2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 516E - MOTOR VEHICLE SERVICE CONTRACTS
516E.4 - REIMBURSEMENT INSURANCE POLICY REQUIREMENTS -- INSURER QUALIFICATIONS.

        516E.4  REIMBURSEMENT INSURANCE POLICY REQUIREMENTS --
      INSURER QUALIFICATIONS.
         1.  Requirements.  A reimbursement insurance policy insuring a
      service contract issued, sold, or offered for sale in this state
      shall provide for all of the following:
         a.  The reimbursement insurance policy shall, in the event of
      the service company's failure to perform under the service contract
      or otherwise, either reimburse or pay on behalf of the service
      company any covered amounts that the service company is legally
      obligated to pay under the service contract, including the return of
      any unearned service company fee owed by the service company to the
      service contract holder.
         b.  An insurer that issues a reimbursement insurance policy
      shall assume full responsibility for the administration of claims
      made pursuant to a service contract in the event that the service
      company is unable to do so.
         c.  If a service covered under a service contract is not
      provided by the service company within sixty days of proof of loss by
      the service contract holder, the service contract holder is entitled
      to apply directly against the reimbursement insurance policy of the
      service company.
         2.  Termination.  As applicable, an insurer that issued a
      reimbursement insurance policy shall not terminate the policy unless
      a written notice has been received by the commissioner and by each
      applicable provider, service company, or third-party administrator.
      The notice shall fix the date of termination at a date no earlier
      than ten days after receipt of the notice by the commissioner and by
      the applicable provider, service company, or third-party
      administrator.  The notice may be delivered in person or sent by
      mail, and a restricted certified mail return receipt shall be deemed
      proof of receipt of notice.  The termination of a reimbursement
      insurance policy shall not reduce the issuer's responsibility for a
      service contract issued by a service company prior to the date of
      termination.
         3.  Indemnification or subrogation.  This section does not
      prevent or limit the right of an insurer that issued a reimbursement
      insurance policy to seek indemnification from or subrogation against
      a service company if the insurer pays or is obligated to pay a
      service contract holder sums that the service company was obligated
      to pay pursuant to the provisions of a service contract or pursuant
      to a contractual agreement.
         4.  Obligations insured.  If a service company secures its
      service contracts with a reimbursement insurance policy, the
      reimbursement insurance policy shall insure one hundred percent of
      the obligations of all service contracts sold by the service company.

         5.  Qualifications of insurer.  An insurer issuing a
      reimbursement insurance policy under this chapter shall be
      authorized, registered, or otherwise permitted to transact business
      in this state, or shall be an excess and surplus lines insurer
      authorized, registered, or otherwise permitted to transact business
      in this state, and shall meet one of the following requirements:
         a.  At the time the policy is filed with the commissioner, and
      continuously thereafter, the insurer maintains surplus as to
      policyholders and paid-in capital of at least fifteen million dollars
      and annually files copies of the insurer's financial statements,
      national association of insurance commissioners annual statement, and
      actuarial certification, if required and filed in the insurer's state
      of domicile.
         b.  At the time the policy is filed with the commissioner and
      continuously thereafter, the insurer does all of the following:
         (1)  Maintains surplus as to policyholders and paid-in capital of
      less than fifteen million dollars but at least ten million dollars.
         (2)  Demonstrates to the satisfaction of the commissioner that the
      insurer maintains a ratio of net written premiums, wherever written,
      to surplus as to policyholders and paid-in capital of not greater
      than three to one.
         (3)  Files copies annually of the insurer's financial statements,
      national association of insurance commissioners annual statement, and
      actuarial certification, if required and filed in the insurer's state
      of domicile.  

         85 Acts, ch 45, §4
         CS85, §321I.4
         2000 Acts, ch 1147, §15
         C2001, §516E.4
         2005 Acts, ch 70, §28; 2006 Acts, ch 1117, §83, 84
         Referred to in § 516E.2