§ 522B.11 — License denial, nonrenewal, or revocation — limitation on duties and responsibilities of insurance producers

Iowa § 522B.11

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 522B: LICENSING OF INSURANCE PRODUCERS

Text

responsibilities of insurance producers.
1. Thecommissionermayplaceonprobation, suspend, revoke, orrefusetoissueorrenew
an insurance producer’s license or may levy a civil penalty as provided in section 522B.17 for
any one or more of the following causes:
a. Providing incorrect, misleading, incomplete, or materially untrue information in the
license application.
b. Violating any insurance laws, or violating any regulation, subpoena, or order of the
commissioner or of a commissioner of another state.
c. Obtaining or attempting to obtain a license through misrepresentation or fraud.
d. Improperly withholding, misappropriating, or converting any moneys or properties
received in the course of doing insurance business.
e. Intentionally misrepresenting the terms of an actual or proposed insurance contract or
application for insurance.
f. Having been convicted of a felony.
g. Having admitted or been found to have committed any unfair insurance trade practice
or fraud.
h. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence,
untrustworthiness, or financial irresponsibility in the conduct of business in this state or
elsewhere.
i. Having an insurance producer license, or its equivalent, denied, suspended, or revoked
in any other state, province, district, or territory.
j. Forging another’s name to an application for insurance or to any document related to
an insurance transaction.
k. Improperly using notes or any other reference material to complete an examination for
an insurance license.
l. Knowingly accepting insurance business from an individual who is not licensed.
m. Failing to comply with an administrative or court order imposing a child support
obligation.
n. Failing to comply with an administrative or court order related to repayment of loans
to the college student aid commission.
o. Failing to pay state income tax or comply with any administrative or court order
directing payment of state income tax.
p. Failing or refusing to cooperate in an investigation by the commissioner.
q. Is the subject of an order denying, suspending, revoking, or otherwise taking action
against a registration as a broker-dealer, agent, investment adviser, or investment adviser
representative issued by any of the following:
(1) The securities administrator of this state or any other state, province, district, or
territory.
(2) The federal securities and exchange commission.
(3) The financial industry regulatory authority.
r. Using an insurance producer’s license for the principal purpose of procuring, receiving,
or forwarding applications for insurance of any kind, or placing, or effecting such insurance
directlyorindirectlyuponorinconnectionwiththepropertyofthelicenseeorthepropertyof
a relative, employer, or employee of the licensee, or upon or in connection with property for
which the licensee or a relative, employer, or employee of the licensee is an agent, custodian,
vendor, bailee, trustee, or payee.
2. If the commissioner does not renew a license or denies an application for a license,
the commissioner shall notify the applicant or licensee and advise, in writing, the licensee
or applicant of the reason for the nonrenewal of the license or denial of the application for
a license. The licensee or applicant may request a hearing on the nonrenewal or denial. A
hearing shall be conducted according to section 507B.6.
3. The license of a business entity may be suspended, revoked, or refused if the
commissionerfinds,afterhearing,thatanindividuallicensee’sviolationwasknownorshould
have been known by a partner, officer, or manager acting on behalf of the business entity
and the violation was not reported to the commissioner and corrective action was not taken.
9 LICENSING OF INSURANCE PRODUCERS, §522B.11
4. In addition to, or in lieu of, any applicable denial, suspension, or revocation of a license,
a person, after hearing, may be subject to a civil penalty as provided in section 522B.17.
5. The commissioner may conduct an investigation of any suspected violation of this
chapter pursuant to section 507B.6 and may enforce the provisions and impose any penalty
or remedy authorized by this chapter and chapter 507B against any person who is under
investigation for, or charged with, a violation of either chapter even if the person’s license
has been surrendered or has lapsed by operation of law.
6. a. In order to assure a free flow of information for accomplishing the purposes of
this section, all complaint files, investigation files, other investigation reports, and other
investigative information in the possession of the commissioner or the commissioner’s
employees or agents that relates to licensee discipline are privileged and confidential, and
are not subject to discovery, subpoena, or other means of legal compulsion for their release
to a person other than the licensee, and are not admissible in evidence in a judicial or
administrative proceeding other than the proceeding involving licensee discipline. A final
written decision of the commissioner in a disciplinary proceeding is a public record.
b. Investigative information in the possession of the commissioner or the commissioner’s
employees or agents that relates to licensee discipline may be disclosed, in the
commissioner’s discretion, to appropriate licensing authorities within this state, the
appropriate licensing authority in another state, the District of Columbia, or a territory or
country in which the licensee is licensed or has applied for a license.
c. If the investigative information in the possession of the commissioner or the
commissioner’s employees or agents indicates a crime has been committed, the information
shall be reported to the proper law enforcement agency.
d. Pursuant to the provisions of section 17A.19, subsection 6, upon an appeal by the
licensee, the commissioner shall transmit the entire record of the contested case to the
reviewing court.
e. Notwithstanding the provisions of section 17A.19, subsection 6, if a waiver of privilege
has been involuntary and evidence has been received at a disciplinary hearing, the court shall
issue an order to withhold the identity of the individual whose privilege was waived.
7. a. Unless an insurance producer holds oneself out as an insurance specialist,
consultant, or counselor and receives compensation for consultation and advice apart from
commissions paid by an insurer, the duties and responsibilities of an insurance producer are
limited to those duties and responsibilities set forth in Sandbulte v. Farm Bureau Mut. Ins.
Co., 343 N.W.2d 457 (Iowa 1984).
b. The general assembly declares that the holding of Langwith v. Am. Nat’l Gen. Ins. Co.,
793N.W.2d215(Iowa2010)isabrogatedtotheextentthatitoverrulesSandbulteandimposes
higher or greater duties and responsibilities on insurance producers than those set forth in
Sandbulte.
c. Notwithstanding the holding in Pitts v. Farm Bureau Life Ins. Co., 818 N.W.2d 91
(Iowa 2012), an insurance producer, while acting within the scope and course of the license
provided for by this chapter, is not in the business of supplying information to others unless
the requirements of paragraph “a” relating to expanded duties and responsibilities are met.
d. Neither an insurance producer nor an insurer has a duty to change the beneficiary of
an insurance policy or contract unless clear written evidence of the policy owner’s intent
to change a beneficiary of the policy or contract is presented to the insurance producer or
insurerinthemannerrequiredbythepolicyorcontractpriortothepaymentofanyinsurance
benefits under the policy or contract. Such evidence shall be provided in the same manner
as a claim for benefits under the policy or contract.
e. An insurance producer owes any duties and responsibilities referred to in this
subsection only to the policy owner, a person in privity of contract with the insurance
producer, and the principal in an agency relationship with the insurance producer. If
a person to whom an insurance producer owes duties and responsibilities is deceased
or incapacitated, a direct and specifically identified beneficiary referenced in a written
instrument required by the insurer and delivered to the insurance producer prior to the
death or incapacity may enforce the insurance producer’s duties and responsibilities. An
insurance producer does not owe any duty or responsibility to a person who was a direct and
§522B.11, LICENSING OF INSURANCE PRODUCERS 10
specifically identified beneficiary if the policy owner changes the beneficiary in the manner
required by the policy or contract to remove the person as a beneficiary.