LEGISLATION

Document Sample
LEGISLATION Powered By Docstoc
					                               LEGISLATION
                              st
                           81 General Assembly
                              2005 Session


                                   IID BILLS

SF 360 Division’s Omnibus Bill – our traditional bill designed for annual revisions
and additions consistent with current issues and model law ; amends 19 chapters
of the Code; substantial rewrite of the Motor Vehicle Service Contracts Act.

HF 836 Division’s Cemetery Bill – combines 3 chapters into one; provides for
additional fees for the Regulatory and Cemetery Funds; fills in regulatory gaps.


            MAJOR BILLS EFFECTING IID POLICY/DUTIES

HF 819 Long Term Care Asset Disregard – encourages private purchases of
Long Term Care policies by allowing dollar for dollar offsets; appropriates funds
for education program.

HF 821 Prescription Drug Assistance – provides for IID to establish a prescription
drug assistance clearinghouse to improve access for persons with no or
inadequate insurance; IID to seek federal funds, if not, appropriates funds.

HF 420 Biologically Based Mental Illness Coverage – requires health insurance
coverage of biologically based mental illness; defines that term and requires IID
rulemaking.
                                                                               Page 1 of 23



Senate File 360
PAG LIN

  1    1                                                     SENATE FILE 360
  1    2
  1    3                               AN ACT
  1    4   RELATING TO VARIOUS PROVISIONS ADMINISTERED BY THE INSURANCE
  1    5      DIVISION OF THE DEPARTMENT OF COMMERCE CONCERNING PREMIUM
  1    6      TAX REFUNDS, THE INTERSTATE INSURANCE COMPACT, INSURER
  1    7      INSOLVENCY PROCEEDINGS, INDIVIDUAL HEALTH INSURANCE, THE
  1    8      SMALL EMPLOYER CARRIER REINSURANCE PROGRAM, INSURANCE
  1    9      APPLICATIONS, THE IOWA COMPREHENSIVE HEALTH ASSOCIATION,
  1   10      FIRE INSURANCE POLICIES, THE IOWA INSURANCE GUARANTY
  1   11      ASSOCIATION, THE FAIR PLAN, MOTOR VEHICLE SERVICE CONTRACTS,
  1   12      INVESTMENTS BY COUNTY AND STATE MUTUAL ASSOCIATIONS,
  1   13      RECIPROCAL OR INTERINSURANCE CONTRACT PREMIUM RATES,
  1   14      UNAUTHORIZED ACTIVITY OF INSURANCE PRODUCERS, AND ANNUITY
  1   15      CONTRACTS FOR CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL
  1   16      SERVICES, AND MAKING FEES AND PENALTIES APPLICABLE AND
  1   17      PROVIDING EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  1   18
  1   19   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1   20
  1   21      Section 1. Section 322.19, subsection 2, paragraph a, Code
  1   22   2005, is amended to read as follows:
  1   23      a. A motor vehicle service contract as defined in section
  1   24   516E.1.
  1   25      Sec. 2. Section 432.1, subsection 6, paragraph d, Code
  1   26   2005, is amended to read as follows:
  1   27      d. The sums prepaid by a company or association under this
  1   28   subsection shall be allowed as credits against its premium tax
  1   29   liability for the calendar year during which the payments are
  1   30   made. If a prepayment made under this subsection exceeds the
  1   31   annual premium tax liability, the excess shall be allowed as a
  1   32   credit against subsequent prepayment or tax liabilities. The
  1   33   commissioner of insurance shall authorize the department of
  1   34   revenue to make a cash refund to an insurer, in lieu of a
  1   35   credit against subsequent prepayment or tax liabilities, if
  2    1   the insurer demonstrates the inability to recoup the funds
  2    2   paid via a credit. The commissioner shall adopt rules
  2    3   establishing eligibility criteria for such a refund and a
  2    4   refund process. The commissioner may suspend or revoke the
  2    5   license of a company or association that fails to make a
  2    6   prepayment on or before the due date.
  2    7      Sec. 3. Section 505A.1, Article II, section 8, Code 2005,
  2    8   is amended to read as follows:
  2    9      8. "Member" means the person chosen by a compacting state
  2   10   as its representative to the commission, or the person's
  2   11   designee. The commissioner of insurance shall be the
  2   12   representative member of the compact for the state of Iowa.
  2   13      Sec. 4. Section 507C.2, Code 2005, is amended by adding
  2   14   the following new subsections:
  2   15      NEW SUBSECTION. 01. "Affiliate" of or "affiliated" with a
  2   16   specific person, means a person that directly or indirectly,
  2   17   through one or more intermediaries, controls or is controlled
  2   18   by, or is under common control with, the person specified.
  2   19      NEW SUBSECTION. 2A. "Commodity contract" means any of the
  2   20   following:




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                  6/9/2005
                                                                            Page 2 of 23



  2   21      a. A contract for the purchase or sale of a commodity for
  2   22   future delivery on, or subject to the rules of, a board of
  2   23   trade designated as a contract market by the commodity futures
  2   24   trading commission under the federal Commodity Exchange Act, 7
  2   25   U.S.C. } 1 et seq., or a board of trade outside the United
  2   26   States.
  2   27      b. An agreement that is subject to regulation under
  2   28   section 19 of the federal Commodity Exchange Act, 7 U.S.C. } 1
  2   29   et seq., and that is commonly known to the commodities trade
  2   30   as a margin account, margin contract, leverage account, or
  2   31   leverage contract.
  2   32      c. An agreement or transaction that is subject to
  2   33   regulation under section 4c(b) of the federal Commodity
  2   34   Exchange Act, 7 U.S.C. } 1 et seq., and that is commonly known
  2   35   to the commodities trade as a commodity option.
  3    1      NEW SUBSECTION. 2B. "Control" means the same as defined
  3    2   in section 521A.1, subsection 3.
  3    3      NEW SUBSECTION. 8A. "Forward contract" means a contract
  3    4   for the purchase, sale, or transfer of a commodity, as defined
  3    5   in section 1 of the federal Commodity Exchange Act, 7 U.S.C. }
  3    6   1 et seq., or any similar good, article, service, right, or
  3    7   interest that is presently or in the future becomes the
  3    8   subject of dealing in the forward contract trade, or product
  3    9   or byproduct thereof, with a maturity date more than two days
  3   10   after the date the contract is entered into, including, but
  3   11   not limited to, a repurchase transaction, reverse repurchase
  3   12   transaction, consignment, lease, swap, hedge transaction,
  3   13   deposit, loan, option, allocated transaction, unallocated
  3   14   transaction, or a combination of them or option on any of
  3   15   them. "Forward contract" does not include a commodity
  3   16   contract.
  3   17      NEW SUBSECTION. 12A. "Netting agreement" means an
  3   18   agreement, including terms and conditions incorporated by
  3   19   reference therein, including a master agreement, which master
  3   20   agreement, together with all schedules, confirmations,
  3   21   definitions, and addenda thereto and transactions under any
  3   22   thereof, shall be treated as one netting agreement, that
  3   23   documents one or more transactions between parties to the
  3   24   agreement for or involving one or more qualified financial
  3   25   contracts and that provides for the netting or liquidation of
  3   26   qualified financial contracts or present or future payment
  3   27   obligations or payment entitlements thereunder, including
  3   28   liquidation or closeout values relating to such obligations or
  3   29   entitlements among the parties to the netting agreement.
  3   30      NEW SUBSECTION. 13A. "Qualified financial contract" means
  3   31   a commodity contract, forward contract, repurchase agreement,
  3   32   securities contract, swap agreement, and any similar agreement
  3   33   that the commissioner determines by regulation, resolution, or
  3   34   order to be a qualified financial contract for the purposes of
  3   35   this chapter.
  4    1      NEW SUBSECTION. 15A. "Repurchase agreement" means an
  4    2   agreement, including related terms, that provides for the
  4    3   transfer of certificates of deposit, eligible bankers'
  4    4   acceptances, or securities that are direct obligations of, or
  4    5   that are fully guaranteed as to principal and interest by, the
  4    6   United States or an agency of the United States against the
  4    7   transfer of funds by the transferee of the certificates of
  4    8   deposit, eligible bankers' acceptances or securities, with a
  4    9   simultaneous agreement by the transferee to transfer to the
  4   10   transferor certificates of deposit, eligible bankers'




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 3 of 23



  4   11   acceptances, or securities as described above, at a date
  4   12   certain not later than one year after the transfers or on
  4   13   demand against the transfer of funds. For the purposes of
  4   14   this definition, the items that may be subject to a repurchase
  4   15   agreement include, but are not limited to, mortgage=related
  4   16   securities, a mortgage loan, and an interest in a mortgage
  4   17   loan, but shall not include any participation in a commercial
  4   18   mortgage loan, unless the commissioner determines by rule,
  4   19   resolution, or order to include the participation within the
  4   20   meaning of the term. Repurchase agreement also applies to a
  4   21   reverse repurchase agreement.
  4   22      NEW SUBSECTION. 16A. "Securities contract" means a
  4   23   contract for the purchase, sale, or loan of a security,
  4   24   including an option for the repurchase or sale of a security,
  4   25   certificate of deposit, or group or index of securities,
  4   26   including an interest therein or based on the value thereof,
  4   27   or an option entered into on a national securities exchange
  4   28   relating to foreign currencies, or the guarantee of a
  4   29   settlement of cash or securities by or to a securities
  4   30   clearing agency. For the purposes of this definition, the
  4   31   term "security" includes a mortgage loan, mortgage=related
  4   32   securities, and an interest in any mortgage loan or mortgage=
  4   33   related security.
  4   34      NEW SUBSECTION. 18A. "Swap agreement" means an agreement,
  4   35   including the terms and conditions incorporated by reference
  5    1   in an agreement, that is a rate swap agreement, basis swap,
  5    2   commodity swap, forward rate agreement, interest rate future,
  5    3   interest rate option, forward foreign exchange agreement, spot
  5    4   foreign exchange agreement, rate cap agreement, rate floor
  5    5   agreement, rate collar agreement, currency swap agreement,
  5    6   cross=currency rate swap agreement, currency future, or
  5    7   currency option or any other similar agreement, and includes
  5    8   any combination of agreements and an option to enter into an
  5    9   agreement.
  5   10      Sec. 5. NEW SECTION. 507C.28A QUALIFIED FINANCIAL
  5   11   CONTRACTS.
  5   12      1. Notwithstanding any other provision of this chapter to
  5   13   the contrary, including any other provision of this chapter
  5   14   permitting the modification of contracts, or other law of a
  5   15   state, a person shall not be stayed or prohibited from
  5   16   exercising any of the following:
  5   17      a. A contractual right to terminate, liquidate, or close
  5   18   out any netting agreement or qualified financial contract with
  5   19   an insurer because of any of the following:
  5   20      (1) The insolvency, financial condition, or default of the
  5   21   insurer at any time, provided that the right is enforceable
  5   22   under applicable law other than this chapter.
  5   23      (2) The commencement of a formal delinquency proceeding
  5   24   under this chapter.
  5   25      b. Any right under a pledge, security, collateral, or
  5   26   guarantee agreement or any other similar security arrangement
  5   27   or credit support document relating to a netting agreement or
  5   28   qualified financial contract.
  5   29      c. Subject to any provision of section 507C.30, subsection
  5   30   2, any right to set off or net out any termination value,
  5   31   payment amount, or other transfer obligation arising under or
  5   32   in connection with a netting agreement or qualified financial
  5   33   contract where the counterparty or its guarantor is organized
  5   34   under the laws of the United States or a state or foreign
  5   35   jurisdiction approved by the securities valuation office or




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 4 of 23



  6    1   the national association of insurance commissioners as
  6    2   eligible for netting.
  6    3      2. Upon termination of a netting agreement, the net or
  6    4   settlement amount, if any, owed by a nondefaulting party to an
  6    5   insurer against which an application or petition has been
  6    6   filed under this chapter shall be transferred to or on the
  6    7   order of the receiver for the insurer, even if the insurer is
  6    8   the defaulting party, notwithstanding any provision in the
  6    9   netting agreement that may provide that the nondefaulting
  6   10   party is not required to pay any net or settlement amount due
  6   11   to the defaulting party upon termination. Any limited two=
  6   12   way payment provision in a netting agreement with an insurer
  6   13   that has defaulted shall be deemed to be a full two=way
  6   14   payment provision as against the defaulting insurer. Any such
  6   15   amount shall, except to the extent it is subject to one or
  6   16   more secondary liens or encumbrances, be a general asset of
  6   17   the insurer.
  6   18      3. In making any transfer of a netting agreement or
  6   19   qualified financial contract of an insurer subject to a
  6   20   proceeding under this chapter, the receiver shall do either of
  6   21   the following:
  6   22      a. Transfer to one party, other than an insurer subject to
  6   23   a proceeding under this chapter, all netting agreements and
  6   24   qualified financial contracts between a counterparty or any
  6   25   affiliate of the counterparty and the insurer that is the
  6   26   subject of the proceeding, including all of the following:
  6   27      (1) All rights and obligations of each party under each
  6   28   such netting agreement and qualified financial contract.
  6   29      (2) All property, including any guarantees or credit
  6   30   support documents, securing any claims of each party under
  6   31   each such netting agreement and qualified financial contract.
  6   32      b. Transfer none of the netting agreements, qualified
  6   33   financial contracts, rights, obligations, or property referred
  6   34   to in paragraph "a" with respect to the counterparty and any
  6   35   affiliate of the counterparty.
  7    1      4. If a receiver for an insurer makes a transfer of one or
  7    2   more netting agreements or qualified financial contracts, the
  7    3   receiver shall use the receiver's best efforts to notify any
  7    4   person who is a party to the netting agreements or qualified
  7    5   financial contracts of the transfer by noon of the receiver's
  7    6   local time on the business day following the transfer. For
  7    7   purposes of this subsection, "business day" means a day other
  7    8   than a Saturday, Sunday, or any day on which either the New
  7    9   York stock exchange or the federal reserve bank of New York is
  7   10   closed.
  7   11      5. Notwithstanding any other provision of this chapter to
  7   12   the contrary, a receiver shall not avoid a transfer of money
  7   13   or other property arising under or in connection with a
  7   14   netting agreement or qualified financial contract, or any
  7   15   pledge security, collateral, or guarantee agreement or any
  7   16   other similar security arrangement or credit support document
  7   17   relating to a netting agreement or qualified financial
  7   18   contract, that is made before the commencement of a formal
  7   19   delinquency proceeding under this chapter. However, a
  7   20   transfer may be avoided under section 507C.28 if the transfer
  7   21   was made with actual intent to hinder, delay, or defraud the
  7   22   insurer, a receiver appointed for the insurer, or existing or
  7   23   future creditors.
  7   24      6. In exercising any of its powers under this chapter to
  7   25   disaffirm or repudiate a netting agreement or qualified




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 5 of 23



  7   26   financial contract, the receiver must take action with respect
  7   27   to each netting agreement or qualified financial contract and
  7   28   all transactions entered into in connection therewith, in its
  7   29   entirety. Notwithstanding any other provision of this chapter
  7   30   to the contrary, any claim of a counterparty against the
  7   31   estate arising from the receiver's disaffirmance or
  7   32   repudiation of a netting agreement or qualified financial
  7   33   contract that has not been previously affirmed in the
  7   34   liquidation or in the immediately preceding rehabilitation
  7   35   case shall be determined and shall be allowed or disallowed as
  8    1   if the claim had arisen before the date of the filing of the
  8    2   petition for liquidation or, if a rehabilitation proceeding is
  8    3   converted to a liquidation proceeding, as if the claim had
  8    4   arisen before the date of filing the petition for
  8    5   rehabilitation. The amount of the claim shall be the actual
  8    6   direct compensatory damages determined as of the date of the
  8    7   disaffirmance or repudiation of the netting agreement or
  8    8   qualified financial contract. The term "actual direct
  8    9   compensatory damages" does not include punitive or exemplary
  8   10   damages, damages for lost profit or lost opportunity, or
  8   11   damages for pain and suffering, but does include normal and
  8   12   reasonable costs of cover or other reasonable measures of
  8   13   damages utilized in the derivatives market for the contract
  8   14   and agreement claims.
  8   15      7. The term "contractual right" as used in this section
  8   16   includes any right, whether or not evidenced in writing,
  8   17   arising under statutory or common law, a rule or bylaw of a
  8   18   national securities exchange, national securities clearing
  8   19   organization or securities clearing agency, a rule or bylaw,
  8   20   or a resolution of the governing body of a contract market or
  8   21   its clearing organization, or under law merchant.
  8   22      8. This section shall not apply to persons who are
  8   23   affiliates of the insurer that is the subject of the
  8   24   proceeding.
  8   25      9. All rights of a counterparty under this chapter shall
  8   26   apply to netting agreements and qualified financial contracts
  8   27   entered into on behalf of the general account or separate
  8   28   accounts, provided that the assets of each separate account
  8   29   are available only to counterparties to netting agreements and
  8   30   qualified financial contracts entered into on behalf of that
  8   31   separate account.
  8   32      Sec. 6. Section 507C.30, subsection 2, paragraph a,
  8   33   subparagraphs (4) and (5), Code 2005, are amended to read as
  8   34   follows:
  8   35      (4) The obligation of the person is owed to the affiliate
  9    1   of the insurer, or any other entity or association other than
  9    2   the insurer.
  9    3      (4) (5) The obligation of the person is to pay an
  9    4   assessment levied against the members or subscribers of the
  9    5   insurer, or is to pay a balance upon a subscription to the
  9    6   capital stock of the insurer, or is in any other way in the
  9    7   nature of a capital contribution.
  9    8      (5) (6) The obligation of the person is to pay earned
  9    9   premiums to the insurer.
  9   10      Sec. 7. Section 509.3, subsection 1, Code 2005, is amended
  9   11   to read as follows:
  9   12      1. The policy shall have a provision that a copy of the
  9   13   application, if any, of the policyholder shall be attached to
  9   14   the policy when issued or shall be furnished to the
  9   15   policyholder within thirty days after the policy is issued,




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 6 of 23



  9   16   that all statements made by the policyholder or by the persons
  9   17   insured shall be deemed representations and not warranties,
  9   18   and that no statement made by any person insured shall be used
  9   19   in any contest unless a copy of the instrument containing the
  9   20   statement is or has been furnished to such person.
  9   21      Sec. 8. Section 513B.12, Code 2005, is amended by adding
  9   22   the following new subsection:
  9   23      NEW SUBSECTION. 6. During the period of time that the
  9   24   operation of the small employer carrier reinsurance program is
  9   25   suspended pursuant to section 513B.13, subsection 14, a small
  9   26   employer carrier is not required to make an application to
  9   27   become a risk=assuming carrier pursuant to this section.
  9   28      Sec. 9. Section 513B.13, subsection 3, Code 2005, is
  9   29   amended by adding the following new paragraph:
  9   30      NEW PARAGRAPH. e. During the period of time that the
  9   31   program is suspended pursuant to subsection 14, the size of
  9   32   the board may be reduced with the approval of the
  9   33   commissioner.
  9   34      Sec. 10. Section 513B.17, subsection 4, Code 2005, is
  9   35   amended by striking the subsection.
 10    1      Sec. 11. Section 513C.6, Code 2005, is amended by adding
 10    2   the following new subsection:
 10    3      NEW SUBSECTION. 7. An individual who has coverage as a
 10    4   dependent under a basic or standard health benefit plan may,
 10    5   when that individual is no longer a dependent under such
 10    6   coverage, elect to continue coverage under the basic or
 10    7   standard health benefit plan if the individual so elects
 10    8   immediately upon termination of the coverage under which the
 10    9   individual was covered as a dependent.
 10   10      Sec. 12. Section 514A.5, subsection 1, Code 2005, is
 10   11   amended to read as follows:
 10   12      1. The insured shall not be bound by any statement made in
 10   13   an application for a policy unless a copy of such application
 10   14   is attached to or endorsed on the policy when issued as a part
 10   15   thereof or is furnished to the policyholder within thirty days
 10   16   after the policy is issued. If any such policy delivered or
 10   17   issued for delivery to any person in this state shall be
 10   18   reinstated or renewed, and the insured or the beneficiary or
 10   19   assignee of such policy shall make written request to the
 10   20   insurer for a copy of the application, if any, for such
 10   21   reinstatement or renewal, the insurer shall within fifteen
 10   22   days after the receipt of such request at its home office or
 10   23   any branch office of the insurer, deliver or mail to the
 10   24   person making such request, a copy of such application. If
 10   25   such copy shall not be so delivered or mailed, the insurer
 10   26   shall be precluded from introducing such application as
 10   27   evidence in any action or proceeding based upon or involving
 10   28   such policy or its reinstatement or renewal.
 10   29      Sec. 13. Section 514B.13, unnumbered paragraph 2, Code
 10   30   2005, is amended to read as follows:
 10   31      Health maintenance organizations providing services
 10   32   exclusively on a group contract basis may limit the open
 10   33   enrollment provided for in this section to all members of the
 10   34   group covered by the contract, including those members of the
 10   35   group who previously waived coverage.
 11    1      Sec. 14. Section 514E.2, subsection 1, paragraph a, Code
 11    2   2005, is amended to read as follows:
 11    3      a. All carriers and all organized delivery systems
 11    4   licensed by the director of public health providing health
 11    5   insurance or health care services in Iowa, whether on an




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 7 of 23



 11    6   individual or group basis, and all other insurers designated
 11    7   by the association's board of directors and approved by the
 11    8   commissioner shall be members of the association.
 11    9      Sec. 15. Section 514E.2, subsection 5, paragraph l, Code
 11   10   2005, is amended to read as follows:
 11   11      l. Develop a method of advising applicants of the
 11   12   availability of other coverages outside the association, and
 11   13   shall promulgate a list of health conditions the existence of
 11   14   which would make an applicant eligible without demonstrating a
 11   15   rejection of coverage by one carrier.
 11   16      Sec. 16. Section 514E.2, subsection 7, Code 2005, is
 11   17   amended by adding the following new unnumbered paragraph:
 11   18      NEW UNNUMBERED PARAGRAPH. For purposes of this subsection,
 11   19   "total health insurance premiums" and "payments for subscriber
 11   20   contracts" include, without limitation, premiums or other
 11   21   amounts paid to or received by a member for individual and
 11   22   group health plan care coverage provided under any chapter of
 11   23   the Code or Acts, and "paid losses" includes, without
 11   24   limitation, claims paid by a member operating on a self=funded
 11   25   basis for individual and group health plan care coverage
 11   26   provided under any chapter of the Code or Acts. For purposes
 11   27   of calculating and conducting the assessment, the association
 11   28   shall have the express authority to require members to report
 11   29   on an annual basis each member's total health insurance
 11   30   premiums and payments for subscriber contracts and paid
 11   31   losses. A member is liable for its share of the assessment
 11   32   calculated in accordance with this section regardless of
 11   33   whether it participates in the individual insurance market.
 11   34      Sec. 17. Section 514E.7, subsection 1, Code 2005, is
 11   35   amended by adding the following new paragraphs:
 12    1      NEW PARAGRAPH. d. That the individual has a health
 12    2   condition that is established by the association's board of
 12    3   directors, with the approval of the commissioner, to be
 12    4   eligible for plan coverage.
 12    5      NEW PARAGRAPH. e. That the individual has coverage under
 12    6   a basic or standard health benefit plan under chapter 513C.
 12    7      Sec. 18. Section 514E.8, subsection 1, Code 2005, is
 12    8   amended to read as follows:
 12    9      1. An association policy shall contain provisions under
 12   10   which the association is obligated to renew the coverage for
 12   11   an individual until the day the individual becomes eligible
 12   12   for Medicare coverage based on age, provided that any
 12   13   individual who is covered by an association policy and is
 12   14   eligible for Medicare coverage based on age prior to January
 12   15   1, 2005, may continue to renew the coverage under the
 12   16   association policy.
 12   17      Sec. 19. Section 515.138, sixth subsection, paragraph
 12   18   entitled concealment == fraud, Code 2005, is amended to read
 12   19   as follows:
 12   20      CONCEALMENT == FRAUD. This entire policy shall be void if,
 12   21   whether before or after a loss, the an insured has willfully
 12   22   concealed or misrepresented any material fact or circumstance
 12   23   concerning this insurance or the subject thereof, or the
 12   24   interest of the an insured therein, or in case of any fraud or
 12   25   false swearing by the an insured relating thereto.
 12   26      Sec. 20. Section 515.138, sixth subsection, paragraph
 12   27   entitled perils not included, Code 2005, is amended to read as
 12   28   follows:
 12   29      PERILS NOT INCLUDED. This company shall not be liable for
 12   30   loss by fire or other perils insured against in this policy




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 8 of 23



 12   31   caused, directly or indirectly, by: (a) Enemy attack by armed
 12   32   forces, including action taken by military, naval or air
 12   33   forces in resisting an actual or an immediately impending
 12   34   enemy attack; (b) invasion; (c) insurrection; (d) rebellion;
 12   35   (e) revolution; (f) civil war; (g) usurped power; (h) order of
 13    1   any civil authority except acts of destruction at the time of
 13    2   and for the purpose of preventing the spread of fire, provided
 13    3   that such fire did not originate from any of the perils
 13    4   excluded by this policy; (i) neglect of the an insured to use
 13    5   all reasonable means to save and preserve the property at and
 13    6   after a loss, or when the property is endangered by fire in
 13    7   neighboring premises; (j) nor shall this company be liable for
 13    8   loss by theft.
 13    9      Sec. 21. Section 515.138, sixth subsection, paragraph
 13   10   entitled conditions suspending or restricting insurance, Code
 13   11   2005, is amended to read as follows:
 13   12      CONDITIONS SUSPENDING OR RESTRICTING INSURANCE. Unless
 13   13   otherwise provided in writing added hereto this company shall
 13   14   not be liable for loss occurring under any of the following
 13   15   circumstances:
 13   16      a. While the hazard is created or increased by any means
 13   17   within the control or knowledge of the an insured; or.
 13   18      b. While a described building, whether intended for
 13   19   occupancy by owner or tenant, is vacant or unoccupied beyond a
 13   20   period of sixty consecutive days; or.
 13   21      c. As a result of explosion or riot, unless fire ensue,
 13   22   and in that event for loss by fire only.
 13   23      Sec. 22. Section 515B.2, subsection 4, paragraph b,
 13   24   subparagraph (7), Code 2005, is amended to read as follows:
 13   25      (7) That would otherwise be a covered claim, but is an
 13   26   obligation to or on behalf of a person who has a net worth, on
 13   27   the date of the occurrence giving rise to the claim, greater
 13   28   than that allowed by the guarantee fund law of the state of
 13   29   residence of the claimant, and which state has denied coverage
 13   30   to that claimant on that basis.
 13   31      Sec. 23. Section 515B.17, Code 2005, is amended to read as
 13   32   follows:
 13   33      515B.17 TIMELY FILING OF CLAIMS.
 13   34      Notwithstanding any other provision of this chapter, a
 13   35   covered claim shall not include any claim filed with the
 14    1   association after twenty=four months from the date of the
 14    2   order of liquidation or after the final date set by the court
 14    3   for the filing of claims against the insolvent insurer or its
 14    4   receiver, whichever occurs first.
 14    5      Sec. 24. Section 515F.36, subsection 2, Code 2005, is
 14    6   amended to read as follows:
 14    7      2. The committee shall consist of seven members, one of
 14    8   whom.
 14    9      a. Five of the members shall be elected by to the
 14   10   committee, with one member from each of the following:
 14   11      a. (1) American insurance association.
 14   12      b. (2) Alliance of American insurers Property casualty
 14   13   insurers association of America.
 14   14      c. National association of independent insurers.
 14   15      d. (3) Iowa insurance institute.
 14   16      e. (4) Mutual insurance association of Iowa.
 14   17      f. (5) Independent insurance agents of Iowa.
 14   18      g. b. All other insurers Two of the members shall be
 14   19   elected to the committee by other insurer members of the plan.
 14   20      Sec. 25. Section 516E.1, Code 2005, is amended to read as




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 9 of 23



 14   21   follows:
 14   22      516E.1 DEFINITIONS.
 14   23      For the purposes of this chapter:
 14   24      1. "Administrator" means the deputy administrator
 14   25   appointed pursuant to section 502.601.
 14   26      1. 2. "Commissioner" means the commissioner of insurance
 14   27   as provided in section 505.1 or the deputy administrator
 14   28   appointed under section 502.601.
 14   29      3. "Maintenance agreement" means a contract of limited
 14   30   duration that provides for scheduled maintenance only.
 14   31      2. 4. "Mechanical breakdown insurance" means a policy,
 14   32   contract, or agreement that undertakes to perform or provide
 14   33   repair or replacement service, or indemnification for that
 14   34   service, for the operational or structural failure of a motor
 14   35   vehicle due to a defect in materials or skill of work or
 15    1   normal wear and tear, and that is issued by an insurance
 15    2   company authorized to do business in this state.
 15    3      3. 5. "Motor vehicle" means any self=propelled vehicle
 15    4   subject to registration under chapter 321.
 15    5      4. "Motor vehicle service contract" or "service contract"
 15    6   means a contract or agreement given for consideration over and
 15    7   above the lease or purchase price of a new or used motor
 15    8   vehicle having a gross vehicle weight rating of less than
 15    9   sixteen thousand pounds that undertakes to perform or provide
 15   10   repair or replacement service, or indemnification for that
 15   11   service, for the operational or structural failure of a motor
 15   12   vehicle due to a defect in materials or skill of work or
 15   13   normal wear and tear, but does not include mechanical
 15   14   breakdown insurance or maintenance agreements providing
 15   15   scheduled repair and maintenance services for leased vehicles.
 15   16      5. 6. "Motor vehicle service contract provider" or
 15   17   "provider" "Provider" means a person who issues, makes,
 15   18   provides, sells, or offers to sell a motor vehicle service
 15   19   contract.
 15   20      6. "Motor vehicle service contract reimbursement insurance
 15   21   policy" or "reimbursement insurance policy" means a policy of
 15   22   insurance providing coverage for all obligations and
 15   23   liabilities incurred by a motor vehicle service contract
 15   24   provider under the terms of motor vehicle service contracts
 15   25   issued by the provider.
 15   26      7. "Record" means information stored or preserved in any
 15   27   medium, including in an electronic or paper format. A record
 15   28   includes but is not limited to documents, books, publications,
 15   29   accounts, correspondence, memoranda, agreements, computer
 15   30   files, film, microfilm, photographs, and audio or visual
 15   31   tapes.
 15   32      8. "Reimbursement insurance policy" means a policy of
 15   33   insurance issued to a service company and pursuant to which
 15   34   the insurer agrees, for the benefit of the service contract
 15   35   holders, to discharge all of the obligations and liabilities
 16    1   of the service company under the terms of service contracts
 16    2   issued by the service company in the event of nonperformance
 16    3   by the service company. For the purposes of this definition,
 16    4   "all obligations and liabilities" include, but are not limited
 16    5   to, failure of the service company to perform under the
 16    6   service contract and the return of the unearned service
 16    7   company fee in the event of the service company's
 16    8   unwillingness or inability to reimburse the unearned service
 16    9   company fee in the event of termination of a service contract.
 16   10      9. "Service company" means a person who issues and is




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html               6/9/2005
                                                                            Page 10 of 23



 16   11   obligated to perform, or arrange for the performance of,
 16   12   services pursuant to a service contract.
 16   13      10. "Service contract" means a contract or agreement given
 16   14   for consideration over and above the lease or purchase price
 16   15   of a new or used motor vehicle having a gross vehicle weight
 16   16   rating of less than sixteen thousand pounds, that undertakes
 16   17   to perform or provide repair or replacement service, or
 16   18   indemnification for that service, for the operation or
 16   19   structural failure of a motor vehicle due to a defect in
 16   20   materials or skill of work or normal wear and tear, but does
 16   21   not include mechanical breakdown insurance or maintenance
 16   22   agreements.
 16   23      8. 11. "Service contract holder" means a person who
 16   24   purchases a motor vehicle service contract.
 16   25      12. "Third=party administrator" means a person who
 16   26   contracts with a service company to be responsible for the
 16   27   administration of the service company's service contracts,
 16   28   including processing and adjudicating claims pursuant to a
 16   29   service contract.
 16   30      Sec. 26. Section 516E.2, Code 2005, is amended to read as
 16   31   follows:
 16   32      516E.2 INSURANCE REQUIRED REQUIREMENTS FOR DOING BUSINESS.
 16   33      1. A motor vehicle service contract shall not be issued,
 16   34   sold, or offered for sale in this state unless the provider of
 16   35   the service contract is insured under a motor vehicle service
 17    1   contract reimbursement insurance policy issued by an insurer
 17    2   authorized to do business in this state. service company does
 17    3   all of the following:
 17    4      a. Provides a receipt for the purchase of the service
 17    5   contract to the service contract holder.
 17    6      b. Provides a copy of the service contract to the service
 17    7   contract holder within a reasonable period of time after the
 17    8   date of purchase of the service contract.
 17    9      2. The issuer of a reimbursement insurance policy shall
 17   10   not cancel a reimbursement insurance policy unless a written
 17   11   notice has been received by the commissioner and by each
 17   12   applicable provider, including automobile dealers and third=
 17   13   party administrators. The notice shall fix the date of
 17   14   cancellation at a date no earlier than ten days after receipt
 17   15   of the notice by the commissioner and by the applicable
 17   16   provider. The notice may be made in person or by mail and a
 17   17   post office department receipt of certified or registered
 17   18   mailing shall be deemed proof of receipt of the notice. A
 17   19   service company shall not issue a service contract or arrange
 17   20   to perform services pursuant to a service contract unless the
 17   21   service company is registered with the commissioner. A
 17   22   service company shall file a registration with the
 17   23   commissioner annually, on a form prescribed by the
 17   24   commissioner, accompanied by a registration fee in the amount
 17   25   of five hundred dollars.
 17   26      3. In order to assure the faithful performance of a
 17   27   service company's obligations to its service contract holders,
 17   28   the administrator may by rule require financial responsibility
 17   29   standards.
 17   30      4. The commissioner may issue an order denying,
 17   31   suspending, or revoking any registration if the commissioner
 17   32   finds that the order is in the public interest and finds any
 17   33   of the following:
 17   34      a. The registration is incomplete in any material respect
 17   35   or contains any statement which, in light of the circumstances




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 11 of 23



 18    1   under which the registration was made, is determined by the
 18    2   commissioner to be false or misleading with respect to any
 18    3   material fact.
 18    4      b. A provision of this chapter or a rule, order, or
 18    5   condition lawfully imposed under this chapter, has been
 18    6   willfully violated in connection with the sale of service
 18    7   contracts by any of the following persons:
 18    8      (1) The person filing the registration, but only if the
 18    9   person filing the registration is directly or indirectly
 18   10   controlled by or acting for the service company.
 18   11      (2) The service company, any partner, officer, or director
 18   12   of the service company or any person occupying a similar
 18   13   status or performing similar functions for the service
 18   14   company, or any person directly or indirectly controlling or
 18   15   controlled by the service company.
 18   16      c. The service company has not filed a document or
 18   17   information required under this chapter.
 18   18      d. The service company's literature or advertising is
 18   19   misleading, incorrect, incomplete, or deceptive.
 18   20      e. The service company has failed to pay the proper filing
 18   21   fee. However, the commissioner shall vacate an order issued
 18   22   pursuant to this paragraph when the proper fee has been paid.
 18   23      f. The service company does not have the minimum net
 18   24   worth, as determined in accordance with generally accepted
 18   25   accounting principles, required under this chapter.
 18   26      The commissioner may vacate or modify an order issued under
 18   27   this subsection if the commissioner finds that the conditions
 18   28   which prompted the entry of the order have changed or that it
 18   29   is otherwise in the public interest to do so.
 18   30      Sec. 27. Section 516E.3, Code 2005, is amended to read as
 18   31   follows:
 18   32      516E.3 FILING AND FEE REQUIREMENTS.
 18   33      1. SERVICE COMPANIES.
 18   34      a. A motor vehicle service contract shall not be issued,
 18   35   sold, or offered for sale in this state unless a true and
 19    1   correct copy of the service contract, and the provider's
 19    2   service company's reimbursement insurance policy have been
 19    3   filed with the commissioner by the service company.
 19    4      2. b. In addition to any other required filings, an
 19    5   accurate copy of the service contract and the provider's
 19    6   reimbursement insurance policy, the A service company shall
 19    7   file a consent to service of process on the commissioner, and
 19    8   such other information as the commissioner requires shall be
 19    9   filed annually with the commissioner no later than the first
 19   10   day of August. If the first day of August falls on a weekend
 19   11   or a holiday, the date for filing shall be the next business
 19   12   day. In addition to the annual filing, the provider service
 19   13   company shall promptly file copies of any amended documents if
 19   14   material amendments have been made in the materials on file
 19   15   with the commissioner. If an annual filing is made after the
 19   16   first of August and sales have occurred during the period when
 19   17   the provider service company was in noncompliance with this
 19   18   section, the commissioner shall assess an additional filing
 19   19   fee that is two times the amount normally required for an
 19   20   annual filing. A fee shall not be charged for interim filings
 19   21   made to keep the materials filed with the division current and
 19   22   accurate. The annual filing shall be accompanied by a filing
 19   23   fee determined by the commissioner which shall be sufficient
 19   24   to defray the costs of administering this chapter.
 19   25      3. a. c. A motor vehicle service contract provider




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 12 of 23



 19   26   service company shall promptly file the following information
 19   27   with the insurance commissioner:
 19   28      (1) A change in the name or ownership of the provider
 19   29   service company.
 19   30      (2) The termination of the provider's service company's
 19   31   business.
 19   32      b. (3) The provider service company is not required to
 19   33   submit a fee as part of this filing.
 19   34      2. PROVIDERS.
 19   35      a. A service contract shall not be sold or offered for
 20    1   sale in this state unless a true and correct copy of the
 20    2   service contract has been filed with the commissioner by the
 20    3   provider.
 20    4      b. A provider shall file a consent to service of process
 20    5   on the commissioner and such other information as the
 20    6   commissioner requires annually with the commissioner no later
 20    7   than August 1. If August 1 falls on a weekend or a holiday,
 20    8   the date for filing shall be the next business day. In
 20    9   addition to the annual filing, the provider shall promptly
 20   10   file copies of any amended documents if material amendments
 20   11   have been made in the materials on file with the commissioner.
 20   12   If an annual filing is made after August 1 and sales have
 20   13   occurred during the period when the provider was in
 20   14   noncompliance with this section, the commissioner shall assess
 20   15   an additional filing fee that is two times the amount normally
 20   16   required for an annual filing. A fee shall not be charged for
 20   17   interim filings made to keep the materials filed with the
 20   18   division current and accurate. The annual filing shall be
 20   19   accompanied by a filing fee in the amount of one hundred
 20   20   dollars.
 20   21      c. A provider shall promptly file the following
 20   22   information with the commissioner:
 20   23      (1) A change in the name or ownership of the provider.
 20   24      (2) The termination of the provider's business.
 20   25      (3) A provider is not required to submit a fee as part of
 20   26   this filing.
 20   27      Sec. 28. Section 516E.4, Code 2005, is amended by striking
 20   28   the section and inserting in lieu thereof the following:
 20   29      516E.4 REIMBURSEMENT INSURANCE POLICY REQUIREMENTS.
 20   30      1. REQUIRED DISCLOSURES. A reimbursement insurance policy
 20   31   insuring a service contract issued, sold, or offered for sale
 20   32   in this state shall conspicuously state that, upon failure of
 20   33   the service company to perform under the contract, including
 20   34   but not limited to a failure to return the unearned
 20   35   consideration paid for a service contract in excess of the
 21    1   premium, the insurer that issued the policy shall pay on
 21    2   behalf of the service company any amount that is owed to the
 21    3   service contract holder by the service company to satisfy the
 21    4   service company's obligations under a service contract issued
 21    5   or sold by the service company.
 21    6      2. TERMINATION. As applicable, an insurer that issued a
 21    7   reimbursement insurance policy shall not terminate the policy
 21    8   unless a written notice has been received by the commissioner
 21    9   and by each applicable provider, service company, or third=
 21   10   party administrator. The notice shall fix the date of
 21   11   termination at a date no earlier than ten days after receipt
 21   12   of the notice by the commissioner and by the applicable
 21   13   provider, service company, or third=party administrator. The
 21   14   notice may be delivered in person or sent by mail, and a
 21   15   restricted certified mail return receipt shall be deemed proof




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 13 of 23



 21   16   of receipt of notice. The termination of a reimbursement
 21   17   insurance policy shall not reduce the issuer's responsibility
 21   18   for a service contract issued by a service company prior to
 21   19   the date of termination.
 21   20      3. INDEMNIFICATION OR SUBROGATION. This section does not
 21   21   prevent or limit the right of an insurer that issued a
 21   22   reimbursement insurance policy to seek indemnification from or
 21   23   subrogation against a service company if the insurer pays or
 21   24   is obligated to pay a service contract holder sums that the
 21   25   service company was obligated to pay pursuant to the
 21   26   provisions of a service contract or pursuant to a contractual
 21   27   agreement.
 21   28      Sec. 29. Section 516E.5, Code 2005, is amended to read as
 21   29   follows:
 21   30      516E.5 DISCLOSURE TO SERVICE CONTRACT HOLDERS == CONTRACT
 21   31   PROVISIONS.
 21   32      1. A motor vehicle service contract shall not be issued,
 21   33   sold, or offered for sale in this state unless the contract
 21   34   conspicuously states that the obligations of the provider
 21   35   service company to the service contract holder are guaranteed
 22    1   under the service contract a reimbursement insurance policy,
 22    2   and unless the including a statement in substantially the
 22    3   following form: "Obligations of the service company under
 22    4   this service contract are guaranteed under a reimbursement
 22    5   insurance policy. If the service company fails to pay or
 22    6   provide service on a claim within sixty days after proof of
 22    7   loss has been filed with the service company, the service
 22    8   contract holder is entitled to make a claim directly against
 22    9   the reimbursement insurance policy." A claim against a
 22   10   reimbursement insurance policy shall also include a claim for
 22   11   return of the unearned consideration paid for the service
 22   12   contract in excess of the premium paid. A service contract
 22   13   shall conspicuously states state the name and address of the
 22   14   issuer of the reimbursement insurance policy for that service
 22   15   contract.
 22   16      2. A motor vehicle service contract shall be written in
 22   17   clear, understandable language and the entire contract shall
 22   18   be printed or typed in easy=to=read type, size, and style, and
 22   19   shall not be issued, sold, or offered for sale in this state
 22   20   unless the contract does all of the following:
 22   21      a. Clearly and conspicuously states the name and address
 22   22   of the service company, describes the service company's
 22   23   obligations to perform services or to arrange for the
 22   24   performance of services under the service contract, and states
 22   25   that the obligations of the provider service company to the
 22   26   service contract holder are guaranteed under a service
 22   27   contract reimbursement insurance policy.
 22   28      b. Clearly and conspicuously states the name and address
 22   29   of the issuer of the reimbursement insurance policy.
 22   30      c. Identifies the motor vehicle service contract provider,
 22   31   the seller of the motor vehicle company obligated to perform
 22   32   the service under the service contract, any third=party
 22   33   administrator, and the service contract holder to the extent
 22   34   that the name and address of the service contract holder has
 22   35   been furnished by the service contract holder.
 23    1      d. Sets forth the total purchase price of the service
 23    2   contract and the terms under which the purchase price of the
 23    3   service contract is to be paid.
 23    4      e. Sets forth the procedure for making a claim, including
 23    5   a telephone number.




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 14 of 23



 23    6      f. Clearly and conspicuously states the dates that
 23    7   coverage starts and ends and the existence, terms, and
 23    8   conditions of a deductible amount, if any.
 23    9      g. Specifies the merchandise or services, or both, to be
 23   10   provided and clearly states any and all limitations,
 23   11   exceptions, or exclusions.
 23   12      h. Sets forth the conditions on which substitution of
 23   13   services will be allowed.
 23   14      i. Sets forth all of the obligations and duties of the
 23   15   service contract holder, including but not limited to the duty
 23   16   to protect against any further damage to the motor vehicle,
 23   17   and the obligation to notify the provider service company in
 23   18   advance of any repair, if any.
 23   19      j. Sets forth any and all terms, restrictions, or
 23   20   conditions governing transferability of the service contract,
 23   21   if any.
 23   22      k. Describes or references any and all applicable
 23   23   provisions of the Iowa consumer credit code, chapter 537.
 23   24      l. States the name and address of the commissioner.
 23   25      m. Sets forth any and all conditions on which the service
 23   26   contract may be canceled, the terms and conditions for the
 23   27   refund of any portion of the purchase price, the identity of
 23   28   the person primarily liable to provide any refund, and the
 23   29   identity of any other person liable to provide any portion of
 23   30   the refund. If the service contract holder cancels the
 23   31   service contract, the service company shall mail a written
 23   32   notice of termination to the service contract holder within
 23   33   fifteen days of the date of the termination.
 23   34      n. Permits the service contract holder to cancel and
 23   35   return the service contract within at least twenty days of the
 24    1   date of mailing the service contract to the service contract
 24    2   holder or within at least ten days after delivery of the
 24    3   service contract if the service contract is delivered at the
 24    4   time of sale of the service contract, or within a longer
 24    5   period of time as permitted under the service contract. If no
 24    6   claim has been made under the service contract prior to its
 24    7   return, the service contract is void and the full purchase
 24    8   price of the service contract shall be refunded to the service
 24    9   contract holder. A ten percent penalty shall be added each
 24   10   month to a refund that is not paid to a service contract
 24   11   holder within thirty days of the return of the service
 24   12   contract to the service company. The applicable time period
 24   13   for cancellation of a service contract shall apply only to the
 24   14   original service contract holder that purchased the service
 24   15   contract.
 24   16      3. A complete copy of the terms of the motor vehicle
 24   17   service contract shall be delivered to the prospective service
 24   18   contract holder at or before the time that the prospective
 24   19   service contract holder makes application for the service
 24   20   contract. If there is no separate application procedure, then
 24   21   a complete copy of the motor vehicle service contract shall be
 24   22   delivered to the service contract holder at or before the time
 24   23   the service contract holder becomes bound under the contract.
 24   24      Sec. 30. Section 516E.6, Code 2005, is amended to read as
 24   25   follows:
 24   26      516E.6 COMMISSIONER MAY PROHIBIT CERTAIN SALES ==
 24   27   INJUNCTION.
 24   28      The commissioner shall issue an order instructing the a
 24   29   provider, service company, or third=party administrator to
 24   30   cease and desist from selling or offering for sale motor




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 15 of 23



 24   31   vehicle service contracts if the commissioner determines that
 24   32   the provider, service company, or third=party administrator
 24   33   has failed to comply with a provision of this chapter. Upon
 24   34   the failure of a motor vehicle provider, service contract
 24   35   provider company, or third=party administrator to obey a cease
 25    1   and desist order issued by the commissioner, the commissioner
 25    2   may give notice in writing of the failure to the attorney
 25    3   general, who shall immediately commence an action against the
 25    4   provider, service company, or third=party administrator to
 25    5   enjoin the provider, service company, or third=party
 25    6   administrator from selling or offering for sale motor vehicle
 25    7   service contracts until the provider, service company, or
 25    8   third=party administrator complies with the provisions of this
 25    9   chapter and the district court may issue the injunction.
 25   10      Sec. 31. Section 516E.7, Code 2005, is amended to read as
 25   11   follows:
 25   12      516E.7 RULES.
 25   13      The commissioner may adopt rules as provided in chapter 17A
 25   14   to administer and enforce the provisions of this chapter and
 25   15   to establish minimum standards for disclosure of motor vehicle
 25   16   service contract coverage limitations and exclusions.
 25   17      Sec. 32. Section 516E.8, Code 2005, is amended to read as
 25   18   follows:
 25   19      516E.8 EXEMPTION.
 25   20      This chapter does not apply to a motor vehicle service
 25   21   contract issued by the manufacturer or importer of the motor
 25   22   vehicle covered by the service contract or to any third party
 25   23   acting in an administrative capacity on the manufacturer's
 25   24   behalf in connection with that service contract.
 25   25      Sec. 33. Section 516E.9, Code 2005, is amended to read as
 25   26   follows:
 25   27      516E.9 MISREPRESENTATIONS OF STATE APPROVAL.
 25   28      A motor vehicle service contract provider company shall not
 25   29   represent or imply in any manner that the provider service
 25   30   company has been sponsored, recommended, or approved or that
 25   31   the provider's service company's abilities or qualifications
 25   32   have in any respect been passed upon by the state of Iowa,
 25   33   including the commissioner, the insurance division, or the
 25   34   division's securities bureau.
 25   35      Sec. 34. Section 516E.10, Code 2005, is amended to read as
 26    1   follows:
 26    2      516E.10 PROHIBITED ACTS == UNFAIR OR DECEPTIVE TRADE
 26    3   PRACTICES.
 26    4      1. MISREPRESENTATIONS, FALSE ADVERTISING, AND UNFAIR
 26    5   PRACTICES.
 26    6      a. Unless licensed as an insurance company, a motor
 26    7   vehicle service contract provider company shall not use in its
 26    8   name, contracts, or literature, the words "insurance",
 26    9   "casualty", "surety", "mutual", or any other words descriptive
 26   10   of the insurance, casualty, or surety business or deceptively
 26   11   similar to the name or description of any insurance or surety
 26   12   corporation, or any other motor vehicle service contract
 26   13   provider company.
 26   14      b. A motor vehicle service contract provider company shall
 26   15   not, without the written consent of the purchaser, knowingly
 26   16   charge a purchaser for duplication of coverage or duties
 26   17   required by state or federal law, a warranty expressly issued
 26   18   by a manufacturer or seller of a product, or an implied
 26   19   warranty enforceable against the lessor, seller, or
 26   20   manufacturer of a product.




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 16 of 23



 26   21      c. A motor vehicle provider, service contract provider
 26   22   company, or third=party administrator shall not make, permit,
 26   23   or cause a false or misleading statement, either oral or
 26   24   written, in connection with the sale, offer to sell, or
 26   25   advertisement of a motor vehicle service contract.
 26   26      d. A motor vehicle provider, service contract provider
 26   27   company, or third=party administrator shall not permit or
 26   28   cause the omission of a material statement in connection with
 26   29   the sale, offer to sell, or advertisement of a motor vehicle
 26   30   service contract, which under the circumstances should have
 26   31   been made in order to make the statement not misleading.
 26   32      e. A motor vehicle provider, service contract provider
 26   33   company, or third=party administrator shall not make, permit,
 26   34   or cause to be made a false or misleading statement, either
 26   35   oral or written, about the benefits or services available
 27    1   under the motor vehicle service contract.
 27    2      f. A motor vehicle provider, service contract provider
 27    3   company, or third=party administrator shall not make, permit,
 27    4   or cause to be made a statement of practice which has the
 27    5   effect of creating or maintaining a fraud.
 27    6      g. A motor vehicle provider, service contract provider
 27    7   company, or third=party administrator shall not make, publish,
 27    8   disseminate, circulate, or place before the public, or cause,
 27    9   directly or indirectly, to be made, published, disseminated,
 27   10   circulated, or placed before the public in a newspaper,
 27   11   magazine, or other publication, or in the form of a notice,
 27   12   circular, pamphlet, letter, or poster, or over a radio or
 27   13   television station, or in any other way, an advertisement,
 27   14   announcement, or statement containing an assertion,
 27   15   representation, or statement with respect to the motor vehicle
 27   16   service contract industry or with respect to a motor vehicle
 27   17   provider, service contract provider company, or third=party
 27   18   administrator which is untrue, deceptive, or misleading. It
 27   19   is deceptive or misleading to use any combination of words,
 27   20   symbols, or physical materials which by their content,
 27   21   phraseology, shape, color, or other characteristics are so
 27   22   similar to a combination of words, symbols, or physical
 27   23   materials used by a manufacturer or of such a nature that the
 27   24   use would tend to mislead a person into believing that the
 27   25   solicitation is in some manner connected with the
 27   26   manufacturer, unless actually authorized or issued by the
 27   27   manufacturer.
 27   28      h. A bank, savings and loan association, credit union,
 27   29   insurance company, or other lending institution shall not
 27   30   require the purchase of a motor vehicle service contract as a
 27   31   condition of a loan.
 27   32      2. DEFAMATION. A motor vehicle provider, service contract
 27   33   provider company, or third=party administrator shall not make,
 27   34   publish, disseminate, or circulate, directly or indirectly, or
 27   35   aid, abet, or encourage the making, publishing, disseminating,
 28    1   or circulating of an oral or written statement or a pamphlet,
 28    2   circular, article, or literature which is false or maliciously
 28    3   critical of or derogatory to the financial condition of a
 28    4   person, and which is calculated to injure the person.
 28    5      3. BOYCOTT, COERCION, AND INTIMIDATION. A motor vehicle
 28    6   provider, service contract provider shall not enter into an
 28    7   company, or third=party administrator agreement to commit, or
 28    8   by a concerted action commit, an act of boycott, coercion, or
 28    9   intimidation resulting in or tending to result in unreasonable
 28   10   restraint of, or monopoly in, the service contract industry.




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 17 of 23



 28   11      4. FALSE STATEMENTS. A motor vehicle provider, service
 28   12   contract provider company, or third=party administrator shall
 28   13   not knowingly file with a supervisory or other public
 28   14   official, or knowingly make, publish, disseminate, circulate,
 28   15   or deliver to a person, or place before the public, or
 28   16   knowingly cause directly or indirectly to be made, published,
 28   17   disseminated, circulated, delivered to a person, or placed
 28   18   before the public, a false material statement of fact as to
 28   19   the financial condition of a person.
 28   20      5. FALSE ENTRIES. A motor vehicle provider, service
 28   21   contract provider company, or third=party administrator shall
 28   22   not knowingly make a false entry of a material fact in a book,
 28   23   report, or statement of a person or knowingly fail to make a
 28   24   true entry of a material fact pertaining to the business of
 28   25   the person in a book, report, or statement of the person.
 28   26      6. USED OR REBUILT PARTS. A motor vehicle service
 28   27   contract provider company shall not repair a motor vehicle
 28   28   covered by a motor vehicle service contract with any of the
 28   29   following:
 28   30      a. Used parts, unless the provider service company
 28   31   receives prior written authorization by the vehicle owner.
 28   32      b. Rebuilt parts, unless the parts are rebuilt according
 28   33   to national standards recognized by the insurance division.
 28   34      7. MARKETING. A provider, service company, or third=party
 28   35   administrator shall not market, advertise, offer to sell, or
 29    1   sell a service contract by using personal information obtained
 29    2   in violation of the federal Driver's Privacy Protection Act,
 29    3   18 U.S.C. } 2721 et seq.
 29    4      7. 8. VIOLATIONS OF SECTION 714.16.
 29    5      a. A violation of this chapter or rules adopted by the
 29    6   commissioner pursuant to this chapter is an unfair practice as
 29    7   defined in section 714.16.
 29    8      b. An enforcement agreement between the commissioner and a
 29    9   motor vehicle provider, service contract provider company, or
 29   10   third=party administrator does not bar the attorney general
 29   11   from bringing an action against the provider, service company,
 29   12   or third=party administrator under section 714.16 as to
 29   13   allegations that a violation of this chapter constitutes a
 29   14   violation of section 714.16.
 29   15      Sec. 35. Section 516E.11, Code 2005, is amended to read as
 29   16   follows:
 29   17      516E.11 RECORDS == EXPLANATION OF REASONS FOR DENIAL OF
 29   18   CLAIMS.
 29   19      1. A motor vehicle provider, service contract provider
 29   20   company, or third=party administrator shall keep accurate
 29   21   records concerning transactions regulated under this chapter.
 29   22      a. A motor vehicle service contract provider's records
 29   23   Records of a provider, service company, or third=party
 29   24   administrator shall include all of the following:
 29   25      (1) Copies of all service contracts each type of service
 29   26   contract issued or sold.
 29   27      (2) The name and address of each service contract holder.
 29   28      (3) The Claim files which shall contain, at a minimum, the
 29   29   dates, amounts, and descriptions of all receipts, claims, and
 29   30   expenditures related to service contracts.
 29   31      (4) Copies of all materials relating to claims which have
 29   32   been denied.
 29   33      b. A motor vehicle provider, service contract provider
 29   34   company, or third=party administrator shall retain all
 29   35   required records pertaining to a service contract holder for




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 18 of 23



 30    1   at least two years after the specified period of coverage has
 30    2   expired. A provider, service company, or third=party
 30    3   administrator discontinuing business in this state shall
 30    4   maintain its records until the provider, service company, or
 30    5   third=party administrator furnishes the commissioner
 30    6   satisfactory proof that the provider, service company, or
 30    7   third=party administrator has discharged all obligations to
 30    8   contract holders in this state.
 30    9      c. Motor vehicle service contract providers Providers,
 30   10   service companies, or third=party administrators shall make
 30   11   all records concerning transactions regulated under the
 30   12   chapter available to the commissioner for the purpose of
 30   13   examination.
 30   14      d. A provider, service company, or third=party
 30   15   administrator may keep all records required under this chapter
 30   16   in an electronic form. If an administrator maintains records
 30   17   in a form other than a printed copy, the records shall be
 30   18   accessible from a computer terminal available to the
 30   19   commissioner and shall be capable of duplication to a legible
 30   20   printed copy.
 30   21      2. A motor vehicle service contract provider, service
 30   22   company, or third=party administrator shall promptly deliver a
 30   23   written explanation to the service contract holder, describing
 30   24   the reasons for denying a claim or for the offer of a
 30   25   compromise settlement, based on all relevant facts or legal
 30   26   requirements and referring to applicable provisions of the
 30   27   service contract.
 30   28      3. A provider, service company, or third=party
 30   29   administrator shall keep accurate records concerning
 30   30   transactions regulated under this chapter, including a list of
 30   31   the locations where service contracts are marketed, sold,
 30   32   offered for sale, or performed.
 30   33      Sec. 36. Section 516E.12, Code 2005, is amended to read as
 30   34   follows:
 30   35      516E.12 SERVICE OF PROCESS.
 31    1      The commissioner shall be the agent for service of process
 31    2   upon a motor vehicle provider, service contract provider
 31    3   company, or third=party administrator and an issuer of a
 31    4   reimbursement insurance policy.
 31    5      Sec. 37. Section 516E.13, subsection 4, unnumbered
 31    6   paragraph 1, Code 2005, is amended to read as follows:
 31    7      Upon the commissioner's determination that a provider,
 31    8   service company, or third=party administrator has engaged, is
 31    9   engaging, or is about to engage in any act or practice
 31   10   constituting a violation of this chapter or a rule adopted
 31   11   pursuant to this chapter, the commissioner may issue a summary
 31   12   order directing the person to cease and desist from engaging
 31   13   in the act or practice resulting in the violation or to take
 31   14   other affirmative action as in the judgment of the
 31   15   commissioner is necessary to comply with the requirements of
 31   16   this chapter.
 31   17      Sec. 38. Section 516E.14, Code 2005, is amended to read as
 31   18   follows:
 31   19      516E.14 AUDITS.
 31   20      The commissioner may examine or cause to be examined the
 31   21   records of a motor vehicle provider, service contract provider
 31   22   company, or third=party administrator for the purpose of
 31   23   verifying compliance with this chapter. The commissioner may
 31   24   require, by a subpoena, the attendance of the provider,
 31   25   service company, or third=party administrator, or the




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 19 of 23



 31   26   provider's a representative thereof, and any other witness
 31   27   whom the commissioner deems necessary or expedient, and the
 31   28   production of records relating in any manner to compliance
 31   29   with this chapter if a provider, service company, third=party
 31   30   administrator, or witness fails or refuses to produce the
 31   31   documents for examination when requested by the commissioner.
 31   32      Sec. 39. Section 516E.15, subsection 1, paragraph b, Code
 31   33   2005, is amended to read as follows:
 31   34      b. A motor vehicle provider, service contract provider who
 31   35   company, or third=party administrator that fails to file
 32    1   documents and information with the commissioner as required
 32    2   pursuant to section 516E.3 may be subject to a civil penalty.
 32    3   The amount of the civil penalty shall not be more than four
 32    4   hundred dollars plus two dollars for each motor vehicle
 32    5   service contract that the person executed prior to satisfying
 32    6   the filing requirement. However, a person who fails to file
 32    7   information regarding a change in the provider's name or the
 32    8   termination of the provider's business of a provider, service
 32    9   company, or third=party administrator as required pursuant to
 32   10   section 516E.3 is subject to a civil penalty of not more than
 32   11   five hundred dollars.
 32   12      Sec. 40. Section 516E.15, subsection 2, Code 2005, is
 32   13   amended to read as follows:
 32   14      2. If the commissioner believes that grounds exist for the
 32   15   criminal prosecution of a motor vehicle provider, service
 32   16   contract provider company, or third=party administrator for
 32   17   violating this chapter or any other law of this state, the
 32   18   commissioner may forward to the attorney general or the county
 32   19   attorney the grounds for the belief, including all evidence in
 32   20   the commissioner's possession for action deemed appropriate by
 32   21   the attorney general or county attorney. At the request of
 32   22   the attorney general, the county attorney shall appear and
 32   23   prosecute the action when brought in the county served by the
 32   24   county attorney.
 32   25      Sec. 41. NEW SECTION. 516E.16 COURT ACTION FOR FAILURE
 32   26   TO COOPERATE.
 32   27      1. If a person fails or refuses to file a statement or
 32   28   report or to produce any books, accounts, papers,
 32   29   correspondence, memoranda, purchase agreements, files, or
 32   30   other documents or records, or to obey a subpoena issued by
 32   31   the commissioner, the commissioner may refer the matter to the
 32   32   attorney general, who may apply to a district court to enforce
 32   33   compliance. The court may order any of the following:
 32   34      a. Injunctive relief restricting or prohibiting the offer
 32   35   or sale of service contracts.
 33    1      b. Production of documents or records including but not
 33    2   limited to books, accounts, papers, correspondence, memoranda,
 33    3   purchase agreements, files, or other documents or records.
 33    4      c. Such other relief as may be appropriate.
 33    5      2. A court order issued pursuant to subsection 1 is
 33    6   effective until the person who is subject to the order files
 33    7   the statement or report, produces the documents requested, or
 33    8   obeys the subpoena.
 33    9      Sec. 42. NEW SECTION. 516E.17 NET WORTH REQUIREMENT.
 33   10      A service company that has issued or renewed in the
 33   11   aggregate one thousand or fewer service contracts during the
 33   12   preceding calendar year shall maintain a minimum net worth of
 33   13   forty thousand dollars. The minimum net worth to be
 33   14   maintained shall be increased by an additional twenty thousand
 33   15   dollars for each additional five hundred contracts or fraction




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 20 of 23



 33   16   thereof issued or renewed, up to a maximum required net worth
 33   17   of four hundred thousand dollars. At least twenty thousand
 33   18   dollars of net worth shall consist of paid=in capital.
 33   19      Sec. 43. NEW SECTION. 516E.18 PUBLIC ACCESS TO RECORDS.
 33   20      1. The administrator shall keep a register of all filings
 33   21   and orders which have been entered. The register shall be
 33   22   open for public inspection.
 33   23      2. Upon request and for a reasonable fee, the
 33   24   administrator shall furnish to any person copies of any
 33   25   register entry or any document which is a matter of public
 33   26   record and not confidential. Copies shall be available during
 33   27   normal business hours and may be certified upon request. In
 33   28   any administrative, civil, or criminal proceeding, a certified
 33   29   copy is prima facie evidence of the contents of the document
 33   30   certified.
 33   31      3. Pursuant to chapter 22, the administrator may maintain
 33   32   the confidentiality of information obtained during an
 33   33   investigation or audit.
 33   34      Sec. 44. NEW SECTION. 516E.19 ADMINISTRATION.
 33   35      1. This chapter shall be administered by the commissioner.
 34    1   The deputy administrator appointed pursuant to section 502.601
 34    2   shall be the principal operations officer responsible to the
 34    3   commissioner for the routine administration of this chapter
 34    4   and management of the administrative staff. In the absence of
 34    5   the commissioner, whether because of vacancy in the office, by
 34    6   reason of absence, physical disability, or other cause, the
 34    7   deputy administrator shall be the acting administrator and
 34    8   shall, for the time being, have and exercise the authority
 34    9   conferred upon the commissioner. The commissioner may from
 34   10   time to time delegate to the deputy administrator any or all
 34   11   of the functions assigned to the commissioner in this chapter.
 34   12   The deputy administrator shall employ officers, attorneys,
 34   13   accountants, auditors, investigators, and other employees as
 34   14   shall be needed for the administration of this chapter.
 34   15      2. Upon request, the commissioner may honor requests from
 34   16   interested persons for interpretive opinions.
 34   17      Sec. 45. Section 518.14, subsection 4, paragraph a, Code
 34   18   2005, is amended to read as follows:
 34   19      a. UNITED STATES GOVERNMENT OBLIGATIONS. Obligations
 34   20   Bonds or other evidences of indebtedness issued, assumed, or
 34   21   guaranteed by the United States of America, or by an any
 34   22   agency or instrumentality of the United States of America,
 34   23   include investments in an open=end management investment
 34   24   company registered with the federal securities and exchange
 34   25   commission under the federal Investment Company Act of 1940,
 34   26   15 U.S.C. } 80(a) and operated in accordance with 17 C.F.R. }
 34   27   270.2a=7, the portfolio of which is limited to the United
 34   28   States obligations described in this paragraph, and which are
 34   29   included in the national association of insurance
 34   30   commissioners' securities valuation office's United States
 34   31   direct obligation = full faith and credit list.
 34   32      Sec. 46. Section 518A.12, subsection 4, paragraph a, Code
 34   33   2005, is amended to read as follows:
 34   34      a. UNITED STATES GOVERNMENT OBLIGATIONS. Obligations
 34   35   Bonds or other evidences of indebtedness issued, assumed, or
 35    1   guaranteed by the United States of America, or an by any
 35    2   agency or instrumentality of the United States of America,
 35    3   include investments in an open=end management investment
 35    4   company registered with the federal securities and exchange
 35    5   commission under the federal Investment Company Act of 1940,




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 21 of 23



 35    6   15 U.S.C. } 80(a) and operated in accordance with 17 C.F.R. }
 35    7   270.2a=7, the portfolio of which is limited to the United
 35    8   States obligations described in this paragraph, and which are
 35    9   included in the national association of insurance
 35   10   commissioners' securities valuation office's United States
 35   11   direct obligation = full faith and credit list.
 35   12      Sec. 47. Section 520.19, Code 2005, is amended to read as
 35   13   follows:
 35   14      520.19 ANNUAL TAX == FEES.
 35   15      In lieu of all other taxes, licenses, charges, and fees
 35   16   whatsoever, such attorney shall annually pay to the
 35   17   commissioner the same fees as are paid by mutual companies
 35   18   transacting the same kind of business, and an annual tax of
 35   19   two percent, if a domestic reciprocal organization, and two
 35   20   percent, if a foreign reciprocal organization, based upon the
 35   21   applicable percentage stated in section 432.1, subsection 4,
 35   22   calculated upon the gross premiums or deposits collected from
 35   23   subscribers in this state during the preceding calendar year,
 35   24   after deducting therefrom returns, or cancellations, and all
 35   25   amounts returned to subscribers or credited to their accounts
 35   26   as savings, and the amount returned upon canceled policies and
 35   27   rejected applications covering property situated or on
 35   28   business done within this state.
 35   29      Sec. 48. Section 522B.17, Code 2005, is amended to read as
 35   30   follows:
 35   31      522B.17 PENALTY.
 35   32      An insurer or insurance producer who, after hearing, is
 35   33   found to have violated this chapter may be ordered to cease
 35   34   and desist from engaging in the conduct resulting in the
 35   35   violation and may be assessed a civil penalty pursuant to
 36    1   chapter 507B.
 36    2      A person found who, after hearing, is found to have acted
 36    3   violated this chapter by acting as an agent of an insurer or
 36    4   otherwise selling, soliciting, or negotiating insurance in
 36    5   this state, or offering to the public advice, counsel, or
 36    6   services with regard to insurance, who is not properly
 36    7   licensed is subject to may be ordered to cease and desist from
 36    8   engaging in the conduct resulting in the violation and may be
 36    9   assessed a civil penalty according to the provisions of
 36   10   chapter 507A.
 36   11      If a person does not comply with an order issued pursuant
 36   12   to this section, the commissioner may petition a court of
 36   13   competent jurisdiction to enforce the order. The court shall
 36   14   not require the commissioner to post a bond in an action or
 36   15   proceeding under this section. If the court finds, after
 36   16   notice and opportunity for hearing, that the person is not in
 36   17   compliance with an order, the court may adjudge the person to
 36   18   be in civil contempt of the order. The court may impose a
 36   19   civil penalty against the person for contempt in an amount not
 36   20   less than three thousand dollars but not greater than ten
 36   21   thousand dollars for each violation and may grant any other
 36   22   relief that the court determines is just and proper in the
 36   23   circumstances.
 36   24      Sec. 49. NEW SECTION. 522B.17A INJUNCTIVE RELIEF.
 36   25      1. An association with at least twenty=five insurance
 36   26   producer members may bring an action in district court to
 36   27   enjoin a person from selling, soliciting, or negotiating
 36   28   insurance in violation of section 522B.2. However, before
 36   29   bringing an action in district court to enjoin a person
 36   30   pursuant to this section, an association shall file a




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                            Page 22 of 23



 36   31   complaint with the insurance division alleging that the person
 36   32   is selling, soliciting, or negotiating insurance in violation
 36   33   of section 522B.2.
 36   34       2. If the division makes a determination to proceed
 36   35   administratively against the person for a violation of section
 37    1   522B.2, the complainant shall not bring an action in district
 37    2   court against the person pursuant to this section based upon
 37    3   the allegations contained in the complaint filed with the
 37    4   division.
 37    5       3. If the division does not make a determination to
 37    6   proceed administratively against the person for a violation of
 37    7   section 522B.2, the division shall issue, on or before ninety
 37    8   days from the date of filing of the complaint, a release to
 37    9   the complainant that permits the complainant to bring an
 37   10   action in district court pursuant to this section.
 37   11       4. The filing of a complaint with the division pursuant to
 37   12   this section tolls the statute of limitations pursuant to
 37   13   section 614.1 as to the alleged violation for a period of one
 37   14   hundred twenty days from the date of filing the complaint.
 37   15       5. Any action brought in district court by a complainant
 37   16   against a person pursuant to this section, based upon the
 37   17   allegations contained in the complaint filed with the
 37   18   division, shall be brought within one year after the ninety=
 37   19   day period following the filing of the complaint with the
 37   20   division, or the date of the issuance of a release by the
 37   21   division, whichever is earlier.
 37   22       6. If the court finds that the person is in violation of
 37   23   section 522B.2 and enjoins the person from selling,
 37   24   soliciting, or negotiating insurance in violation of that
 37   25   section, the court's findings of fact and law, and the
 37   26   judgment and decree, when final, shall be admissible in any
 37   27   proceeding initiated pursuant to section 522B.17 by the
 37   28   commissioner against the person enjoined and the person
 37   29   enjoined shall be precluded from contesting in that proceeding
 37   30   the court's determination that the person sold, solicited, or
 37   31   negotiated insurance in violation of section 522B.2.
 37   32       Sec. 50. Section 523A.402, subsection 6, paragraph c, Code
 37   33   2005, is amended to read as follows:
 37   34       c. The annuity shall not be contestable, or limit death
 37   35   benefits in the case of suicide, with respect to that portion
 38    1   of the face amount of the annuity which is required by
 38    2   paragraph "b". The annuity shall not refer to physical
 38    3   examination, or otherwise operate as an exclusion, limitation,
 38    4   or condition other than requiring submission of proof of death
 38    5   or surrender of the annuity at the time the prepaid purchase
 38    6   agreement is funded, matures, or is canceled, as the case may
 38    7   be.
 38    8       Sec. 51. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
 38    9   This section and the sections of this Act amending sections
 38   10   513C.6 and 514E.2, and amending section 514E.7, subsection 1,
 38   11   by enacting paragraph "e", being deemed of immediate
 38   12   importance, take effect upon enactment. The section of the
 38   13   Act amending section 513C.6 is retroactively applicable to
 38   14   January 1, 2005, and is applicable on and after that date.
 38   15   The sections of the Act amending section 514E.2 are
 38   16   retroactively applicable to July 1, 1986, and are applicable
 38   17   on and after that date. The portion of the section of the Act
 38   18   amending section 514E.7, subsection 1, by enacting paragraph
 38   19   "e" is retroactively applicable to January 1, 2005, and is
 38   20   applicable on and after that date.




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                6/9/2005
                                                                             Page 23 of 23



 38   21
 38   22
 38   23
 38   24                                        JOHN P. KIBBIE
 38   25                                        President of the Senate
 38   26
 38   27
 38   28
 38   29                                        CHRISTOPHER C. RANTS
 38   30                                        Speaker of the House
 38   31
 38   32      I hereby certify that this bill originated in the Senate and
 38   33   is known as Senate File 360, Eighty=first General Assembly.
 38   34
 38   35
 39    1
 39    2                                      MICHAEL E. MARSHALL
 39    3                                      Secretary of the Senate
 39    4   Approved                     , 2005
 39    5
 39    6
 39    7
 39    8   THOMAS J. VILSACK
 39    9   Governor




http://coolice.legis.state.ia.us/legislation/enrolled/SF360.html                 6/9/2005
                                                                                    Page 1 of 34



House File 836
PAG LIN

  1    1                                                           HOUSE FILE 836
  1    2
  1    3                               AN ACT
  1    4   RELATING TO CEMETERIES AND CEMETERY REGULATION, PROVIDING
  1    5      ADMINISTRATION AND ENFORCEMENT PROCEDURES, ESTABLISHING
  1    6      REQUIREMENTS FOR INTERMENT RIGHTS AGREEMENTS AND REPORTING,
  1    7      ESTABLISHING AND APPROPRIATING FEES, AND PROVIDING
  1    8      PENALTIES.
  1    9
  1   10   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1   11
  1   12      Section 1. Section 331.325, subsections 2 and 3, Code
  1   13   2005, are amended to read as follows:
  1   14      2. Each county board of supervisors may adopt an ordinance
  1   15   assuming jurisdiction and control of pioneer cemeteries in the
  1   16   county. The board shall exercise the powers and duties of
  1   17   township trustees relating to the maintenance and repair of
  1   18   cemeteries in the county as provided in sections 359.28
  1   19   through 359.41 359.40 except that the board shall not certify
  1   20   a tax levy pursuant to section 359.30 or 359.33 and except
  1   21   that the maintenance and repair of all cemeteries under the
  1   22   jurisdiction of the county including pioneer cemeteries shall
  1   23   be paid from the county general fund. The maintenance and
  1   24   improvement program for a pioneer cemetery may include
  1   25   restoration and management of native prairie grasses and
  1   26   wildflowers.
  1   27      3. In lieu of management of the cemeteries, the board of
  1   28   supervisors may create, by ordinance, a cemetery commission to
  1   29   assume jurisdiction and management of the pioneer cemeteries
  1   30   in the county. The ordinance shall delineate the number of
  1   31   commissioners, the appointing authority, the term of office,
  1   32   officers, employees, organizational matters, rules of
  1   33   procedure, compensation and expenses, and other matters deemed
  1   34   pertinent by the board. The board may delegate any power and
  1   35   duties relating to cemeteries which may otherwise be exercised
  2    1   by township trustees pursuant to sections 359.28 through
  2    2   359.41 359.40 to the cemetery commission except the commission
  2    3   shall not certify a tax levy pursuant to section 359.30 or
  2    4   359.33 and except that the expenses of the cemetery commission
  2    5   shall be paid from the county general fund.
  2    6      Sec. 2. Section 331.502, subsection 34, Code 2005, is
  2    7   amended to read as follows:
  2    8      34. Serve as a trustee for funds of a cemetery association
  2    9   as provided in sections 566.12 and 566.13 section 523I.505.
  2   10      Sec. 3. Section 523A.203, subsection 6, paragraph b, Code
  2   11   2005, is amended to read as follows:
  2   12      b. Use any funds required to be held in trust under this
  2   13   chapter or chapter 566A to purchase an interest in any
  2   14   contract or agreement to which a seller is a party.
  2   15      Sec. 4. Section 523A.812, Code 2005, is amended to read as
  2   16   follows:
  2   17      523A.812 INSURANCE DIVISION REGULATORY FUND.
  2   18      The insurance division may authorize the creation of a
  2   19   special revenue fund in the state treasury, to be known as the
  2   20   insurance division regulatory fund. The commissioner shall




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                       6/9/2005
                                                                            Page 2 of 34



  2   21   allocate annually from the fees paid pursuant to section
  2   22   523A.204, two dollars for each purchase agreement reported on
  2   23   an establishment permit holder's annual report for deposit to
  2   24   the regulatory fund. The remainder of the fees collected
  2   25   pursuant to section 523A.204 shall be deposited into the
  2   26   general fund of the state. The commissioner shall also
  2   27   allocate annually the audit fees paid pursuant to section
  2   28   523A.814 for deposit to the regulatory fund. The moneys in
  2   29   the regulatory fund shall be retained in the fund. The moneys
  2   30   are appropriated and, subject to authorization by the
  2   31   commissioner, may be used to pay auditors, audit expenses,
  2   32   investigative expenses, the expenses of mediation ordered by
  2   33   the commissioner, consumer education expenses, the expenses of
  2   34   a toll=free telephone line to receive consumer complaints, and
  2   35   the expenses of receiverships established under section
  3    1   523A.811. An annual allocation to the regulatory fund shall
  3    2   not be imposed if the current balance of the fund exceeds two
  3    3   hundred thousand dollars.
  3    4      Sec. 5. NEW SECTION. 523A.814 AUDIT FEE.
  3    5      In addition to the filing fee paid pursuant to section
  3    6   523A.204, subsection 5, an establishment filing an annual
  3    7   report shall pay an audit fee in the amount of five dollars
  3    8   for each purchase agreement subject to a filing fee that is
  3    9   sold between July 1, 2005, and December 31, 2007.
  3   10                             SUBCHAPTER 1
  3   11             SHORT TITLE, DEFINITIONS, AND APPLICABILITY
  3   12      Sec. 6. NEW SECTION. 523I.101 SHORT TITLE.
  3   13      This chapter may be cited as the "Iowa Cemetery Act".
  3   14      Sec. 7. NEW SECTION. 523I.102 DEFINITIONS.
  3   15      For purposes of this chapter, unless the context otherwise
  3   16   requires:
  3   17      1. "Authorized to do business within this state" means a
  3   18   person licensed, registered, or subject to regulation by an
  3   19   agency of the state of Iowa or who has filed a consent to
  3   20   service of process with the commissioner for purposes of this
  3   21   chapter.
  3   22      2. "Burial site" means any area, except a cemetery, that
  3   23   is used to inter or scatter remains.
  3   24      3. "Capital gains" means appreciation in the value of
  3   25   trust assets for which a market value may be determined with
  3   26   reasonable certainty after deduction of investment losses,
  3   27   taxes, expenses incurred in the sale of trust assets, any
  3   28   costs of the operation of the trust, and any annual audit
  3   29   fees.
  3   30      4. "Care fund" means funds set aside for the care of a
  3   31   perpetual care cemetery, including all of the following:
  3   32      a. Money or real or personal property impressed with a
  3   33   trust by the terms of this chapter.
  3   34      b. Contributions in the form of a gift, grant, or bequest.
  3   35      c. Any accumulated income that the trustee of the fund or
  4    1   the cemetery allocates to principal.
  4    2      5. "Casket" means a rigid container which is designed for
  4    3   the encasement of human remains and which is usually
  4    4   constructed of wood, metal, fiberglass, plastic, or like
  4    5   material and ornamented and lined with fabric.
  4    6      6. "Cemetery" means any area that is or was open to use by
  4    7   the public in general or any segment thereof and is used or is
  4    8   intended to be used to inter or scatter remains. "Cemetery"
  4    9   does not include the following:
  4   10      a. A private burial site where use is restricted to




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 3 of 34



  4   11   members of a family, if the interment rights are conveyed
  4   12   without a monetary payment, fee, charge, or other valuable
  4   13   form of compensation or consideration.
  4   14      b. A private burial site where use is restricted to a
  4   15   narrow segment of the public, if the interment rights are
  4   16   conveyed without a monetary payment, fee, charge, or other
  4   17   valuable form of compensation or consideration.
  4   18      c. A pioneer cemetery.
  4   19      7. "Columbarium" means a structure, room, or space in a
  4   20   mausoleum or other building containing niches or recesses for
  4   21   disposition of cremated remains.
  4   22      8. "Commissioner" means the commissioner of insurance or
  4   23   the deputy administrator authorized in section 523A.801 to the
  4   24   extent the commissioner delegates functions to the deputy
  4   25   administrator.
  4   26      9. "Common business enterprise" means a group of two or
  4   27   more business entities that share common ownership in excess
  4   28   of fifty percent.
  4   29      10. "Disinterment" means to remove human remains from
  4   30   their place of final disposition.
  4   31      11. "Doing business in this state" means issuing or
  4   32   performing wholly or in part any term of an interment rights
  4   33   agreement executed within the state of Iowa.
  4   34      12. "Financial institution" means a state or federally
  4   35   insured bank, savings and loan association, credit union,
  5    1   trust department thereof, or a trust company that is
  5    2   authorized to do business within this state, that has been
  5    3   granted trust powers under the laws of this state or the
  5    4   United States, and that holds funds under a trust agreement.
  5    5   "Financial institution" does not include a cemetery or any
  5    6   person employed by or directly involved with a cemetery.
  5    7      13. "Garden" means an area within a cemetery established
  5    8   by the cemetery as a subdivision for organizational purposes,
  5    9   not for sale purposes.
  5   10      14. "Grave space" means a space of ground in a cemetery
  5   11   that is used or intended to be used for an in=ground burial.
  5   12      15. "Gross selling price" means the aggregate amount a
  5   13   purchaser is obligated to pay for interment rights, exclusive
  5   14   of finance charges.
  5   15      16. "Inactive cemetery" means a cemetery that is not
  5   16   operating on a regular basis, is not offering to sell or
  5   17   provide interments or other services reasonably necessary for
  5   18   interment, and does not provide or permit reasonable ingress
  5   19   or egress for the purposes of visiting interment spaces.
  5   20      17. "Income" means the return in money or property derived
  5   21   from the use of trust principal after deduction of investment
  5   22   losses, taxes, and expenses incurred in the sale of trust
  5   23   assets, any cost of the operation of the trust, and any annual
  5   24   audit fees. "Income" includes but is not limited to:
  5   25      a. Rent of real or personal property, including sums
  5   26   received for cancellation or renewal of a lease and any
  5   27   royalties.
  5   28      b. Interest on money lent, including sums received as
  5   29   consideration for prepayment of principal.
  5   30      c. Cash dividends paid on corporate stock.
  5   31      d. Interest paid on deposit funds or debt obligations.
  5   32      e. Gain realized from the sale of trust assets.
  5   33      18. "Insolvent" means the inability to pay debts as they
  5   34   become due in the usual course of business.
  5   35      19. "Interment rights" means the rights to place remains




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 4 of 34



  6    1   in a specific location for use as a final resting place or
  6    2   memorial.
  6    3      20. "Interment rights agreement" means an agreement to
  6    4   furnish memorials, memorialization, opening and closing
  6    5   services, or interment rights.
  6    6      21. "Interment space" means a space used or intended to be
  6    7   used for the interment of remains including, but not limited
  6    8   to, a grave space, lawn crypt, mausoleum crypt, and niche.
  6    9      22. "Lawn crypt" means a preplaced enclosed chamber, which
  6   10   is usually constructed of reinforced concrete and poured in
  6   11   place, or a precast unit installed in quantity, either side=
  6   12   by=side or at multiple depths, and covered by earth or sod.
  6   13      23. "Lot" means an area in a cemetery containing more than
  6   14   one interment space which is uniquely identified by an
  6   15   alphabetical, numeric, or alphanumerical identification
  6   16   system.
  6   17      24. "Maintenance fund" means funds set aside for the
  6   18   maintenance of a nonperpetual care cemetery, including all of
  6   19   the following:
  6   20      a. Money or real or personal property impressed with a
  6   21   trust by the terms of this chapter.
  6   22      b. Contributions in the form of a gift, grant or bequest.
  6   23      c. Any accumulated income that the trustee of the fund or
  6   24   the cemetery allocates to principal.
  6   25      25. "Mausoleum" means an aboveground structure designed
  6   26   for the entombment of human remains.
  6   27      26. "Mausoleum crypt" means a chamber in a mausoleum of
  6   28   sufficient size to contain casketed human remains.
  6   29      27. "Memorial" means any product, including any foundation
  6   30   other than a mausoleum or columbarium, used for identifying an
  6   31   interment space or for commemoration of the life, deeds, or
  6   32   career of a decedent including, but not limited to, a
  6   33   monument, marker, niche plate, urn garden plaque, crypt plate,
  6   34   cenotaph, marker bench, and vase.
  6   35      28. "Memorial care" means any care provided or to be
  7    1   provided for the general maintenance of memorials including
  7    2   foundation repair or replacement, resetting or straightening
  7    3   tipped memorials, repairing or replacing inadvertently damaged
  7    4   memorials and any other care clearly specified in the purchase
  7    5   agreement.
  7    6      29. "Memorial dealer" means any person offering or selling
  7    7   memorials retail to the public.
  7    8      30. "Memorialization" means any permanent system designed
  7    9   to mark or record the name and other data pertaining to a
  7   10   decedent.
  7   11      31. "Merchandise" means any personal property offered or
  7   12   sold for use in connection with the funeral, final
  7   13   disposition, memorialization, or interment of human remains,
  7   14   but which is exclusive of interment rights.
  7   15      32. "Neglected cemetery" means a cemetery where there has
  7   16   been a failure to cut grass or weeds or care for graves,
  7   17   memorials or memorialization, walls, fences, driveways, and
  7   18   buildings, or for which proper records of interments have not
  7   19   been maintained.
  7   20      33. "Niche" means a recess or space in a columbarium or
  7   21   mausoleum used for placement of cremated human remains.
  7   22      34. "Opening and closing services" means one or more
  7   23   services necessarily or customarily provided in connection
  7   24   with the interment or entombment of human remains or a
  7   25   combination thereof.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 5 of 34



  7   26      35. "Operating a cemetery" means offering to sell or
  7   27   selling interment rights, or any service or merchandise
  7   28   necessarily or customarily provided for a funeral, or for the
  7   29   entombment or cremation of a dead human, or any combination
  7   30   thereof, including but not limited to opening and closing
  7   31   services, caskets, memorials, vaults, urns, and interment
  7   32   receptacles.
  7   33      36. "Outer burial container" means any container which is
  7   34   designed for placement in the ground around a casket or an urn
  7   35   including, but not limited to, containers commonly known as
  8    1   burial vaults, urn vaults, grave boxes, grave liners, and lawn
  8    2   crypts.
  8    3      37. "Perpetual care cemetery" includes all of the
  8    4   following:
  8    5      a. Any cemetery that was organized or commenced business
  8    6   in this state on or after July 1, 1995.
  8    7      b. Any cemetery that has established a care fund in
  8    8   compliance with section 523I.810.
  8    9      c. Any cemetery that represents that it is a perpetual
  8   10   care cemetery in its interment rights agreement.
  8   11      d. Any cemetery that represents in any other manner that
  8   12   the cemetery provides perpetual, permanent, or guaranteed
  8   13   care.
  8   14      38. "Person" means an individual, firm, corporation,
  8   15   partnership, joint venture, limited liability company,
  8   16   association, trustee, government or governmental subdivision,
  8   17   agency, or other entity, or any combination thereof.
  8   18      39. "Pioneer cemetery" means a cemetery where there were
  8   19   six or fewer burials in the preceding fifty years.
  8   20      40. "Purchaser" means a person who purchases memorials,
  8   21   memorialization, opening and closing services, scattering
  8   22   services, interment rights, or a combination thereof. A
  8   23   purchaser need not be a beneficiary of the interment rights
  8   24   agreement.
  8   25      41. "Relative" means a great=grandparent, grandparent,
  8   26   father, mother, spouse, child, brother, sister, nephew, niece,
  8   27   uncle, aunt, first cousin, second cousin, third cousin, or
  8   28   grandchild connected to a person by either blood or affinity.
  8   29      42. "Religious cemetery" means a cemetery that is owned,
  8   30   operated, or controlled by a recognized church or
  8   31   denomination, or a cemetery designated as such in the Official
  8   32   Catholic Directory on file with the insurance division or in a
  8   33   similar publication of a recognized church or denomination, or
  8   34   a cemetery that the commissioner determines is operating as a
  8   35   religious cemetery upon review of an application by the
  9    1   cemetery that includes a description of the cemetery's
  9    2   affiliation with a recognized church or denomination, the
  9    3   extent to which the affiliate organization is responsible for
  9    4   the financial and contractual obligations of the cemetery, or
  9    5   the provision of the Internal Revenue Code, if any, that
  9    6   exempts the cemetery from the payment of federal income tax.
  9    7      43. "Relocation" means the act of taking remains from the
  9    8   place of interment or the place where the remains are being
  9    9   held to another designated place.
  9   10      44. "Remains" means the body of a deceased human or a body
  9   11   part, or limb that has been removed from a living human,
  9   12   including a body, body part, or limb in any stage of
  9   13   decomposition, or cremated remains.
  9   14      45. "Scattering services provider" means a person in the
  9   15   business of scattering human cremated remains.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 6 of 34



  9   16      46. "Seller" means a person doing business within this
  9   17   state, including a person doing business within this state who
  9   18   advertises, sells, promotes, or offers to furnish memorials,
  9   19   memorialization, opening and closing services, scattering
  9   20   services or interment rights, or a combination thereof,
  9   21   whether the transaction is completed or offered in person,
  9   22   through the mail, over the telephone, by the internet, or
  9   23   through any other means of commerce.
  9   24      47. "Special care" means any care provided or to be
  9   25   provided that supplements or exceeds the requirements of this
  9   26   chapter in accordance with the specific directions of any
  9   27   donor of funds for such purposes.
  9   28      48. "Undeveloped space" means a designated area or
  9   29   building within a cemetery that has been mapped and planned
  9   30   for future development but is not yet fully developed.
  9   31      Sec. 8. NEW SECTION. 523I.103 APPLICABILITY OF CHAPTER.
  9   32      1. This chapter applies to all of the following:
  9   33      a. All cemeteries, except religious cemeteries that
  9   34   commenced business prior to July 1, 2005.
  9   35      b. All persons advertising or offering memorials,
 10    1   memorialization, opening and closing services, scattering
 10    2   services at a cemetery, interment rights, or a combination
 10    3   thereof for sale.
 10    4      c. Interments made in areas not dedicated as a cemetery,
 10    5   by a person other than the state archaeologist.
 10    6      2. This chapter applies when a purchase agreement is
 10    7   executed within this state or an advertisement, promotion, or
 10    8   offer to furnish memorials, memorialization, opening and
 10    9   closing services, scattering services, interment rights, or a
 10   10   combination thereof is made or accepted within this state. An
 10   11   offer to furnish memorials, memorialization, opening and
 10   12   closing services, scattering services, interment rights, or a
 10   13   combination thereof is made within this state, whether or not
 10   14   either party is then present in this state, when the offer
 10   15   originates from this state or is directed by the offeror to
 10   16   this state and received by the offeree in this state through
 10   17   the mail, over the telephone, by the internet, or through any
 10   18   other means of commerce.
 10   19      3. If a foreign person does not have a registered agent or
 10   20   agents in the state of Iowa, doing business within this state
 10   21   shall constitute the person's appointment of the secretary of
 10   22   state of the state of Iowa to be its true and lawful attorney
 10   23   upon whom may be served all lawful process of original notice
 10   24   in actions or proceedings arising or growing out of any
 10   25   contract or tort.
 10   26                            SUBCHAPTER 2
 10   27                   ADMINISTRATION AND ENFORCEMENT
 10   28      Sec. 9. NEW SECTION. 523I.201 ADMINISTRATION.
 10   29      1. This chapter shall be administered by the commissioner.
 10   30   The deputy administrator appointed pursuant to section
 10   31   523A.801 shall be the principal operations officer responsible
 10   32   to the commissioner for the routine administration of this
 10   33   chapter and management of the administrative staff. In the
 10   34   absence of the commissioner, whether because of vacancy in the
 10   35   office due to absence, physical disability, or other cause,
 11    1   the deputy administrator shall, for the time being, have and
 11    2   exercise the authority conferred upon the commissioner. The
 11    3   commissioner may by order from time to time delegate to the
 11    4   deputy administrator any or all of the functions assigned to
 11    5   the commissioner in this chapter. The deputy administrator




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 7 of 34



 11    6   shall employ officers, attorneys, accountants, and other
 11    7   employees as needed for administering this chapter.
 11    8      2. It is unlawful for the commissioner or any
 11    9   administrative staff to use for personal benefit any
 11   10   information which is filed with or obtained by the
 11   11   commissioner and which is not made public. This chapter does
 11   12   not authorize the commissioner or any staff member to disclose
 11   13   any such information except among themselves or to other
 11   14   cemetery and funeral administrators, regulatory authorities,
 11   15   or governmental agencies, or when necessary and appropriate in
 11   16   a proceeding or investigation under this chapter or as
 11   17   required by chapter 22. This chapter neither creates nor
 11   18   derogates any privileges that exist at common law or otherwise
 11   19   when documentary or other evidence is sought under a subpoena
 11   20   directed to the commissioner or any administrative staff.
 11   21      Sec. 10. NEW SECTION. 523I.202 INVESTIGATIONS AND
 11   22   SUBPOENAS.
 11   23      1. The commissioner may, for the purpose of discovering a
 11   24   violation of this chapter, or implementing rules or orders
 11   25   issued under this chapter do any of the following:
 11   26      a. Make such public or private investigations within or
 11   27   outside of this state as the commissioner deems necessary to
 11   28   determine whether any person has violated or is about to
 11   29   violate this chapter, or implementing rules or orders issued
 11   30   under this chapter, or to aid in the enforcement of this
 11   31   chapter, or in the prescribing of rules and forms under this
 11   32   chapter.
 11   33      b. Require or permit any person to file a statement in
 11   34   writing, under oath or otherwise as the commissioner or
 11   35   attorney general determines, as to all the facts and
 12    1   circumstances concerning the matter being investigated.
 12    2      c. Notwithstanding chapter 22, keep confidential the
 12    3   information obtained in the course of an investigation.
 12    4   However, if the commissioner determines that it is necessary
 12    5   or appropriate in the public interest or for the protection of
 12    6   the public, the commissioner may share information with other
 12    7   administrators, regulatory authorities, or governmental
 12    8   agencies, or may publish information concerning a violation of
 12    9   this chapter, or implementing rules or orders issued under
 12   10   this chapter.
 12   11      d. Investigate a cemetery and examine the books, accounts,
 12   12   papers, correspondence, memoranda, purchase agreements, files,
 12   13   or other documents or records of the cemetery.
 12   14      e. Administer oaths and affirmations, subpoena witnesses,
 12   15   compel their attendance, take evidence, and require the
 12   16   production of any books, accounts, papers, correspondence,
 12   17   memoranda, purchase agreements, files, or other documents or
 12   18   records which the commissioner deems relevant or material to
 12   19   any investigation or proceeding under this chapter and
 12   20   implement rules, all of which may be enforced under chapter
 12   21   17A.
 12   22      f. Apply to the district court for an order requiring a
 12   23   person's appearance before the commissioner or attorney
 12   24   general, or a designee of either or both, in cases where the
 12   25   person has refused to obey a subpoena issued by the
 12   26   commissioner or attorney general. The person may also be
 12   27   required to produce documentary evidence germane to the
 12   28   subject of the investigation. Failure to obey a court order
 12   29   under this subsection constitutes contempt of court.
 12   30      2. The commissioner may issue and bring an action in




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 8 of 34



 12   31   district court to enforce subpoenas within this state at the
 12   32   request of an agency or administrator of another state, if the
 12   33   activity constituting an alleged violation for which the
 12   34   information is sought would be a violation of this chapter had
 12   35   the activity occurred in this state.
 13    1      Sec. 11. NEW SECTION. 523I.203 CEASE AND DESIST ORDERS
 13    2   == INJUNCTIONS.
 13    3      If it appears to the commissioner that a person has engaged
 13    4   or is about to engage in an act or practice constituting a
 13    5   violation of this chapter, or implementing rules or orders
 13    6   issued under this chapter, the commissioner or the attorney
 13    7   general may do any of the following:
 13    8      1. Issue a summary order directed to the person that
 13    9   requires the person to cease and desist from engaging in such
 13   10   an act or practice. A person may request a hearing within
 13   11   thirty days of issuance of the summary order. If a hearing is
 13   12   not timely requested, the summary order shall become final by
 13   13   operation of law. The order shall remain effective from the
 13   14   date of issuance until the date the order becomes final by
 13   15   operation of law or is overturned by a presiding officer
 13   16   following a request for hearing. Section 17A.18A is
 13   17   inapplicable to summary cease and desist orders issued under
 13   18   this section.
 13   19      2. Bring an action in the district court in any county of
 13   20   the state for an injunction to restrain a person subject to
 13   21   this chapter and any agents, employees, or associates of the
 13   22   person from engaging in conduct or practices deemed contrary
 13   23   to the public interest. In any proceeding for an injunction,
 13   24   the commissioner or attorney general may apply to the court
 13   25   for a subpoena to require the appearance of a defendant and
 13   26   the defendant's agents, employees, or associates and for the
 13   27   production of any books, accounts, papers, correspondence,
 13   28   memoranda, purchase agreements, files, or other documents or
 13   29   records germane to the hearing upon the petition for an
 13   30   injunction. Upon a proper showing, a permanent or temporary
 13   31   injunction, restraining order, or writ of mandamus shall be
 13   32   granted and a receiver may be appointed for the defendant or
 13   33   the defendant's assets. The commissioner or attorney general
 13   34   shall not be required to post a bond.
 13   35      Sec. 12. NEW SECTION. 523I.204 COURT ACTION FOR FAILURE
 14    1   TO COOPERATE.
 14    2      1. If a person fails or refuses to file a statement or
 14    3   report or to produce any books, accounts, papers,
 14    4   correspondence, memoranda, purchase agreements, files, or
 14    5   other documents or records, or to obey a subpoena issued by
 14    6   the commissioner, the commissioner may refer the matter to the
 14    7   attorney general, who may apply to a district court to enforce
 14    8   compliance. The court may order any or all of the following:
 14    9      a. Injunctive relief restricting or prohibiting the offer
 14   10   or sale of memorials, memorialization, opening and closing
 14   11   services, scattering services, interment rights, or a
 14   12   combination thereof.
 14   13      b. Production of documents or records including but not
 14   14   limited to books, accounts, papers, correspondence, memoranda,
 14   15   purchase agreements, files, or other documents or records.
 14   16      c. Such other relief as may be required.
 14   17      2. A court order issued pursuant to subsection 1 is
 14   18   effective until the person files the statement or report or
 14   19   produces the documents requested, or obeys the subpoena.
 14   20      Sec. 13. NEW SECTION. 523I.205 PROSECUTION FOR




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 9 of 34



 14   21   VIOLATIONS OF LAW == CIVIL PENALTIES.
 14   22      1. A violation of this chapter or rules adopted or orders
 14   23   issued under this chapter is a violation of section 714.16,
 14   24   subsection 2, paragraph "a". The remedies and penalties
 14   25   provided by section 714.16, including but not limited to
 14   26   injunctive relief and penalties, apply to violations of this
 14   27   chapter.
 14   28      2. If the commissioner believes that grounds exist for the
 14   29   criminal prosecution of persons subject to this chapter for
 14   30   violations of this chapter or any other law of this state, the
 14   31   commissioner may forward to the attorney general or the county
 14   32   attorney the grounds for the belief, including all evidence in
 14   33   the commissioner's possession, so that the attorney general or
 14   34   the county attorney may proceed with the matter as deemed
 14   35   appropriate. At the request of the attorney general, the
 15    1   county attorney shall appear and prosecute the action when
 15    2   brought in the county attorney's county.
 15    3      3. A person who violates a provision of this chapter or
 15    4   rules adopted or orders issued under this chapter may be
 15    5   subject to civil penalties in addition to criminal penalties.
 15    6   The commissioner may impose, assess, and collect a civil
 15    7   penalty not exceeding ten thousand dollars for each violation.
 15    8   For the purposes of computing the amount of each civil
 15    9   penalty, each day of a continuing violation constitutes a
 15   10   separate violation. All civil penalties collected pursuant to
 15   11   this section shall be deposited in the general fund of the
 15   12   state.
 15   13      Sec. 14. NEW SECTION. 523I.206 COOPERATION WITH OTHER
 15   14   AGENCIES.
 15   15      1. The commissioner may cooperate with any governmental
 15   16   law enforcement or regulatory agency to encourage uniform
 15   17   interpretation and administration of this chapter and
 15   18   effective enforcement of this chapter and effective regulation
 15   19   of the sale of memorials, memorialization, and cemeteries.
 15   20      2. Cooperation with other agencies may include but is not
 15   21   limited to:
 15   22      a. Making a joint examination or investigation.
 15   23      b. Holding a joint administrative hearing.
 15   24      c. Filing and prosecuting a joint civil or administrative
 15   25   proceeding.
 15   26      d. Sharing and exchanging personnel.
 15   27      e. Sharing and exchanging relevant information and
 15   28   documents.
 15   29      f. Formulating, in accordance with chapter 17A, rules or
 15   30   proposed rules on matters such as statements of policy,
 15   31   regulatory standards, guidelines, and interpretive opinions.
 15   32      Sec. 15. NEW SECTION. 523I.207 RULES, FORMS, AND ORDERS.
 15   33      1. Under chapter 17A, the commissioner may from time to
 15   34   time make, amend, and rescind such rules, forms, and orders as
 15   35   are necessary or appropriate for the protection of purchasers
 16    1   and the public and to administer the provisions of this
 16    2   chapter, its implementing rules, and orders issued under this
 16    3   chapter.
 16    4      2. A rule, form, or order shall not be made, amended, or
 16    5   rescinded unless the commissioner finds that the action is
 16    6   necessary or appropriate to protect purchasers and the public
 16    7   and is consistent with the policies and provisions of this
 16    8   chapter, its implementing rules, and orders issued under this
 16    9   chapter.
 16   10      3. A provision of this chapter imposing any liability does




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html               6/9/2005
                                                                            Page 10 of 34



 16   11   not apply to an act done or omitted in good faith in
 16   12   conformity with any rule, form, or order of the commissioner.
 16   13      Sec. 16. NEW SECTION. 523I.208 DATE OF FILING ==
 16   14   INTERPRETIVE OPINIONS.
 16   15      1. A document is filed when it is received by the
 16   16   commissioner.
 16   17      2. Requests for interpretive opinions may be granted in
 16   18   the commissioner's discretion.
 16   19      Sec. 17. NEW SECTION. 523I.209 MISLEADING FILINGS.
 16   20      It is unlawful for a person to make or cause to be made, in
 16   21   any document filed with the commissioner, or in any proceeding
 16   22   under this chapter, any statement of material fact which is,
 16   23   at the time and in the light of the circumstances under which
 16   24   it is made, false or misleading, or, in connection with such
 16   25   statement, to omit to state a material fact necessary in order
 16   26   to make the statements made, in the light of the circumstances
 16   27   under which they are made, not misleading.
 16   28      Sec. 18. NEW SECTION. 523I.210 MISREPRESENTATIONS OF
 16   29   GOVERNMENT APPROVAL.
 16   30      It is unlawful for a seller under this chapter to represent
 16   31   or imply in any manner that the seller has been sponsored,
 16   32   recommended, or approved, or that the seller's abilities or
 16   33   qualifications have in any respect been passed upon by the
 16   34   commissioner.
 16   35      Sec. 19. NEW SECTION. 523I.211 FRAUDULENT PRACTICES.
 17    1      A person who commits any of the following acts commits a
 17    2   fraudulent practice which is punishable as provided in chapter
 17    3   714:
 17    4      1. Knowingly fails to comply with any requirement of this
 17    5   chapter.
 17    6      2. Knowingly makes, causes to be made, or subscribes to a
 17    7   false statement or representation in a report or other
 17    8   document required under this chapter, or implementing rules or
 17    9   orders, or renders such a report or document misleading
 17   10   through the deliberate omission of information properly
 17   11   belonging in the report or document.
 17   12      3. Conspires to defraud in connection with the sale of
 17   13   memorials, memorialization, opening and closing services,
 17   14   scattering services, interment rights, or a combination
 17   15   thereof under this chapter.
 17   16      4. Fails to deposit funds under this chapter or withdraws
 17   17   funds in a manner inconsistent with this chapter.
 17   18      5. Knowingly sells memorials, memorialization, opening and
 17   19   closing services, scattering services, interment rights, or a
 17   20   combination thereof without the permits required under this
 17   21   chapter.
 17   22      6. Deliberately misrepresents or omits a material fact
 17   23   relative to the sale of memorials, memorialization, opening
 17   24   and closing services, scattering services, interment rights,
 17   25   or a combination thereof.
 17   26      Sec. 20. NEW SECTION. 523I.212 RECEIVERSHIPS.
 17   27      1. The commissioner shall notify the attorney general of
 17   28   the potential need for establishment of a receivership if the
 17   29   commissioner finds that a cemetery subject to this chapter
 17   30   meets one or more of the following conditions:
 17   31      a. Is insolvent.
 17   32      b. Has utilized trust funds for personal or business
 17   33   purposes in a manner inconsistent with this chapter.
 17   34      c. The amount held in trust in a maintenance fund or care
 17   35   fund is less than the amount required by this chapter.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 11 of 34



 18    1      2. The commissioner or attorney general may apply to the
 18    2   district court in any county of the state for the
 18    3   establishment of a receivership. Upon proof that any of the
 18    4   conditions described in this section have occurred, the court
 18    5   may grant a receivership.
 18    6      Sec. 21. NEW SECTION. 523I.213 INSURANCE DIVISION'S
 18    7   ENFORCEMENT FUND.
 18    8      A special revenue fund in the state treasury, to be known
 18    9   as the insurance division's enforcement fund, is created under
 18   10   the authority of the commissioner. The commissioner shall
 18   11   allocate annually from the audit fees paid pursuant to section
 18   12   523I.808, an amount not exceeding fifty thousand dollars, for
 18   13   deposit to the insurance division's enforcement fund. The
 18   14   moneys in the enforcement fund shall be retained in the fund.
 18   15   The moneys are appropriated and, subject to authorization by
 18   16   the commissioner, shall be used to pay auditors, audit
 18   17   expenses, investigative expenses, the expenses of consumer
 18   18   education, compliance, and education programs for filers and
 18   19   other regulated persons, and educational or compliance program
 18   20   materials, the expenses of a toll=free telephone line for
 18   21   consumer complaints, and the expenses of receiverships of
 18   22   perpetual care cemeteries established under section 523I.212.
 18   23      Sec. 22. NEW SECTION. 523I.214 VIOLATIONS OF LAW ==
 18   24   REFERRALS TO THE DEPARTMENT OF PUBLIC HEALTH.
 18   25      If the commissioner discovers a violation of a provision of
 18   26   this chapter or any other state law or rule concerning the
 18   27   disposal or transportation of human remains, the commissioner
 18   28   shall forward all evidence in the possession of the
 18   29   commissioner concerning such a violation to the department of
 18   30   public health for such proceedings as the department of public
 18   31   health deems appropriate.
 18   32                             SUBCHAPTER 3
 18   33                         CEMETERY MANAGEMENT
 18   34      Sec. 23. NEW SECTION. 523I.301 DISCLOSURE REQUIREMENTS
 18   35   == PRICES AND FEES.
 19    1      1. A cemetery shall disclose, prior to the sale of
 19    2   interment rights, whether opening and closing of the interment
 19    3   space is included in the purchase of the interment rights. If
 19    4   opening and closing services are not included in the sale and
 19    5   the cemetery offers opening and closing services, the cemetery
 19    6   must disclose that the price for this service is subject to
 19    7   change and disclose the current prices for opening and closing
 19    8   services provided by the cemetery.
 19    9      2. The cemetery shall fully disclose all fees required for
 19   10   interment, entombment, or inurnment of human remains.
 19   11      3. A person owning interment rights may sell those rights
 19   12   to third parties. The cemetery shall fully disclose, in the
 19   13   cemetery's rules, any requirements necessary to transfer title
 19   14   of interment rights to a third party.
 19   15      Sec. 24. NEW SECTION. 523I.302 INSTALLATION OF OUTER
 19   16   BURIAL CONTAINERS.
 19   17      A cemetery shall provide services necessary for the
 19   18   installation of outer burial containers or other similar
 19   19   merchandise sold by the cemetery. This section shall not
 19   20   require the cemetery to provide for opening and closing of
 19   21   interment or entombment space, unless an agreement executed by
 19   22   the cemetery expressly provides otherwise.
 19   23      Sec. 25. NEW SECTION. 523I.303 ACCESS BY FUNERAL
 19   24   DIRECTORS.
 19   25      A cemetery shall not deny access to a licensed funeral




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 12 of 34



 19   26   director who is conducting funeral services or supervising the
 19   27   interment or disinterment of human remains.
 19   28      Sec. 26. NEW SECTION. 523I.304 RULEMAKING AND
 19   29   ENFORCEMENT.
 19   30      1. A cemetery may adopt, amend, and enforce rules for the
 19   31   use, care, control, management, restriction, and protection of
 19   32   the cemetery, as necessary for the proper conduct of the
 19   33   business of the cemetery, including, but not limited to, the
 19   34   use, care, and transfer of any interment space or right of
 19   35   interment.
 20    1      2. A cemetery may restrict and limit the use of all
 20    2   property within the cemetery by rules that do, but are not
 20    3   limited to doing, all of the following:
 20    4      a. Prohibit the placement of memorials or memorialization,
 20    5   buildings, or other types of structures within any portion of
 20    6   the cemetery.
 20    7      b. Regulate the uniformity, class, and kind of memorials
 20    8   and memorialization and structures within the cemetery.
 20    9      c. Regulate the scattering or placement of cremated
 20   10   remains within the cemetery.
 20   11      d. Prohibit or regulate the placement of nonhuman remains
 20   12   within the cemetery.
 20   13      e. Prohibit or regulate the introduction or care of trees,
 20   14   shrubs, and other types of plants within the cemetery.
 20   15      f. Regulate the right of third parties to open, prepare
 20   16   for interment, and close interment spaces.
 20   17      g. Prohibit interment in any part of the cemetery not
 20   18   designated as an interment space.
 20   19      h. Prevent the use of space for any purpose inconsistent
 20   20   with the use of the property as a cemetery.
 20   21      3. A cemetery shall not adopt or enforce a rule that
 20   22   prohibits interment because of the race, color, or national
 20   23   origin of a decedent. A provision of a contract or a
 20   24   certificate of ownership or other instrument conveying
 20   25   interment rights that prohibits interment in a cemetery
 20   26   because of the race, color, or national origin of a decedent
 20   27   is void.
 20   28      4. A cemetery's rules shall be plainly printed or
 20   29   typewritten and maintained for inspection in the office of the
 20   30   cemetery or, if the cemetery does not have an office, in
 20   31   another suitable place within the cemetery. The cemetery's
 20   32   rules shall be provided to owners of interment spaces upon
 20   33   request.
 20   34      5. A cemetery's rules shall specify the cemetery's
 20   35   obligations in the event that interment spaces, memorials, or
 21    1   memorialization are damaged or defaced by acts of vandalism.
 21    2   The rules may specify a multiyear restoration of an interment
 21    3   space, or a memorial or memorialization when the damage is
 21    4   extensive or when money available from the cemetery's trust
 21    5   fund is inadequate to complete repairs immediately. The owner
 21    6   of an interment space, or a memorial or memorialization that
 21    7   has been damaged or defaced shall be notified by the cemetery
 21    8   by restricted certified mail at the owner's last known address
 21    9   within sixty days of the discovery of the damage or
 21   10   defacement. The rules shall specify whether the owner is
 21   11   liable, in whole or in part, for the cost to repair or replace
 21   12   an interment space or a damaged or defaced memorial or
 21   13   memorialization.
 21   14      6. The cemetery shall not approve any rule which
 21   15   unreasonably restricts competition, or which unreasonably




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 13 of 34



 21   16   increases the cost to the owner of interment rights in
 21   17   exercising these rights.
 21   18      Sec. 27. NEW SECTION. 523I.305 MEMORIALS AND
 21   19   MEMORIALIZATION.
 21   20      1. AUTHORIZATION. A cemetery is entitled to determine
 21   21   whether a person requesting installation of a memorial is
 21   22   authorized to do so, to the extent that this can be determined
 21   23   from the records of the cemetery, as is consistent with the
 21   24   cemetery's rules. The owner of an interment space or the
 21   25   owner's agent may authorize a memorial dealer or independent
 21   26   third party to perform all necessary work related to
 21   27   preparation and installation of a memorial.
 21   28      2. CONFORMITY WITH CEMETERY RULES. A person selling a
 21   29   memorial shall review the rules of the cemetery where the
 21   30   memorial is to be installed to ensure that the memorial will
 21   31   comply with those rules prior to ordering or manufacturing the
 21   32   memorial.
 21   33      3. SPECIFICATIONS. Upon request, a cemetery shall provide
 21   34   reasonable written specifications and instructions governing
 21   35   installation of memorials, which shall apply to all
 22    1   installations whether performed by the cemetery or another
 22    2   person. The written specifications shall include provisions
 22    3   governing hours of installation or any other relevant
 22    4   administrative requirements of the cemetery. A copy of these
 22    5   specifications and instructions shall be provided upon
 22    6   request, without charge, to the owner of the interment space,
 22    7   next of kin, or a personal representative or agent of the
 22    8   owner, including the person installing the memorial. The
 22    9   person installing the memorial shall comply with the
 22   10   cemetery's written installation specifications and
 22   11   instructions. A cemetery shall not adopt or enforce any rule
 22   12   prohibiting the installation of a memorial by a memorial
 22   13   dealer or independent third party, unless the rule is adopted
 22   14   and enforced uniformly for all memorials installed in the
 22   15   cemetery.
 22   16      4. WRITTEN NOTICE. A memorial dealer or independent third
 22   17   party shall provide the cemetery with at least seven business
 22   18   days' prior written notice of intent to install a memorial at
 22   19   the cemetery, or such lesser notice as the cemetery deems
 22   20   acceptable. The notice shall contain the full name, address,
 22   21   and relationship of the memorial's purchaser to the person
 22   22   interred in the interment space or the owner of the interment
 22   23   space, if different. The notice shall also contain the color,
 22   24   type, and size of the memorial, the material, the inscription,
 22   25   and the full name and interment date of the person interred in
 22   26   the interment space.
 22   27      5. PREPARATION AND INSTALLATION.
 22   28      a. A person installing a memorial shall be responsible to
 22   29   the cemetery for any damage caused to the cemetery grounds,
 22   30   including roadways, other than normal use during installation
 22   31   of the memorial.
 22   32      b. Installation work shall cease during any nearby funeral
 22   33   procession or committal service.
 22   34      c. Installation work shall be done during the cemetery's
 22   35   normal weekday hours or at such other times as may be arranged
 23    1   with the cemetery.
 23    2      d. A memorial must comply with the cemetery's rules. In
 23    3   the event of noncompliance, the person installing a memorial
 23    4   is responsible for removal of the memorial and shall pay any
 23    5   reasonable expenses incurred by the cemetery in connection




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 14 of 34



 23    6   with the memorial's removal.
 23    7      e. The cemetery shall, without charge, provide information
 23    8   as described on the cemetery's map or plat necessary to locate
 23    9   the place where a memorial is to be installed and any other
 23   10   essential information the person installing the memorial needs
 23   11   to locate the proper interment space.
 23   12      f. A person installing a memorial shall follow the
 23   13   cemetery's instructions regarding the positioning of the
 23   14   memorial.
 23   15      g. During the excavation, all sod and dirt shall be
 23   16   carefully removed with no sod or dirt left on the interment
 23   17   space except the amount needed to fill the space between the
 23   18   memorial and the adjacent lawn.
 23   19      h. A person installing a memorial shall carefully fill in
 23   20   any areas around the memorial with topsoil or sand, in
 23   21   accordance with the cemetery's written instructions.
 23   22      i. A person installing a memorial shall remove all
 23   23   equipment and any debris which has accumulated during
 23   24   installation of the memorial.
 23   25      j. A person installing a memorial shall check to see if
 23   26   any adjacent memorials have become soiled or dirty during
 23   27   installation of the memorial and, if so, clean the adjacent
 23   28   memorials.
 23   29      k. If the person who is installing a memorial damages any
 23   30   cemetery property, the person shall notify the cemetery
 23   31   immediately. The person installing the memorial shall then
 23   32   repair the damage as soon as possible, upon approval by the
 23   33   cemetery. The cemetery may require a person installing a
 23   34   memorial to provide current proof of workers' compensation
 23   35   insurance as required by state law and current proof of
 24    1   liability insurance, sufficient to indemnify the cemetery
 24    2   against claims resulting from installation of the memorial.
 24    3   Proof of liability insurance in an amount of one million
 24    4   dollars or more shall preclude the cemetery from requiring a
 24    5   person installing a memorial to obtain a performance bond.
 24    6      l. If a cemetery has an office, a person installing a
 24    7   memorial shall immediately leave notice at the cemetery office
 24    8   when the memorial has been installed and all work related to
 24    9   the installation is complete.
 24   10      6. INSPECTION. A cemetery may inspect the installation
 24   11   site of a memorial at any time. If the cemetery determines
 24   12   that cemetery rules are not being followed during the
 24   13   installation, the cemetery may order the installation to stop
 24   14   until the infraction is corrected. The cemetery shall provide
 24   15   written notice to the installer as soon as possible if the
 24   16   cemetery believes that any of the following have occurred:
 24   17      a. The memorial has not been installed correctly.
 24   18      b. The person installing the memorial has damaged property
 24   19   at the cemetery.
 24   20      c. Other cemetery requirements for installation have not
 24   21   been met, such as removal of debris or equipment.
 24   22      7. LOCATION AND SERVICE CHARGE. A cemetery may charge a
 24   23   reasonable service charge for allowing the installation of a
 24   24   memorial purchased or obtained from and installed by a person
 24   25   other than the cemetery or its agents. This service charge
 24   26   shall be based on the cemetery's actual labor costs, including
 24   27   fringe benefits, of those employees whose normal duty is to
 24   28   inspect the installation of memorials, in accordance with
 24   29   generally accepted accounting practices. General
 24   30   administrative and overhead costs and any other functions not




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 15 of 34



 24   31   related to actual inspection time shall be excluded from the
 24   32   service charge.
 24   33      8. FAULTY INSTALLATION. If a memorial sinks, tilts, or
 24   34   becomes misaligned within twelve months of its installation
 24   35   and the cemetery believes the cause is faulty installation,
 25    1   the cemetery shall notify the person who installed the
 25    2   memorial in writing and the person who installed the memorial
 25    3   shall be responsible to correct the damage, unless the damage
 25    4   is caused by inadequate written specifications and
 25    5   instructions from the cemetery or acts of the cemetery and its
 25    6   agents or employees, including but not limited to running a
 25    7   backhoe over the memorial, carrying a vault or other heavy
 25    8   equipment over the memorial, or opening or closing an
 25    9   interment space adjacent to the memorial.
 25   10      9. PERPETUAL CARE. A cemetery may require contributions
 25   11   from the purchaser of a memorial for perpetual care, if a
 25   12   perpetual care fund deposit is uniformly charged on every
 25   13   memorial installed in the cemetery.
 25   14      Sec. 28. NEW SECTION. 523I.306 COMMISSION OR BONUS
 25   15   UNLAWFUL.
 25   16      It shall be unlawful for any organization subject to the
 25   17   provisions of this chapter to pay or offer to pay to, or for
 25   18   any person, firm, or corporation to receive directly or
 25   19   indirectly a commission or bonus or rebate or other thing of
 25   20   value, for or in connection with the sale of any interment
 25   21   space, lot, or part thereof, in any cemetery. The provisions
 25   22   of this section shall not apply to a person regularly employed
 25   23   and supervised by such organization or to a person, firm,
 25   24   corporation, or other entity licensed under chapter 523A that
 25   25   contracts with the cemetery to sell interment spaces or lots.
 25   26   The conduct of any person, firm, corporation, or other entity
 25   27   described in this section is the direct responsibility of the
 25   28   cemetery.
 25   29      Sec. 29. NEW SECTION. 523I.307 DISCRIMINATION
 25   30   PROHIBITED.
 25   31      It shall be unlawful for any organization subject to the
 25   32   provisions of this chapter to deny the privilege of interment
 25   33   of the remains of any deceased person in any cemetery solely
 25   34   because of the race, color, or national origin of such
 25   35   deceased person. Any contract, agreement, deed, covenant,
 26    1   restriction, or charter provision at any time entered into, or
 26    2   bylaw, rule, or regulation adopted or put in force, either
 26    3   subsequent or prior to July 4, 1953, authorizing, permitting,
 26    4   or requiring any organization subject to the provisions of
 26    5   this chapter to deny such privilege of interment because of
 26    6   race, color, or national origin of such deceased person is
 26    7   hereby declared to be null and void and in conflict with the
 26    8   public policy of this state. An organization subject to the
 26    9   provisions of this chapter or any director, officer, agent,
 26   10   employee, or trustee thereof, shall not be liable for damages
 26   11   or other relief, or be subjected to any action in any court of
 26   12   competent jurisdiction for refusing to commit any act unlawful
 26   13   under this chapter.
 26   14      Sec. 30. NEW SECTION. 523I.308 SPECULATION PROHIBITED.
 26   15      A cemetery or any person representing a cemetery in a sales
 26   16   capacity shall not advertise or represent, in connection with
 26   17   the sale or attempted sale of any interment space, that the
 26   18   same is or will be a desirable speculative investment for
 26   19   resale purposes.
 26   20      Sec. 31. NEW SECTION. 523I.309 INTERMENT, RELOCATION, OR




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 16 of 34



 26   21   DISINTERMENT OF REMAINS.
 26   22      1. Any available member of the following classes of
 26   23   persons, in the priority listed, shall have the right to
 26   24   control the interment, relocation, or disinterment of a
 26   25   decedent's remains within or from a cemetery:
 26   26      a. The attorney in fact of the decedent pursuant to a
 26   27   durable power of attorney for health care.
 26   28      b. The surviving spouse of the decedent.
 26   29      c. The decedent's surviving adult children. If there is
 26   30   more than one surviving adult child, any adult child who can
 26   31   confirm, in writing, that all other adult children have been
 26   32   notified of the proposed interment, relocation, or
 26   33   disinterment may authorize the interment, relocation, or
 26   34   disinterment, unless the cemetery receives an objection to
 26   35   such action from another adult child of the decedent.
 27    1      d. A surviving parent of the decedent.
 27    2      e. A surviving adult sibling of the decedent.
 27    3      f. A surviving grandparent of the decedent.
 27    4      g. The legal guardian of the decedent at the time of the
 27    5   decedent's death.
 27    6      2. A person who represents that the person knows the
 27    7   identity of a decedent and, in order to procure the interment,
 27    8   relocation, or disinterment of the decedent's remains, signs
 27    9   an order or statement, other than a death certificate, that
 27   10   warrants the identity of the decedent is liable for all
 27   11   damages that result, directly or indirectly, from that
 27   12   representation.
 27   13      3. A person may provide written directions for the
 27   14   interment, relocation, or disinterment of the person's own
 27   15   remains in a prepaid funeral or cemetery contract, or written
 27   16   instrument signed and acknowledged by the person. The
 27   17   directions may govern the inscription to be placed on a grave
 27   18   marker attached to any interment space in which the decedent
 27   19   had the right of interment at the time of death and in which
 27   20   interment space the decedent is subsequently interred. The
 27   21   directions may be modified or revoked only by a subsequent
 27   22   writing signed and acknowledged by the person. A person other
 27   23   than a decedent who is entitled to control the interment,
 27   24   relocation, or disinterment of a decedent's remains under this
 27   25   section shall faithfully carry out the directions of the
 27   26   decedent to the extent that the decedent's estate or the
 27   27   person controlling the interment, relocation, or disinterment
 27   28   is financially able to do so.
 27   29      4. A cemetery shall not be liable for carrying out the
 27   30   written directions of a decedent or the directions of any
 27   31   person entitled to control the interment, relocation, or
 27   32   disinterment of the decedent's remains.
 27   33      5. In the event of a dispute concerning the right to
 27   34   control the interment, relocation, or disinterment of a
 27   35   decedent's remains, the dispute may be resolved by a court of
 28    1   competent jurisdiction. A cemetery shall not be liable for
 28    2   refusing to accept the decedent's remains, relocate or
 28    3   disinter, inter or otherwise dispose of the decedent's
 28    4   remains, until the cemetery receives a court order or other
 28    5   suitable confirmation that the dispute has been resolved or
 28    6   settled.
 28    7      6. a. If good cause exists to relocate or disinter
 28    8   remains interred in a cemetery, the remains may be removed
 28    9   from the cemetery pursuant to a disinterment permit as
 28   10   required under section 144.34, with the written consent of the




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 17 of 34



 28   11   cemetery, the current interment rights owner and the person
 28   12   entitled by this section to control the interment, relocation,
 28   13   or disinterment of the decedent's remains.
 28   14      b. If the consent required by this subsection cannot be
 28   15   obtained, the remains may be relocated by permission of the
 28   16   district court of the county in which the cemetery is located.
 28   17   Before the date of application to the court for permission to
 28   18   relocate remains under this subsection, notice must be given
 28   19   to the cemetery in which the remains are interred, each person
 28   20   whose consent is required for relocation of the remains under
 28   21   subsection 1, and any other person that the court requires to
 28   22   be served.
 28   23      c. For the purposes of this subsection, personal notice
 28   24   must be given not later than the eleventh day before the date
 28   25   of application to the court for permission to relocate or
 28   26   disinter the remains, or notice by certified mail or
 28   27   restricted certified mail must be given not later than the
 28   28   sixteenth day before the date of application.
 28   29      d. This subsection does not apply to the removal of
 28   30   remains from one interment space to another interment space in
 28   31   the same cemetery to correct an error, or relocation of the
 28   32   remains by the cemetery from an interment space for which the
 28   33   purchase price is past due and unpaid, to another suitable
 28   34   interment space.
 28   35      7. A person who removes remains from a cemetery shall keep
 29    1   a record of the removal, and provide a copy to the cemetery,
 29    2   that includes all of the following:
 29    3      a. The date the remains are removed.
 29    4      b. The name of the decedent and age at death if those
 29    5   facts can be conveniently obtained.
 29    6      c. The place to which the remains are removed.
 29    7      d. The name of the cemetery and the location of the
 29    8   interment space from which the remains are removed.
 29    9      8. A cemetery may disinter and relocate remains interred
 29   10   in the cemetery for the purpose of correcting an error made by
 29   11   the cemetery after obtaining a disinterment permit as required
 29   12   by section 144.34. The cemetery shall provide written notice
 29   13   describing the error to the commissioner and to the person who
 29   14   has the right to control the interment, relocation, or
 29   15   disinterment of the remains erroneously interred, by
 29   16   restricted certified mail at the person's last known address
 29   17   and sixty days prior to the disinterment. The notice shall
 29   18   include the location where the disinterment will occur and the
 29   19   location of the new interment space. A cemetery is not
 29   20   civilly or criminally liable for an erroneously made interment
 29   21   that is corrected in compliance with this subsection unless
 29   22   the error was the result of gross negligence or intentional
 29   23   misconduct.
 29   24      9. Relocations and disinterments of human remains shall be
 29   25   done in compliance with sections 144.32 and 144.34.
 29   26      Sec. 32. NEW SECTION. 523I.310 SALE OF INTERMENT RIGHTS.
 29   27      1. For sales or transfers of interment rights made on or
 29   28   after July 1, 2005, a cemetery shall issue a certificate of
 29   29   interment rights or other instrument evidencing the conveyance
 29   30   of exclusive rights of interment upon payment in full of the
 29   31   purchase price.
 29   32      2. The interment rights in an interment space that is
 29   33   conveyed by a certificate of ownership or other instrument
 29   34   shall not be divided without the consent of the cemetery.
 29   35      3. A conveyance of exclusive rights of interment shall be




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 18 of 34



 30    1   filed and recorded in the cemetery office. Any transfer of
 30    2   the ownership of interment rights shall be filed and recorded
 30    3   in the cemetery office. The cemetery may charge a reasonable
 30    4   recording fee to record the transfer of interment rights.
 30    5      Sec. 33. NEW SECTION. 523I.311 RECORDS OF INTERMENT
 30    6   RIGHTS AND INTERMENT.
 30    7      1. For sales or transfers of interment rights made on or
 30    8   after July 1, 2005, a cemetery shall keep complete records
 30    9   identifying the owners of all interment rights sold by the
 30   10   cemetery and historical information regarding any transfers of
 30   11   ownership. The records shall include all of the following:
 30   12      a. The name and last known address of each owner or
 30   13   previous owner of interment rights.
 30   14      b. The date of each purchase or transfer of interment
 30   15   rights.
 30   16      c. A unique numeric or alphanumeric identifier that
 30   17   identifies the location of each interment space sold by the
 30   18   cemetery.
 30   19      2. For interments made on or after July 1, 2005, a
 30   20   cemetery shall keep a record of each interment in a cemetery.
 30   21   The records shall include all of the following:
 30   22      a. The date the remains are interred.
 30   23      b. The name, date of birth, and date of death of the
 30   24   decedent interred, if those facts can be conveniently
 30   25   obtained.
 30   26      c. A unique numeric or alphanumeric identifier that
 30   27   identifies the location of the interment space where the
 30   28   remains are interred.
 30   29      Sec. 34. NEW SECTION. 523I.312 DISCLOSURE REQUIREMENTS
 30   30   == INTERMENT AGREEMENTS.
 30   31      1. Each nonperpetual care cemetery shall have printed or
 30   32   stamped at the head of all of its contracts, deeds,
 30   33   statements, letterheads, and advertising material, the legend:
 30   34   "This is a nonperpetual care cemetery", and shall not sell any
 30   35   lot or interment space in the cemetery unless the purchaser of
 31    1   the interment space is informed that the cemetery is a
 31    2   nonperpetual care cemetery.
 31    3      2. An agreement for interment rights under this chapter
 31    4   shall be written in clear, understandable language and do all
 31    5   of the following:
 31    6      a. Identify the seller and purchaser.
 31    7      b. Identify the salesperson.
 31    8      c. Specify the interment rights to be provided and the
 31    9   cost of each item.
 31   10      d. State clearly the conditions on which substitution will
 31   11   be allowed.
 31   12      e. Set forth the total purchase price and the terms under
 31   13   which it is to be paid.
 31   14      f. State clearly whether the agreement is revocable or
 31   15   irrevocable, and if revocable, which parties have the
 31   16   authority to revoke the agreement.
 31   17      g. State the amount or percentage of money to be placed in
 31   18   the cemetery's care or maintenance fund.
 31   19      h. If the cemetery has a care fund, set forth an
 31   20   explanation that the care fund is an irrevocable trust, that
 31   21   deposits cannot be withdrawn even in the event of
 31   22   cancellation, and that the trust's income shall be used by the
 31   23   cemetery for its care.
 31   24      i. Set forth an explanation of any fees or expenses that
 31   25   may be charged.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 19 of 34



 31   26      j. Set forth an explanation of whether amounts for
 31   27   perpetual care will be deposited in trust upon payment in full
 31   28   or on an allocable basis as payments are made.
 31   29      k. Set forth an explanation of whether initial payments on
 31   30   agreements for multiple items of funeral and cemetery
 31   31   merchandise or services, or both, will be allocated first to
 31   32   the purchase of an interment space. If such an allocation is
 31   33   to be made, the agreement shall provide for the immediate
 31   34   transfer of such interment rights upon payment in full and
 31   35   prominently state that any applicable trust deposits under
 32    1   chapter 523A will not be made until the cemetery has received
 32    2   payment in full for the interment rights. The transfer of an
 32    3   undeveloped interment space may be deferred until the
 32    4   interment space is ready for interment.
 32    5      l. If the transfer of an undeveloped interment space will
 32    6   be deferred until the interment space is ready for interment
 32    7   as permitted in paragraph "k", the agreement shall provide for
 32    8   some form of written acknowledgement upon payment in full,
 32    9   specify a reasonable time period for development of the
 32   10   interment space, describe what happens in the event of a death
 32   11   prior to development of the interment space, and provide for
 32   12   the immediate transfer of the interment rights when
 32   13   development of the interment space is complete.
 32   14      m. Specify the purchaser's right to cancel and the damages
 32   15   payable for cancellation, if any.
 32   16      n. State the name and address of the commissioner.
 32   17      Sec. 35. NEW SECTION. 523I.313 NEW CEMETERIES AND
 32   18   GARDENS AND CEMETERY REGISTRY.
 32   19      1. A person that dedicates property for a new cemetery on
 32   20   or after July 1, 2005, and a cemetery that dedicates an
 32   21   additional garden on or after July 1, 2005, shall:
 32   22      a. In the case of land, survey and subdivide the property
 32   23   into gardens with descriptive names or numbers and make a map
 32   24   or plat of the cemetery or garden.
 32   25      b. In the case of a mausoleum or a columbarium, make a map
 32   26   or plat of the property delineating sections or other
 32   27   divisions with descriptive names and numbers.
 32   28      c. File the map or plat with the commissioner, including a
 32   29   written certificate or declaration of dedication of the
 32   30   property delineated by the map or plat, dedicating the
 32   31   property for cemetery purposes.
 32   32      2. A map or plat and a certificate or declaration of
 32   33   dedication that is filed pursuant to this section dedicates
 32   34   the property for cemetery purposes and constitutes
 32   35   constructive notice of that dedication.
 33    1      3. The commissioner shall maintain a registry of perpetual
 33    2   care and nonperpetual care cemeteries, to the extent that
 33    3   information is available. A cemetery selling interment rights
 33    4   on or after July 1, 2005, shall file a written notice with the
 33    5   commissioner that includes the legal description of the
 33    6   property with boundary lines of the land, the name of the
 33    7   cemetery, the status of the cemetery as either perpetual care
 33    8   or nonperpetual care, the status of the cemetery as either
 33    9   religious or nonreligious, and the cemetery's ownership in a
 33   10   form approved by the commissioner. A cemetery shall notify
 33   11   the commissioner of any changes in this information within
 33   12   sixty days of the change.
 33   13      Sec. 36. NEW SECTION. 523I.314 NEW CONSTRUCTION.
 33   14      1. A person shall not offer to sell interment rights in a
 33   15   mausoleum or columbarium that will be built or completed in




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 20 of 34



 33   16   the future unless the person has notified the commissioner of
 33   17   the offer to sell on a form prescribed by the commissioner.
 33   18      2. The notice of an offer to sell interment rights in such
 33   19   a mausoleum or columbarium shall include the following
 33   20   information:
 33   21      a. A description of the new facility or the proposed
 33   22   expansion, including a description of the interment rights to
 33   23   be offered to prospective purchasers.
 33   24      b. A statement of the financial resources available for
 33   25   the project.
 33   26      c. A copy of the proposed interment rights agreement to be
 33   27   used, which shall include the following:
 33   28      (1) That purchase payments will be held in trust in
 33   29   accordance with the requirements of chapter 523A until
 33   30   construction of the mausoleum or columbarium is complete.
 33   31      (2) That the purchaser may request a refund of the
 33   32   purchase amount, if construction does not begin within five
 33   33   years of the purchaser's first payment.
 33   34      (3) That the new facility will operate as a perpetual care
 33   35   cemetery in compliance with this chapter, even if the facility
 34    1   is located at a nonperpetual care cemetery.
 34    2      (4) That the purchaser will receive an ownership
 34    3   certificate upon payment in full or, if later, when
 34    4   construction is complete.
 34    5      3. Unless financing has been secured that is adequate in
 34    6   amount and terms to complete the facility proposed, new
 34    7   construction of a mausoleum or columbarium shall not begin
 34    8   until the notice required by this section has been approved by
 34    9   the commissioner.
 34   10      Sec. 37. NEW SECTION. 523I.315 UNPAID CARE ASSESSMENTS
 34   11   AND UNOCCUPIED INTERMENT SPACES.
 34   12      1. FORECLOSURE == UNPAID ASSESSMENTS. Unpaid care
 34   13   assessments for an unoccupied interment space not under
 34   14   perpetual care shall create a lien by the cemetery against the
 34   15   applicable interment space. The cemetery may, following
 34   16   notice, foreclose on the interment space if the amount of the
 34   17   lien exceeds the amount paid for the interment space. If the
 34   18   lien is not paid within one year from the date that notice of
 34   19   foreclosure is served on the owner of record or the owner of
 34   20   record's heirs, the ownership in or right to the unoccupied
 34   21   interment space shall revert to the cemetery that owns the
 34   22   cemetery in which the unoccupied interment space is located.
 34   23      2. ABANDONMENT == QUIET TITLE ACTION. A cemetery may file
 34   24   an action to quiet title to determine whether an interment
 34   25   space has been abandoned if the interment space is unoccupied
 34   26   and has not been occupied in the preceding seventy=five years.
 34   27   An action to quiet title shall commence when the cemetery
 34   28   serves notice on the owner of record or the owner of record's
 34   29   heirs declaring that the interment space is considered to be
 34   30   abandoned. If the owner of record or the owner of record's
 34   31   heirs do not respond within three years from the date that
 34   32   notice is served, the abandonment is considered to be
 34   33   complete. The ownership in or right to an abandoned interment
 34   34   space shall revert to the cemetery in which the abandoned
 34   35   interment space is located and the cemetery may sell and
 35    1   convey title to the interment space.
 35    2      3. SERVICE OF NOTICE. Notice under this section shall be
 35    3   served personally on the owner of record or the owner of
 35    4   record's heirs, or may be served by mailing notice by
 35    5   certified mail to the owner of record or to the owner of




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 21 of 34



 35    6   record's heirs at the last known address. If the address of
 35    7   the owner of record or the owner of record's heirs cannot be
 35    8   ascertained, notice of abandonment shall be given by one
 35    9   publication of the notice in the official newspaper of the
 35   10   county in which the cemetery is located.
 35   11      Sec. 38. NEW SECTION. 523I.316 PROTECTION OF CEMETERIES
 35   12   AND BURIAL SITES.
 35   13      1. EXISTENCE OF CEMETERY OR BURIAL SITE == NOTIFICATION.
 35   14   If a governmental subdivision is notified of the existence of
 35   15   a cemetery, or a marked burial site that is not located in a
 35   16   dedicated cemetery, within its jurisdiction and the cemetery
 35   17   or burial site is not otherwise provided for under this
 35   18   chapter, the governmental subdivision shall, as soon as is
 35   19   practicable, notify the owner of the land upon which the
 35   20   cemetery or burial site is located of the cemetery's or burial
 35   21   site's existence and location. The notification shall include
 35   22   an explanation of the provisions of this section. If there is
 35   23   a basis to believe that interment may have occurred more than
 35   24   one hundred fifty years earlier, the governmental subdivision
 35   25   shall also notify the state archaeologist.
 35   26      2. DISTURBANCE OF INTERMENT SPACES == PENALTY. A person
 35   27   who knowingly and without authorization damages, defaces,
 35   28   destroys, or otherwise disturbs an interment space commits
 35   29   criminal mischief in the third degree. Criminal mischief in
 35   30   the third degree is an aggravated misdemeanor.
 35   31      3. DUTY TO PRESERVE AND PROTECT. A governmental
 35   32   subdivision having a cemetery, or a burial site that is not
 35   33   located within a dedicated cemetery, within its jurisdiction,
 35   34   for which preservation is not otherwise provided, shall
 35   35   preserve and protect the cemetery or burial site as necessary
 36    1   to restore or maintain its physical integrity as a cemetery or
 36    2   burial site. The governmental subdivision may enter into an
 36    3   agreement to delegate the responsibility for the preservation
 36    4   and protection of the cemetery or burial site to a private
 36    5   organization interested in historical preservation.
 36    6      4. CONFISCATION AND RETURN OF MEMORIALS. A law
 36    7   enforcement officer having reason to believe that a memorial
 36    8   or memorialization is in the possession of a person without
 36    9   authorization or right to possess the memorial or
 36   10   memorialization may take possession of the memorial or
 36   11   memorialization from that person and turn it over to the
 36   12   officer's law enforcement agency. If a law enforcement agency
 36   13   determines that a memorial or memorialization the agency has
 36   14   taken possession of rightfully belongs on an interment space,
 36   15   the agency shall return the memorial or memorialization to the
 36   16   interment space, or make arrangements with the person having
 36   17   jurisdiction over the interment space for its return.
 36   18      5. BURIAL SITES LOCATED ON PRIVATE PROPERTY. If a person
 36   19   notifies a governmental subdivision that a burial site of the
 36   20   person's relative is located on property owned by another
 36   21   person within the jurisdiction of the governmental
 36   22   subdivision, the governmental subdivision shall notify the
 36   23   property owner of the location of the burial site and that the
 36   24   property owner is required to permit the person reasonable
 36   25   ingress and egress for the purposes of visiting the burial
 36   26   site of the person's relative.
 36   27      6. DISCOVERY OF HUMAN REMAINS. Any person discovering
 36   28   human remains shall notify the county or state medical
 36   29   examiner or a city, county, or state law enforcement agency as
 36   30   soon as is reasonably possible unless the person knows or has




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 22 of 34



 36   31   good reason to believe that such notice has already been given
 36   32   or the discovery occurs in a cemetery. If there is reason to
 36   33   believe that interment may have occurred more than one hundred
 36   34   fifty years earlier, the governmental subdivision notified
 36   35   shall also notify the state archaeologist. A person who does
 37    1   not provide notice required pursuant to this subsection
 37    2   commits a serious misdemeanor.
 37    3                            SUBCHAPTER 4
 37    4        COUNTY CEMETERY COMMISSIONS AND NEGLECTED CEMETERIES
 37    5      Sec. 39. NEW SECTION. 523I.401 NEGLECTED CEMETERIES.
 37    6      The commissioner shall create a form that interested
 37    7   persons may use to report neglected cemeteries to the
 37    8   commissioner. The commissioner shall catalog and review the
 37    9   neglected cemetery reports received on or before December 31,
 37   10   2007, conduct site visits as warranted to determine the nature
 37   11   or extent of any neglect, and publish a report of findings on
 37   12   or before December 31, 2008.
 37   13      Sec. 40. NEW SECTION. 523I.402 REMOVAL OF REMAINS.
 37   14      1. Upon a showing of good cause, a county cemetery
 37   15   commission may file suit in the district court in that county
 37   16   to have remains interred in a cemetery owned and operated by
 37   17   the commission removed to another cemetery. All persons in
 37   18   interest, known or unknown, other than the plaintiffs, shall
 37   19   be made defendants to the suit. If any parties are unknown,
 37   20   notice may be given by publication. After hearing and a
 37   21   showing of good cause for the removal, the court may order the
 37   22   removal of the remains and the remains shall be properly
 37   23   interred in another cemetery, at the expense of the county.
 37   24   The removal and reinterment of the remains shall be done
 37   25   pursuant to a disinterment permit issued under section 144.34
 37   26   with due care and decency. In deciding whether to order the
 37   27   removal of interred remains, a court shall consider present or
 37   28   future access to the cemetery, the historical significance of
 37   29   the cemetery, and the wishes of the parties concerned if they
 37   30   are brought to the court's attention, including the desire of
 37   31   any beneficiaries to reserve their rights to waive a
 37   32   reservation of rights in favor of removal, and shall exercise
 37   33   the court's sound discretion in granting or refusing the
 37   34   removal of interred remains.
 37   35      2. Any heir at law or descendent of a deceased person
 38    1   interred in a neglected cemetery may file suit in the district
 38    2   court in the county where the cemetery is located, to have the
 38    3   deceased person's remains interred in the cemetery removed to
 38    4   another cemetery. The owner of the land, any beneficiaries of
 38    5   any reservation of rights, and any other persons in interest,
 38    6   known or unknown, other than the plaintiffs shall be made
 38    7   defendants. If any parties are unknown, notice may be given
 38    8   by publication. After hearing and upon a showing of good
 38    9   cause, the court may order removal and the proper interment of
 38   10   the remains in another cemetery, at the expense of the
 38   11   petitioner. The removal and reinterment shall be done with
 38   12   due care and decency.
 38   13                            SUBCHAPTER 5
 38   14                      GOVERNMENTAL SUBDIVISIONS
 38   15      Sec. 41. NEW SECTION. 523I.501 CEMETERY AUTHORIZED.
 38   16      The governing body of a governmental subdivision may
 38   17   purchase, establish, operate, enclose, improve, or regulate a
 38   18   cemetery. A cemetery owned or operated by a governmental
 38   19   subdivision may sell interment rights subject to the
 38   20   provisions of this chapter.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 23 of 34



 38   21      Sec. 42. NEW SECTION. 523I.502 TRUST FOR CEMETERY.
 38   22      1. A governmental subdivision that owns or operates a
 38   23   cemetery or has control of cemetery property may act as a
 38   24   permanent trustee for the perpetual maintenance of interment
 38   25   spaces in the cemetery.
 38   26      2. To act as a trustee, a majority of the governmental
 38   27   subdivision's governing body must adopt an ordinance or
 38   28   resolution stating the governmental subdivision's willingness
 38   29   and intention to act as a trustee for the perpetual
 38   30   maintenance of cemetery property. When the ordinance or
 38   31   resolution is adopted and the trust is accepted, the trust is
 38   32   perpetual.
 38   33      Sec. 43. NEW SECTION. 523I.503 AUTHORITY TO RECEIVE
 38   34   GIFTS AND DEPOSITS FOR CARE == CERTIFICATES.
 38   35      1. A governmental subdivision that is a trustee for the
 39    1   perpetual maintenance of a cemetery may adopt reasonable rules
 39    2   governing the receipt of a gift or grant from any source.
 39    3      2. A governmental subdivision that is a trustee for a
 39    4   person shall accept the amount the governmental subdivision
 39    5   requires for permanent maintenance of an interment space on
 39    6   behalf of that person or a decedent.
 39    7      3. A governmental subdivision's acceptance of a deposit
 39    8   for permanent maintenance of an interment space constitutes a
 39    9   perpetual trust for the designated interment space.
 39   10      4. Upon acceptance of a deposit, a governmental
 39   11   subdivision's secretary, clerk, or mayor shall issue a
 39   12   certificate in the name of the governmental subdivision to the
 39   13   trustee or depositor. The certificate shall state all of the
 39   14   following:
 39   15      a. The depositor's name.
 39   16      b. The amount and purpose of the deposit.
 39   17      c. The location, with as much specificity as possible, of
 39   18   the interment space to be maintained.
 39   19      d. Other information required by the governmental
 39   20   subdivision.
 39   21      5. An individual, association, foundation, or corporation
 39   22   that is interested in the maintenance of a neglected cemetery
 39   23   in a governmental subdivision's possession and control may
 39   24   donate funds to the cemetery's perpetual trust fund to
 39   25   beautify and maintain the entire cemetery or burial grounds
 39   26   generally.
 39   27      Sec. 44. NEW SECTION. 523I.504 APPOINTMENT OF SUCCESSOR
 39   28   TRUSTEE.
 39   29      A district judge of a county in which a cemetery is located
 39   30   shall appoint a suitable successor or trustee to faithfully
 39   31   execute a trust in accordance with this subchapter if a
 39   32   governmental subdivision renounces a trust assumed under this
 39   33   subchapter, fails to act as its trustee, a vacancy occurs, or
 39   34   the appointment of a successor or trustee is otherwise
 39   35   necessary.
 40    1      Sec. 45. NEW SECTION. 523I.505 COUNTY AUDITOR AS
 40    2   TRUSTEE.
 40    3      1. In the absence of a trustee for care funds, unless
 40    4   otherwise provided by law, the care funds shall be placed in
 40    5   the hands of the county auditor, who shall provide a receipt
 40    6   for, loan, and make annual reports of the care funds.
 40    7      2. The county auditor shall not be required to post a
 40    8   bond.
 40    9      3. The county auditor shall serve without compensation,
 40   10   but may, out of the income received, pay all proper items of




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 24 of 34



 40   11   expense incurred in the performance of the auditor's duties as
 40   12   trustee, if any.
 40   13      4. The county auditor shall make a full report of the
 40   14   trustee's actions and trust funds annually in January. The
 40   15   net proceeds for care funds received by the county auditor as
 40   16   trustee shall be apportioned and credited to each of any
 40   17   separate care funds assigned to the auditor.
 40   18      5. The county auditor shall turn over the accrued income
 40   19   from each care fund annually to the person having control of
 40   20   the cemetery.
 40   21      Sec. 46. NEW SECTION. 523I.506 COMMINGLING OF CARE FUNDS
 40   22   BY GOVERNMENTAL SUBDIVISIONS.
 40   23      A governmental subdivision subject to this section may
 40   24   commingle care funds for more than one cemetery for the
 40   25   purposes of investment and administration and may file a
 40   26   single report, if each cemetery is appropriately identified
 40   27   and separate records are maintained for each cemetery.
 40   28      Sec. 47. NEW SECTION. 523I.507 INVESTMENT OF CARE FUNDS
 40   29   BY GOVERNMENTAL SUBDIVISIONS.
 40   30      Notwithstanding section 12B.10, a perpetual care cemetery
 40   31   owned by a governmental subdivision may invest and reinvest
 40   32   deposits pursuant to the requirements of this chapter. The
 40   33   trustee shall use the judgment and care under the
 40   34   circumstances then prevailing that persons of prudence,
 40   35   discretion, and intelligence exercise in the management of
 41    1   their own affairs, not in regard to speculation but in regard
 41    2   to the permanent disposition of their funds, considering the
 41    3   probable income as well as the probable safety of their
 41    4   capital. The trustee of the trust funds has a fiduciary duty
 41    5   to make reasonable investment decisions and to properly
 41    6   oversee and manage the funds entrusted to the trust fund.
 41    7      Sec. 48. NEW SECTION. 523I.508 MANAGEMENT BY
 41    8   GOVERNMENTAL SUBDIVISIONS.
 41    9      1. POLITICAL SUBDIVISIONS AS TRUSTEES. Counties, cities,
 41   10   irrespective of their form of government, boards of trustees
 41   11   of cities to whom the management of municipal cemeteries has
 41   12   been transferred by ordinance, and civil townships wholly
 41   13   outside of any city, are trustees in perpetuity, and are
 41   14   required to accept, receive, and expend all moneys and
 41   15   property donated or left to them by bequest for perpetual
 41   16   care, and that portion of interment space sales or permanent
 41   17   charges made against interment spaces which has been set aside
 41   18   in a perpetual care fund for which there is no other acting
 41   19   trustee, shall be used in caring for the property of the donor
 41   20   or lot owner who by purchase or otherwise has provided for the
 41   21   perpetual care of an interment space in any cemetery, or in
 41   22   accordance with the terms of the donation, bequest, or
 41   23   agreement for sale and purchase of an interment space, and the
 41   24   money or property thus received shall be used for no other
 41   25   purpose.
 41   26      2. AUTHORITY TO INVEST FUNDS == CURRENT CARE CHARGE
 41   27   PAYMENTS. The board of supervisors, mayor and council, or
 41   28   other elected governmental body, as the case may be, may
 41   29   receive and invest all moneys and property, donated or
 41   30   bequeathed, and that portion of cemetery lot sales and
 41   31   permanent charges made against cemetery lots which have been
 41   32   set aside in a perpetual care fund, and in so investing, shall
 41   33   use the judgment and care under the circumstances then
 41   34   prevailing that persons of prudence, discretion, and
 41   35   intelligence exercise in the management of their own affairs




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 25 of 34



 42    1   not in regard to speculation but in regard to the permanent
 42    2   disposition of their funds, considering the probable income as
 42    3   well as the probable safety of their capital. The trustee of
 42    4   the trust funds has a fiduciary duty to make reasonable
 42    5   investment decisions and to properly oversee and manage the
 42    6   funds entrusted to the trust fund. The income from the
 42    7   investment shall be used in caring for the property of the
 42    8   donor in any cemetery, or as provided in the terms of the gift
 42    9   or donations or agreement for sale and purchase of a cemetery
 42   10   lot.
 42   11      All current care charge payments received shall be
 42   12   allocated to the perpetual care fund or to the fund paying the
 42   13   costs of cemetery operations. Care charge payments received
 42   14   one year or more after the date they were incurred shall be
 42   15   used to fund the cost of operating the cemetery. Care charge
 42   16   payments received one year or more in advance of their due
 42   17   date shall be deposited in the perpetual care fund. Interest
 42   18   from the perpetual care fund shall be used for the maintenance
 42   19   of both occupied and unoccupied lots or spaces. Any remaining
 42   20   interest may be used for costs of access roads and paths,
 42   21   fencing, and general maintenance of the cemetery. Lots under
 42   22   perpetual care shall be maintained in accordance with the
 42   23   cemetery covenants of sale.
 42   24      3. RESOLUTION OF ACCEPTANCE == INTEREST. Before any part
 42   25   of the principal may be invested or used, the county, city,
 42   26   board of trustees of a city to whom the management of a
 42   27   municipal cemetery has been transferred by ordinance, or civil
 42   28   township shall, by resolution, accept the moneys described in
 42   29   subsection 1 and, by resolution, shall provide for the payment
 42   30   of interest annually to the appropriate fund, or to the
 42   31   cemetery, or the person in charge of the cemetery, to be used
 42   32   in caring for or maintaining the individual property of the
 42   33   donor in the cemetery, or interment spaces which have been
 42   34   sold if provision was made for perpetual care, all in
 42   35   accordance with the terms of the donation or bequest, or the
 43    1   terms of the sale or purchase of an interment space.
 43    2      If there is no person in charge of the cemetery, the income
 43    3   from the fund shall be expended under the direction of the
 43    4   board of supervisors, city council, board of trustees, or
 43    5   civil township trustees, as the case may be, in accordance
 43    6   with the terms of the donation or bequest, or the terms of the
 43    7   sale or purchase of an interment space.
 43    8      4. DELEGATES TO CONVENTIONS. A township having one or
 43    9   more cemeteries under its control may designate, not to exceed
 43   10   two, officials from each cemetery as delegates to attend
 43   11   meetings of cemetery officials, and certain expenses,
 43   12   including association dues, not to exceed twenty=five dollars,
 43   13   of the delegates may be paid out of the cemetery fund of the
 43   14   township.
 43   15      5. SUBSCRIBING TO PUBLICATIONS. The cemetery officials of
 43   16   every township having a cemetery under its control may
 43   17   subscribe to one or more publications devoted exclusively to
 43   18   cemetery management, and the subscriptions may be paid out of
 43   19   the cemetery fund of the township.
 43   20                            SUBCHAPTER 6
 43   21                         GENERAL PROVISIONS
 43   22      Sec. 49. NEW SECTION. 523I.601 SETTLEMENT OF ESTATES ==
 43   23   MAINTENANCE FUND.
 43   24      The court in which the estate of a deceased person is
 43   25   administered, before final distribution, may allow and set




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 26 of 34



 43   26   apart from the estate a sum sufficient to provide an income
 43   27   adequate to pay for the perpetual care and upkeep of the
 43   28   interment spaces upon which the body of the deceased is
 43   29   buried, except where perpetual care has otherwise been
 43   30   provided for. The sum so allowed and set apart shall be paid
 43   31   to a trustee as provided by this chapter.
 43   32      Sec. 50. NEW SECTION. 523I.602 MANAGEMENT BY TRUSTEE.
 43   33      1. TRUSTEE APPOINTED == TRUST FUNDS. The owners of, or
 43   34   any party interested in, a cemetery may, by petition presented
 43   35   to the district court of the county where the cemetery is
 44    1   situated, have a trustee appointed with authority to receive
 44    2   any and all moneys or property that may be donated for and on
 44    3   account of the cemetery and to invest, manage, and control the
 44    4   moneys or property under the direction of the court. However,
 44    5   the trustee shall not be authorized to receive any gift,
 44    6   except with the understanding that the principal sum is to be
 44    7   a permanent fund, and only the net proceeds therefrom shall be
 44    8   used in carrying out the purpose of the trust created, and all
 44    9   such funds shall be exempt from taxation.
 44   10      2. REQUISITES OF PETITION. The petition shall state the
 44   11   amount proposed to be placed in such trust fund, the manner of
 44   12   investment thereof, and the provisions made for the
 44   13   disposition of any surplus income not required for the care
 44   14   and upkeep of the property described in such petition.
 44   15      3. APPROVAL OF COURT == SURPLUS FUND. Such provisions
 44   16   shall be subject to the approval of the court and when so
 44   17   approved the trust fund and the trustee thereof shall, at all
 44   18   times, be subject to the orders and control of the court and
 44   19   such surplus arising from the trust fund shall not be used
 44   20   except for charitable, eleemosynary, or public purposes under
 44   21   the direction of the court.
 44   22      4. RECEIPT == CEMETERY RECORD. Every such trustee shall
 44   23   execute and deliver to the donor a receipt showing the amount
 44   24   of money or other property received, and the use to be made of
 44   25   the net proceeds from the same, duly attested by the clerk of
 44   26   the court granting letters of trusteeship, and a copy thereof,
 44   27   signed by the trustee and so attested, shall be filed with and
 44   28   recorded by the clerk in a book to be known as the cemetery
 44   29   record, in which shall be recorded all reports and other
 44   30   papers, including orders made by the court relative to
 44   31   cemetery matters.
 44   32      5. INVESTMENTS. Any such trustee may receive and invest
 44   33   all moneys and property, so donated or bequeathed, and that
 44   34   portion of cemetery lot sales and permanent charges made
 44   35   against interment spaces which has been set aside in a
 45    1   perpetual care fund, in such authorized investments and in the
 45    2   manner prescribed in section 636.23.
 45    3      6. BOND == APPROVAL == OATH. Every such trustee before
 45    4   entering upon the discharge of the trustee's duties or at any
 45    5   time thereafter when required by the court shall give a bond
 45    6   in an amount as may be required by the court, approved by the
 45    7   clerk, and conditioned for the faithful discharge of the
 45    8   trustee's duties, and take and subscribe an oath the same in
 45    9   substance as the condition of the bond, which bond and oath
 45   10   must be filed with the clerk.
 45   11      7. CLERK == DUTY OF. At the time of filing each bond and
 45   12   oath the clerk shall at once advise the court as to the amount
 45   13   of the principal fund in the hands of such trustee, the amount
 45   14   of the bond filed, and whether it is good and sufficient for
 45   15   the amount given.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 27 of 34



 45   16      8. COMPENSATION == COSTS. Such trustee shall serve
 45   17   without compensation, but may, out of the income received, pay
 45   18   all proper items of expense incurred in the performance of the
 45   19   trustee's duties, including cost of the bond, if any.
 45   20      9. ANNUAL REPORT. Such trustee shall make a full report
 45   21   of the trustee's doings in the month of January following
 45   22   appointment and in January of each successive year. In each
 45   23   report the trustee shall apportion the net proceeds received
 45   24   from the sum total of the permanent funds assigned to the
 45   25   trustee in trust.
 45   26      10. REMOVAL == VACANCY FILLED. Any such trustee may be
 45   27   removed by the court at any time for cause, and in the event
 45   28   of removal or death, the court shall appoint a new trustee and
 45   29   require the new trustee's predecessor or the predecessor's
 45   30   personal representative to make a full accounting.
 45   31      Sec. 51. NEW SECTION. 523I.603 OWNERS OF INTERMENT
 45   32   RIGHTS.
 45   33      1. An interment space in which exclusive rights of
 45   34   interment are conveyed is presumed to be the separate property
 45   35   of the person named as grantee in the certificate of interment
 46    1   rights or other instrument of conveyance.
 46    2      2. Two or more owners of interment rights may designate a
 46    3   person to represent the interment space and file notice of the
 46    4   designation of a representative with the cemetery. If notice
 46    5   is not filed, the cemetery may inter or permit an interment in
 46    6   the interment space at the request or direction of a
 46    7   registered co=owner of the interment space.
 46    8      Sec. 52. NEW SECTION. 523I.604 LIEN AGAINST CEMETERY
 46    9   PROPERTY.
 46   10      1. A cemetery, by contract, may incur indebtedness as
 46   11   necessary to conduct its business and may secure the
 46   12   indebtedness by mortgage, deed of trust, or other lien against
 46   13   its property.
 46   14      2. A mortgage, deed of trust, or other lien placed on
 46   15   dedicated cemetery property, or on cemetery property that is
 46   16   later dedicated with the consent of the holder of the lien,
 46   17   does not affect the dedication and is subject to the
 46   18   dedication. A sale on foreclosure of the lien is subject to
 46   19   the dedication of the property for cemetery purposes.
 46   20      Sec. 53. NEW SECTION. 523I.605 PRIVATE CARE OF GRAVES.
 46   21      This subchapter does not affect the right of a person who
 46   22   has an interest in an interment space, or who is a relative of
 46   23   a decedent interred in a cemetery, to beautify or maintain an
 46   24   interment space individually or at the person's own expense in
 46   25   accordance with reasonable rules established by the cemetery.
 46   26                            SUBCHAPTER 7
 46   27                             LAWN CRYPTS
 46   28      Sec. 54. NEW SECTION. 523I.701 REQUIREMENTS FOR LAWN
 46   29   CRYPTS.
 46   30      A lawn crypt shall not be installed unless all of the
 46   31   following apply:
 46   32      1. The lawn crypt is constructed of concrete and
 46   33   reinforced steel or other comparable durable material.
 46   34      2. The lawn crypt is installed on not less than six inches
 46   35   of rock, gravel, or other drainage material.
 47    1      3. The lawn crypt provides a method to drain water out of
 47    2   the lawn crypt.
 47    3      4. The lawn crypt is capable of withstanding the weight of
 47    4   the soil and sod above the top surface and the weight of
 47    5   machinery and equipment normally used in the maintenance of




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 28 of 34



 47    6   the cemetery.
 47    7      5. Except as provided by section 523I.702, the lawn crypt
 47    8   is installed in multiple units of ten or more.
 47    9      6. The lawn crypt shall be installed in compliance with
 47   10   any applicable law or rule adopted by the department of public
 47   11   health.
 47   12      Sec. 55. NEW SECTION. 523I.702 REQUEST TO INSTALL LAWN
 47   13   CRYPTS IN FEWER THAN TEN UNITS.
 47   14      1. A lawn crypt may be installed in fewer than ten units
 47   15   if it is installed in an interment space pursuant to a written
 47   16   request to the commissioner signed by the owner or owners of
 47   17   the interment space.
 47   18      2. The written request shall be filed on a form prescribed
 47   19   by the commissioner and shall contain substantially all of the
 47   20   following information:
 47   21      a. The owner's name and address.
 47   22      b. The name of the cemetery and the owner of the cemetery.
 47   23      c. The number of lawn crypt units to be installed.
 47   24      d. A description of the interment spaces.
 47   25      e. A statement that the lawn crypt meets the requirements
 47   26   of section 523I.701, including all of the following:
 47   27      (1) A statement that the lawn crypt will be constructed of
 47   28   concrete and reinforced steel or other comparable durable
 47   29   materials.
 47   30      (2) A statement that the lawn crypt will be installed on
 47   31   not less than six inches of rock, gravel, or other drainage
 47   32   material.
 47   33      (3) A statement that the lawn crypt will provide a method
 47   34   to drain water out of the lawn crypt.
 47   35      (4) A statement that the outside top surface of the lawn
 48    1   crypt at the time of installation will be capable of
 48    2   withstanding the weight of the soil and sod above the top
 48    3   surface and the weight of machinery and equipment normally
 48    4   used in the maintenance of the cemetery.
 48    5      f. A statement that the space in which the lawn crypt is
 48    6   to be installed is located in a garden.
 48    7      g. The date on which a representative of the cemetery
 48    8   signed the form.
 48    9                            SUBCHAPTER 8
 48   10              PERPETUAL CARE CEMETERIES == REQUIREMENTS
 48   11      Sec. 56. NEW SECTION. 523I.801 APPLICABILITY AND
 48   12   CONVERSION BY NONPERPETUAL CARE CEMETERIES.
 48   13      1. All cemeteries are designated as either "perpetual care
 48   14   cemeteries" or "nonperpetual care cemeteries" for the purposes
 48   15   of this chapter. A cemetery that represents that it is
 48   16   offering perpetual care on or after July 1, 2005, is subject
 48   17   to this subchapter.
 48   18      2. A cemetery that operates a nonperpetual care cemetery
 48   19   may elect to become a perpetual care cemetery if at all times
 48   20   subsequent to the date of the election, the cemetery complies
 48   21   with the other requirements of this subchapter except section
 48   22   523I.805.
 48   23      Sec. 57. NEW SECTION. 523I.802 ADVERTISING.
 48   24      1. A cemetery shall not advertise, represent, guarantee,
 48   25   promise, or contract to provide or offer perpetual care or use
 48   26   terms or phrases like permanent care, permanent maintenance,
 48   27   care forever, continuous care, eternal care, or everlasting
 48   28   care to imply that a certain level of care and financial
 48   29   security will be furnished or is guaranteed except in
 48   30   compliance with the provisions of this subchapter.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 29 of 34



 48   31      2. A cemetery or person advertising or selling interment
 48   32   rights shall not represent that the purchase of the interment
 48   33   rights is or will be a desirable speculative investment for
 48   34   resale purposes.
 48   35      Sec. 58. NEW SECTION. 523I.803 PERPETUAL CARE REGISTRY.
 49    1      1. A cemetery that operates a perpetual care cemetery
 49    2   shall maintain a registry of individuals who have purchased
 49    3   interment rights in the cemetery subject to the care fund
 49    4   requirements of this subchapter.
 49    5      2. The registry shall include the amount deposited in
 49    6   trust for each interment rights agreement entered into on or
 49    7   after July 1, 1995.
 49    8      Sec. 59. NEW SECTION. 523I.804 USE OF GIFT FOR SPECIAL
 49    9   CARE.
 49   10      A trustee may accept and hold money or property transferred
 49   11   to the trustee in trust for the purpose of applying the
 49   12   principal or income of the money or property transferred for a
 49   13   purpose consistent with the purpose of a perpetual care
 49   14   cemetery, including the following:
 49   15      1. Improvement or embellishment of any part of the
 49   16   cemetery.
 49   17      2. Erection, renewal, repair, or preservation of a
 49   18   monument, fence, building, or other structure in the cemetery.
 49   19      3. Planting or cultivation of plants in or around the
 49   20   cemetery.
 49   21      4. Special care of or embellishment of an interment space,
 49   22   section, or building in the cemetery.
 49   23      Sec. 60. NEW SECTION. 523I.805 INITIAL DEPOSIT.
 49   24      1. A cemetery owned or operated by a political subdivision
 49   25   of this state is not required to make a minimum initial
 49   26   deposit in a care fund. Any other cemetery commencing
 49   27   business in this state on or after July 1, 2005, shall not
 49   28   sell interment spaces unless the cemetery has a care fund of
 49   29   at least twenty=five thousand dollars in cash.
 49   30      2. If an initial deposit is made by a cemetery to satisfy
 49   31   subsection 1, the initial twenty=five thousand dollar deposit
 49   32   may be withdrawn by the cemetery when the care fund balance
 49   33   reaches one hundred thousand dollars. An affidavit shall be
 49   34   filed with the commissioner providing prior notice of the
 49   35   intended withdrawal of the initial deposit and attesting that
 50    1   the money has not previously been withdrawn. Upon a showing
 50    2   by the cemetery that the initial deposit has not previously
 50    3   been withdrawn, the commissioner shall approve withdrawal of
 50    4   the money and the withdrawal shall take place within one year
 50    5   after the care fund balance reaches one hundred thousand
 50    6   dollars.
 50    7      Sec. 61. NEW SECTION. 523I.806 IRREVOCABLE TRUST.
 50    8      1. A perpetual care cemetery shall establish a care fund
 50    9   as an irrevocable trust to provide for the care of the
 50   10   cemetery, which shall provide for the appointment of a
 50   11   trustee, with perpetual succession.
 50   12      2. The care fund shall be administered under the
 50   13   jurisdiction of the district court of the county where the
 50   14   cemetery is located. Notwithstanding chapter 633, annual
 50   15   reports shall not be required unless specifically required by
 50   16   the district court. Reports shall be filed with the court
 50   17   when necessary to receive approval of appointments of
 50   18   trustees, trust agreements and amendments, changes in fees or
 50   19   expenses, and other matters within the court's jurisdiction.
 50   20   A court having jurisdiction over a care fund shall have full




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 30 of 34



 50   21   jurisdiction to approve the appointment of trustees, the
 50   22   amount of surety bond required, if any, and investment of
 50   23   funds.
 50   24      Sec. 62. NEW SECTION. 523I.807 CARE FUND DEPOSITS.
 50   25      1. To continue to operate as a perpetual care cemetery, a
 50   26   cemetery shall set aside and deposit in the care fund an
 50   27   amount equal to or greater than fifty dollars or twenty
 50   28   percent of the gross selling price received by the cemetery
 50   29   for each sale of interment rights, whichever is more.
 50   30      2. A cemetery may require a contribution to the care fund
 50   31   for perpetual care of a memorial or memorialization placed in
 50   32   the cemetery. A cemetery may establish a separate care fund
 50   33   for this purpose. The contributions shall be nonrefundable
 50   34   and shall not be withdrawn from the trust fund once deposited.
 50   35   The amount charged shall be uniformly charged on every
 51    1   installation of a memorial, based on the height and width of
 51    2   the memorial or the size of the ground surface area used for
 51    3   the memorial. A fee for special care of a memorial may be
 51    4   collected if the terms of the special care items and
 51    5   arrangements are clearly specified in the interment rights
 51    6   agreement. Except as otherwise provided in an interment
 51    7   rights agreement, a cemetery is not liable for repair or
 51    8   maintenance of memorials or vandalism. A cemetery may use
 51    9   income from a care fund to repair or replace memorials or
 51   10   interment spaces damaged by vandalism or acts of God.
 51   11      3. Moneys shall be deposited in the care fund no later
 51   12   than the fifteenth day after the close of the month when the
 51   13   cemetery receives the final payment from a purchaser of
 51   14   interment rights.
 51   15      Sec. 63. NEW SECTION. 523I.808 AUDIT FEE.
 51   16      An audit fee shall be submitted with the cemetery's annual
 51   17   report in an amount equal to five dollars for each certificate
 51   18   of interment rights issued during the fiscal year covered by
 51   19   the report. The cemetery may charge the audit fee directly to
 51   20   the purchaser of the interment rights.
 51   21      Sec. 64. NEW SECTION. 523I.809 TRUST AGREEMENT
 51   22   PROVISIONS.
 51   23      1. A trust agreement shall provide for the appointment of
 51   24   at least one trustee, with perpetual succession, in case the
 51   25   cemetery is dissolved or ceases to be responsible for the
 51   26   cemetery's care.
 51   27      2. A cemetery and the trustee or trustees of the care fund
 51   28   may, by agreement, amend the instrument that established the
 51   29   fund to include any provision that is necessary to comply with
 51   30   the requirements of this chapter.
 51   31      3. A cemetery is responsible for the deposit of all moneys
 51   32   required to be placed in a care fund.
 51   33      4. The commissioner may require the amending of a trust
 51   34   agreement that is not in accord with the provisions of this
 51   35   chapter.
 52    1      Sec. 65. NEW SECTION. 523I.810 CARE FUNDS.
 52    2      1. A trustee of a care fund shall use the judgment and
 52    3   care under the circumstances then prevailing that persons of
 52    4   prudence, discretion, and intelligence exercise in the
 52    5   management of their own affairs, not in regard to speculation
 52    6   but in regard to the permanent disposition of their funds,
 52    7   considering the probable income as well as the probable safety
 52    8   of their capital. The trustee of a care fund has a fiduciary
 52    9   duty to make reasonable investment decisions and to properly
 52   10   oversee and manage the funds entrusted to the care fund.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 31 of 34



 52   11      a. A financial institution may serve as a trustee if
 52   12   granted those powers under the laws of this state or of the
 52   13   United States. A financial institution acting as a trustee of
 52   14   a care fund under this chapter shall invest the funds in
 52   15   accordance with applicable law.
 52   16      b. A financial institution acting as a trustee of a care
 52   17   fund under this chapter has a fiduciary duty to make
 52   18   reasonable investment decisions and to properly oversee and
 52   19   manage the funds entrusted to the financial institution. The
 52   20   commissioner may take enforcement action against a financial
 52   21   institution in its capacity as trustee for a breach of
 52   22   fiduciary duty under this chapter.
 52   23      c. Care fund moneys may be deposited pursuant to a master
 52   24   trust agreement, if each care fund is treated as a separate
 52   25   beneficiary of the trust and each care fund is separable. The
 52   26   master trust shall maintain a separate accounting of principal
 52   27   and income for each care fund. Moneys deposited under a
 52   28   master trust agreement may be commingled by the financial
 52   29   institution for investment purposes.
 52   30      d. Subject to a master trust agreement, the cemetery may
 52   31   appoint an independent investment advisor to advise the
 52   32   financial institution about investment of the care fund.
 52   33      e. Subject to an agreement between the cemetery and the
 52   34   financial institution, the financial institution may receive a
 52   35   reasonable fee from the care fund for services rendered as
 53    1   trustee.
 53    2      f. If the amount of a care fund exceeds two hundred
 53    3   thousand dollars, the cemetery or any officer, director,
 53    4   agent, employee, or affiliate of the cemetery shall not serve
 53    5   as trustee unless the cemetery is a cemetery owned or operated
 53    6   by a governmental subdivision of this state. A financial
 53    7   institution holding care funds shall not do any of the
 53    8   following:
 53    9      (1) Be owned, under the control of, or affiliated with the
 53   10   cemetery.
 53   11      (2) Use any funds required to be held in trust under this
 53   12   chapter to purchase an interest in a contract or agreement to
 53   13   which the cemetery is a party.
 53   14      (3) Otherwise invest care funds, directly or indirectly,
 53   15   in the cemetery's business operations.
 53   16      2. All moneys required to be deposited in the care fund
 53   17   shall be deposited in the name of the trustee, as trustee,
 53   18   under the terms of a trust agreement and the trustee may
 53   19   invest, reinvest, exchange, retain, sell, and otherwise manage
 53   20   the care fund trust for the benefit and protection of the
 53   21   cemetery.
 53   22      3. This section does not prohibit a cemetery from moving
 53   23   care funds from one financial institution to another.
 53   24      4. A care fund may receive and hold as part of the care
 53   25   fund or as an incident to the care fund any property
 53   26   contributed to the care fund.
 53   27      5. A contribution to a care fund is considered to be for
 53   28   charitable purposes if the care financed by the care fund is
 53   29   for the following purposes:
 53   30      a. The discharge of a duty due from the cemetery to
 53   31   persons interred and to be interred in the cemetery.
 53   32      b. The benefit and protection of the public by preserving
 53   33   and keeping the cemetery in a dignified condition so that the
 53   34   cemetery does not become a nuisance or a place of disorder,
 53   35   reproach, and desolation in the community in which the




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 32 of 34



 54    1   cemetery is located.
 54    2      6. A contribution to a care fund is not invalid because of
 54    3   the following:
 54    4      a. Indefiniteness or uncertainty as to the person
 54    5   designated as a beneficiary in the instrument establishing the
 54    6   care fund.
 54    7      b. A violation of the law against perpetuities or the law
 54    8   against the suspension of the power of alienation of title to
 54    9   or use of property.
 54   10      7. A care fund shall pay the fund's operation costs and
 54   11   any annual audit fees. The principal of a care fund is
 54   12   intended to remain available perpetually as a funding source
 54   13   for care of the cemetery. The principal of a care fund shall
 54   14   not be reduced voluntarily and shall remain inviolable, except
 54   15   as provided in this section. The trustee or trustees of a
 54   16   care fund shall maintain the principal of the care fund
 54   17   separate from all operating funds of the cemetery.
 54   18      8. In establishing a care fund, the cemetery may adopt
 54   19   plans for the care of the cemetery and installed memorials and
 54   20   memorialization.
 54   21      9. A cemetery may, by resolution adopted by a vote of at
 54   22   least two=thirds of the members of its board at any authorized
 54   23   meeting of the board, authorize the withdrawal and use of not
 54   24   more than twenty percent of the principal of the care fund to
 54   25   acquire additional land for cemetery purposes, to repair a
 54   26   mausoleum or other building or structure intended for cemetery
 54   27   purposes, or to build, improve, or repair roads and walkways
 54   28   in the cemetery. The resolution shall establish a reasonable
 54   29   repayment schedule, not to exceed five years, and provide for
 54   30   interest in an amount comparable to the care fund's current
 54   31   rate of return on its investments. However, the care fund
 54   32   shall not be diminished below an amount equal to the greater
 54   33   of twenty=five thousand dollars or five thousand dollars per
 54   34   acre of land in the cemetery. The resolution, and either a
 54   35   bond or proof of insurance to guarantee replenishment of the
 55    1   care fund, shall be filed with the commissioner thirty days
 55    2   prior to the withdrawal of funds.
 55    3      Sec. 66. NEW SECTION. 523I.811 USE OF DISTRIBUTIONS FROM
 55    4   CARE FUND.
 55    5      1. Care fund distributions may be used in any manner
 55    6   determined to be in the best interests of the cemetery if
 55    7   authorized by a resolution, bylaw, or other action or
 55    8   instrument establishing the care fund, including but not
 55    9   limited to the general care of memorials, memorialization, and
 55   10   any of the following:
 55   11      a. Cutting and trimming lawns, shrubs, and trees at
 55   12   reasonable intervals.
 55   13      b. Maintaining drains, water lines, roads, buildings,
 55   14   fences, and other structures.
 55   15      c. Maintaining machinery, tools, and equipment.
 55   16      d. Compensating maintenance employees, paying insurance
 55   17   premiums, and making payments to employees' pension and
 55   18   benefit plans.
 55   19      e. Paying overhead expenses incidental to such purposes.
 55   20      f. Paying expenses necessary to maintain ownership,
 55   21   transfer, and interment records of the cemetery.
 55   22      2. The commissioner may, by rule, establish terms and
 55   23   conditions under which a cemetery may withdraw capital gains
 55   24   from the care fund.
 55   25      Sec. 67. NEW SECTION. 523I.812 SUIT BY COMMISSIONER.




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 33 of 34



 55   26      1. If the person or persons in control of a cemetery do
 55   27   not care for and maintain the cemetery, the district court of
 55   28   the county in which the cemetery is located may do the
 55   29   following:
 55   30      a. By injunction compel the cemetery to expend the net
 55   31   income of the care fund as required by this chapter.
 55   32      b. Appoint a receiver to take charge of the care fund and
 55   33   expend the net income of the care fund as required by this
 55   34   chapter.
 55   35      c. Grant relief on a petition for relief filed pursuant to
 56    1   this section by the commissioner.
 56    2      2. Inadequate care and maintenance of a cemetery includes
 56    3   but is not limited to the following:
 56    4      a. Failure to adequately mow grass.
 56    5      b. Failure to adequately edge and trim bushes, trees, and
 56    6   memorials.
 56    7      c. Failure to keep walkways and sidewalks free of
 56    8   obstructions.
 56    9      d. Failure to adequately maintain the cemetery's equipment
 56   10   and fixtures.
 56   11      This subsection is not intended to prevent the
 56   12   establishment of a cemetery as a nature park or preserve.
 56   13      Sec. 68. NEW SECTION. 523I.813 ANNUAL REPORT BY
 56   14   PERPETUAL CARE CEMETERIES.
 56   15      1. A perpetual care cemetery shall file a written report
 56   16   at the end of each fiscal year of the cemetery that includes
 56   17   all of the following:
 56   18      a. The name and address of the cemetery.
 56   19      b. The name and address of the corporation that owns the
 56   20   cemetery, if any.
 56   21      c. A description of any common business enterprise or
 56   22   parent company that owns the cemetery, if any.
 56   23      d. The name and address of any owner, officer, or other
 56   24   official of the cemetery, including, when relevant, the chief
 56   25   executive officer and the members of the board of directors.
 56   26      e. The name and address of any trustee holding trust funds
 56   27   for the cemetery, including the name and location of the
 56   28   applicable trust account.
 56   29      f. An affidavit that the cemetery is in compliance with
 56   30   this chapter.
 56   31      g. Copies of all sales agreement forms used by the
 56   32   cemetery.
 56   33      h. The amount of the principal of the cemetery's care
 56   34   funds or maintenance funds, if any, at the end of the fiscal
 56   35   year.
 57    1      2. The report shall be filed with the commissioner within
 57    2   four months following the end of the cemetery's fiscal year in
 57    3   the form required by the commissioner.
 57    4      Sec. 69. NEW SECTION. 523I.814 UNIFIED ANNUAL REPORTS.
 57    5      The commissioner shall permit the filing of a unified
 57    6   report in the event of commonly owned or affiliated cemeteries
 57    7   if each cemetery is separately identified and separate records
 57    8   are maintained for each cemetery.
 57    9      Sec. 70. Section 602.8102, subsection 81, Code 2005, is
 57   10   amended to read as follows:
 57   11      81. Carry out duties relating to cemeteries as provided in
 57   12   sections 566.4, 566.7, and 566.8 section 523I.602.
 57   13      Sec. 71. Section 602.8104, subsection 2, paragraph h, Code
 57   14   2005, is amended to read as follows:
 57   15      h. A cemetery record as provided in section 566.4




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                            Page 34 of 34



 57   16   523I.602.
 57   17      Sec. 72. Section 636.23, subsection 14, Code 2005, is
 57   18   amended to read as follows:
 57   19      14. LIMITATION AS TO COURT=APPROVED INVESTMENTS. This
 57   20   section does not prohibit investment of such funds in a
 57   21   savings account or time certificate of deposit of a bank or
 57   22   savings and loan association, located within the city or its
 57   23   county of this state and when first approved by the court.
 57   24   However, a city that is the trustee of a cemetery as provided
 57   25   in section 566.14 523I.508 may invest perpetual care funds in
 57   26   a savings account or certificates of deposit at a bank or
 57   27   savings and loan association, located in this state without
 57   28   court approval.
 57   29      Sec. 73. Section 359.41, Code 2005, is repealed.
 57   30      Sec. 74. Chapters 523I, 566, and 566A, Code 2005, are
 57   31   repealed.
 57   32
 57   33
 57   34
 57   35                                       CHRISTOPHER C. RANTS
 58    1                                       Speaker of the House
 58    2
 58    3
 58    4
 58    5                                       JOHN P. KIBBIE
 58    6                                       President of the Senate
 58    7
 58    8      I hereby certify that this bill originated in the House and
 58    9   is known as House File 836, Eighty=first General Assembly.
 58   10
 58   11
 58   12
 58   13                                      MARGARET THOMSON
 58   14                                      Chief Clerk of the House
 58   15   Approved                     , 2005
 58   16
 58   17
 58   18
 58   19   THOMAS J. VILSACK
 58   20   Governor




http://coolice.legis.state.ia.us/legislation/enrolled/HF836.html                6/9/2005
                                                                                    Page 1 of 4



House File 819
PAG LIN

  1    1                                                           HOUSE FILE 819
  1    2
  1    3                               AN ACT
  1    4   RELATING TO ASSET DISREGARD UNDER THE MEDICAL ASSISTANCE
  1    5      PROGRAM FOR THE PURCHASE OF A CERTIFIED LONG=TERM CARE
  1    6      INSURANCE POLICY, PROVIDING FOR A REPEAL, PROVIDING A
  1    7      CONTINGENT EFFECTIVE DATE, AND PROVIDING AN APPROPRIATION.
  1    8
  1    9   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1   10
  1   11      Section 1. NEW SECTION. 249A.35 PURCHASE OF CERTIFIED
  1   12   LONG=TERM CARE INSURANCE POLICY == COMPUTATION UNDER MEDICAL
  1   13   ASSISTANCE PROGRAM.
  1   14      A computation for the purposes of determining eligibility
  1   15   under this chapter concerning an individual who is the
  1   16   beneficiary of a certified long=term care insurance policy
  1   17   under chapter 514H shall include consideration of the asset
  1   18   disregard provided in section 514H.5.
  1   19      Sec. 2. NEW SECTION. 514H.1 DEFINITIONS.
  1   20      As used in this chapter, unless the context otherwise
  1   21   requires:
  1   22      1. "Certified long=term care insurance policy" means a
  1   23   long=term care insurance contract that is issued by an insurer
  1   24   or other person who complies with section 514H.4.
  1   25      2. "Long=term care facility" means a facility licensed
  1   26   under chapter 135C or an assisted living program certified
  1   27   under chapter 231C.
  1   28      3. "Long=term care insurance" means long=term care
  1   29   insurance as defined in section 514G.4 and regulated in
  1   30   section 514G.7.
  1   31      4. "Qualified long=term care services" means qualified
  1   32   long=term care services as defined in section 7702B(c) of the
  1   33   Internal Revenue Code.
  1   34      Sec. 3. NEW SECTION. 514H.2 IOWA LONG=TERM CARE ASSET
  1   35   DISREGARD INCENTIVE PROGRAM == ESTABLISHMENT AND
  2    1   ADMINISTRATION.
  2    2      1. The Iowa long=term care asset disregard incentive
  2    3   program is established to do all of the following:
  2    4      a. Provide incentives for individuals to insure against
  2    5   the costs of providing for their long=term care needs.
  2    6      b. Provide a mechanism for individuals to qualify for
  2    7   coverage of the costs of their long=term care needs under the
  2    8   medical assistance program without first being required to
  2    9   substantially exhaust all their resources.
  2   10      c. Assist in developing methods for increasing access to
  2   11   and the affordability of long=term care insurance.
  2   12      d. Alleviate the financial burden on the state's medical
  2   13   assistance program by encouraging the pursuit of private
  2   14   initiatives.
  2   15      2. The insurance division of the department of commerce
  2   16   shall administer the program in cooperation with the division
  2   17   responsible for medical services within the department of
  2   18   human services. Each agency shall take appropriate action to
  2   19   maintain the waiver granted by the centers for Medicare and
  2   20   Medicaid services of the United States department of health




http://coolice.legis.state.ia.us/legislation/enrolled/HF819.html                      6/9/2005
                                                                            Page 2 of 4



  2   21   and human services under 42 U.S.C. } 1396 relating to
  2   22   providing medical assistance under chapter 249A, in effect
  2   23   prior to the effective date of this Act.
  2   24      Sec. 4. NEW SECTION. 514H.3 ELIGIBILITY.
  2   25      An individual who is the beneficiary of a certified long=
  2   26   term care insurance policy approved by the insurance division
  2   27   may be eligible for assistance under the medical assistance
  2   28   program using the asset disregard provisions pursuant to
  2   29   section 514H.5.
  2   30      Sec. 5. NEW SECTION. 514H.4 INSURER REQUIREMENTS.
  2   31      1. An insurer or other person who wishes to issue a
  2   32   certified long=term care insurance policy meeting the
  2   33   requirements of this chapter shall, at a minimum, offer to
  2   34   each policyholder or prospective policyholder a policy that
  2   35   provides both of the following:
  3    1      a. Facility coverage, including but not limited to long=
  3    2   term care facility coverage.
  3    3      b. Nonfacility coverage, including but not limited to home
  3    4   and community=based care coverage.
  3    5      2. An insurer or other person who complies with subsection
  3    6   1 may also elect to offer a certified long=term care insurance
  3    7   policy that provides only facility coverage.
  3    8      Sec. 6. NEW SECTION. 514H.5 ASSET DISREGARD ADJUSTMENT.
  3    9      1. As used in this section, "asset disregard" means a one
  3   10   dollar increase in the amount of assets an individual who is
  3   11   the beneficiary of a certified long=term care insurance policy
  3   12   and meets the requirements of section 514H.3 may retain under
  3   13   section 249A.35 for each one dollar of benefit paid out under
  3   14   the individual's certified long=term care insurance policy for
  3   15   qualified long=term care services if the policy meets all of
  3   16   the following criteria:
  3   17      a. If purchased prior to January 1, 2005, provides
  3   18   benefits in an amount equal to at least seventy thousand
  3   19   dollars as computed on January 1, 2005.
  3   20      b. If purchased on or after January 1, 2005, provides
  3   21   benefits in an amount equal to at least seventy thousand
  3   22   dollars as computed on January 1, 2005, compounded annually by
  3   23   at least five percent, or an amount equal to at least the
  3   24   minimum face amount specified by the commissioner of insurance
  3   25   pursuant to subsection 3, whichever amount is greater.
  3   26      c. Includes a provision under which the total amount of
  3   27   the benefit increases by at least five percent, compounded
  3   28   annually.
  3   29      2. When the division responsible for medical services
  3   30   within the department of human services determines whether an
  3   31   individual is eligible for medical assistance under chapter
  3   32   249A, the division shall make an asset disregard adjustment
  3   33   for any individual who meets the requirements of section
  3   34   514H.3. The asset disregard shall be available after benefits
  3   35   of the certified long=term care insurance policy have been
  4    1   applied to the cost of qualified long=term care services as
  4    2   required under this chapter.
  4    3      3. Beginning September 1, 2006, or one year after the
  4    4   effective date of this Act, whichever is later, the
  4    5   commissioner of insurance shall issue a bulletin annually on
  4    6   that date, declaring the minimum face amount for policies to
  4    7   qualify for the Iowa long=term care asset disregard incentive
  4    8   program for the following calendar year. In making this
  4    9   determination, the commissioner shall consult with the
  4   10   division responsible for collecting data on average nursing




http://coolice.legis.state.ia.us/legislation/enrolled/HF819.html              6/9/2005
                                                                            Page 3 of 4



  4   11   home costs in Iowa. Additionally, in making this
  4   12   determination, the commissioner shall consider the current
  4   13   average daily cost for three years of nursing home care and
  4   14   other relevant information.
  4   15      Sec. 7. NEW SECTION. 514H.6 APPLICATION OF ASSET
  4   16   DISREGARD TO DETERMINATION OF INDIVIDUAL'S ASSETS.
  4   17      A public program administered by the state that provides
  4   18   long=term care services and bases eligibility upon the amount
  4   19   of the individual's assets shall apply the asset disregard
  4   20   under section 514H.5 in determining the amount of the
  4   21   individual's assets.
  4   22      Sec. 8. NEW SECTION. 514H.7 PRIOR PROGRAM ==
  4   23   DISCONTINUATION OF PROGRAM.
  4   24      1. If the Iowa long=term care asset disregard incentive
  4   25   program is discontinued, an individual who is covered by a
  4   26   certified long=term care insurance policy prior to the date
  4   27   the program is discontinued is eligible to continue to receive
  4   28   an asset disregard as defined under section 514H.5.
  4   29      2. An individual who is covered by a long=term care
  4   30   insurance policy under the long=term care asset preservation
  4   31   program established pursuant to chapter 249G, Code 2005, on or
  4   32   before the effective date of this Act, is eligible to continue
  4   33   to receive the asset adjustment as defined under that chapter.
  4   34      3. The insurance division, in cooperation with the
  4   35   department of human services, shall adopt rules to provide an
  5    1   asset disregard to individuals who are covered by a long=term
  5    2   care insurance policy prior to the effective date of this Act,
  5    3   consistent with the Iowa long=term care asset disregard
  5    4   incentive program.
  5    5      Sec. 9. NEW SECTION. 514H.8 RECIPROCAL AGREEMENTS TO
  5    6   EXTEND ASSET DISREGARD.
  5    7      The division responsible for medical services within the
  5    8   department of human services may enter into reciprocal
  5    9   agreements with other states to extend the asset disregard
  5   10   under section 514H.5 to Iowa residents who had purchased or
  5   11   were covered by certified long=term care insurance policies in
  5   12   other states.
  5   13      Sec. 10. NEW SECTION. 514H.9 RULES.
  5   14      The insurance division of the department of commerce in
  5   15   cooperation with the department of human services shall adopt
  5   16   rules pursuant to chapter 17A as necessary to administer this
  5   17   chapter. The insurance division shall consult with
  5   18   representatives of the insurance industry in adopting such
  5   19   rules. This delegation of rulemaking authority shall be
  5   20   construed narrowly.
  5   21      Sec. 11. Chapter 249G, Code 2005, is repealed.
  5   22      Sec. 12. MEDICAL ASSISTANCE STATE PLAN AMENDMENT == WAIVER
  5   23   == IOWA LONG=TERM CARE ASSET DISREGARD INCENTIVE PROGRAM.
  5   24      1. The department of human services shall amend the
  5   25   medical assistance state plan to provide that all amounts paid
  5   26   for qualified long=term care services under a certified long=
  5   27   term care insurance policy pursuant to chapter 514H, as
  5   28   enacted in this Act, shall be considered in determining the
  5   29   amount of the asset disregard.
  5   30      2. The department of human services shall seek approval of
  5   31   a medical assistance state plan amendment or make application
  5   32   to the United States department of health and human services
  5   33   for any waiver necessary to implement chapter 514H, as enacted
  5   34   in this Act.
  5   35      Sec. 13. CONTINGENT EFFECTIVE DATE == IOWA LONG=TERM CARE




http://coolice.legis.state.ia.us/legislation/enrolled/HF819.html              6/9/2005
                                                                              Page 4 of 4



  6    1   ASSET DISREGARD INCENTIVE PROGRAM.
  6    2      1. This Act shall not take effect until all medical
  6    3   assistance state plan amendments and waivers necessary to
  6    4   implement chapter 514H, as enacted in this Act, are approved
  6    5   by the United States department of health and human services.
  6    6   The department of human services shall notify the Code editor
  6    7   if such approval is received.
  6    8      2. If the requirement of subsection 1 is met, the program
  6    9   shall begin no sooner than six months following the date that
  6   10   the requirement is met.
  6   11      Sec. 14. APPROPRIATION. There is appropriated from the
  6   12   general fund of the state to the division of insurance of the
  6   13   department of commerce for the fiscal year beginning July 1,
  6   14   2005, and ending June 30, 2006, the following amount, or so
  6   15   much thereof as is necessary, to establish an educational
  6   16   program to inform Iowans regarding the Iowa long=term care
  6   17   asset disregard incentive program and for up to the following
  6   18   full=time equivalent positions:
  6   19   .................................................. $    300,000
  6   20   ............................................... FTEs        2.00
  6   21
  6   22
  6   23
  6   24                                       CHRISTOPHER C. RANTS
  6   25                                       Speaker of the House
  6   26
  6   27
  6   28
  6   29                                       JOHN P. KIBBIE
  6   30                                       President of the Senate
  6   31
  6   32      I hereby certify that this bill originated in the House and
  6   33   is known as House File 819, Eighty=first General Assembly.
  6   34
  6   35
  7    1
  7    2                                      MARGARET THOMSON
  7    3                                      Chief Clerk of the House
  7    4   Approved                     , 2005
  7    5
  7    6
  7    7
  7    8   THOMAS J. VILSACK
  7    9   Governor




http://coolice.legis.state.ia.us/legislation/enrolled/HF819.html                6/9/2005
                                                                             Page 1 of 3



House File 821
PAG LIN

  1    1                                                HOUSE FILE 821
  1    2
  1    3                               AN ACT
  1    4   RELATING TO THE ESTABLISHMENT OF A PRESCRIPTION DRUG ASSISTANCE
  1    5      CLEARINGHOUSE PROGRAM BY THE COMMISSIONER OF INSURANCE, AND
  1    6      PROVIDING FOR A CONTINGENT APPROPRIATION.
  1    7
  1    8   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1    9
  1   10      Section 1. NEW SECTION. 505.26 PRESCRIPTION DRUG
  1   11   ASSISTANCE CLEARINGHOUSE PROGRAM.
  1   12      1. The commissioner of insurance shall establish and
  1   13   administer a prescription drug assistance clearinghouse
  1   14   program to improve access to prescription drugs for
  1   15   individuals who have no or inadequate health insurance or
  1   16   other resources for the purchase of medically necessary
  1   17   prescription drugs and to assist individuals in accessing
  1   18   programs offered by pharmaceutical manufacturers that provide
  1   19   free or discounted prescription drugs or provide coverage for
  1   20   prescription drugs.
  1   21      2. The commissioner of insurance shall utilize computer
  1   22   software programs to do all of the following:
  1   23      a. Provide a clearinghouse to assist individuals in
  1   24   accessing manufacturer=sponsored prescription drug assistance
  1   25   programs for which they may be eligible, including listing the
  1   26   eligibility requirements for pharmaceutical assistance
  1   27   programs offered by manufacturers.
  1   28      b. Disseminate information about and assist individuals in
  1   29   assessing pharmaceutical discount or insurance programs that
  1   30   may be beneficial.
  1   31      c. Serve as a resource for pharmaceutical benefit issues.
  1   32      d. Assist individuals in making application to and
  1   33   enrolling in the pharmaceutical assistance program most
  1   34   appropriate for the individual.
  1   35      e. Maintain a listing of community=based pharmacy
  2    1   assistance programs for additional assistance.
  2    2      3. The commissioner of insurance shall provide information
  2    3   to pharmacies, physicians, other appropriate health care
  2    4   providers, and the general public regarding the program and
  2    5   about manufacturer=sponsored prescription drug assistance
  2    6   programs.
  2    7      4. The commissioner of insurance shall notify
  2    8   pharmaceutical manufacturers doing business in this state of
  2    9   the prescription drug assistance clearinghouse program, and
  2   10   every pharmaceutical manufacturer that does business in this
  2   11   state that offers a pharmaceutical assistance program shall
  2   12   notify the commissioner of the existence of the program, the
  2   13   prescription drugs covered by the program, and all information
  2   14   necessary for application for assistance through the program.
  2   15   The commissioner of insurance shall provide for ongoing review
  2   16   and assessment of pharmaceutical discount or insurance
  2   17   programs.
  2   18      5. The commissioner of insurance may work with
  2   19   pharmaceutical manufacturers to develop a simplified system to
  2   20   assist individuals in accessing pharmaceutical assistance




http://coolice.legis.state.ia.us/legislation/enrolled/HF821.html               6/9/2005
                                                                              Page 2 of 3



  2   21   programs. The system may include a simplified, uniform
  2   22   application process or a voucher system for dispensing
  2   23   prescription drugs through local pharmacies.
  2   24      6. The commissioner of insurance shall monitor and
  2   25   evaluate the prescription drug assistance clearinghouse
  2   26   program including but not limited to the number of individuals
  2   27   served, the length and types of services provided, and any
  2   28   other measurable data available to assess the effectiveness of
  2   29   the program. The commissioner shall make recommendations for
  2   30   improvement of the program and shall identify and make
  2   31   recommendations regarding additional strategies to improve
  2   32   access to prescription drugs for citizens who have no or
  2   33   inadequate health insurance or other resources for the
  2   34   purchase of prescription drugs.
  2   35      7. The commissioner of insurance shall submit a report
  3    1   regarding the effectiveness of the program and including any
  3    2   recommendations for improvement of the program to the governor
  3    3   and the general assembly on or before December 15, annually.
  3    4   If a national pharmaceutical assistance program is established
  3    5   by a public or private entity, the commissioner of insurance
  3    6   shall include in the annual report a recommendation regarding
  3    7   the continuation or elimination of the state prescription drug
  3    8   assistance clearinghouse program.
  3    9      Sec. 2. PRESCRIPTION DRUG ASSISTANCE CLEARINGHOUSE PROGRAM
  3   10   == FUNDING == CONTINGENT APPROPRIATION.
  3   11      1. The commissioner of insurance shall seek federal
  3   12   funding to establish and administer the prescription drug
  3   13   assistance clearinghouse program pursuant to section 505.26.
  3   14      2. If federal funding is not received pursuant to
  3   15   subsection 1 before October 1, 2005, as certified by the
  3   16   commissioner of insurance, there is appropriated from the
  3   17   senior living trust fund created in section 249H.4 to the
  3   18   insurance division of the department of commerce beginning
  3   19   October 1, 2005, and ending June 30, 2006, the following
  3   20   amount, or so much thereof as is necessary, to be used for the
  3   21   purpose designated:
  3   22      For the establishment and administration of the
  3   23   prescription drug assistance clearinghouse program pursuant to
  3   24   section 505.26:
  3   25   .................................................. $     250,000
  3   26
  3   27
  3   28
  3   29                                       CHRISTOPHER C. RANTS
  3   30                                       Speaker of the House
  3   31
  3   32
  3   33
  3   34                                       JOHN P. KIBBIE
  3   35                                       President of the Senate
  4    1
  4    2      I hereby certify that this bill originated in the House and
  4    3   is known as House File 821, Eighty=first General Assembly.
  4    4
  4    5
  4    6
  4    7                                      MARGARET THOMSON
  4    8                                      Chief Clerk of the House
  4    9   Approved                     , 2005
  4   10




http://coolice.legis.state.ia.us/legislation/enrolled/HF821.html                6/9/2005
                                                                   Page 3 of 3



  4   11
  4   12
  4   13 THOMAS J. VILSACK
  4   14 Governor




http://coolice.legis.state.ia.us/legislation/enrolled/HF821.html     6/9/2005
                                                                               Page 1 of 3



House File 420
PAG LIN

  1    1                                                      HOUSE FILE 420
  1    2
  1    3                               AN ACT
  1    4   RELATING TO THIRD=PARTY PAYMENT OF HEALTH CARE COVERAGE COSTS
  1    5      FOR BIOLOGICALLY BASED MENTAL ILLNESS TREATMENT SERVICES.
  1    6
  1    7   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1    8
  1    9      Section 1. NEW SECTION. 514C.22 BIOLOGICALLY BASED
  1   10   MENTAL ILLNESS COVERAGE.
  1   11      1. Notwithstanding the uniformity of treatment
  1   12   requirements of section 514C.6, a group policy, contract, or
  1   13   plan providing for third=party payment or prepayment of
  1   14   health, medical, and surgical coverage benefits issued by a
  1   15   carrier, as defined in section 513B.2, or by an organized
  1   16   delivery system authorized under 1993 Iowa Acts, chapter 158,
  1   17   shall provide coverage benefits for treatment of a
  1   18   biologically based mental illness if either of the following
  1   19   is satisfied:
  1   20      a. The policy, contract, or plan is issued to an employer
  1   21   who on at least fifty percent of the employer's working days
  1   22   during the preceding calendar year employed more than fifty
  1   23   full=time equivalent employees. In determining the number of
  1   24   full=time equivalent employees of an employer, employers who
  1   25   are affiliated or who are able to file a consolidated tax
  1   26   return for purposes of state taxation shall be considered one
  1   27   employer.
  1   28      b. The policy, contract, or plan is issued to a small
  1   29   employer as defined in section 513B.2, and such policy,
  1   30   contract, or plan provides coverage benefits for the treatment
  1   31   of mental illness.
  1   32      2. Notwithstanding the uniformity of treatment
  1   33   requirements of section 514C.6, a plan established pursuant to
  1   34   chapter 509A for public employees shall provide coverage
  1   35   benefits for treatment of a biologically based mental illness.
  2    1      3. For purposes of this section, "biologically based
  2    2   mental illness" means the following psychiatric illnesses:
  2    3      a. Schizophrenia.
  2    4      b. Bipolar disorders.
  2    5      c. Major depressive disorders.
  2    6      d. Schizo=affective disorders.
  2    7      e. Obsessive=compulsive disorders.
  2    8      f. Pervasive developmental disorders.
  2    9      g. Autistic disorders.
  2   10      4. The commissioner, by rule, shall define the
  2   11   biologically based mental illnesses identified in subsection
  2   12   3. Definitions established by the commissioner shall be
  2   13   consistent with definitions provided in the most recent
  2   14   edition of the American psychiatric association's diagnostic
  2   15   and statistical manual of mental disorders, as such
  2   16   definitions may be amended from time to time. The
  2   17   commissioner may adopt the definitions provided in such manual
  2   18   by reference.
  2   19      5. This section shall not apply to accident only,
  2   20   specified disease, short=term hospital or medical, hospital




http://coolice.legis.state.ia.us/legislation/enrolled/HF420.html                 6/9/2005
                                                                            Page 2 of 3



  2   21   confinement indemnity, credit, dental, vision, Medicare
  2   22   supplement, long=term care, basic hospital and medical=
  2   23   surgical expense coverage as defined by the commissioner,
  2   24   disability income insurance coverage, coverage issued as a
  2   25   supplement to liability insurance, workers' compensation or
  2   26   similar insurance, or automobile medical payment insurance, or
  2   27   individual accident and sickness policies issued to
  2   28   individuals or to individual members of a member association.
  2   29      6. A carrier, organized delivery system, or plan
  2   30   established pursuant to chapter 509A may manage the benefits
  2   31   provided through common methods including, but not limited to,
  2   32   providing payment of benefits or providing care and treatment
  2   33   under a capitated payment system, prospective reimbursement
  2   34   rate system, utilization control system, incentive system for
  2   35   the use of least restrictive and least costly levels of care,
  3    1   a preferred provider contract limiting choice of specific
  3    2   providers, or any other system, method, or organization
  3    3   designed to assure services are medically necessary and
  3    4   clinically appropriate.
  3    5      7. a. A group policy, contract, or plan covered under
  3    6   this section shall not impose an aggregate annual or lifetime
  3    7   limit on biologically based mental illness coverage benefits
  3    8   unless the policy, contract, or plan imposes an aggregate
  3    9   annual or lifetime limit on substantially all health, medical,
  3   10   and surgical coverage benefits.
  3   11      b. A group policy, contract, or plan covered under this
  3   12   section that imposes an aggregate annual or lifetime limit on
  3   13   substantially all health, medical, and surgical coverage
  3   14   benefits shall not impose an aggregate annual or lifetime
  3   15   limit on biologically based mental illness coverage benefits
  3   16   that is less than the aggregate annual or lifetime limit
  3   17   imposed on substantially all health, medical, and surgical
  3   18   coverage benefits.
  3   19      8. A group policy, contract, or plan covered under this
  3   20   section shall at a minimum allow for thirty inpatient days and
  3   21   fifty=two outpatient visits annually. The policy, contract,
  3   22   or plan may also include deductibles, coinsurance, or
  3   23   copayments, provided the amounts and extent of such
  3   24   deductibles, coinsurance, or copayments applicable to other
  3   25   health, medical, or surgical services coverage under the
  3   26   policy, contract, or plan are the same. It is not a violation
  3   27   of this section if the policy, contract, or plan excludes
  3   28   entirely from coverage benefits for the cost of providing the
  3   29   following:
  3   30      a. Marital, family, educational, developmental, or
  3   31   training services.
  3   32      b. Care that is substantially custodial in nature.
  3   33      c. Services and supplies that are not medically necessary
  3   34   or clinically appropriate.
  3   35      d. Experimental treatments.
  4    1      9. This section applies to third=party payment provider
  4    2   policies or contracts and to plans established pursuant to
  4    3   chapter 509A that are delivered, issued for delivery,
  4    4   continued, or renewed in this state on or after January 1,
  4    5   2006.
  4    6
  4    7
  4    8
  4    9                                       CHRISTOPHER C. RANTS
  4   10                                       Speaker of the House




http://coolice.legis.state.ia.us/legislation/enrolled/HF420.html              6/9/2005
                                                                            Page 3 of 3



  4   11
  4   12
  4   13
  4   14                                       JOHN P. KIBBIE
  4   15                                       President of the Senate
  4   16
  4   17      I hereby certify that this bill originated in the House and
  4   18   is known as House File 420, Eighty=first General Assembly.
  4   19
  4   20
  4   21
  4   22                                      MARGARET THOMSON
  4   23                                      Chief Clerk of the House
  4   24   Approved                     , 2005
  4   25
  4   26
  4   27
  4   28   THOMAS J. VILSACK
  4   29   Governor




http://coolice.legis.state.ia.us/legislation/enrolled/HF420.html              6/9/2005

				
DOCUMENT INFO