§ 522A.3 — Limited licenses

Iowa § 522A.3

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 522A: SALE OF INSURANCE BY VEHICLE RENTAL COMPANIES

Text

1. Notwithstanding the provisions of chapter 522B, the commissioner may issue a limited
license to a rental company that has complied with the requirements of this chapter. The
limited license shall authorize the limited licensee to offer or sell insurance with the rental of
vehicles.
2. As a prerequisite for issuance of a limited license under this section, a written
application for a limited license, which is signed by an officer of the applicant, shall be
filed with the commissioner. The application shall be in a form and contain information
prescribed by the commissioner. The application shall include a list of all rental locations
where the rental company intends to conduct business. An updated list shall be provided to
the commissioner within thirty business days from any date on which the list is amended.
3. If a provision of this section is violated by a limited licensee, the commissioner may,
after notice and a hearing, revoke or suspend a limited license issued under this section, or
impose any other penalties, including suspending permission for the transaction of insurance
offersorsalesatspecificrentallocationswhereviolationsofthissectionhaveoccurred, asthe
commissioner deems to be necessary or convenient to carry out the purposes of this section.
4. A rental company licensed pursuant to this section may offer or sell insurance issued
by an insurance carrier authorized to do business in this state and only in connection with
§522A.3, SALE OF INSURANCE BY VEHICLE RENTAL COMPANIES 2
and incidental to the rental of a vehicle. A renter shall not be required to purchase coverage
in order to rent a vehicle. The type of insurance offered or sold by a limited licensee, whether
at the rental office or by preselection of coverage in a master, corporate, group rental, or
individual agreement, may be in any of the following general categories:
a. Personal accident insurance covering the risks of travel, including, but not limited to,
accident and health insurance that provides coverage, as applicable, to a renter and other
rental vehicle occupants for accidental death or dismemberment and reimbursement for
medical expenses resulting from an accident that occurs during the rental period.
b. Liability insurance that provides coverage, as applicable, to a renter and other
authorized drivers of rental vehicles for liability arising from the operation of the rental
vehicle.
c. Personal effects insurance that provides coverage, as applicable, to a renter and other
vehicle occupants for the loss of, or damage to, personal effects that occurs during the rental
period.
d. Roadside assistance and emergency sickness protection programs.
5. Insurance shall only be sold by a limited licensee pursuant to this section if all of the
following apply:
a. The rental period of the rental agreement does not exceed ninety consecutive days.
b. At every rental location where a rental agreement is executed, brochures or other
written materials are readily available to a prospective renter that include all of the following
information:
(1) A clear and correct summary of the material terms of coverage offered to renters,
including the identity of the insurer.
(2) A disclosure that the coverage offered by the rental company may provide a
duplication of coverage already provided by a renter’s personal automobile insurance
policy, homeowner’s insurance policy, personal liability insurance policy, or other source of
coverage.
(3) A statement that the purchase by a renter of the types of coverage specified in this
section is not required in order to rent a vehicle.
(4) A description of the process for filing a claim in the event a renter elects to purchase
coverage and in the event of a claim.
c. Evidence of coverage in the rental agreement is provided to every renter who elects to
purchase such coverage.
d. A fee, compensation, or commission is not paid to an employee by a rental company
dependent solely on the sale of insurance under any limited license issued pursuant to this
section.
6. Any limited license issued under this section shall authorize a counter employee of
the limited licensee to act individually on behalf, and under the supervision, of the limited
licensee with respect to the offer and sale of coverage specified in this section.
7. A rental company counter employee must successfully pass an examination covering
the insurance products offered for sale by the rental company in connection with and
incidental to the rental of vehicles by the rental company. The examination shall be
approved and administered by the insurance division or a vendor approved by the insurance
division pursuant to section 522A.6. The counter employee shall file an application with the
commissioner for an individual license. Any application shall be deemed approved unless
the commissioner notifies the rental company of the denial or rejection of the application
within thirty days of receiving the application. An application shall not include requirements
greater in scope than defined in this section.
8. A limited licensee pursuant to this section shall not be required to treat moneys
collected from renters purchasing insurance when renting vehicles as moneys received in a
fiduciary capacity, provided that the charges for coverage are itemized and are ancillary to a
rental agreement. The offer or sale of insurance not in conjunction with a rental agreement
shall not be permitted.
9. A limited licensee under this section shall not advertise, represent, or otherwise hold
itself out or hold any of its employees out as licensed insurers, insurance agents, or insurance
brokers.
3 SALE OF INSURANCE BY VEHICLE RENTAL COMPANIES, §522A.7
10. A limited licensee shall not engage in this state in any of the following:
a. A trade practice defined in chapter 507B as, or determined pursuant to section 507B.6
tobe, anunfairmethodofcompetitionoranunfairordeceptiveactorpracticeinthebusiness
of insurance.
b. An illegal sales practice or unfair trade practice as defined in rules adopted pursuant
to chapter 17A by the commissioner.
11. An individual license, authorization, and certification to offer or sell insurance
products under this chapter shall expire when the counter employee’s employment
terminates with the rental company.