§ 508E.7 — Examination or investigations

Iowa § 508E.7

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 508E: VIATICAL SETTLEMENT CONTRACTS

Text

1. Authority, scope, and scheduling of examinations.
a. (1) The commissioner may conduct an examination under this chapter of a licensee
as often as the commissioner in the commissioner’s discretion deems appropriate after
considering the factors set forth in this paragraph “a”.
(2) In scheduling and determining the nature, scope, and frequency of the examinations,
thecommissionershallconsidersuchmattersastheconsumercomplaints,resultsoffinancial
statement analyses and ratios, changes in management or ownership, actuarial opinions,
reports of independent certified public accountants, and other relevant criteria as determined
by the commissioner.
b. For purposes of completing an examination of a licensee under this chapter, the
commissioner may examine or investigate any person, or the business of any person, insofar
as the examination or investigation is, in the sole discretion of the commissioner, necessary
or material to the examination of the licensee.
c. In lieu of an examination under this chapter of any foreign or alien licensee licensed
9 VIATICAL SETTLEMENT CONTRACTS, §508E.7
in this state, the commissioner may, at the commissioner’s discretion, accept an examination
report on the licensee as prepared by the commissioner for the licensee’s state of domicile or
port-of-entry state.
d. As far as practical, the examination of a foreign or alien licensee shall be made in
cooperation with the insurance supervisory officials of other states in which the licensee
transacts business.
2. Record retention requirements.
a. A person required to be licensed pursuant to section 508E.3 shall for five years retain
copies of all of the following:
(1) Proposed, offered, or executed contracts, purchase agreements, underwriting
documents, policy forms, and applications from the date of the proposal, offer, or execution
of the contract or purchase agreement, whichever is later.
(2) All checks, drafts, or other evidence and documentation related to the payment,
transfer, deposit, or release of funds from the date of the transaction.
(3) All other records and documents related to the requirements of this chapter.
b. Thissectiondoesnotrelieveapersonoftheobligationtoproducedocumentsdescribed
in paragraph “a” to the commissioner after the retention period has expired if the person has
retained the documents.
c. Recordsrequiredtoberetainedbyparagraph“a”mustbelegibleandcompleteandmay
be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic media,
or by any process that accurately reproduces or forms a durable medium for the reproduction
of a record.
3. Conduct of examinations.
a. Upon determining that an examination should be conducted, the commissioner shall
issue an examination warrant appointing one or more examiners to perform the examination
and instructing them as to the scope of the examination. In conducting the examination, the
examiner shall observe those guidelines and procedures set forth in the examiners handbook
adopted by the national association of insurance commissioners. The commissioner may
also adopt rules for such other guidelines or procedures as the commissioner may deem
appropriate.
b. Every licensee or person from whom information is sought, its officers, directors, and
agents shall provide to the examiners timely, convenient, and free access at all reasonable
hours at its offices to all books, records, accounts, papers, documents, assets, and computer
or other recordings relating to the property, assets, business, and affairs of the licensee being
examined. The officers, directors, employees, and agents of the licensee or person shall
facilitate the examination and aid in the examination so far as it is in their power to do
so. The refusal of a licensee, by its officers, directors, employees, or agents, to submit to
examination or to comply with any reasonable written request of the commissioner shall
be grounds for suspension or refusal of, or nonrenewal of, any license or authority held by
the licensee to engage in the viatical settlement business or other business subject to the
commissioner’s jurisdiction. Any proceedings for suspension, revocation, or refusal of any
license or authority shall be conducted pursuant to section 507B.6A.
c. The commissioner shall have the power to issue subpoenas, to administer oaths, and
to examine under oath any person as to any matter pertinent to the examination. Upon the
failure or refusal of a person to obey a subpoena, the commissioner may petition a court of
competent jurisdiction, and upon proper showing, the court may enter an order compelling
the witness to appear and testify or produce documentary evidence. A failure to obey the
court order shall be punishable as contempt of court.
d. When making an examination under this chapter, the commissioner may retain
attorneys, appraisers, independent actuaries, independent certified public accountants, or
other professionals and specialists as examiners, the reasonable cost of which shall be borne
by the licensee that is the subject of the examination.
e. Nothing contained in this chapter shall be construed to limit the commissioner’s
authority to terminate or suspend an examination in order to pursue other legal or regulatory
action pursuant to the insurance laws of this state. Findings of fact and conclusions made
pursuant to any examination shall be prima facie evidence in any legal or regulatory action.
§508E.7, VIATICAL SETTLEMENT CONTRACTS 10
f. The commissioner’s authority to use and, if appropriate, to make public any final or
preliminary examination report, any examiner or licensee workpapers, or other documents,
or any other information discovered or developed during the course of any examination in
the furtherance of any legal or regulatory action shall be permitted consistent with section
507.14.
4. Examination reports.
a. Examination reports shall be comprised of only facts appearing upon the books,
records, or other documents of the licensee, its agents, or other persons examined, or as
ascertained from the testimony of its officers, agents, or other persons examined concerning
its affairs, and such conclusions and recommendations as the examiners find reasonably
warranted from the facts.
b. Not later than sixty days following completion of the examination, the examiner in
charge shall file with the commissioner a verified written report of examination under oath.
Upon receipt of the verified report, the commissioner shall transmit the report to the licensee
examined, together with a notice that shall afford the licensee examined a reasonable
opportunity of not more than thirty days to make a written submission or rebuttal with
respect to any matters contained in the examination report.
c. In the event the commissioner determines that regulatory action is appropriate as a
result of an examination, the commissioner may initiate any proceedings or actions provided
by law.
5. Confidentiality of examination information.
a. Notwithstanding chapter 22, the names and individual identification data for all viators
shall be considered private and confidential information and shall not be disclosed by the
commissioner, unless required by law.
b. Except as otherwise provided in this chapter, all examination reports, working papers,
recorded information, documents, and copies thereof produced by, obtained by, or disclosed
to the commissioner or any other person in the course of an examination made under this
chapter, or in the course of an analysis or investigation by the commissioner of the financial
conditionormarketconductofalicensee,shallbeconfidentialbylawandprivileged,shallnot
besubjecttochapter22, shallnotbesubjecttosubpoena, andshallnotbesubjecttodiscovery
or admissible in evidence in any private civil action. The commissioner is authorized to
use the documents, materials, or other information in the furtherance of any regulatory or
legal action brought as part of the commissioner’s official duties. All examination reports,
working papers, recorded information, documents, and their copies produced by, obtained
by, or disclosed to the commissioner or any other person in the course of an examination
made under this chapter, or in the course of an analysis or investigation by the commissioner
of the financial condition or market conduct of a licensee shall be privileged and confidential
in any judicial or administrative proceeding except for any of the following:
(1) An administrative proceeding brought by the insurance division under chapter 17A.
(2) A judicial review proceeding under chapter 17A brought by an insurer to whom the
records relate.
(3) An action or proceeding which arises out of the criminal provisions of the laws of this
state or the United States.
c. Documents, materials, or other information, including but not limited to all working
papers and copies, in the possession or control of the national association of insurance
commissioners and its affiliates and subsidiaries shall be confidential by law and privileged,
shall not be subject to chapter 22, shall not be subject to subpoena, and shall not be subject to
discovery or admissible in evidence in any private civil action if they are any of the following:
(1) Created, produced, orobtainedbyordisclosedtothenationalassociationofinsurance
commissioners and its affiliates and subsidiaries in the course of assisting an examination
made under this chapter, or assisting the commissioner in the analysis or investigation of the
financial condition or market conduct of a licensee.
(2) Disclosed to the national association of insurance commissioners and its affiliates and
subsidiaries under paragraph “d” by the commissioner.
(3) For the purposes of paragraph “b”, “chapter” includes the law of another state or
jurisdiction that is substantially similar to this chapter.
11 VIATICAL SETTLEMENT CONTRACTS, §508E.7
d. In order to assist in the performance of the commissioner’s duties, the commissioner
may do all of the following:
(1) Share documents, materials, or other information, including the confidential and
privileged documents, materials, or information subject to paragraph “a”, with other state,
federal, and international regulatory agencies, with the national association of insurance
commissioners and its affiliates and subsidiaries, and with state, federal, and international
lawenforcementauthorities,providedthattherecipientagreestomaintaintheconfidentiality
and privileged status of the documents, materials, communications, or other information.
(2) Receive documents, materials, communications, or information, including otherwise
confidential and privileged documents, materials, or information, from the national
association of insurance commissioners and its affiliates and subsidiaries, notwithstanding
chapter 22, and from regulatory and law enforcement officials of other foreign or domestic
jurisdictions, and shall maintain as confidential or privileged any documents, materials, or
information received with notice or the understanding that it is confidential or privileged
under the laws of the jurisdiction that is the source of the documents, materials, or
information.
(3) Enter into agreements governing sharing and use of information consistent with
section 507.14, subsection 4.
e. No waiver of any applicable privilege or claim of confidentiality in the documents,
materials, or information shall occur as a result of disclosure to the commissioner under this
section or as a result of sharing as authorized in paragraph “c”.
f. A privilege established under the law of any state or jurisdiction that is substantially
similar to the privilege established under this subsection shall be available and enforced in
any proceeding in, and in any court of, this state.
g. Nothing contained in this chapter shall prevent or be construed as prohibiting the
commissionerfromdisclosingthecontentofanexaminationreport, preliminaryexamination
report or results, or any matter relating thereto, to the commissioner of any other state or
country, or to law enforcement officials of this or any other state or agency of the federal
government at any time or to the national association of insurance commissioners, so long
as such agency or office receiving the report or matters relating thereto agrees in writing to
hold it confidential and in a manner consistent with this chapter.
6. Conflict of interest.
a. An examiner may not be appointed by the commissioner if the examiner, either directly
or indirectly, has a conflict of interest or is affiliated with the management of or owns a
pecuniary interest in any person subject to examination under this chapter. This section shall
not be construed to automatically preclude an examiner from being any of the following:
(1) A viator.
(2) An insured in a viaticated insurance policy.
(3) A beneficiary in an insurance policy that is proposed to be viaticated.
b. Notwithstanding the requirements of paragraph “a”, the commissioner may retain
from time to time, on an individual basis, qualified actuaries, certified public accountants, or
other similar individuals who are independently practicing their professions, even though
these persons may from time to time be similarly employed or retained by persons subject
to examination under this chapter.
7. Cost of examinations.
a. The commissioner may appoint insurance examiners who, while conducting
examinations, shall possess all the powers conferred upon the commissioner for such
purposes. The entire time of the examiners shall be under the control of the commissioner,
and shall be employed as the commissioner may direct.
b. The commissioner may, when in the commissioner’s judgment it is advisable, appoint
assistants to aid in making examinations. The examiners shall be compensated on the basis
of the normal workweek of the insurance division at a salary to be fixed by the commissioner
subject, however, to the provisions of section 505.14. The compensation shall be paid from
appropriations for such purposes upon certification of the commissioner, which shall be
reimbursed as provided in sections 507.8 and 507.9.
c. When making an examination under this chapter, the commissioner may retain
§508E.7, VIATICAL SETTLEMENT CONTRACTS 12
attorneys, appraisers, independent actuaries, independent certified public accountants, or
other professionals and specialists as examiners, the reasonable cost of which shall be borne
by the company which is the subject of the examination.
d. The commissioner shall, upon the completion of an examination, or at such regular
intervalspriortocompletionasthecommissionerdetermines, prepareanaccountofthecosts
incurredinperformingandpreparingthereportofsuchexaminationswhichshallbecharged
to and paid by the company examined, and upon failure or refusal of a company examined to
pay such costs, the same may be recovered by the commissioner or the attorney general in an
action brought in the name of the state, and the commissioner may also revoke the certificate
of authority of such company to transact business within this state.
8. Immunity from liability.
a. No cause of action shall arise, nor shall any liability be imposed, against the
commissioner, the commissioner’s authorized representatives, or any examiner appointed
by the commissioner for any statements made or conduct performed reasonably and in good
faith while carrying out the provisions of this chapter.
b. No cause of action shall arise, nor shall any liability be imposed, against any person
for the act of communicating or delivering information or data to the commissioner or the
commissioner’s authorized representative or examiner pursuant to an examination made
under this chapter, if the act of communication or delivery was performed reasonably and
in good faith and without fraudulent intent or the intent to deceive. This paragraph does not
abrogateormodifyinanywayanycommonlaworstatutoryprivilegeorimmunityheretofore
enjoyed by any person identified in paragraph “a”.
9. Investigative authority of the commissioner. The commissioner may investigate
suspected fraudulent viatical settlement acts and persons engaged in the business of viatical
settlements.