erv ice co mp any .

T10. he co sts of a n e xa m inatio n u nd er th is se ctio n sh all no t ex cee d a n am o unt equ al to ten pe rce nt o f th e se rv ice com pan y's re po rted n et in com e in the pre vio us fis ca l y ea r.

SSection ec.523C.13, Code 2019, is amended to read as follows:

10523C.13 .Prohibited acts or practices —— penalty —— violations —— contracts voided.

S1. ec tion 52 3C .13, Co de 201 9, is a m ended to rea d as fo llow s :

3CA .licensed service company which offers motor vehicle service contracts for sale in this state, or its representative, shall not, directly or indirectly, represent in any manner, whether by written solicitation or telemarketing, a false, deceptive, or misleading statement with respect to any Senate File 619, p.

316 Proof hibthe itedfollowing: ac ts o r p rac tice s ~ pe na lty ~ v iola tion s co n tracts vo ided .

ich o ffe rs m o tor .

A lice ns ed se rvic e com pan y w h v eh icle se rvic e co ntra cts for sa le in th is s tate , or its re p rese n tativ e, sh all no t, d ire ctly o r in d irec tly , re pre sen t in an y m ann er, w h ether by w ritten s o licita tio n or telem ark etin g, a fa lse , de cep tive , o r m isle ad i g state m en t w ith res pe ct to an y Senate F ile 619 , p .

16 of the fo l l owing :

Statements regardregarding i ng the servservice icompany’s ceaffiliation company's a f f ilia tio n with a motor vehicle manufacturer or imimporter. porter.

bb. .

Statements regarding the vvalidity a lid ity or expiration of a warranty.

Statements regarding a motor vehicle service contract hholder’s o ld er's coverage under a motor vehicle service cocontract, n tract, including statemstatements ents suggesting ththat at the service contract holder must purchase a new service contract in order to mmaintain aintain coverage under the exexisting istin g service contract or warranty.

The commissioner shshall a ll may adopt rules which regulate motor vehicle service contracts and reresidential sid e n tia l service contracts to pprohibit romisrepresentation, h ib it m isrepresentation, false advertising, defamation, boycotts, coercion, intimintimidation, idation, false statemstatements ents and eentries n trie s and unfair discrimdiscrimination ination or ppractices. ractices.

IIf f the commissioner finds ththat at a person has violated the rules adopted under ththis issection, sectio n , the commissioner may order any or aall l l of the following:

-1-.-a.1.

Paymenta. of a c iv il penalty of not more than one thousand d o llars for each and every act or v io latio n , but not to exceed an aggregate of ten thousand d o lla rs, unless the person knew or reasonably should have known the person was in v io latio n of th is section, in which case the penalty sh a ll be not more than five thousand d o llars for each and every act or v io latio n , but not to exceed an aggregate penalty of f if ty thousand d o llars in any one six-month period.

ThePayment commissionerof sa hcivil apenalty ll,of inot fmore ithan tone findsthousand thedollars vfor ioeach latioand nevery sact ofor thviolation, isbut sectionnot wereto dexceed irectedan ,aggregate encouraged,of condoned,ten ignored,thousand dollars, unless the person knew or rareasonably tifieshould dhave byknown the employerperson was in violation of suchthis person,section, assessin suchwhich case the penalty toshall thebe employernot more than five thousand dollars for each and every act or violation, but not suchto person.exceed an aggregate penalty of fifty thousand dollars in any one six-month period.

AnyThe ccommissioner ivshall, ilif pit enfinds altiesthe collectedviolations underof ththis issection subsectionwere shdirected, aencouraged, llcondoned, beignored, depositedor asratified providedby inthe sectionemployer 505.7.of such person, assess such penalty to the employer and not such person.

~Any bcivil .penalties collected under this subsection shall be deposited as provided in section 505.7.

Suspension2. or revocation of the licen se of a person , i f the person knew or reasonably should have known the person was in v io latio n of th is section.

b.

Suspension or revocation of the license of a person, if the person knew or reasonably should have known the person was in violation of this section.

A vviolation io latio n of ththis is chapter coconstitutes n stitu tes an unlawful ppractice ractice pursuant to section 714.16.

A service contract issued or sold in ththis isstate s ta te is void iif f the person ththat at issued or sold the service cocontract, nat tract, a t the SSenate enFile ate619, F ile 61 9, p.

17 ttime ime of issuissuance an ce or sasale, le,was wnot aslicensed n ot lic ense d as a sservice ervcompany iceunder comthis pchapter. any u nde r th is ch ap ter.

S ec.

11 .

S ec tion 52 3C .15 , C ode 20 19, is am end ed to read as fo llow s:

3C .

5 An nua l rep o rt.

A licen se d ser vic e c om pany th at do es not de m on strate fin an c ial res po n sib ility by insu rin g ser vic e c on tra cts un der a reim b urse m en t ins ura nce p olic y as pro vide d in sec tion 5 23 C.5 , su bs ectio n 1, sh all file w ih th e com m iss i ner an an nu al re po rt w it ia aia ety d ays of the e lose o f it s fise al no la ter th an A ugu st 31 o f ea ch ye ar.

T he a nn ua l rep o rt s ha ll b e in a form p res crib ed by th e c om m iss i ner an d c on tain a ll o f th e fo llow in g:

A cu rre nt fina n cia l sta tem e nt i clu din g a b ala nce sh ee t an d s tatem en t of op era tion s prep are d in acc ord anc e w ith g en era lly a cc epte d a cc ou nting p rin cip les an d c e rtifie d by an in dep en den t c er tified pu blic ac co un tan t.

~ he att be r o f re sid e atia l se rv iee eo atr ae ts iss tt d d tria g t e pre eed iag fi sea l ye ar, the attm ber e aae eled o r e xp i ed dttriag th e ye ar, the attmb er ia e ffe et at yea r e ad aad th e a m ott t of re sid ea tial se rvie e eo atra et fee s r eee ive d.

--o 2 .

Any o t er inf orm a tion re latin g to th e p erfo rm an ce an d solv enc y of the re sid ea tia l se rvic e com pan y r eq uired b y th e co m m issio ner.

S ec.

12 .

S e ction 5 23C .16 , C ode 20 19, is am end ed to read a s fo llow s :

3C .16 E xclu sion s.

T his ch ap ter d oe s n ot a pp ly to any of the fo llow in g and the fo llow in g do no t co n stitu te the p rac tice o f in sura nc e:

A pe rform a nce g ua ran t e give n by a b uild er of a resid en ce o r th e m an ufac turer or se lle r o r le sso r of re sid en tial pro p erty if n o id e ntifi ab le cha rge is m ade for th e g ua ran tee .

A re sid e ntia l s erv ice co n trac t, g ua ran tee or w arra nty b etw een a res id en tial cus t m er and a se rvic e c om pan y w hich w ill p erform th e w ork its e lf a nd no t thr oug h su bc on trac tors fo r th e ser vic e, rep air or rep lace m en t o f re sid e ntia l p rop er t , a ppl ian ces ~ o r e le ctr ica l, p lum b ing, he atin g, co olin g or a ir-co n ditio nin g sy stem s .

A c on trac t b etw een a serv ic e co m pany iss uin g res ide n tial Se na t F ile 61 9, p .

1 8 se rv ice co ntra cts an d a pe rson w ho a ctu a ly p erfo rm s th e m a i ten anc e, r ep airs , o r re plac em e nts of stru ctu ra l co m po nen ts, o r ap p la nc es, or e lec tric al, plu m bing , h ea ti g , c oo ling , o r air -co nd itio nin g sys t m s, if som eon e o the r th an the se rv i e ac tua lly perfo rm s the se fun ctio ns .

co mp any 4.

A re sid en tial ser vic e c o ntra ct, gu aran tee or w arra nty iss ue d b y a re ta il m e rcha nt to a re tai l cu stom er, g ua ran teein g o r w ar rantin g the re pa ir, serv ice o r re plac em en t o f ap plia nc es o r e lec tric al, plu m bing , h ea ting , c oo li g or air-c on d ition ing t.

sy stem s so l b y s aid re ta il m e rcha n 5.

A re sid en tial se rvic e c on tra ct, gu ara ntee , o r w a rran t iss ue d b y a m an u factu rer, thir d p a rty, or re ta il co m pany , co ve ring th e r ep air, m ain tena nce , o r re plac em en t o f re sid en tia l p rop erty , in d ivid ua l ap pli anc es~ and o the r in div idu al item s m p any, in the o f m erc han dise m ark eted an d s old by a ret ail co o rdin ary co urs e o f b us ine ss.

A m otor ve hic le s erv ice co n trac t issu ed b y th e m a nu factu rer o r im po rt r o f th e m otor ve hicle co ve red by th e s erv ice c on trac t or to any th ird p arty ac ting in a n a dm i istra tive ca pa city on th e m a nu fac ture r's b eh alf in co nn ec ti n w ith th a t se rvic e co ntra ct.

A re sid en tial se rvic e c o ntra ct i vo lvin g res ide n tial p rop erty c on tainin g m ore th an fo ur dw e lin g un its.

a.

A w arra nty .

A m otor ve hic le serv ice c on trac t iss ue d, offe red fo r s ale , o r so ld to any pe rson o the r th an a con sum er.

0.

A m a inten anc e a gree m en t S ec.

13 .

S ec tion 52 3C .17 , C ode 201 9, is a me nded to rea d as fo llow s :

3C .

7 Le nding in stitu tio ns , se r9ie e e em pa nies, and in sura nee ee m pan ies.

A ba nk, sav ing s a sso c i tio n, insu ran ce com p any , or oth er le nd ing in stitu tio n sh all no t re qu ire the pu rch ase of a m otor v eh icle se rvic e co ntra ct o r res ide ntia l s erv ice co n trac t as o r m o tor a co nd ition o f a loa n o r th e sa le o f an y pro pe rty v eh icle .

A s erv ice com p aay o r a n ia su re r, e ith er dire ct ly or ia d irec tly , a s a pa rt o f a ay rea l p ro per t tr aa sae tioa ia w hieh a re sid ea tia l se rvic e co atra ct w ill be iss ue d, pu rcha sed , o r a cq uire d, sh all ao t re qu ire tha t a re sid ea tial ser vic e c oa trac t Senate F ile 619 , p .

19 be is s u e d , purchased, or acq u ired ia c o a ju a c tio a w ith or as a c o a d itio a p reced eat to th e issu a a c e , p u rch ase, or a c q u is itio a , by aay p e rso a , o f a p o lic y of ia s u ra a c e .

A leadift§ i a s t i t u t i o a s h a ll ao t s e l l a r e s id e a tia l s e rv ic e c o a tra c t to a borrow er u a le s s th e borrow er si§ftS aa a f f id a v it ackaowled§ift§ th a t th e purchase i s a o t re q u ire d .

V io la tio n o f th is s e c tio n i s p u n ish ab le as provided in s e c tio n 523C.13.

11.

Section 523C.15, Code 2019, is amended to read as follows:

523C.15 Annual report.

A licensed service company that does not demonstrate financial responsibility by insuring service contracts under a reimbursement insurance policy as provided in section 523C.5, subsection 1, shall file with the commissioner an annual report within ninety days of the close of its fiscal no later than August 31 of each year.

The annual report shall be in a form prescribed by the commissioner and contain all of the following:

1.

A current financial statement including a balance sheet and statement of operations prepared in accordance with generally accepted accounting principles and certified by an independent certified public accountant.

2.

The number of residential service contracts issued during the preceding fiscal year, the number canceled or expired during the year, the number in effect at year end and the amount of residential service contract fees received.

3.

2.

Any other information relating to the performance and solvency of the residential service company required by the commissioner.

Sec.

12.

Section 523C.16, Code 2019, is amended to read as follows:

523C.16 Exclusions.

This chapter does not apply to any of the following and the following do not constitute the practice of insurance :

1.

A performance guarantee given by a builder of a residence or the manufacturer or seller or lessor of residential property if no identifiable charge is made for the guarantee.

2.

A residential service contract, guarantee or warranty between a residential customer and a service company which will perform the work itself and not through subcontractors for the service, repair or replacement of residential property, appliances, or electrical, plumbing, heating, cooling or air-conditioning systems.

3.

A contract between a service company issuing residential Senate File 619, p.

18 service contracts and a person who actually performs the maintenance, repairs, or replacements of structural components, or appliances, or electrical, plumbing, heating, cooling, or air-conditioning systems, if someone other than the service company actually performs these functions.

4.

A residential service contract, guarantee or warranty issued by a retail merchant to a retail customer, guaranteeing or warranting the repair, service or replacement of appliances or electrical, plumbing, heating, cooling or air-conditioning systems sold by said retail merchant.

5.

A residential service contract, guarantee, or warranty issued by a manufacturer, third party, or retail company, covering the repair, maintenance, or replacement of residential property, individual appliances, and other individual items of merchandise marketed and sold by a retail company, in the ordinary course of business.

6.

A motor vehicle service contract issued by the manufacturer or importer of the motor vehicle covered by the service contract or to any third party acting in an administrative capacity on the manufacturer’s behalf in connection with that service contract.

7.

A residential service contract involving residential property containing more than four dwelling units.

8.

A warranty.

9.

A motor vehicle service contract issued, offered for sale, or sold to any person other than a consumer.

10.

A maintenance agreement.

Sec.

13.

Section 523C.17, Code 2019, is amended to read as follows:

523C.17 Lending institutions, service companies, and insurance companies.

A bank, savings association, insurance company, or other lending institution shall not require the purchase of a motor vehicle service contract or residential service contract as a condition of a loan or the sale of any property or motor vehicle .

A service company or an insurer, either directly or indirectly, as a part of any real property transaction in which a residential service contract will be issued, purchased, or acquired, shall not require that a residential service contract Senate File 619, p.

19 be issued, purchased, or acquired in conjunction with or as a condition precedent to the issuance, purchase, or acquisition, by any person, of a policy of insurance.

A lending institution shall not sell a residential service contract to a borrower unless the borrower signs an affidavit acknowledging that the purchase is not required.

Violation of this section is punishable as provided in section 523C.13.

Sec.

SSection ectio n 523C.22, Code 2019, iis s amended to read as fofollows: llo w s:

A liclicensed eservice n s e d s e rv ic e company sshall hpromptly aprovide ll prom ptly p ro v id e a wwritten ritteexplanation n e x p la n a tio n to ththe eresidential rcustomer eservice scontract idholder e, adescribing tiathe l custom er s e rv ic e c o n tra c t h o ld e r, d e sc rib in g th e reasons fofor r denying a claim oor rfor fothe roffer thof e o f f e r o f a compromise ssettlement, e ttle m e n t, based on aall lrelevant lfacts re le v a n t f a c ts or lelegal grequirements a l requirem ents and rreferring e f e r r in g to aapplicable pprovisions p lic a b le p ro v isio n s of ththe eresidential rservice econtract. s id e a tia l s e rv ic e c o n tra c t.

523C.24 SService ervice company ooversight v ersig h t fund.

A1. s e rv ic e company o v e rsig h t fund i s c re a te d in th e s t a t e tre a s u ry as a se p a ra te fund under th e c o n tro l o f th e com m issioner.

TheA fundservice scompany hoversight afund llis ccreated oin nthe sstate istreasury tas o f a lseparate l moneys d e p o site d in th e fund punder uthe rsucontrol anof tthe tocommissioner. su b se c tio n 2.

The fund shall consist of all moneys deposited in the fund pursuant to subsection 2.

The comcommissioner mshall issionerdeposit s h a ll d e p o sit in ththe eservice s e rv ic e company ooversight v e rsig h t fund an amount equal to oone-third nof eall -thlicensing, irdexamination, orenewal, f a l l lic e n s in g , exam ination, renew al, and ininspection spfees ecollected c tio n fe e s c o lle c te d under tthis hchapter, i s c h a p te r, provided ththat athe t th e maximum amount oof ffees fedeposited e s d e p o site d in ththe e fund each ffiscal i s c a l year sshall h a ll not exceed fivfive e hundred thousand ddollars. o lla r s .

Any remremaining aining fees ccollected o lle c te d under ththis ischapter ch ap ter and not ddeposited e p o site d in ththe eservice s e rv ic e company ooversight v e rsig h t fund sshall h a ll be ddeposited ep o sited as provided in ssection e c tio n 505.7.

Moneys in ththe eservice s e rv ic e company ooversight v e rsig h t fund aare reappropriated a p p ro p ria te d to ththe ecommissioner comfor mthe issioneradministration fo r th e a d m in is tra tio n and enforcemenforcement entof othis fchapter, t h i s c h a p te r, and fofor restablishing eservice scontract ta b lis h in g s e rv ic e c o n tra c t consumer cocomplaint, meducation, p lain t, e d u c a tio n , and ooutreach uprograms. treach program s .

NNotwithstanding otwsection ithstanding12C.7, ssubsection e c tio n 12C .7, su b se c tio n 2, iinterest n t e r e s t or earnearnings in g s on moneys ddeposited e p o site d in ththe eservice s e rv ic e company ooversight v e rsig h t fund sshall h a ll be ccredited re d ite d to ththe e fund.

NNotwithstanding otwsection ithstanding8.33, s e c tio n .3 3 , moneys ccredited re d ite d to ththe e fund sshall h a ll not rerevert vat ethe rtclose aof t th e c lo se o f a ffiscal iyear. s c a l y e a r.

SSenate enFile ate619, Fp. ile 61 9, p .

20 SSec. ec .

1616. .

REPREPEAL. EA L .

CChapter ha516E, pteCode r2019, 5 16E , C ode 2 01 9, is rerepealed. pe ale d .

cSec. .

1717. .

REREPEAL. PEA L .

SeSections ctio523C.8, n523C.8A, s523C.11, 523523C.14, Cand .8523C.18, ,Code 52019, 23are C.8repealed. A , 5 2 3C .ll, S e 23 C .

4,Sec. an d 52 3C .18 , C ode 2 01 9, are rep ea le d.

S18. ec .

1EMERGENCY 8RULES. .

EMThe ERGcommissioner ENof CYinsurance Rmay ULadopt ESemergency .rules under section 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph “b”, to implement the provisions of this Act and the rules shall be effective immediately upon filing unless a later date is specified in the rules.

ThAny erules cadopted omin maccordance issiowith nethis rsection oshall falso ins ura n ce m ay ad op t em erg en cy ru le s un de r s ec tio n 17 A .4, su b se ctio n 3 , an d se ctio n 1 7A .S , su bs ec tion 2, pa rag ra ph " b" , to im ple m en t e ffe c tiv e th e p rov isio n s of th is A c t an d th e ru les s h all be impublished mas ed iate l u po n filin g un le ss a lanotice teof rintended daction aas teprovided is sp e cif ied in thesection ru17A.4. le s.

AnSec. y r ule s ad o pte d in ac co rda nc e w ith th is s ec tio n sh a ll a lso b e pu b lishe d a s a n o tice o f inte nd e d ac tio n as p rov id ed in s ec tio n 17 A .4.

S19. e c.

19EFFECTIVE .DATE.

EFThis FECAct, Tbeing Ideemed Eof Dimmediate ATimportance, E.takes effect upon enactment.

T______________________________ h______________________________ isCHARLES ASCHNEIDER ct,LINDA oUPMEYER fPresident Pof rethe sidSenate enSpeaker t of ththe eHouse Se n ate I hhereby erecertify bythat cthis ebill rtiforiginated y th a t th is b i ll or igin a ted in ththe eSenate Se na te and is knowknown nas aSenate sFile Se619, naEighty-eighth teGeneral FAssembly. ile 61 9, E ig hty -e igh th G e ne ral A sse m bly .

W______________________________ CW. ~ r l t , s ~ £ o ~ W .

CCHARLES HASMITHSON RLSecretary ES SM ITH SO N S e cre tary of ththe eSenate SeApproved na_______________, te2019 A______________________________ ppKIM rovREYNOLDS edGovernor M ~ l\/£ , 20 19 K I ~ O ~ h G o ver nor