Iowa Property & Casualty Insurance License, Practice Exams

An insurer wishing to comply with GLBA must provide its initial privacy notice to a customer:

1. Only when the policy is cancelled or nonrenewed, along with the final notice
2. Only after the customer files a first claim under the policy
3. At the time the customer relationship is established (and annually thereafter, as applicable) ✓
4. Only when the customer asks in writing to see the insurer's information-sharing practices

Why: GLBA requires delivery of a privacy notice when the customer relationship is established and, historically, an annual notice describing information-sharing practices.

'Completed operations' coverage applies when:

1. The product is still in the insured's inventory awaiting shipment
2. A customer slips on a wet floor inside the insured's showroom
3. Work is still in progress at the job site and the insured's crew has not yet turned the finished project over to the owner
4. The insured's work is completed or abandoned and bodily injury or property damage occurs away from the premises ✓

Why: Completed operations responds after the work is finished, typically for injury/damage occurring away from owned/rented premises.

An Iowa-organised insurer refuses to submit to an examination. Under Iowa Code 507.3, what must the commissioner do, and what follows?

1. Issue a notice of hearing under chapter 17A and, if the refusal persists after that hearing, suspend or revoke the company's certificate of authority for noncompliance.
2. Apply to the district court of the county for an order compelling the examination, revocation of the certificate being available only if that order is disobeyed.
3. Immediately revoke its certificate of authority, and report the action to the attorney general, who shall immediately apply to the district court for the appointment of a receiver. ✓
4. Impose the $5,000 civil penalty in section 505.7A and renew the written request for access.

Why: Iowa Code 507.3(2) requires a company and its officers, directors and agents to give the examiners TIMELY, CONVENIENT, AND FREE ACCESS AT ALL REASONABLE HOURS AT ITS OFFICES TO ALL BOOKS, RECORDS, ACCOUNTS, PAPERS, DOCUMENTS, AND ANY OR ALL COMPUTER OR OTHER RECORDINGS, and to FACILITATE THE EXAMINATION AND AID IN THE EXAMINATION SO FAR AS IT IS IN THEIR POWER TO DO SO. It then sets two different consequences. A REFUSAL to submit to examination or to comply with any reasonable written request IS GROUNDS FOR SUSPENSION OR REVOCATION OF, OR NONRENEWAL OF, ANY LICENSE OR AUTHORITY. But where the company DECLINES OR REFUSES TO SUBMIT TO AN EXAMINATION, THE COMMISSIONER SHALL IMMEDIATELY REVOKE ITS CERTIFICATE OF AUTHORITY, AND IF THE COMPANY IS ORGANIZED UNDER THE LAWS OF THIS STATE, THE COMMISSIONER SHALL REPORT THE COMMISSIONER'S ACTION TO THE ATTORNEY GENERAL, WHO SHALL IMMEDIATELY APPLY TO THE DISTRICT COURT FOR THE APPOINTMENT OF A RECEIVER TO ADMINISTER THE FINAL AFFAIRS OF THE COMPANY. SHALL and IMMEDIATELY in both places: the commissioner has no discretion to wait, and no hearing precedes it.

An Iowa automobile insurer decides not to renew a policy and relies on the thirty-day regime in Iowa Code 515D.7, subsection 1. What must it do, and what must the notice say if it does not give the reason?

1. Mail or deliver a notice of intention not to renew to the named insured at least thirty calendar days before the expiration date of the policy; and set out the reason for the nonrenewal on the face of that notice in every case, subsection 1 giving the insured no separate right to request a reason afterwards and the insurer no option to withhold the reason at the time the notice of intention not to renew is first sent out.
2. Mail or deliver a notice of intention not to renew to the named insured at least thirty calendar days before the expiration date of the policy; and, unless the reason accompanies the notice, state in the notice that upon written request of the named insured made at any time before the expiration date, the insurer will state the reason for nonrenewal together with notification of the right to a hearing before the commissioner.
3. Mail or deliver a notice of intention not to renew to the named insured at least fifteen calendar days before the expiration date of the policy; and, unless the reason accompanies the notice, state in the notice that upon written request of the named insured mailed or delivered not less than ten calendar days before the expiration date, the insurer will state the reason for nonrenewal.
4. Mail or deliver a notice of intention not to renew to the named insured at least thirty calendar days before the expiration date of the policy; and, unless the reason accompanies the notice, state in the notice that upon written request of the named insured mailed or delivered to the insurer not less than thirty calendar days before the expiration date, the insurer will state the reason for nonrenewal. ✓

Why: Iowa Code 515D.7(1) provides that NOTWITHSTANDING THE PROVISIONS OF SECTIONS 515.125 AND 515.128, AN INSURER SHALL NOT FAIL TO RENEW A POLICY EXCEPT BY NOTICE TO THE INSURED AS PROVIDED IN THIS CHAPTER, and that A NOTICE OF INTENTION NOT TO RENEW SHALL NOT BE EFFECTIVE UNLESS MAILED OR DELIVERED BY THE INSURER TO THE NAMED INSURED AT LEAST THIRTY CALENDAR DAYS PRIOR TO THE EXPIRATION DATE OF THE POLICY. As in 515D.5, A POST OFFICE DEPARTMENT CERTIFICATE OF MAILING TO THE NAMED INSURED AT THE ADDRESS SHOWN IN THE POLICY SHALL BE PROOF OF RECEIPT OF SUCH MAILING. The subsection then provides that UNLESS THE REASON ACCOMPANIES THE NOTICE OF INTENT NOT TO RENEW, THE NOTICE SHALL STATE THAT, UPON WRITTEN REQUEST OF THE NAMED INSURED, MAILED OR DELIVERED TO THE INSURER NOT LESS THAN THIRTY CALENDAR DAYS PRIOR TO THE EXPIRATION DATE OF THE POLICY, THE INSURER WILL STATE THE REASON FOR NONRENEWAL. Two things are worth noticing. The reason may be withheld from the first notice, which is what the second option denies. And the request deadline is the SAME thirty calendar days as the notice period, measured from the same expiration date - so an insured who wants a reason must in practice ask on or before the day the notice itself was due. The hearing right is not mentioned in subsection 1; it arrives with the statement of reason under 515D.7(3).

An Iowa claimant with a covered claim against the association also has a policy of her own that responds to the same loss, and a second claimant could recover from the guaranty association of two different states. What does Iowa Code 515B.9 require of each?

1. The first may choose which policy to claim under, the association's obligation being treated as other insurance and contributing rateably with the other policy; the amount payable on the covered claim is reduced only by what she actually recovers under that other policy. The second must seek recovery first from the association of the place of residence of the insured in every case, the chapter drawing no distinction between a first party property claim, a workers' compensation claim and any other kind of claim which two guaranty associations might both be obliged to meet.
2. The first must exhaust all coverage provided by the other policy before the association pays, and any obligation of the association is not to be considered other insurance; the amount payable on the covered claim is reduced by the full applicable limits of that other policy. The second must seek recovery first from the association of the place of residence of the insured, save that a first party claim for damage to property with a permanent location goes first to the association of the location of the property; but sums recovered from another guaranty association or equivalent organization are not subtracted from the maximum liability of the association under the section which fixes what it must pay on a covered claim.
3. The first must exhaust all coverage provided by the other policy, whether primary, excess or pro rata, before the association pays, and any obligation of the association is not to be considered other insurance; the amount payable on the covered claim is reduced by the full applicable limits of that other policy, or by the total recovery where there are no applicable limits. The second must seek recovery first from the association of the place of residence of the insured, save that a first party claim for damage to property with a permanent location goes first to the association of the location of the property, and a workers' compensation claim to the association of the residence of the claimant. ✓
4. The first must exhaust all coverage provided by the other policy before the association pays, but a policy providing liability coverage to a person merely jointly and severally liable with the insured of the insolvent insurer need not be exhausted first; the amount payable is reduced by the full applicable limits of the other policy. The second must seek recovery first from the association of the place of residence of the insured, save that a workers' compensation claim goes first to the association of the residence of the claimant.

Why: Iowa Code 515B.9(1)(a) requires a person having a claim under another insurance policy which ALLEGES THE SAME DAMAGES OR ARISES FROM THE SAME FACTS, INJURY, OR LOSS that gives rise to a covered claim TO FIRST EXHAUST ALL COVERAGE PROVIDED BY THAT POLICY, WHETHER SUCH COVERAGE IS ON A PRIMARY, EXCESS, OR PRO RATA BASIS, and provides that ANY OBLIGATION OF THE ASSOCIATION SHALL NOT BE CONSIDERED OTHER INSURANCE. The association is the last resort, not a co-insurer, which is what the second option misses. By (1)(a)(1), ANY AMOUNT PAYABLE ON A COVERED CLAIM SHALL BE REDUCED BY THE FULL APPLICABLE LIMITS OF SUCH OTHER INSURANCE POLICY AND THE ASSOCIATION SHALL RECEIVE FULL CREDIT FOR SUCH LIMITS OR WHERE THERE ARE NO APPLICABLE LIMITS, THE CLAIM SHALL BE REDUCED BY THE TOTAL RECOVERY - the credit is for the LIMITS, not for what was actually paid, so a claimant who settles the other policy cheaply bears the difference. By (1)(a)(2), A POLICY PROVIDING LIABILITY COVERAGE TO A PERSON WHO MAY BE JOINTLY AND SEVERALLY LIABLE WITH, OR A JOINT TORTFEASOR WITH, THE PERSON COVERED UNDER THE POLICY OF THE INSOLVENT INSURER SHALL BE FIRST EXHAUSTED BEFORE ANY CLAIM IS MADE AGAINST THE ASSOCIATION - which is what the fourth option denies. Iowa Code 515B.9(2) then orders the guaranty associations themselves: A PERSON HAVING A CLAIM WHICH MAY BE RECOVERED UNDER MORE THAN ONE INSURANCE GUARANTY ASSOCIATION OR ITS EQUIVALENT SHALL SEEK RECOVERY FIRST FROM THE ASSOCIATION OF THE PLACE OF RESIDENCE OF THE INSURED. HOWEVER, IF THE CLAIM IS A FIRST PARTY CLAIM FOR DAMAGE TO PROPERTY WITH A PERMANENT LOCATION, RECOVERY SHALL BE FIRST SOUGHT FROM THE ASSOCIATION OF THE LOCATION OF THE PROPERTY. IF THE CLAIM IS A WORKERS' COMPENSATION CLAIM, RECOVERY SHALL BE FIRST SOUGHT FROM THE ASSOCIATION OF THE RESIDENCE OF THE CLAIMANT. Three rules, and the claim type chooses between them. The subsection closes: ANY SUMS RECOVERED FROM ANY OTHER GUARANTY ASSOCIATION OR EQUIVALENT ORGANIZATION SHALL BE SUBTRACTED FROM THE MAXIMUM LIABILITY OF THE ASSOCIATION UNDER SECTION 515B.5, SUBSECTION 1, PARAGRAPH A - which is what the third option denies.

What must be true before a surplus lines insurance producer may place business with a nonadmitted insurer or a domestic surplus lines insurer under Iowa Code 515I.3, and what is the status of insurance so placed?

1. The proposed insurer must be an eligible surplus lines insurer; it must be authorized to write the type of insurance sought in this state in its domiciliary jurisdiction; unless otherwise exempt, after a diligent search the full amount or type of insurance cannot be obtained from an admitted insurer; and all other requirements of the chapter must be met. Insurance placed under the section is valid and enforceable as to all parties. ✓
2. The proposed insurer must be an eligible surplus lines insurer and must be authorized to write the type of insurance sought in its domiciliary jurisdiction; a diligent search of the admitted market is good practice but is not a statutory condition of placement, the chapter leaving the choice of market to the producer and the insured. Insurance placed under the section is valid and enforceable as to all parties, and remains so whether or not the conditions of the section were satisfied when it was placed.
3. The proposed insurer must be an eligible surplus lines insurer; it must be authorized to write the type of insurance sought in this state in its domiciliary jurisdiction; after a diligent search, from which no purchaser is exempt, the full amount or type of insurance cannot be obtained from an admitted insurer; and all other requirements of the chapter must be met. Insurance placed under the section is voidable at the option of the insured if any of those conditions was not met.
4. The proposed insurer must be authorized to write the type of insurance sought in its domiciliary jurisdiction and must have filed its rates and forms with the commissioner; unless otherwise exempt, after a diligent search the full amount or type of insurance cannot be obtained from an admitted insurer; and all other requirements of the chapter must be met. Insurance placed under the section is valid and enforceable as to all parties.

Why: Iowa Code 515I.3(1) provides that SURPLUS LINES INSURANCE MAY BE PLACED BY A SURPLUS LINES INSURANCE PRODUCER WITH A NONADMITTED INSURER OR DOMESTIC SURPLUS LINES INSURER ONLY IF ALL OF THE FOLLOWING REQUIREMENTS ARE MET: (a) THE PROPOSED NONADMITTED INSURER OR DOMESTIC SURPLUS LINES INSURER IS AN ELIGIBLE SURPLUS LINES INSURER. (b) THE PROPOSED NONADMITTED INSURER OR DOMESTIC SURPLUS LINES INSURER IS AUTHORIZED TO WRITE THE TYPE OF INSURANCE SOUGHT IN THIS STATE IN ITS DOMICILIARY JURISDICTION. (c) UNLESS OTHERWISE EXEMPT FROM THIS REQUIREMENT, AFTER A DILIGENT SEARCH THE FULL AMOUNT OR TYPE OF INSURANCE CANNOT BE OBTAINED FROM AN ADMITTED INSURER. (d) ALL OTHER REQUIREMENTS OF THIS CHAPTER ARE MET. Paragraph (c) carries its own escape - UNLESS OTHERWISE EXEMPT - which is the door 515I.9 opens for an exempt commercial purchaser, so the third option overstates the search duty and the second removes it. Iowa Code 515I.3(4) then provides that INSURANCE PLACED UNDER THIS SECTION SHALL BE VALID AND ENFORCEABLE AS TO ALL PARTIES; and 515I.13 makes the related point that a policy which contains a provision not complying with the chapter IS NOT THEREBY RENDERED INVALID but is construed as if it had complied. Two further parts of the section are worth noting. 515I.3(2) makes the producer collect and pay the premium tax under section 432.1 where Iowa is the home state, requires the tax on unearned premium credited by the state to be RETURNED TO THE POLICYHOLDER DIRECTLY BY THE SURPLUS LINES INSURANCE PRODUCER, and prohibits the producer from REBATING, FOR ANY REASON, ANY PART OF THE TAX. And 515I.3(3) takes the section off a producer engaged SOLELY to give advice or counsel for a fee under a written agreement who does not participate in the sale, solicitation or negotiation. Eligible surplus lines insurers do not file rates or forms at all: 515I.4(3) says so in terms, which is what the fourth option contradicts.

A building valued at $1,000,000 carries an 80% coinsurance clause. The insured carries $600,000 of coverage and suffers a $200,000 loss (before deductible). What does coinsurance pay?

1. $200,000
2. $120,000
3. $160,000
4. $150,000 ✓

Why: Required = 80% of $1,000,000 = $800,000. Penalty factor = $600,000/$800,000 = 0.75. Payment = 0.75 x $200,000 = $150,000.

A business decides not to manufacture a dangerous chemical at all to eliminate the chance of related liability claims. This is an example of risk:

1. Transfer
2. Reduction
3. Avoidance ✓
4. Retention

Why: Risk avoidance eliminates the possibility of a particular loss by not engaging in the activity that creates the exposure.

Which construction type is considered the MOST resistant to fire?

1. Ordinary
2. Joisted masonry
3. Fire-resistive ✓
4. Frame

Why: Fire-resistive construction uses materials like reinforced concrete and protected steel and carries the lowest fire risk classification.

Extra Expense coverage pays for:

1. Necessary expenses incurred to continue operations after a covered loss ✓
2. Lost profits during the months after a business closes permanently
3. Repair of the damaged building itself
4. Employee bonuses paid during the shutdown

Why: Extra Expense covers reasonable and necessary expenses (above normal costs) the insured incurs to avoid or minimize a suspension and continue operations.

Compared with a loss payable clause, a standard mortgage clause gives the mortgagee:

1. No rights of its own, so it must sue the insured to collect
2. Independent rights, including payment even if the insured's own claim is denied for certain acts ✓
3. The same derivative rights a loss payee has, so denial of the insured's claim also bars payment
4. Only the right to take salvage after the insurer pays

Why: A standard (union) mortgage clause grants the mortgagee independent rights, so it may still be paid even if the insured's claim is voided by certain acts.

Many Homeowners policies suspend certain coverages, such as vandalism and freezing, after the dwelling has been vacant for more than:

1. 30 days
2. 90 days
3. 60 days ✓
4. 15 days

Why: A common provision suspends or restricts coverage for vandalism, glass breakage, and freezing once the dwelling has been vacant for more than 60 consecutive days.

A commercial umbrella policy provides which three basic functions?

1. Excess limits over underlying coverage, broader 'drop-down' coverage for some gaps, and additional protection where no underlying exists (subject to an SIR) ✓
2. Replacement cost valuation, actual cash value settlement, and agreed value coverage on the insured's buildings and stock
3. Property, commercial auto, and crime coverage packaged in one form so the insured needs only a single policy
4. Surety bonds, fidelity bonds, and license and permit bonds, guaranteeing the insured's performance of its contracts and the honesty of the employees who handle its money

Why: Umbrellas provide excess limits over underlying policies, broader coverage that drops down for certain gaps, and coverage for losses not covered by underlying subject to a self-insured retention.

Iowa Code 321.20B does not apply to certain vehicles and persons. Which set does the section exempt?

1. Government vehicles only. Every other motor vehicle driven on the highways of this state is within the section, including a vehicle in the hands of a lienholder who has taken possession of it and a vehicle in a licensed dealer's stock awaiting sale to a retail customer, each of which must carry its own proof of financial liability coverage card at all times while it is being driven or moved.
2. The operator of a motor vehicle owned by or leased to the United States, this state or another state, or any political subdivision of either, and a motor vehicle subject to section 325A.6; a motor vehicle identified in section 321.18, subsections 1 to 6 or 8; a lienholder with a security interest in a registered motor vehicle, so long as the lienholder maintains financial liability coverage for any such vehicle the lienholder drives or moves; and a motor vehicle owned by a licensed motor vehicle dealer or wholesaler. ✓
3. The operator of a government vehicle; a licensed motor vehicle dealer or wholesaler; and a lienholder, whether or not the lienholder maintains any financial liability coverage of its own for the vehicle it is driving or moving, the lienholder's interest in the collateral being sufficient to take the vehicle outside the compulsory scheme altogether.
4. The operator of a government vehicle and a vehicle identified in section 321.18; a dealer or wholesaler is not exempt, and a lienholder is exempt only where the vehicle has been repossessed and the lienholder has become its registered owner in place of the borrower who defaulted on the loan secured by it, and a vehicle subject to section 325A.6 is within the section in the same way as any other motor vehicle driven upon the highways of this state, whoever may own it and for whatever purpose it is being driven at the time.

Why: Four provisions carve out of Iowa Code 321.20B. By (1)(c), THIS SUBSECTION DOES NOT APPLY TO THE OPERATOR OF A MOTOR VEHICLE OWNED BY OR LEASED TO THE UNITED STATES, THIS STATE OR ANOTHER STATE, OR ANY POLITICAL SUBDIVISION OF THIS STATE OR OF ANOTHER STATE, OR TO A MOTOR VEHICLE WHICH IS SUBJECT TO SECTION 325A.6. By (6), THIS SECTION DOES NOT APPLY TO A MOTOR VEHICLE IDENTIFIED IN SECTION 321.18, SUBSECTION 1, 2, 3, 4, 5, 6, OR 8 - note that subsection 7 is not on that list. By (7), THIS SECTION DOES NOT APPLY TO A LIENHOLDER WHO HAS A SECURITY INTEREST IN A MOTOR VEHICLE SUBJECT TO THE REGISTRATION REQUIREMENTS OF THIS CHAPTER, SO LONG AS SUCH LIENHOLDER MAINTAINS FINANCIAL LIABILITY COVERAGE FOR ANY MOTOR VEHICLE DRIVEN OR MOVED BY THE LIENHOLDER IN WHICH THE LIENHOLDER HAS AN INTEREST - the exemption is conditional, which is what the third option removes, and it does not depend on repossession or on a change of registered owner. By (8), THIS SECTION DOES NOT APPLY TO A MOTOR VEHICLE OWNED BY A MOTOR VEHICLE DEALER OR WHOLESALER LICENSED PURSUANT TO CHAPTER 322. Nothing is asserted here about what sections 321.18 and 325A.6 or chapter 322 provide; they are named only as 321.20B names them.

The Iowa commissioner disapproves a competitive-market filing, leaving the insurer with no legally effective rates. Under Iowa Code 515F.25, what must the commissioner do, and what may be done about the gap?

1. The commissioner shall issue an order specifying the reasons for the disapproval within ninety days of the disapproval or of any hearing held on it, and the insurer must cease writing business in the affected market until new rates have been filed with the commissioner and affirmatively approved; the section provides no mechanism of any kind for interim rates while that is done, and any premium already collected on the disapproved rates must be refunded in full to the policyholders concerned rather than adjusted for the period after the effective date of the order or placed in an escrow account approved by the commissioner pending the filing of rates that are legally effective, the section drawing no distinction between prefiled rates and rates in effect at the time of the disapproval.
2. The commissioner shall notify the insurer of the disapproval but need give no reasons for it, a competitive filing having taken effect when filed and without any review; the insurer may continue to use the disapproved rates until it has filed replacements, and the commissioner may require a specified portion of the premium to be escrowed in the meantime.
3. The commissioner shall issue an order specifying the reasons the filing fails to meet the requirements of sections 515F.4 and 515F.5, shall inform the insurer within a reasonable period when further use of rates in effect is prohibited, and shall issue the order within thirty days of the disapproval or of a hearing on it; the order may provide for premium adjustment for the period after its effective date for policies in effect; and on the insurer's request the commissioner shall work with it to develop interim rates sufficient to protect the interest of all parties, and may order a specified portion of the premium to be placed in an approved escrow account. ✓
4. The commissioner shall issue an order within thirty days specifying the reasons for the disapproval; the insurer may petition for a hearing within ten days after the disapproval of prefiled rates; and where the insurer is left without legally effective rates the commissioner shall fix interim rates for it, the insurer having no part in developing those interim rates and no right to be heard about them, and no portion of the premium collected on those interim rates may be placed in an escrow account pending the filing of new rates that are legally effective in this state, nor may any overcharge contained in those interim rates be distributed to the affected policyholders afterwards.

Why: Iowa Code 515F.25(1) starts the process: if the commissioner believes a competitive-market filing violates sections 515F.4 and 515F.5, the commissioner MAY REQUIRE THE INSURER TO FILE SUPPORTING INFORMATION, and if the belief survives that review SHALL NOTIFY THE INSURER OF THE INSURER'S RIGHT TO PETITION FOR A HEARING ON ANY SUBSEQUENT ORDER. By (2) the commissioner MAY DISAPPROVE PREFILED RATES THAT HAVE NOT BECOME EFFECTIVE, and SHALL NOTIFY THE INSURER WHOSE RATES HAVE BEEN DISAPPROVED OF THE INSURER'S RIGHT TO PETITION FOR A HEARING ON THE DISAPPROVAL WITHIN THIRTY DAYS AFTER THE DISAPPROVAL - thirty days, not ten. By (3), IF THE COMMISSIONER DISAPPROVES A FILING IN A COMPETITIVE MARKET, THE COMMISSIONER SHALL ISSUE AN ORDER SPECIFYING THE REASONS THE FILING FAILS TO MEET THE REQUIREMENTS OF SECTIONS 515F.4 AND 515F.5. FOR RATES IN EFFECT AT THE TIME OF DISAPPROVAL, THE COMMISSIONER SHALL INFORM THE INSURER WITHIN A REASONABLE PERIOD OF TIME THE DATE WHEN FURTHER USE OF THE RATES FOR POLICIES OR CONTRACTS OF INSURANCE IS PROHIBITED. THE ORDER SHALL BE ISSUED WITHIN THIRTY DAYS OF DISAPPROVAL, OR WITHIN THIRTY DAYS OF A HEARING ON THE DISAPPROVAL IF A HEARING IS HELD. THE ORDER MAY INCLUDE A PROVISION FOR PREMIUM ADJUSTMENT FOR THE PERIOD AFTER THE EFFECTIVE DATE OF THE ORDER FOR POLICIES OR CONTRACTS IN EFFECT ON THE DATE OF THE ORDER. By (4), WHENEVER AN INSURER HAS FILED NO LEGALLY EFFECTIVE RATES AS A RESULT OF THE COMMISSIONER'S DISAPPROVAL, THE COMMISSIONER SHALL ON REQUEST OF THE INSURER WORK WITH THE INSURER TO DEVELOP INTERIM RATES THAT ARE SUFFICIENT TO PROTECT THE INTEREST OF ALL PARTIES AND MAY ORDER THAT A SPECIFIED PORTION OF THE PREMIUM BE PLACED IN AN ESCROW ACCOUNT APPROVED BY THE COMMISSIONER. WHEN NEW RATES BECOME LEGALLY EFFECTIVE, THE COMMISSIONER SHALL ORDER THE ESCROWED FUNDS OR ANY OVERCHARGE IN THE INTERIM RATES TO BE DISTRIBUTED APPROPRIATELY, and MAY WAIVE DISTRIBUTION IF THE AMOUNT INVOLVED WOULD NOT WARRANT SUCH ACTION. The interim rates are developed WITH the insurer and only ON ITS REQUEST.

Medical benefits under most workers' compensation laws are generally:

1. Capped at a fixed dollar amount per claim set by the state legislature
2. Unlimited in amount and duration for the compensable injury ✓
3. Paid only for the first 30 days following the injury
4. Subject to a deductible the injured worker pays before treatment begins

Why: Medical benefits for a compensable injury are typically unlimited, covering reasonable and necessary treatment with no dollar cap and no cost to the employee.

Which of the following is typically EXCLUDED under an NFIP flood policy?

1. The furnace and central air conditioner serving the dwelling, which NFIP building coverage insures even when they sit in a basement
2. Damage to finished basement improvements and personal property in a basement (with limited exceptions) ✓
3. The building's foundation walls, anchorage system, and staircases
4. A detached garage located on the same premises, which may draw up to ten percent of the building coverage limit

Why: The NFIP severely limits coverage in basements, generally excluding finished walls, floors, and most personal property below the lowest elevated floor.

What does the insuring clause on the first page of the Iowa standard fire policy promise, and what does it expressly exclude from the measure of recovery?

1. Payment of the amount of insurance stated in the policy for a total loss by fire, lightning or removal, together with the increased cost of reconstruction imposed by any ordinance or law, but not loss resulting from interruption of business.
2. Payment to the extent of the replacement cost of the property at the time of loss against all direct loss by fire, lightning and by removal, including any increased cost of repair or reconstruction required by an ordinance or law regulating construction or repair, and including loss resulting from interruption of business or manufacture where the interruption follows the insured peril, but in no event more than the interest of the insured in the property.
3. Payment to the extent of the actual cash value of the property at the time of loss, but not more than the cost to repair or replace with material of like kind and quality within a reasonable time, without allowance for increased cost of repair or reconstruction by reason of any ordinance or law, without compensation for loss from interruption of business or manufacture, and not more than the interest of the insured. ✓
4. Payment to the extent of the actual cash value of the property at the time of loss against all direct and indirect loss by fire and lightning, including loss from interruption of business or manufacture where the interruption follows directly from the insured peril.

Why: The insuring clause in Iowa Code 515.109(6)(a) insures TO THE EXTENT OF THE ACTUAL CASH VALUE OF THE PROPERTY AT THE TIME OF LOSS, BUT NOT EXCEEDING THE AMOUNT WHICH IT WOULD COST TO REPAIR OR REPLACE THE PROPERTY WITH MATERIAL OF LIKE KIND AND QUALITY WITHIN A REASONABLE TIME AFTER SUCH LOSS, WITHOUT ALLOWANCE FOR ANY INCREASED COST OF REPAIR OR RECONSTRUCTION BY REASON OF ANY ORDINANCE OR LAW REGULATING CONSTRUCTION OR REPAIR, AND WITHOUT COMPENSATION FOR LOSS RESULTING FROM INTERRUPTION OF BUSINESS OR MANUFACTURE, NOR IN ANY EVENT FOR MORE THAN THE INTEREST OF THE INSURED. Four limits in one sentence, and the last of them is the principle of indemnity in statutory form. The peril wording is equally precise: ALL DIRECT LOSS BY FIRE, LIGHTNING AND BY REMOVAL FROM PREMISES ENDANGERED BY THE PERILS INSURED AGAINST IN THIS POLICY - DIRECT loss, which is why an indirect loss such as business interruption is bought by endorsement rather than found in the form. Property necessarily removed for preservation from an insured peril is covered PRO RATA FOR FIVE DAYS AT EACH PROPER PLACE to which it is removed, BUT NOT ELSEWHERE. The clause closes with two further rules: ASSIGNMENT OF THIS POLICY SHALL NOT BE VALID EXCEPT WITH THE WRITTEN CONSENT OF THIS COMPANY, and the policy is made subject to the provisions and stipulations printed and added.

Iowa Code 515.103 controls how current an insurer's credit information must be. What are the two rules?

1. An insurer may not take adverse action based on credit information unless it obtains and uses a credit report issued, or an insurance score calculated, within ninety days before the date the policy is first written or a renewal is issued; and it may not use credit information unless it recalculates the score or obtains an updated report not later than every thirty-six months following the last time it obtained current credit information. ✓
2. An insurer may not take adverse action based on credit information unless the credit report or insurance score was obtained within thirty days before the date the policy is first written or renewed; and it must obtain an updated credit report or recalculate the insurance score for every insured at each annual renewal of a personal insurance policy, whether or not the consumer or the consumer's agent has asked the insurer to do so.
3. An insurer may take adverse action on a credit report of any age provided it discloses the date of the report to the consumer in the adverse action notice; and it must recalculate the insurance score or obtain an updated report not later than every twelve months following the last time it obtained current credit information for the insured, no longer interval being permitted for any insured.
4. An insurer may not take adverse action based on credit information unless the credit report or insurance score is current within ninety days before the policy is first written or a renewal is issued; but once a policy has been written using credit information the insurer may never re-underwrite or re-rate it on credit information again, even at the request of the consumer or the consumer's agent.

Why: Iowa Code 515.103(2)(f) forbids an insurer to TAKE ADVERSE ACTION AGAINST A CONSUMER BASED ON CREDIT INFORMATION, UNLESS THE INSURER OBTAINS AND USES A CREDIT REPORT ISSUED OR AN INSURANCE SCORE CALCULATED WITHIN NINETY DAYS BEFORE THE DATE A PERSONAL INSURANCE POLICY IS FIRST WRITTEN OR A RENEWAL IS ISSUED. Iowa Code 515.103(2)(g) forbids the use of credit information UNLESS NOT LATER THAN EVERY THIRTY-SIX MONTHS FOLLOWING THE LAST TIME THAT THE INSURER OBTAINED CURRENT CREDIT INFORMATION FOR THE INSURED, THE INSURER RECALCULATES THE INSURANCE SCORE OR OBTAINS AN UPDATED CREDIT REPORT. Three qualifications follow. By (2)(g)(1), AT ANNUAL RENEWAL, UPON THE REQUEST OF THE CONSUMER OR THE CONSUMER'S AGENT, THE INSURER SHALL RE-UNDERWRITE AND RE-RATE THE POLICY BASED UPON A CURRENT CREDIT REPORT OR INSURANCE SCORE, though it NEED NOT DO SO MORE THAN ONCE IN A TWELVE-MONTH PERIOD. By (2)(g)(2) the insurer MAY refresh more often if that is consistent with its underwriting guidelines. And by (2)(g)(3) it need not obtain current information at all where it is treating the consumer as otherwise approved by the commissioner; where the consumer is IN THE MOST FAVORABLY PRICED TIER OF THE INSURER, WITHIN A GROUP OF AFFILIATED INSURERS; where CREDIT INFORMATION WAS NOT USED when the policy was initially written; or where the insurer REEVALUATES THE INSURED beginning no later than thirty-six months after the policy was initially written, and thereafter, on other underwriting or rating factors EXCLUDING CREDIT INFORMATION.

The implied warranty of 'no deviation' means:

1. The cargo cannot be repacked or transshipped en route
2. The premium cannot be adjusted once the voyage begins
3. The vessel must not depart from the customary or agreed route without necessity ✓
4. The vessel must sail under the flag of registry named in the declarations

Why: The warranty against deviation requires the vessel to follow the customary or agreed-upon route; unjustified departure can void coverage.

Glass breakage to a covered building under broad and special homeowners forms is generally:

1. Covered only under DP-1, which adds breakage of glass as an extended coverage peril on all dwelling forms
2. Part of Section II liability, since broken glass creates a hazard to visitors on the premises
3. Excluded entirely unless a separate glass floater is purchased for the storm doors and windows
4. Covered, though restricted if the dwelling has been vacant beyond the allowed period ✓

Why: Breakage of glass is a covered additional coverage/peril under broad and special forms, but coverage may be suspended when the dwelling has been vacant beyond the stated period.

Which sales practices does Iowa Code 515K.5 forbid in connection with travel insurance, and which does it expressly permit?

1. Forbidden: offering travel insurance through a negative option or opt out; selling a policy that because of an exclusion cannot result in payment of any claim; marketing blanket travel insurance as no cost coverage; and requiring a consumer travelling to a jurisdiction that mandates specific coverage to buy that coverage or produce proof of equivalent coverage, which is an impermissible condition on the sale of a travel package however clearly the choice is put to the consumer before departure. Permitted: an accurate summary or short description of coverage on an insurer's internet site or an aggregator site where all provisions of each available policy are accessible electronically.
2. Forbidden: offering, soliciting or negotiating travel insurance through a negative option or opt out requiring the consumer to take affirmative action to deselect coverage; and selling a policy that because of an exclusion or other provision cannot result in payment of any claim by any insured. Permitted: marketing blanket travel insurance as no cost coverage, since under the chapter's own definition blanket travel insurance is provided to all members of an eligible group without a separate charge to individual members and the description is therefore accurate; and any accurate summary or short description of coverage on an insurer's internet site or on an aggregator site.
3. Forbidden: offering, soliciting or negotiating travel insurance or a travel protection plan through a negative option or opt out requiring the consumer to take affirmative action to deselect coverage; selling a policy that because of an exclusion or other provision cannot result in payment of any claim; and marketing blanket travel insurance as no cost coverage. Permitted: an accurate summary or short description of coverage on an insurer's internet site or an aggregator site where all provisions are accessible electronically, and requiring a consumer travelling to a jurisdiction that mandates coverage to buy it or provide proof of equivalent coverage. ✓
4. Forbidden: offering travel insurance through a negative option or opt out; selling a policy that because of an exclusion cannot result in payment of any claim; and marketing blanket travel insurance as no cost coverage. Permitted: requiring a consumer travelling to a jurisdiction that mandates coverage to buy it or provide proof of equivalent coverage; but any summary or short description of the coverage on an insurer's own internet site or on an aggregator site is itself an unfair trade practice, because only the full policy language, and no summary or short description of it, may be shown to a prospective purchaser of the coverage before that purchaser makes the purchase.

Why: Iowa Code 515K.5(3) provides that NO PERSON SHALL OFFER, SOLICIT, OR NEGOTIATE TRAVEL INSURANCE OR A TRAVEL PROTECTION PLAN ON AN INDIVIDUAL OR GROUP BASIS THROUGH USE OF A NEGATIVE OPTION OR AN OPT OUT THAT REQUIRES A CONSUMER TO TAKE AN AFFIRMATIVE ACTION TO DESELECT COVERAGE, SUCH AS UNCHECKING A BOX ON AN ELECTRONIC FORM WHEN THE CONSUMER PURCHASES A TRIP. Iowa Code 515K.5(4) makes two things an unfair trade practice under sections 507B.3 and 507B.4: OFFER OR SELL A TRAVEL INSURANCE POLICY THAT, DUE TO AN EXCLUSION OR OTHER PROVISIONS IN THE POLICY, CANNOT RESULT IN PAYMENT OF ANY CLAIM MADE BY ANY INSURED UNDER THE POLICY, and MARKET BLANKET TRAVEL INSURANCE COVERAGE AS NO COST COVERAGE. The second is worth pausing on, because 515K.2(2) does define blanket travel insurance as provided to all members of an eligible group WITHOUT A SEPARATE CHARGE TO INDIVIDUAL MEMBERS - and the statute still forbids calling it free, which is what the third option misses. On the permitted side, 515K.5(2)(e) provides that where travel insurance is marketed directly through an insurer's internet site or by another person via an aggregator site, IT SHALL NOT BE AN UNFAIR TRADE PRACTICE OR OTHER VIOLATION OF LAW to provide AN ACCURATE SUMMARY OR SHORT DESCRIPTION OF THE AVAILABLE INSURANCE COVERAGE, IF ALL PROVISIONS OF EACH AVAILABLE TRAVEL INSURANCE POLICY ARE ACCESSIBLE TO CONSUMERS VIA ELECTRONIC MEANS. And 515K.5(5) provides that where a destination jurisdiction MANDATES SPECIFIC INSURANCE COVERAGE it is NOT an unfair trade practice to require the consumer, as a condition of purchasing a travel package, to choose between buying that coverage through the retailer or producer and agreeing to OBTAIN AND PROVIDE PROOF OF COVERAGE THAT MEETS THE DESTINATION JURISDICTION'S REQUIREMENTS PRIOR TO THE CONSUMER'S DEPARTURE. The framing provision is 515K.5(1): all persons offering travel insurance to residents of this state are subject to sections 507B.3 and 507B.4, and where this chapter conflicts with another provision of Title XIII, subtitle 1, THIS CHAPTER SHALL CONTROL - the same priority 515K.9(2) states for the chapter as a whole.

What may the Iowa insurance guaranty association do about the claims and judgments it inherits from an insolvent insurer, and when does its duty to defend an insured end?

1. It must accept every settlement, release and judgment to which the insolvent insurer or its insureds were parties, including an uncontested or default judgment, its function being to pay what the insolvent insurer would have owed rather than to relitigate what the insolvent insurer allowed to be decided against it; it may appoint or substitute legal counsel retained to defend insureds on covered claims; and its obligation to defend an insured ceases upon its payment or tender to an excess insurer of an amount which is equal to the lesser of its own covered claim obligation or the applicable limits of the policy.
2. It may investigate, adjust, compromise, settle and pay covered claims and deny all other claims; it may review settlements, releases and judgments, and any uncontested or default judgment against the insolvent insurer or its insured is not binding on it; but it may not appoint or substitute counsel already retained to defend an insured, that being the insured's choice; and its obligation to defend continues until the claim is finally resolved whatever it pays or tenders to an excess insurer along the way.
3. It may investigate, adjust, compromise, settle and pay covered claims to the extent of its obligations and deny all other claims; it may review settlements, releases and judgments to which the insolvent insurer or its insureds were parties, and any uncontested or default judgment against the insolvent insurer or its insured is not binding on it; it may appoint or substitute legal counsel retained to defend insureds on covered claims; and its obligation to defend ceases upon its payment or tender to an excess insurer of an amount equal to the lesser of its covered claim obligation or the applicable policy limits. ✓
4. It may investigate, adjust, compromise, settle and pay covered claims to the extent of its obligations and deny all other claims; it may review settlements, releases and judgments, and any judgment against the insolvent insurer or its insured, contested or not, is not binding on it; it may appoint or substitute legal counsel; and its obligation to defend ceases upon its payment or tender to an excess insurer of an amount equal to the greater of its covered claim obligation or the applicable policy limits.

Why: Iowa Code 515B.5(1)(d) requires the association to INVESTIGATE CLAIMS BROUGHT AGAINST THE ASSOCIATION AND ADJUST, COMPROMISE, SETTLE, AND PAY COVERED CLAIMS TO THE EXTENT OF THE ASSOCIATION'S OBLIGATIONS ON COVERED CLAIMS AND DENY ALL OTHER CLAIMS. It continues: THE ASSOCIATION MAY REVIEW SETTLEMENTS, RELEASES, AND JUDGMENTS TO WHICH THE INSOLVENT INSURER OR ITS INSUREDS WERE PARTIES TO DETERMINE THE EXTENT TO WHICH SETTLEMENTS, RELEASES, AND JUDGMENTS MAY PROPERLY BE CONTESTED, AND, TO THAT END, ANY UNCONTESTED OR DEFAULT JUDGMENT AGAINST THE INSOLVENT INSURER OR ITS INSURED SHALL NOT BE BINDING ON THE ASSOCIATION. THE ASSOCIATION SHALL HAVE THE RIGHT TO APPOINT OR SUBSTITUTE LEGAL COUNSEL RETAINED TO DEFEND INSUREDS ON COVERED CLAIMS. Read the judgment rule precisely: it is the UNCONTESTED OR DEFAULT judgment that does not bind, not every judgment, so the second option is too narrow and the fourth too wide. Iowa Code 515B.5(1)(c)(2) gives the association THE RIGHT TO PURSUE AND RETAIN FOR ITS OWN ACCOUNT SALVAGE AND SUBROGATION RECOVERABLE ON PAID COVERED CLAIM OBLIGATIONS, and provides that AN OBLIGATION OF THE ASSOCIATION TO DEFEND AN INSURED SHALL CEASE UPON THE ASSOCIATION'S PAYMENT OR TENDER TO AN EXCESS INSURER OF AN AMOUNT EQUAL TO THE LESSER OF THE ASSOCIATION'S COVERED CLAIM OBLIGATION OR THE APPLICABLE POLICY LIMITS - THE LESSER, which the fourth option reverses. The rest of the machinery is in the same subsection: by (1)(e) the association notifies such persons as the commissioner directs under 515B.7(2)(a); by (1)(f) it processes claims through its own employees or through member insurers or others designated as SERVICING FACILITIES, a designation which is subject to the commissioner's approval BUT MAY BE DECLINED BY A MEMBER INSURER; and by (1)(g) it reimburses each servicing facility. Its permissive powers under 515B.5(2) include appearing in, defending and appealing any action, employing or retaining persons, borrowing funds in accord with the plan of operation, suing and being sued, contracting, refunding excess amounts, and requesting commutation of future workers' compensation payments to a present lump sum on the terms the paragraph sets out.

An Iowa surplus lines insurance producer places a risk, and six months later the proportion of the risk assumed by the eligible surplus lines insurer changes. What do the producer's duties under Iowa Code 515I.5 require, including as to records?

1. The producer must promptly deliver the policy or other evidence of insurance; must as soon as reasonably possible deliver a copy of the policy or a certificate to replace it; and must keep records for not less than three years following termination of the policy. A change in the proportion of the risk assumed by the insurer after the evidence of insurance has been delivered requires no further document from the producer, since the insured's contract is with the insurer and the change is a matter between the insurer and its reinsurers rather than a matter for the producer who placed the risk.
2. The producer must promptly deliver the policy or other evidence of insurance; must as soon as reasonably possible deliver a copy of the policy or a certificate to replace it; must on any change in the identity of the insurer promptly issue and deliver an appropriate substitute or endorsement, though a change in the proportion of the risk assumed does not require one; and must keep records for not less than five years following termination of the policy.
3. The producer must deliver the policy within thirty days of placement, no earlier evidence of insurance being permitted; must on any change in the identity of the insurer or the proportion of the risk assumed promptly issue and deliver an appropriate substitute or endorsement showing the current status; and must keep records for not less than five years following termination of the policy.
4. The producer must promptly deliver the policy or, if not then available, a certificate cover note, binder or other evidence of insurance containing information the commissioner specifies by rule; must as soon as reasonably possible deliver a copy of the policy or a certificate to replace it; must on any change in the identity of the insurer or the proportion of the risk assumed promptly issue and deliver an appropriate substitute or endorsement showing the current status; and must keep records for not less than five years following termination of the policy. ✓

Why: Iowa Code 515I.5 sets six duties. Subsection 1 bars the producer from issuing or delivering evidence of insurance, or purporting to insure, UNLESS THE PRODUCER HAS AUTHORITY FROM THE INSURER TO BIND THE RISK TO BE INSURED, OR HAS RECEIVED INFORMATION FROM THE INSURER IN THE REGULAR COURSE OF BUSINESS THAT THE COVERAGE HAS BEEN GRANTED. Subsection 2 requires prompt delivery of the policy OR, IF THE POLICY OR CONTRACT IS NOT THEN AVAILABLE, A CERTIFICATE COVER NOTE, BINDER, OR OTHER EVIDENCE OF INSURANCE containing information the commissioner specifies by rule - so interim evidence is expressly contemplated, which is what the fourth option denies. Subsection 3 requires delivery AS SOON AS IS REASONABLY POSSIBLE of a copy of the policy or a certificate to REPLACE ANY EVIDENCE OF INSURANCE PREVIOUSLY ISSUED, with A COMPLETE RECORD OF ALL POLICY OR CONTRACT INSURING AGREEMENTS, CONDITIONS, EXCLUSIONS, CLAUSES, ENDORSEMENTS, OR ANY OTHER MATERIAL FACTS. Subsection 4 is the one the facts engage: IF, AFTER DELIVERY OF ANY EVIDENCE OF INSURANCE, THERE IS ANY CHANGE IN THE IDENTITY OF THE ELIGIBLE SURPLUS LINES INSURER, OR THE PROPORTION OF THE RISK ASSUMED BY SUCH INSURER, OR ANY OTHER MATERIAL CHANGE IN COVERAGE, the producer SHALL PROMPTLY ISSUE AND DELIVER TO THE INSURED AN APPROPRIATE SUBSTITUTE FOR, OR ENDORSEMENT OF THE ORIGINAL DOCUMENT. The proportion of the risk is named in the statute, which is what the third option removes. Subsection 5 requires A FULL AND TRUE RECORD of each policy placed, available to the commissioner on request, MAINTAINED FOR A PERIOD OF NOT LESS THAN FIVE YEARS FOLLOWING TERMINATION of the policy. Subsection 6 requires the tax report and remittance on the reporting period the commissioner establishes.

Under Iowa Code 522B.11, what happens procedurally when the commissioner declines to renew a licence, and what becomes of the commissioner's authority if the producer then surrenders the licence?

1. The commissioner must notify the applicant or licensee and advise in writing of the reason, and the licensee may request a hearing conducted according to section 507B.6; but once the licence has been surrendered the commissioner's jurisdiction over that former licensee ends, no licence being left to act against.
2. The commissioner need give no reason for a nonrenewal, a licence being a privilege and not a right, though a hearing may be requested under section 507B.6; and the commissioner may go on investigating the former licensee after surrender and impose any penalty the chapter authorises.
3. The commissioner must notify the applicant or licensee and advise in writing of the reason, and the licensee may request a hearing conducted according to section 507B.6; and the commissioner may still investigate and impose a penalty even though the licence has been surrendered or has lapsed by operation of law. ✓
4. The commissioner must notify the applicant or licensee and advise in writing of the reason, and the matter then proceeds directly to the district court for the county where the licensee resides; surrender of the licence during those proceedings abates the case.

Why: Two subsections answer this. Iowa Code 522B.11(2): if the commissioner does not renew or denies an application, the commissioner SHALL NOTIFY THE APPLICANT OR LICENSEE AND ADVISE, IN WRITING, THE LICENSEE OR APPLICANT OF THE REASON, the licensee or applicant MAY REQUEST A HEARING, and A HEARING SHALL BE CONDUCTED ACCORDING TO SECTION 507B.6. And 522B.11(5): the commissioner MAY CONDUCT AN INVESTIGATION OF ANY SUSPECTED VIOLATION OF THIS CHAPTER PURSUANT TO SECTION 507B.6 and may impose any penalty or remedy authorised 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. Handing the licence back is therefore not an escape. Two further pieces of the section are worth noting. By (3) a business entity's licence may be suspended, revoked or refused if the commissioner finds after hearing that an individual licensee's violation WAS KNOWN OR SHOULD HAVE BEEN KNOWN BY A PARTNER, OFFICER, OR MANAGER acting for the entity AND THE VIOLATION WAS NOT REPORTED TO THE COMMISSIONER AND CORRECTIVE ACTION WAS NOT TAKEN. By (6)(a) complaint and investigation files relating to licensee discipline are PRIVILEGED AND CONFIDENTIAL and not subject to discovery or subpoena, though A FINAL WRITTEN DECISION OF THE COMMISSIONER IN A DISCIPLINARY PROCEEDING IS A PUBLIC RECORD. Separately, 522B.11(7)(a) limits a producer's duties and responsibilities to those set out in Sandbulte v. Farm Bureau Mut. Ins. Co. unless the 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.

Iowa Code 515F.15 is headed 'Rate administration'. What does it authorise?

1. Rules for companies to record and report their rates and other information the commissioner determines necessary; rules and statistical plans for recording and reporting loss and expense experience so that the experience of all insurers is available at least annually in the form and detail needed to judge compliance with the rate standards, with power to designate advisory organizations or other agencies to assist in gathering and compiling it and with the compilations being public documents; rules and plans for the interchange of rating plan data; the exchange of information and consultation with officials, insurers and advisory organizations in other states; and rules including definitions of the rate standards. ✓
2. Rules for companies to record and report their rates only; the commissioner may not require the reporting of loss or expense experience, that being confidential to the insurer, and may not designate any advisory organization or other agency to gather or compile the experience of insurers writing in this state.
3. The commissioner to fix the rates that insurers must charge for each class of casualty insurance written in this state, by rule adopted after notice and hearing; and to publish those rates annually as public documents together with the loss and expense experience on which they are based; the commissioner may in addition designate one or more advisory organizations or other agencies to assist in gathering that experience and in making the compilations, may adopt rules and plans for the interchange of the data necessary for the application of rating plans, and may exchange information and experience data with the insurance supervisory officials of other states and consult with them about the application of rating systems in those states and in this one.
4. Rules for recording and reporting loss and expense experience, but the compilations are confidential records and are not public documents; and the commissioner may neither exchange information with the insurance supervisory officials of other states nor consult with them about the application of rating systems.

Why: Iowa Code 515F.15 has four subsections. By (1)(a) the commissioner MAY ADOPT REASONABLE RULES FOR USE BY COMPANIES TO RECORD AND REPORT TO THE COMMISSIONER THEIR RATES AND OTHER INFORMATION DETERMINED BY THE COMMISSIONER TO BE NECESSARY OR APPROPRIATE FOR THE ADMINISTRATION OF THIS CHAPTER. By (1)(b) the commissioner MAY ADOPT REASONABLE RULES AND STATISTICAL PLANS, WHICH SHALL THEN BE USED BY EACH INSURER IN THE RECORDING AND REPORTING OF ITS LOSS AND EXPENSE EXPERIENCE, IN ORDER THAT THE EXPERIENCE OF ALL INSURERS MAY BE MADE AVAILABLE AT LEAST ANNUALLY IN THE FORM AND DETAIL NECESSARY TO AID THE COMMISSIONER IN DETERMINING WHETHER RATING SYSTEMS COMPLY WITH THE STANDARDS SET FORTH IN SECTION 515F.4; THE COMMISSIONER MAY DESIGNATE ONE OR MORE ADVISORY ORGANIZATIONS OR OTHER AGENCIES TO ASSIST IN GATHERING THE EXPERIENCE AND MAKING COMPILATIONS, AND THE COMPILATIONS SHALL BE PUBLIC DOCUMENTS - which is what the fourth option reverses. By (2), REASONABLE RULES AND PLANS MAY BE ADOPTED BY THE COMMISSIONER FOR THE INTERCHANGE OF DATA NECESSARY FOR THE APPLICATION OF RATING PLANS. By (3), IN ORDER TO FURTHER UNIFORM ADMINISTRATION OF RATE REGULATORY LAWS, THE COMMISSIONER AND EVERY INSURER AND ADVISORY ORGANIZATION MAY EXCHANGE INFORMATION AND EXPERIENCE DATA WITH INSURANCE SUPERVISORY OFFICIALS, INSURERS, AND ADVISORY ORGANIZATIONS IN OTHER STATES AND MAY CONSULT WITH THEM WITH RESPECT TO THE APPLICATION OF RATING SYSTEMS. And by (4) the commissioner MAY MAKE REASONABLE RULES NECESSARY, INCLUDING DEFINITIONS OF THE RATE STANDARDS CONTAINED IN SECTION 515F.4. Nothing in the section lets the commissioner fix rates; the chapter regulates rates the insurers make.

A building has $400,000 ACV and 80% coinsurance. The insured carries $240,000 and suffers a total loss. Ignoring deductible, the insurer pays:

1. $240,000 ✓
2. $400,000
3. $180,000
4. $320,000

Why: Required = 80% x $400,000 = $320,000. Penalty factor = $240,000/$320,000 = 0.75, but recovery is also capped at the $240,000 policy limit, so the most paid is $240,000.

Under Iowa Code 505.2, who appoints the Iowa commissioner of insurance, for how long, and on what may the appointment be ended early?

1. The governor alone, without confirmation by the senate, for six years beginning and ending as provided by section 69.19; removable only on impeachment and conviction, and a vacancy is filled for a fresh six-year term.
2. The governor of the state, subject to confirmation by the senate, for a fixed term of four years beginning and ending as provided by section 69.19; removable by the governor at pleasure at any time and for any reason at all.
3. The governor, subject to senate confirmation, for four years; removable by the governor for malfeasance in office or any cause rendering the commissioner ineligible, incapable or unfit. ✓
4. The department of insurance and financial services, for four years; removable by the director of that department at will.

Why: Iowa Code 505.2(1) provides that THE GOVERNOR SHALL APPOINT SUBJECT TO CONFIRMATION BY THE SENATE, A COMMISSIONER OF INSURANCE, WHO SHALL BE SELECTED SOLELY WITH REGARD TO QUALIFICATIONS AND FITNESS TO DISCHARGE THE DUTIES OF THIS POSITION, DEVOTE THE ENTIRE TIME TO SUCH DUTIES, AND SERVE FOR FOUR YEARS BEGINNING AND ENDING AS PROVIDED BY SECTION 69.19. THE GOVERNOR MAY REMOVE THE COMMISSIONER FOR MALFEASANCE IN OFFICE, OR FOR ANY CAUSE THAT RENDERS THE COMMISSIONER INELIGIBLE, INCAPABLE, OR UNFIT TO DISCHARGE THE DUTIES OF THE OFFICE. Removal is FOR CAUSE, and the causes are named - which is what the third option attacks. Two further points sit in the same section: by (2) a vacancy is filled FOR THE UNEXPIRED PORTION OF THE REGULAR TERM, not for a fresh four years, and by (3) the commissioner ALSO SERVES AS THE DIRECTOR OF THE DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES PURSUANT TO SECTION 546.2.

An Iowa driver was cited and had her plates and registration receipt removed. She now produces to the clerk of court, before her court date, proof that coverage was in effect when she was stopped. Under Iowa Code 321.20B, what happens next?

1. She shall be given a receipt indicating that the proof was provided, and the county treasurer of the county in which the vehicle is registered shall thereupon return the licence plates and the registration receipt that the peace officer removed at the roadside, no fee being payable because the driver has shown that she was insured at the time she was stopped and cited by the officer.
2. She shall be given a receipt indicating that the proof was provided; she provides a copy of the receipt to the county treasurer of the county in which the motor vehicle is registered; and the owner shall be assessed a fifteen dollar administrative fee by the county treasurer, who shall issue new licence plates and registration to the person after payment of the fee. ✓
3. She shall be given a receipt, and must then apply to the court for an order directing the county treasurer to issue new plates; the court may make the order on payment of a fifteen dollar administrative fee into court, and may refuse it where the driver has been cited for the same violation on a previous occasion within the preceding twelve months.
4. She shall be given a receipt indicating that the proof was provided, and may thereafter drive the vehicle for up to forty-eight hours while she arranges for new plates; the county treasurer shall issue the new plates and registration without charge, the fifteen dollar administrative fee being payable only by a person who was unable to show that coverage was in effect at the time of the stop.

Why: Iowa Code 321.20B(4)(b)(1) applies to AN OWNER OR DRIVER WHO PRODUCES TO THE CLERK OF COURT, PRIOR TO THE DATE OF THE INDIVIDUAL'S COURT APPEARANCE AS INDICATED ON THE CITATION, PROOF THAT FINANCIAL LIABILITY COVERAGE WAS IN EFFECT FOR THE MOTOR VEHICLE AT THE TIME THE PERSON WAS STOPPED AND CITED, OR, IF THE DRIVER IS NOT THE OWNER OF THE MOTOR VEHICLE, PROOF THAT LIABILITY COVERAGE WAS IN EFFECT FOR THE DRIVER WITH RESPECT TO THE MOTOR VEHICLE BEING DRIVEN AT THE TIME THE DRIVER WAS STOPPED AND CITED, IN THE SAME MANNER AS IF THE MOTOR VEHICLE WERE OWNED BY THE DRIVER. Such a person SHALL BE GIVEN A RECEIPT INDICATING THAT SUCH PROOF WAS PROVIDED. Where the citation was issued under (4)(a)(3) - plates removed but no impoundment - subparagraph (1)(a) applies: THE OWNER OR DRIVER SHALL PROVIDE A COPY OF THE RECEIPT TO THE COUNTY TREASURER OF THE COUNTY IN WHICH THE MOTOR VEHICLE IS REGISTERED AND THE OWNER SHALL BE ASSESSED A FIFTEEN DOLLAR ADMINISTRATIVE FEE BY THE COUNTY TREASURER WHO SHALL ISSUE NEW LICENSE PLATES AND REGISTRATION TO THE PERSON AFTER PAYMENT OF THE FEE. Two points defeat the second option: the plates were DELIVERED FOR DESTRUCTION by the officer under (4)(a)(3)(a), so there is nothing to give back and NEW plates must be issued; and the fifteen dollar fee is payable even by the person who was insured all along. No court order is needed - the route runs through the clerk of court for the receipt and the county treasurer for the plates.

A competitor sues the insured alleging the insured's advertisement infringed its slogan. This falls under:

1. Coverage B — Personal and Advertising Injury ✓
2. Coverage A, treating the slogan as tangible property that was damaged
3. A fidelity bond, because copying the slogan was a dishonest act
4. Coverage C, which pays medical expenses without regard to fault

Why: Advertising injury offenses such as use of another's advertising idea or slogan are covered under Coverage B.

An Iowa producer wants a customer to give up the underinsured motorist coverage. He hands her the application, which has a rejection paragraph among the questions about her vehicles. Under Iowa Code 516A.1, is a signature there good enough?

1. Yes. The section requires only that the rejection be in writing and signed by the named insured; where on the paperwork the signature appears is a matter of the insurer's own practice and of no concern to the statute, provided the named insured can be shown to have read and understood the paragraph before signing it.
2. No. A rejection of any of the coverage this chapter requires must be made on a form prescribed by the commissioner of insurance and filed with the commissioner within thirty days of the date on which it is signed by the named insured, and no other form of rejection is effective in this state.
3. No. The rejection must be by written rejection signed by the named insured, and if it is made on a form or document furnished by an insurance company or insurance producer it shall be on a separate sheet of paper which contains only the rejection and information directly related to it. ✓
4. Yes, provided the producer also gives the customer a written explanation of what she is giving up and keeps a copy of that explanation in the agency's file for three years; the separate sheet requirement applies only where the rejection is of all of the coverage rather than of one of the two parts of it.

Why: Iowa Code 516A.1(2) sets out two requirements and the second is the one this item turns on. The rejection must be BY WRITTEN REJECTIONS SIGNED BY THE NAMED INSURED. Then: IF REJECTION IS MADE ON A FORM OR DOCUMENT FURNISHED BY AN INSURANCE COMPANY OR INSURANCE PRODUCER, IT SHALL BE ON A SEPARATE SHEET OF PAPER WHICH CONTAINS ONLY THE REJECTION AND INFORMATION DIRECTLY RELATED TO IT. Three points follow. The separate-sheet rule bites whenever the document came from the company or the producer, which is the ordinary case. The sheet must contain ONLY the rejection and information DIRECTLY RELATED TO IT, so a rejection buried among vehicle questions on an application does not comply. And the rule applies to any of the three rejections permitted by the subsection, not only to a rejection of the whole, which is what the fourth option supposes. Nothing in the subsection requires a form prescribed by the commissioner or a filing with the commissioner; what the commissioner approves under 516A.1(1) is the form and provisions of the COVERAGE.

An Iowa public adjuster is engaged on a hail claim that is not a catastrophic disaster, and on a second file the insurer commits in writing to pay the policy limit four days after the loss was reported. What does Iowa Code 522C.10 allow him to charge in each?

1. On the first, a reasonable fee not exceeding ten percent of all claim payments approved by the insurer, fifteen percent being the cap for a catastrophic disaster claim settlement, the larger share belonging to the harder work; on the second, because the insurer paid or committed in writing to pay the policy limit no later than five calendar days after the loss was reported, only reasonable compensation based on the time he spent on the claim and the expenses he incurred, running until the date of payment or of the written commitment to pay.
2. On the first, a reasonable fee not exceeding fifteen percent of all claim payments approved by the insurer, ten percent being the cap for a catastrophic disaster claim settlement; on the second, because the insurer paid or committed in writing to pay the policy limit no later than five calendar days after the loss was reported, only reasonable compensation based on time spent and expenses incurred until the date of payment or written commitment, and he must inform the insured that the total amount of loss claimed may not be agreed to by the insurer. ✓
3. On the first, any fee the contract states, the section requiring only that the exact percentage be written into the contract and leaving its size to the bargain between the adjuster and the insured; on the second, his ordinary contractual percentage, since the insurer's prompt commitment to pay the policy limit is the result the insured wanted and does not cut down what the adjuster may charge for obtaining it.
4. On the first, a reasonable fee not exceeding fifteen percent of all claim payments approved by the insurer, ten percent being the cap for a catastrophic disaster claim settlement; on the second, his ordinary contractual percentage, because the reduction to time and expenses applies only where the insurer pays the policy limit before the public adjuster has been engaged at all.

Why: Iowa Code 522C.10(1)(a)(8) provides that A PUBLIC ADJUSTER MAY CHARGE A REASONABLE FEE THAT SHALL NOT EXCEED ANY OF THE FOLLOWING: (a) FIFTEEN PERCENT OF ALL CLAIM PAYMENTS APPROVED BY THE INSURER FOR ANY NONCATASTROPHIC DISASTER INSURANCE CLAIM SETTLEMENT. (b) TEN PERCENT OF ALL CLAIM PAYMENTS APPROVED BY THE INSURER FOR ANY CATASTROPHIC DISASTER INSURANCE CLAIM SETTLEMENT. The LOWER cap belongs to the CATASTROPHIC claim, which is the opposite of what instinct suggests and what the second option says: the harder the market conditions for the insured, the less the adjuster may take. CATASTROPHIC DISASTER is defined at 522C.2(4) by five cumulative effects - a large number of deaths or injuries, extensive damage to facilities that provide and sustain human needs, an overwhelming demand on state and local response resources, a severe long-term effect on general economic activity, and a severe effect on state, local and private sector capabilities - and includes a presidential major disaster declaration or a gubernatorial state of disaster emergency proclamation. So the fee is capped, which is what the third option denies. Iowa Code 522C.10(1)(a)(9) adds that COMPENSATION FOR ANY REOPENED OR SUPPLEMENTAL CLAIM MAY NOT EXCEED THE LIMITATIONS SET FORTH IN THE CONTRACT, and (10) that the contract must state THAT THE INSURED HAS THE RIGHT TO AGREE TO OR REJECT A LOSS SETTLEMENT EVEN IF THE PUBLIC ADJUSTER OBJECTS TO THE INSURED'S DECISION. Iowa Code 522C.10(2) supplies the second answer: IF THE INSURER, NO LATER THAN FIVE CALENDAR DAYS AFTER THE DATE ON WHICH THE INSURED'S LOSS IS REPORTED TO THE INSURER, EITHER PAYS OR COMMITS IN WRITING TO PAY TO THE INSURED THE POLICY LIMIT, the public adjuster shall (a) INFORM THE INSURED THAT THE TOTAL AMOUNT OF LOSS CLAIMED BY THE INSURED MAY NOT BE AGREED TO BY THE INSURER and (b) ONLY BE ENTITLED TO REASONABLE COMPENSATION FROM THE INSURED FOR SERVICES PROVIDED ON BEHALF OF THE INSURED BASED ON THE TIME SPENT ON THE CLAIM, AND THE EXPENSES INCURRED, UNTIL THE DATE THE INSURER PAYS THE CLAIM OR PROVIDES THE INSURED WITH A WRITTEN COMMITMENT. Nothing in the subsection turns on whether the adjuster had already been engaged, which is what the fourth option invents.

A peace officer in Iowa stops a car registered in Nebraska driven by a Nebraska resident who cannot produce proof of coverage. Under Iowa Code 321.20B, what may the officer do, and what happens if proof is later produced?

1. The officer has the same four options as for an Iowa-registered vehicle, including removal of the licence plates and the registration receipt and impoundment of the motor vehicle; and proof produced later to the clerk of court secures the return of the plates and the registration receipt on payment of a fifteen dollar administrative fee to the county treasurer of the county in which the vehicle was stopped, the citation itself standing whether or not proof is afterwards produced, and the costs of the action being assessed against the county rather than against the nonresident defendant named on the citation who has been shown to have been insured all along.
2. The officer shall issue a citation in every case, a warning memorandum being available only for a motor vehicle registered in this state; and proof produced later to the clerk of court goes to the penalty the court imposes rather than to the citation itself, which cannot be dismissed once it has been issued to a nonresident driver.
3. The officer shall issue a warning memorandum to the driver or issue a citation; and an owner or driver who produces to the clerk of court, before the date of the court appearance indicated on the citation, proof that the coverage was in effect for the vehicle at the time of the stop - or, if the driver is not the owner, proof that liability coverage was in effect for the driver with respect to the vehicle in the same manner as if it were owned by the driver - shall be given a receipt indicating that proof was provided, and the citation shall be dismissed by the court, which shall assess the costs of the action against the county in which the citation was issued, the defendant having been shown not to have been in breach of the section at the time of the stop.
4. The officer shall issue a warning memorandum to the driver or issue a citation; and an owner or driver who produces to the clerk of court, before the date of the court appearance indicated on the citation, proof that the coverage was in effect for the vehicle at the time of the stop - or, if the driver is not the owner, proof that liability coverage was in effect for the driver with respect to the vehicle in the same manner as if it were owned by the driver - shall be given a receipt indicating that proof was provided, and the citation shall be dismissed by the court, which shall assess the costs of the action against the defendant named on the citation. ✓

Why: Iowa Code 321.20B(5) deals with the out-of-state vehicle and the nonresident driver, and it gives the officer TWO options rather than four: IF THE MOTOR VEHICLE IS NOT REGISTERED IN THIS STATE AND THE DRIVER IS A NONRESIDENT, THE PEACE OFFICER SHALL DO ONE OF THE FOLLOWING: (a) ISSUE A WARNING MEMORANDUM TO THE DRIVER. (b) ISSUE A CITATION. Removing plates and impounding are not available here, which is what the second option assumes. Paragraph (b) then supplies the cure: AN OWNER OR DRIVER WHO PRODUCES TO THE CLERK OF COURT PRIOR TO THE DATE OF THE PERSON'S COURT APPEARANCE AS INDICATED ON THE CITATION PROOF THAT THE FINANCIAL LIABILITY COVERAGE WAS IN EFFECT FOR THE MOTOR VEHICLE AT THE TIME THE PERSON WAS STOPPED AND CITED, OR IF THE DRIVER IS NOT THE OWNER OF THE MOTOR VEHICLE, PROOF THAT LIABILITY COVERAGE WAS IN EFFECT FOR THE DRIVER WITH RESPECT TO THE MOTOR VEHICLE BEING DRIVEN AT THE TIME THE DRIVER WAS STOPPED AND CITED IN THE SAME MANNER AS IF THE MOTOR VEHICLE WERE OWNED BY THE DRIVER, SHALL BE GIVEN A RECEIPT INDICATING THAT PROOF WAS PROVIDED, AND THE CITATION ISSUED SHALL BE DISMISSED BY THE COURT. UPON DISMISSAL, THE COURT OR CLERK OF COURT SHALL ASSESS THE COSTS OF THE ACTION AGAINST THE DEFENDANT NAMED ON THE CITATION. The sting is in the last sentence: the citation goes, but the costs are assessed AGAINST THE DEFENDANT, not against the county - the same rule as for a resident under 321.20B(4)(c).

Iowa Code 515D.12 confers an immunity. Who is protected, and in respect of what?

1. The commissioner of insurance, any employee of the division, any insurer and its authorized representatives, agents and employees, and any firm, person or corporation furnishing the insurer information as to reasons for cancellation or intent not to renew, in respect of any statement in a notice of cancellation or intent not to renew or in any other communication, oral or written, specifying those reasons, and any information provided or evidence submitted at a hearing. ✓
2. The commissioner of insurance and any employee of the division only, in respect of the conduct of a hearing under this chapter and of the confidentiality of the information obtained in the course of it; an insurer, its authorized representatives, its agents and the firms and persons who supply it with underwriting information all remain answerable at law for anything they say about the reason for a cancellation or a nonrenewal, and must justify what they said in the ordinary way if they are sued upon it.
3. Any insurer and its authorized representatives, agents and employees, in respect of any statement made in a notice of cancellation or of intent not to renew or in any other communication specifying the reasons for it, but only where the statement was made in good faith and without malice and only where the insurer can show that it had reasonable grounds for the reason it gave; the immunity does not extend to the commissioner, to any employee of the division, or to a firm, person or corporation which merely furnishes information to the insurer.
4. The commissioner of insurance, any employee of the division, any insurer and its authorized representatives, agents and employees, and any firm, person or corporation furnishing information to the insurer, but only in respect of statements made at a hearing conducted under this chapter; a statement in the notice of cancellation itself is outside the immunity, because the notice of cancellation is a communication addressed to the insured rather than a step taken in the hearing process before the commissioner.

Why: Iowa Code 515D.12 provides that THERE SHALL BE NO LIABILITY ON THE PART OF, AND NO CAUSE OF ACTION OF ANY NATURE SHALL ARISE AGAINST THE COMMISSIONER OF INSURANCE OR ANY EMPLOYEE OF THE DIVISION OR AGAINST ANY INSURER, ITS AUTHORIZED REPRESENTATIVES, ITS AGENTS, ITS EMPLOYEES, OR AGAINST ANY FIRM, PERSON, OR CORPORATION FURNISHING TO THE INSURER INFORMATION AS TO REASONS FOR CANCELLATION OR INTENT NOT TO RENEW, FOR ANY STATEMENT MADE BY ANY OF THEM IN ANY WRITTEN NOTICE OF CANCELLATION OR NOTICE OF INTENT NOT TO RENEW OR IN ANY OTHER COMMUNICATION, ORAL OR WRITTEN, SPECIFYING THE REASONS FOR CANCELLATION OR INTENT NOT TO RENEW, OR FOR ANY INFORMATION PROVIDED OR EVIDENCE SUBMITTED AT ANY HEARINGS CONDUCTED IN CONNECTION WITH REASONS FOR CANCELLATION OR INTENT NOT TO RENEW. The list of protected persons is long and deliberate: it reaches past the insurer to THE INFORMATION SUPPLIER, which is what makes the chapter's statement-of-reason machinery workable at all. The reach in subject matter is equally wide - the notice, ANY OTHER COMMUNICATION, ORAL OR WRITTEN, and the hearing material - so the fourth option's confinement to the hearing is wrong. Note what the section does NOT say: it sets no good faith or absence of malice condition, so the qualifier in the third option is not in the text.

An adjuster, an appraiser and a benevolent association operating under chapter 512A each say the Iowa trade practices chapter does not reach them. Whom does 'person' cover in Iowa Code 507B.2?

1. Only an insurer holding a certificate of authority in this state, together with a reciprocal exchange or interinsurer transacting business here; the chapter regulates companies rather than the individuals who work for or with them, so an appraiser, an umpire or an adjuster answers instead to the producer licensing chapter and to the contract under which each is engaged.
2. Any individual or entity engaged in the business of insurance, including insurance producers, but expressly excluding appraisers, umpires and adjusters, and excluding corporations operating under chapter 514 and benevolent associations under chapter 512A, whose conduct is regulated under the chapters that apply to each of them rather than under this chapter.
3. Any individual, corporation, association, partnership, reciprocal exchange, interinsurer, fraternal beneficiary association and any other legal entity engaged in the business of insurance, including insurance producers, appraisers, umpires and adjusters, and corporations operating under chapter 514 and benevolent associations under chapter 512A. ✓
4. Any individual, corporation, association, partnership, reciprocal exchange, interinsurer or fraternal beneficiary association engaged in the business of insurance, including producers, appraisers, umpires and adjusters, and additionally any policyholder, applicant or claimant who deals with such an entity, so that the chapter's prohibitions bind both sides of an insurance transaction equally.

Why: Iowa Code 507B.2(1) is deliberately wide. PERSON SHALL MEAN ANY INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP, RECIPROCAL EXCHANGE, INTERINSURER, FRATERNAL BENEFICIARY ASSOCIATION, AND ANY OTHER LEGAL ENTITY ENGAGED IN THE BUSINESS OF INSURANCE, INCLUDING INSURANCE PRODUCERS, APPRAISERS, UMPIRES, AND ADJUSTERS. It then adds ANY CORPORATION OPERATING UNDER THE PROVISIONS OF CHAPTER 514 AND ANY BENEVOLENT ASSOCIATION AS DEFINED AND OPERATED UNDER CHAPTER 512A, and provides that for the purposes of the chapter those two SHALL BE DEEMED TO BE ENGAGED IN THE BUSINESS OF INSURANCE. Because the definition reaches individuals as well as companies, a producer or an adjuster commits an unfair trade practice in their own right, and 507B.7(1)(b) allows a licence to be suspended or revoked for it. The definition does not extend to the customer: the chapter's prohibitions bind the insurance side. Two other definitions complete the section - COMMISSIONER means the commissioner of insurance of this state, and INSURANCE POLICY is defined at 507B.2(3).

An Iowa insurer files rates for credit personal property insurance. Under Iowa Code 515F.4A, when are the benefits reasonable in relation to the premium charged?

1. When the premium rate charged develops, or may reasonably be expected to develop, a loss ratio of not less than seventy-five per cent; the commissioner has no power to designate any lower loss ratio, that figure being fixed by the section itself for every insurer writing this class of business in the state, whatever allowance the insurer may need for its catastrophe provision, its general and administrative expenses, its acquisition expenses, creditor compensation, premium taxes, licences, fees, assessments and profit.
2. When the rate has been filed with the commissioner and the thirty-day waiting period prescribed by section 515F.5 has expired without a disapproval; the section imposes no loss ratio requirement of its own upon credit personal property insurance and no benefit-to-premium test of any kind, but applies the general standards of section 515F.4, and those standards alone, to that class of business in exactly the same way as to any other casualty rate written upon a risk or an operation that is located in this state.
3. When the premium rate charged develops, or may reasonably be expected to develop, a loss ratio of not less than fifty per cent, or such lower loss ratio as the commissioner designates to afford a reasonable allowance for actual and expected loss experience including a reasonable catastrophe provision, general and administrative expenses, reasonable acquisition expenses, reasonable creditor compensation, investment income, premium taxes, licences, fees, assessments and reasonable insurer profit. ✓
4. When the premium rate charged develops a loss ratio of not less than fifty per cent, or such higher loss ratio as the commissioner designates by order; the section applies that requirement to every kind of credit insurance written in this state and to every personal risk.

Why: Iowa Code 515F.4A provides that BENEFITS PROVIDED BY CREDIT PERSONAL PROPERTY INSURANCE SHALL BE REASONABLE IN RELATION TO THE PREMIUM CHARGED, and that THIS REQUIREMENT IS SATISFIED IF THE PREMIUM RATE CHARGED DEVELOPS OR MAY REASONABLY BE EXPECTED TO DEVELOP A LOSS RATIO OF NOT LESS THAN FIFTY PERCENT OR SUCH LOWER LOSS RATIO AS DESIGNATED BY THE COMMISSIONER TO AFFORD A REASONABLE ALLOWANCE FOR ACTUAL AND EXPECTED LOSS EXPERIENCE INCLUDING A REASONABLE CATASTROPHE PROVISION, GENERAL AND ADMINISTRATIVE EXPENSES, REASONABLE ACQUISITION EXPENSES, REASONABLE CREDITOR COMPENSATION, INVESTMENT INCOME, PREMIUM TAXES, LICENSES, FEES, ASSESSMENTS, AND REASONABLE INSURER PROFIT. Three points decide the item. The figure is fifty per cent, not seventy-five. The commissioner may designate a LOWER ratio, not a higher one, and the list of allowances explains why - the lower ratio exists to make room for those costs. And the section is confined to CREDIT PERSONAL PROPERTY INSURANCE, so the fourth option's extension to every kind of credit insurance and every personal risk is wrong. Nothing in the section displaces 515F.4; it adds a benefit-to-premium test for one narrow class on top of the general rate standards.

An Iowa insured and the company cannot agree on the actual cash value of a fire-damaged building. Under the appraisal clause of the standard fire policy, how is the disagreement resolved and who pays?

1. On the written demand of either, each selects a competent and disinterested appraiser and notifies the other of the appraiser selected within twenty days; the appraisers select an umpire, and failing for fifteen days to agree they may ask a judge of a court of record where the property is located to select one; an itemised written award of any two determines the amount; each appraiser is paid by the party selecting, and the expenses of appraisal and umpire are shared equally. ✓
2. On the written demand of the insured only, each party selects a competent and disinterested appraiser and notifies the other of the appraiser selected within twenty days; the company then selects the umpire; an award of the umpire alone, filed with the company, determines the amount of actual cash value and loss; and the company pays the whole cost of the appraisal, including the fees of both appraisers and of the umpire it selected, the whole of the appraisal being a cost of adjusting the claim.
3. On the written demand of either, each selects a competent and disinterested appraiser and notifies the other of the appraiser selected within thirty days; the appraisers select an umpire, and failing to agree upon one within thirty days the commissioner of insurance appoints the umpire; an itemised written award of any two of the three determines the amount of actual cash value and loss; and the party whose figure the award rejects pays the whole cost of the appraisal and of the umpire.
4. The disagreement is resolved by suit and by nothing else, the standard form prescribed for this state containing no appraisal clause at all; the insured must commence the action within twelve months next after inception of the loss, must plead the actual cash value claimed and prove it by expert evidence at trial, and each party bears its own costs of the action unless the court orders otherwise, no provision of the prescribed form allowing either party to compel a valuation out of court.

Why: The clause in Iowa Code 515.109(6)(a) headed APPRAISAL applies IN CASE THE INSURED AND THIS COMPANY SHALL FAIL TO AGREE AS TO THE ACTUAL CASH VALUE OR THE AMOUNT OF LOSS - value or quantum, not coverage, which is the limit of what an appraisal decides. THEN, ON THE WRITTEN DEMAND OF EITHER, EACH SHALL SELECT A COMPETENT AND DISINTERESTED APPRAISER AND NOTIFY THE OTHER OF THE APPRAISER SELECTED WITHIN TWENTY DAYS OF SUCH DEMAND. THE APPRAISERS SHALL FIRST SELECT A COMPETENT AND DISINTERESTED UMPIRE; AND FAILING FOR FIFTEEN DAYS TO AGREE UPON SUCH UMPIRE, THEN, ON REQUEST OF THE INSURED OR THIS COMPANY, SUCH UMPIRE SHALL BE SELECTED BY A JUDGE OF A COURT OF RECORD IN THE STATE IN WHICH THE PROPERTY COVERED IS LOCATED. THE APPRAISERS SHALL THEN APPRAISE THE LOSS, STATING SEPARATELY ACTUAL CASH VALUE AND LOSS TO EACH ITEM; AND, FAILING TO AGREE, SHALL SUBMIT THEIR DIFFERENCES, ONLY, TO THE UMPIRE. AN AWARD IN WRITING, SO ITEMIZED, OF ANY TWO WHEN FILED WITH THIS COMPANY SHALL DETERMINE THE AMOUNT OF ACTUAL CASH VALUE AND LOSS. EACH APPRAISER SHALL BE PAID BY THE PARTY SELECTING THE APPRAISER AND THE EXPENSES OF APPRAISAL AND UMPIRE SHALL BE PAID BY THE PARTIES EQUALLY. Four points repay attention: either party may demand it; only the DIFFERENCES go to the umpire; ANY TWO of the three can make the award, so the umpire never decides alone; and the court that selects an umpire is a court where the PROPERTY is located, not where the insurer is domiciled. Nothing in the clause is waived by the process: NO PROVISION, STIPULATION OR FORFEITURE SHALL BE HELD TO BE WAIVED BY ANY REQUIREMENT OR PROCEEDING ON THE PART OF THIS COMPANY RELATING TO APPRAISAL OR TO ANY EXAMINATION PROVIDED FOR HEREIN.

Iowa Code 515.101 protects certain conditions from its own anti-technicality rule. Which set of subjects does the section list?

1. Other insurance, valid or invalid; vacancy of the insured premises; title or ownership of the property; any lien or encumbrance on the property however it arose; non-payment of premium; assignment or transfer of the policy at any time, whether before or after the loss; removal of the property insured; any change whatever in the occupancy or use of the property; and any misstatement by an insured, whether material or not.
2. Fraud, concealment or misrepresentation of an insured, and nothing else. Every other condition making the policy void before the loss occurs remains subject to the rule that the breach must have contributed to the loss before the insurer may rely on it in an action brought on the policy.
3. Other insurance, valid or invalid; vacancy of the insured premises; title or ownership of the property insured; and fraud, concealment or misrepresentation of an insured. Conditions about voluntary liens, default on a written premium obligation, assignment before loss, removal of the property and a change of occupancy or use are all left inside the contribution rule.
4. Other insurance, valid or invalid; vacancy of the insured premises; title or ownership of the property; voluntary liens or encumbrances within the insured's control; suspension or forfeiture during default on a written premium obligation; assignment or transfer before loss without consent; removal of the property; a change in occupancy or use that makes the risk more hazardous; and fraud, concealment or misrepresentation of an insured. ✓

Why: Iowa Code 515.101(2) provides that a condition or stipulation referring to any of nine subjects SHALL NOT BE CHANGED OR AFFECTED BY THE PROVISIONS OF SUBSECTION 1. They are: (a) ANY OTHER INSURANCE, VALID OR INVALID; (b) VACANCY OF THE INSURED PREMISES; (c) THE TITLE OR OWNERSHIP OF THE PROPERTY INSURED; (d) LIENS OR ENCUMBRANCES ON THE PROPERTY INSURED CREATED BY THE VOLUNTARY ACT OF THE INSURED AND WITHIN THE INSURED'S CONTROL; (e) SUSPENSION OR FORFEITURE OF THE POLICY DURING DEFAULT OR FAILURE TO PAY ANY WRITTEN OBLIGATION GIVEN TO THE INSURANCE COMPANY FOR THE PREMIUM; (f) THE ASSIGNMENT OR TRANSFER OF SUCH POLICY OF INSURANCE BEFORE THE LOSS OCCURS WITHOUT THE CONSENT OF THE INSURANCE COMPANY; (g) THE REMOVAL OF THE PROPERTY INSURED; (h) A CHANGE IN THE OCCUPANCY OR USE OF THE PROPERTY INSURED, IF SUCH CHANGE OR USE MAKES THE RISK MORE HAZARDOUS; and (i) FRAUD, CONCEALMENT, OR MISREPRESENTATION OF AN INSURED. Three of the qualifiers are what the second option strips out, and they matter: the lien must be VOLUNTARY and WITHIN THE INSURED'S CONTROL, the assignment must be BEFORE THE LOSS OCCURS and without consent, and the change of occupancy or use must MAKE THE RISK MORE HAZARDOUS. Because these nine subjects are outside subsection 1, the contribution-to-loss argument is simply unavailable on them - which is why the standard fire policy's vacancy and other-insurance clauses in 515.109(6) work as written.

Vocational rehabilitation benefits under workers' compensation are intended to:

1. Reimburse the employer for the cost of recruiting and training a replacement worker
2. Pay for all of the medical treatment the injured worker receives during the recovery period
3. Permanently replace the worker's lost wages once statutory indemnity benefits are exhausted
4. Help an injured worker retrain or be re-educated to return to gainful employment ✓

Why: Vocational rehabilitation provides retraining, education, or job-placement assistance so an injured worker can return to suitable employment.

The commissioner obtains a cease and desist order against a person under Iowa Code 522B.17 and the person ignores it. What may follow?

1. The commissioner may impose a penalty for contempt directly, without applying to any court, in an amount not less than three thousand dollars but not greater than ten thousand dollars for each violation of the order.
2. The commissioner may petition a court to enforce the order on posting a bond fixed by the court, and the court may then adjudge the person in civil contempt and impose a single civil penalty of ten thousand dollars however many violations of the order are proved against the person.
3. The commissioner's only remedy is to revoke the person's licence under section 522B.11, a cease and desist order carrying no separate sanction for disobedience where the person holds a licence that can be acted against.
4. The commissioner may petition a court to enforce the order, and the court, after notice and opportunity for hearing, may adjudge the person in civil contempt and impose a civil penalty of not less than three thousand dollars but not greater than ten thousand dollars for each violation. ✓

Why: Iowa Code 522B.17(3) says that if a person does not comply, THE COMMISSIONER MAY PETITION A COURT OF COMPETENT JURISDICTION TO ENFORCE THE ORDER. THE COURT SHALL NOT REQUIRE THE COMMISSIONER TO POST A BOND - so the third option has it backwards. IF THE COURT FINDS, AFTER NOTICE AND OPPORTUNITY FOR HEARING, THAT THE PERSON IS NOT IN COMPLIANCE WITH AN ORDER, THE COURT MAY ADJUDGE THE PERSON TO BE IN CIVIL CONTEMPT OF THE ORDER, and MAY IMPOSE A CIVIL PENALTY AGAINST THE PERSON FOR CONTEMPT IN AN AMOUNT NOT LESS THAN THREE THOUSAND DOLLARS BUT NOT GREATER THAN TEN THOUSAND DOLLARS FOR EACH VIOLATION, and may grant any other relief that is just and proper. The band is per violation, and it is the court's to impose, not the commissioner's. The orders themselves come from the two earlier subsections: by (1) an insurer or producer found after hearing to have violated the chapter may be ordered to cease and desist and MAY BE ASSESSED A CIVIL PENALTY PURSUANT TO CHAPTER 507B; by (2) a person found after hearing to have violated the chapter by acting as an insurer's agent, or otherwise selling, soliciting or negotiating insurance, or offering advice, counsel or services with regard to insurance, WHO IS NOT PROPERLY LICENSED may be ordered to cease and desist and MAY BE ASSESSED A CIVIL PENALTY ACCORDING TO THE PROVISIONS OF CHAPTER 507A.

The general rule in Iowa Code 516A.2 opens with an exception. What is excepted?

1. A policy issued to an insured who has rejected the underinsured motor vehicle coverage in writing on a separate sheet of paper; where such a rejection has been made the minimum-limits ceiling has nothing to operate on, and the paragraph is expressed not to apply to a policy of that kind at all.
2. A policy containing both underinsured motor vehicle coverage and uninsured or hit-and-run motor vehicle coverage. The words are EXCEPT WITH RESPECT TO A POLICY CONTAINING BOTH, so where the insured has bought both kinds of protection in the one policy the minimum-limits ceiling does not apply in the way the rest of the paragraph provides. ✓
3. A policy issued by an insurer that has become the subject of insolvency proceedings instituted by the insurance regulatory official of this or any other state; the ceiling is lifted in that case so that the insolvency protection required by the chapter is not cut down by whatever limits the insolvent liability insurer of the tortfeasor had agreed to carry.
4. A policy delivered or issued for delivery outside this state with respect to a motor vehicle principally garaged in this state; such a policy is subject to the law of the state in which it was delivered, and the ceiling stated in this paragraph is expressed not to apply to a policy of that description at all.

Why: Iowa Code 516A.2(1)(a) opens EXCEPT WITH RESPECT TO A POLICY CONTAINING BOTH UNDERINSURED MOTOR VEHICLE COVERAGE AND UNINSURED OR HIT-AND-RUN MOTOR VEHICLE COVERAGE, and only then goes on to the general rule that nothing in the chapter requires the coverages to afford limits in excess of the minimum-limits benchmark. The carve-out is defined by what the POLICY CONTAINS - both kinds of protection together - and by nothing else. It has nothing to do with rejection, with the insolvency of an insurer, or with where the policy was delivered, which are the three false trails in the other options; each of those subjects is dealt with elsewhere in the chapter, at 516A.1(2), 516A.3 and 516A.1(1) respectively. Read with 516A.2(3), which entitles an injured insured covered by more than one policy to recover up to the HIGHEST SINGLE LIMIT available, the shape of the Iowa scheme emerges: a floor set by 516A.1, a ceiling set by 516A.2(1)(a) for the ordinary case, and an express rule for the insured who holds several policies.

An Iowa insured takes out a second automobile policy giving broader coverage on the same vehicle, and her first insurer had a cancellation ground against her before the last renewal but renewed the policy anyway. What do Iowa Code 515D.8 and 515D.9 provide?

1. Where an insured obtains a second policy providing equal or more extensive coverage for a vehicle designated in both, the first policy's coverage of that vehicle may be terminated by failure to renew, but only if the first insurer complies with all the notice provisions of section 515D.7; and renewal is a waiver of any ground for cancellation which the insurer knew of, or with reasonable diligence should have known of, before the effective date of the renewal it granted.
2. Where an insured obtains a second policy providing equal or more extensive coverage for a vehicle designated in both, the first policy is void from inception as to that vehicle as duplicate coverage; and renewal is not a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of renewal, nor with respect to grounds which arise after it.
3. Where an insured obtains a second policy providing equal or more extensive coverage for a vehicle designated in both, the first policy's coverage of that vehicle may be terminated by failure to renew as of the effective time and date of the second policy, whether or not the first insurer complies with all provisions of section 515D.7; and renewal is not a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of renewal. ✓
4. Where an insured obtains a second policy providing more extensive coverage for a vehicle designated in both, the first policy's coverage of that vehicle may be cancelled mid-term as of the effective time and date of the second policy without the notice section 515D.5 requires; and renewal is not a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of renewal.

Why: Iowa Code 515D.8 provides that IF AN INSURED OBTAINS A SECOND POLICY WHICH PROVIDES EQUAL OR MORE EXTENSIVE COVERAGE FOR ANY VEHICLE DESIGNATED IN BOTH POLICIES, THE FIRST POLICY'S COVERAGE OF SUCH VEHICLE MAY BE TERMINATED BY FAILURE TO RENEW AS OF THE EFFECTIVE TIME AND DATE OF THE SECOND POLICY, WHETHER OR NOT THE FIRST POLICY INSURER COMPLIES WITH ALL PROVISIONS OF SECTION 515D.7. Three limits are built in and each is examinable. The second policy must give EQUAL OR MORE EXTENSIVE coverage. What ends is the first policy's coverage OF SUCH VEHICLE, not the whole policy, and it ends BY FAILURE TO RENEW - this is a nonrenewal relief, not a licence to cancel mid-term, which is what the fourth option supposes. And nothing here voids the first policy from inception, which is what the third option supposes; the first policy runs to its expiration date. Iowa Code 515D.9 then provides that RENEWAL OF A POLICY SHALL NOT CONSTITUTE A WAIVER OR ESTOPPEL WITH RESPECT TO GROUNDS FOR CANCELLATION WHICH EXISTED BEFORE THE EFFECTIVE DATE OF RENEWAL. It is a one-sentence section and it says only that: an insurer which renews does not lose a ground it already had.

Under the PAP, the duty to allow the insurer to inspect and appraise the damaged vehicle before its repair or disposal falls under:

1. Part E — Duties After an Accident or Loss ✓
2. Part C, which governs uninsured motorists claims handling
3. Part A general conditions applying to liability claims
4. Part B medical payments

Why: Part E requires the insured to permit the insurer to inspect and appraise the damaged property before repairs or disposal, as part of the post-loss duties.

The principle of utmost good faith (uberrimae fidei) means that:

1. Only the insurer must act honestly, the applicant being free to answer as he sees fit
2. The insured may exaggerate a claim without consequence, since the insurer drafted the wording
3. Both parties are entitled to rely on the honesty and full disclosure of the other ✓
4. The insurer guarantees the insured a profit on any loss the policy covers

Why: Utmost good faith requires both parties to deal honestly and disclose all material facts when forming the contract.

A homeowner's water heater bursts and water damages flooring. Under HO-3, this sudden and accidental discharge of water is:

1. Generally a covered named peril (accidental discharge or overflow of water) ✓
2. Covered only under Section II liability if a guest is injured by the water
3. Subject to a $500 sublimit that applies to all plumbing-related losses
4. Excluded as flood damage, since the exclusion applies to any water that escapes onto floors

Why: Sudden and accidental discharge or overflow of water from a plumbing system is a covered broad-form peril; gradual seepage and flood are excluded.

Under Iowa Code 505.13, what must the Iowa commissioner deliver about insurance companies OTHER THAN life insurance companies, to whom, and by when?

1. A report drawn from the statements those companies are required to file, delivered to the governor on or before the first day of September each year. ✓
2. A report drawn from those same companies' own annual statements, delivered instead to the general assembly of the state on or before 15 January each year.
3. A summary of every examination completed in the year, delivered to the governor by 31 December.
4. Nothing; the annual reporting duty reaches life insurance companies only.

Why: Iowa Code 505.13 provides that THE COMMISSIONER SHALL ANNUALLY CAUSE THE PREPARATION AND PRINTING OF A REPORT TO BE DELIVERED TO THE GOVERNOR. THE REPORT SHALL CONTAIN INFORMATION FROM THE STATEMENTS REQUIRED OF INSURANCE COMPANIES, OTHER THAN LIFE INSURANCE COMPANIES, ORGANIZED OR DOING BUSINESS IN THE STATE. THE REPORTS SHALL BE DELIVERED ON OR BEFORE THE FIRST DAY OF SEPTEMBER EACH YEAR. The report is built out of the annual statements the companies have already filed, not out of examinations - which is what the third option attacks. Iowa splits this duty in two, and the LIFE side is section 505.12, which requires a report to the governor before the same first day of September on the general conduct and condition of the life insurance companies doing business in the state, including an aggregate of the estimated value of all outstanding policies. That section is left to the life and health module and is not keyed here.

The policy section that defines the rights and duties of both parties, such as duties after a loss and cancellation, is the:

1. Insuring agreement
2. Declarations
3. Conditions ✓
4. Definitions

Why: The conditions section spells out the rules, rights, and duties governing how the policy operates for both insurer and insured.

What is the plan of operation under Iowa Code 515B.6, what must it contain, and what happens if the association does not produce one?

1. The commissioner writes it and the association administers it; all member insurers must comply with it. If the association objects to any provision it may appeal to the commissioner within ninety days. Among other things the plan must establish procedures for performing the association's duties and powers, for managing its assets, for reimbursing directors and for filing claims, and it must fix the amount of every assessment the association may levy, that being a matter which the chapter treats as far too important to be left to the board of directors of the association itself, whose own members are selected by the very insurers on whom the assessment would have to fall when it was levied.
2. The association submits it to the commissioner and it becomes effective on approval; all member insurers must comply with it. If the association fails to submit a suitable plan within thirty days of the chapter's effective date the commissioner shall adopt rules, without notice or opportunity for hearing, and those rules continue in force permanently, a plan afterwards submitted by the association and approved by the commissioner being unable to supersede them. Among other things the plan must provide that a member insurer aggrieved by a final action or decision of the association may appeal to the commissioner within ninety days after the date of the action or decision complained of.
3. The association submits it to the commissioner with any amendments needed to assure fair, reasonable and equitable administration, and it becomes effective on the commissioner's written approval; all member insurers must comply with it. If the association fails to submit a suitable plan within ninety days the commissioner shall adopt rules after notice and opportunity for hearing. The plan may delegate any of the association's duties and powers, including the power to assess member insurers and the power to borrow funds, to a person performing similar functions in two or more states, the chapter placing no duty or power beyond the reach of such a delegation once the commissioner has approved the plan which makes it.
4. The association submits it to the commissioner with any amendments needed to assure fair, reasonable and equitable administration, and it becomes effective on the commissioner's written approval; all member insurers must comply with it. If the association fails to submit a suitable plan within ninety days of the chapter's effective date, or later fails to submit suitable amendments, the commissioner shall, after notice and opportunity for hearing, adopt rules which continue in force until modified or superseded by an approved plan. Among other things the plan must provide that a member aggrieved by a final action of the association may appeal to the commissioner within thirty days. ✓

Why: Iowa Code 515B.6(1)(a) requires the association to SUBMIT A PLAN OF OPERATION TO THE COMMISSIONER, TOGETHER WITH ANY AMENDMENTS NECESSARY OR SUITABLE TO ASSURE THE FAIR, REASONABLE, AND EQUITABLE ADMINISTRATION OF THE ASSOCIATION, and provides that the plan and any amendments SHALL BECOME EFFECTIVE UPON APPROVAL IN WRITING BY THE COMMISSIONER. The association writes it and the commissioner approves it, which is the reverse of the second option. By 515B.6(1)(b), if the association FAILS TO SUBMIT A SUITABLE PLAN OF OPERATION WITHIN NINETY DAYS FOLLOWING THE EFFECTIVE DATE OF THIS CHAPTER or later fails to submit suitable amendments, the commissioner SHALL, AFTER NOTICE AND OPPORTUNITY FOR HEARING, ADOPT AND PROMULGATE REASONABLE RULES, and SUCH RULES SHALL CONTINUE IN FORCE UNTIL MODIFIED BY THE COMMISSIONER OR SUPERSEDED BY A PLAN SUBMITTED BY THE ASSOCIATION AND APPROVED BY THE COMMISSIONER - so the rules are a stopgap, not a permanent replacement, and they follow notice and hearing. 515B.6(2) provides that ALL MEMBER INSURERS SHALL COMPLY WITH THE PLAN OF OPERATION. 515B.6(3) lists nine required contents, among them procedures for performing all the duties and powers under 515B.5, for managing assets, for reimbursing directors under 515B.4, for filing claims and acceptable proof of covered claims - with NOTICE OF CLAIMS TO THE RECEIVER OR LIQUIDATOR OF THE INSOLVENT INSURER DEEMED NOTICE TO THE ASSOCIATION - regular meeting times, financial records, submission of board selections, and paragraph (g), which requires the plan to PROVIDE THAT ANY MEMBER INSURER AGGRIEVED BY ANY FINAL ACTION OR DECISION OF THE ASSOCIATION MAY APPEAL TO THE COMMISSIONER WITHIN THIRTY DAYS AFTER THE ACTION OR DECISION. That thirty days is a third distinct thirty-day period in this chapter and belongs to an appeal, not to the liquidation window in 515B.5(1)(a) or the assessment notice in 515B.5(1)(c)(1). Finally 515B.6(4) permits delegation to a multistate organisation - but expressly NOT of the powers in 515B.5(1)(c) and 515B.5(2)(c), which are the power to assess and the power to borrow, so the fourth option delegates the two things that cannot be delegated.

A hit-and-run accident with an unidentified driver who flees is typically covered under which PAP part?

1. Part A — Liability
2. Part B — Medical Payments only
3. Part C — Uninsured Motorists ✓
4. Part D — Collision only

Why: An unidentified hit-and-run vehicle is treated as an uninsured motor vehicle, so bodily injury is addressed under Part C — Uninsured Motorists.

A lender refuses to accept the insurance policy an Iowa borrower has arranged on the mortgaged property. Under Iowa Code 507B.5, when is that disapproval deemed unreasonable?

1. Whenever the borrower's insurer holds a certificate of authority in this state, an admitted insurer's policy being one the lender must accept without further inquiry into its terms.
2. Whenever the disapproval is not based solely on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer; and those standards must not discriminate against any particular type of insurer, nor call for disapproval because the policy contains coverage in addition to that required. ✓
3. Whenever the lender cannot show that accepting the policy would have exposed it to a material risk of loss on the security; the burden of justifying a refusal rests on the lender, which must relate its objection to the value of the property and to the extent of the coverage the borrower has actually bought, standards uniformly applied being no answer in themselves.
4. Whenever the disapproval is not based on reasonable standards uniformly applied; but a lender may always disapprove a policy that contains coverage in addition to that which the lender requires, since the additional coverage forms no part of the security for the loan the lender bargained for at the time when it first agreed to advance the money to the borrower on that security.

Why: Iowa Code 507B.5(1)(b) forbids a person to UNREASONABLY DISAPPROVE THE INSURANCE POLICY PROVIDED BY A BORROWER FOR THE PROTECTION OF THE PROPERTY SECURING THE CREDIT OR LIEN, and 507B.5(3) then tells us what unreasonable means: SUCH DISAPPROVAL SHALL BE DEEMED UNREASONABLE IF IT IS NOT BASED SOLELY ON REASONABLE STANDARDS UNIFORMLY APPLIED, RELATING TO THE EXTENT OF COVERAGE REQUIRED AND THE FINANCIAL SOUNDNESS AND THE SERVICES OF AN INSURER. Two express limits follow: SUCH STANDARDS SHALL NOT DISCRIMINATE AGAINST ANY PARTICULAR TYPE OF INSURER, NOR SHALL SUCH STANDARDS CALL FOR THE DISAPPROVAL OF AN INSURANCE POLICY BECAUSE SUCH POLICY CONTAINS COVERAGE IN ADDITION TO THAT REQUIRED. The fourth option reverses the second of those. Note the word SOLELY: a lender that applies proper standards and something else besides has not brought itself within the safe harbour. Two subsections round the section off. By (4), IF A VIOLATION OF THIS SECTION IS FOUND, THE PERSON IN VIOLATION SHALL BE SUBJECT TO THE SAME PROCEDURES AND PENALTIES AS ARE APPLICABLE TO OTHER PROVISIONS OF THIS CHAPTER - so a lender who is not in the insurance business at all is answerable through 507B.6 and 507B.7. And by (5), PERSON for the purposes of this section INCLUDES ANY INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP, OR OTHER LEGAL ENTITY, a definition that does not require the entity to be engaged in the business of insurance at all.

In the Homeowners program, the loss assessment additional coverage is most relevant to which insured?

1. A renter under an HO-4 form, whose landlord may pass building repair costs through as added rent
2. A landlord who insures a rented dwelling and bills tenants for damage to common hallways
3. The owner of a vacant home awaiting sale
4. A condominium or association member who may be assessed for shared property damage ✓

Why: Loss assessment coverage helps pay an insured's share of an assessment charged by a homeowners or condo association for a covered loss to commonly owned property.

In the Homeowners policy, the term 'insured location' generally includes all of the following EXCEPT:

1. Other premises acquired during the policy period for use as a residence
2. The residence premises
3. A commercial warehouse rented to a third party ✓
4. Vacant land owned by the insured

Why: Insured location includes the residence premises, newly acquired residences, vacant land, and certain other personal-use premises, but not a separately rented commercial property.

An Iowa lender tells a borrower that the loan will be advanced only if the borrower buys the hazard cover through the lender's own agency, and adds a separate handling charge for processing the policy taken as security on the real estate. Under Iowa Code 507B.5, what is the position?

1. Both acts are permitted if disclosed to the borrower in writing before the loan closes, the section being a disclosure provision rather than a prohibition on the practices it describes.
2. Only the tie is prohibited. A charge for handling an insurance policy taken as security for a loan on real estate is a service the lender actually performs, and the section leaves the lender free to recover its cost.
3. Only the separate charge is prohibited. Requiring the borrower to place the insurance through a particular agency is a matter for the general antitrust laws and for the licensing chapter, and this section reaches only the making of a separate charge in connection with the handling of an insurance policy that has been taken as security for a loan on real estate situated in this state.
4. Both acts are prohibited. A person may not require, as a condition precedent to lending money or extending credit, that the borrower negotiate any policy through a particular insurer, group of insurers, agent or broker; nor require, directly or indirectly, a separate charge in connection with the handling of any insurance policy required as security for a loan on real estate. ✓

Why: Iowa Code 507B.5(1) forbids four things and two of them are in issue here. Paragraph (a) forbids REQUIRING, AS A CONDITION PRECEDENT TO THE LENDING OF MONEY OR EXTENSION OF CREDIT, OR ANY RENEWAL THEREOF, THAT THE PERSON TO WHOM SUCH MONEY OR CREDIT IS EXTENDED OR WHOSE OBLIGATION THE CREDITOR IS TO ACQUIRE OR FINANCE, NEGOTIATE ANY POLICY OR CONTRACT OF INSURANCE THROUGH A PARTICULAR INSURER OR GROUP OF INSURERS OR AGENT OR BROKER OR GROUP OF AGENTS OR BROKERS. Paragraph (c) forbids REQUIRING DIRECTLY OR INDIRECTLY THAT ANY BORROWER, MORTGAGOR, PURCHASER, INSURER, BROKER, OR AGENT PAY A SEPARATE CHARGE IN CONNECTION WITH THE HANDLING OF ANY INSURANCE POLICY REQUIRED AS SECURITY FOR A LOAN ON REAL ESTATE OR PAY A SEPARATE CHARGE TO SUBSTITUTE THE INSURANCE POLICY OF ONE INSURER FOR THAT OF ANOTHER. The one thing paragraph (c) does not reach is set out in 507B.5(2): it DOES NOT INCLUDE THE INTEREST WHICH MAY BE CHARGED ON PREMIUM LOANS OR PREMIUM ADVANCEMENTS IN ACCORDANCE WITH THE SECURITY INSTRUMENT. The other two prohibitions are (b), unreasonably disapproving the borrower's policy, and (d), using or disclosing information obtained from a requirement that the borrower furnish insurance where that is to the advantage of the mortgagee, vendor or lender or to the detriment of the borrower, mortgagor, purchaser, insurer, agent or broker.

Saying that a property insurance contract is personal means that it:

1. Can only be sold to individuals in their own names, and never to a partnership, corporation or other business entity
2. Covers only personal property such as furniture and clothing, and never the dwelling or other real property
3. Must be signed in person by the named insured before the coverage can attach
4. Insures a person, not the property itself, and generally cannot be transferred without the insurer's consent ✓

Why: A personal contract insures the individual against loss, not the property; it cannot be assigned to another party without the insurer's consent.

An insurer organized under the laws of another U.S. state is, in any other state, classified as:

1. Domestic
2. Admitted
3. Alien
4. Foreign ✓

Why: A foreign insurer is incorporated in another U.S. state relative to the state where it is transacting business.

Iowa Code 507B.1 states the purpose of the insurance trade practices chapter. What is that purpose?

1. To regulate trade practices in the business of insurance in accordance with the intent of Congress expressed in the Act of Congress of March 9, 1945, by defining, or providing for the determination of, the practices that constitute unfair methods of competition or unfair or deceptive acts or practices, and by prohibiting them. ✓
2. To bring the business of insurance in this state within the general federal antitrust laws, so that an unfair method of competition or an unfair or deceptive act or practice in the business of insurance is investigated and prosecuted by the federal authorities as such conduct is dealt with in any other industry.
3. To create a private right of action for a policyholder injured by an insurer's trade practices, the chapter defining the practices that are actionable and fixing the damages a court may award for each of them.
4. To regulate the rates insurers may charge for property and casualty insurance in this state, by defining the practices that constitute unfair methods of competition in the setting and filing of those rates and by prohibiting them.

Why: Iowa Code 507B.1 says the purpose IS TO REGULATE TRADE PRACTICES IN THE BUSINESS OF INSURANCE IN ACCORDANCE WITH THE INTENT OF CONGRESS AS EXPRESSED IN THE ACT OF CONGRESS OF MARCH 9, 1945, PUB. L. NO. 79-15, 59 STAT. 33, CODIFIED AT 15 U.S.C. SECTIONS 1011 TO 1015, BY DEFINING, OR PROVIDING FOR THE DETERMINATION OF, ALL SUCH PRACTICES IN THIS STATE WHICH CONSTITUTE UNFAIR METHODS OF COMPETITION OR UNFAIR OR DECEPTIVE ACTS OR PRACTICES AND BY PROHIBITING THE TRADE PRACTICES SO DEFINED OR DETERMINED. The 1945 statute referred to is the one commonly called the McCarran-Ferguson Act, which left the regulation of insurance to the states; the second option inverts that. Note the phrase OR PROVIDING FOR THE DETERMINATION OF, which is why the chapter is not merely a list: 507B.3 also prohibits a practice DETERMINED PURSUANT TO SECTION 507B.6 to be unfair. The section says nothing about rates or about a private cause of action.

Which of the following is typically NOT covered as personal property under Coverage C of a Homeowners policy?

1. Small kitchen appliances such as a toaster or blender
2. Furniture in the living room
3. Motorized vehicles licensed for road use ✓
4. Clothing kept in bedroom closets

Why: Motor vehicles licensed for road use are excluded from Coverage C; they are insured under auto policies. Household items like furniture and clothing are covered.

How does Iowa Code 515I.2 define control for the purposes of the surplus lines chapter, and what does the chapter's definition of a nonadmitted insurer leave out?

1. Control means that an entity directly or indirectly owns, controls or has the power to vote ten percent or more of any class of voting securities of another entity; the ability to control the election of a majority of directors or trustees is evidence of control but is not itself control within the definition. Nonadmitted insurer means an insurer not licensed to do insurance business in this state, and the definition includes a risk retention group as defined in chapter 515E, because such a group is not licensed here.
2. Control means either that an entity directly or indirectly, or acting through one or more other persons, owns, controls or has the power to vote twenty-five percent or more of any class of voting securities of another entity, or that an entity controls in any manner the election of a majority of the directors or trustees of another entity. Nonadmitted insurer means an insurer not licensed to do insurance business in this state, and does not include a risk retention group as defined in chapter 515E. ✓
3. Control means either that an entity directly or indirectly, or acting through one or more other persons, owns, controls or has the power to vote twenty-five percent or more of any class of voting securities of another entity, or that an entity controls in any manner the election of a majority of the directors or trustees of another entity. Nonadmitted insurer means an insurer not licensed to do insurance business in this state, and the definition expressly includes a domestic surplus lines insurer authorized by the commissioner under this chapter.
4. Control means that an entity owns, controls or has the power to vote a majority of any class of voting securities of another entity, indirect ownership and ownership through other persons being disregarded. Nonadmitted insurer means an insurer not licensed to do insurance business in this state, and does not include a risk retention group as defined in chapter 515E.

Why: Iowa Code 515I.2(6) defines CONTROL as EITHER OF THE FOLLOWING: (a) THAT AN ENTITY DIRECTLY OR INDIRECTLY, OR ACTING THROUGH ONE OR MORE OTHER PERSONS, OWNS, CONTROLS, OR HAS THE POWER TO VOTE TWENTY-FIVE PERCENT OR MORE OF ANY CLASS OF VOTING SECURITIES OF ANOTHER ENTITY. (b) THAT AN ENTITY CONTROLS IN ANY MANNER THE ELECTION OF A MAJORITY OF THE DIRECTORS OR TRUSTEES OF ANOTHER ENTITY. EITHER makes the two limbs alternatives, and DIRECTLY OR INDIRECTLY, OR ACTING THROUGH ONE OR MORE OTHER PERSONS defeats the fourth option's restriction. The definition matters because 515I.2(2) defines AFFILIATE as ANY ENTITY THAT CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH THE INSURER and 515I.2(3) defines AFFILIATED GROUP as ANY GROUP OF ENTITIES THAT ARE AFFILIATES - and affiliated groups then reappear in the home state rule in 515I.2(10)(b) and the exempt commercial purchaser test in 515I.2(9)(c)(3). Iowa Code 515I.2(13) defines NONADMITTED INSURER as AN INSURER NOT LICENSED TO DO INSURANCE BUSINESS IN THIS STATE and adds that NONADMITTED INSURER DOES NOT INCLUDE A RISK RETENTION GROUP AS DEFINED IN CHAPTER 515E. That carve-out is the point of the item: a risk retention group is unlicensed here but is regulated under its own chapter and is outside 515I altogether. Contrast 515I.2(1), ADMITTED INSURER, which is AN INSURER LICENSED TO DO INSURANCE BUSINESS IN THIS STATE. What chapter 515E provides is a matter for chapter 515E, which is not in this corpus.

A large, financially strong corporation chooses to retain its own workers' compensation risk and pay benefits directly, with state approval. This arrangement is called:

1. Experience rating
2. Monopolistic funding
3. Assigned risk
4. Self-insurance ✓

Why: Qualified self-insurance allows financially sound employers, with state approval and security/bonding, to pay WC benefits directly rather than buying a policy.

How does Iowa Code 522B.1 define an insurance producer's 'home state'?

1. The state or territory of the United States in which the producer was born, or of which the producer is a citizen, whichever the producer identifies on the uniform application, the principal place of business mattering only to a nonresident licence under section 522B.7.
2. The District of Columbia, or any state or territory of the United States, in which the producer maintains the principal place of residence or principal place of business AND is licensed to act as an insurance producer. ✓
3. Any state or territory of the United States in which the producer holds a licence to act as an insurance producer, at the producer's own election, provided the producer notifies the commissioner of that election when the licence is issued.
4. The state in which the insurer that appointed the producer is domiciled, or, where several insurers have appointed the producer, the domicile of the first of them to do so.

Why: Iowa Code 522B.1(4) defines HOME STATE as THE DISTRICT OF COLUMBIA AND ANY STATE OR TERRITORY OF THE UNITED STATES IN WHICH AN INSURANCE PRODUCER MAINTAINS THE PRODUCER'S PRINCIPAL PLACE OF RESIDENCE OR PRINCIPAL PLACE OF BUSINESS AND IS LICENSED TO ACT AS AN INSURANCE PRODUCER. Two conditions joined by AND: the principal place - of residence OR of business, so either will do - and a licence there. That is what makes the third option wrong; holding a licence somewhere is not enough without the principal place. The term is load-bearing across the chapter: 522B.7 makes a nonresident licence turn on being licensed and IN GOOD STANDING IN THE PERSON'S HOME STATE, 522B.15 makes reciprocity turn on it, and 522B.1(9) defines LIMITED LINES INSURANCE by reference to the authority GRANTED BY THE HOME STATE.

Under Iowa Code 515F.14, whom may the Iowa commissioner examine, who pays, and may the commissioner rely on another state's work?

1. The commissioner may examine an advisory organization once in each three-year licence period and no more often than that, an examination being an interference with the organization's business which the section permits only at fixed intervals; the reasonable costs of the examination are paid out of the state treasury, the examination being made for the public benefit rather than for the benefit of the organization examined; and the commissioner may not accept the report of an examination made by the insurance supervisory official of another state in place of an examination made under this section, however recently that other examination was completed.
2. The commissioner may examine an advisory organization only on the written complaint of two or more insurers that subscribe to its services; the costs are shared equally between the complainants and the organization; and the officers, manager, agents and employees of the organization may be examined only with the organization's consent and only in respect of the matters raised in the complaint, the organization being under no obligation to exhibit its books, records, accounts, documents or agreements to the commissioner unless a court of competent jurisdiction has first ordered it to do so on the commissioner's application.
3. The commissioner may examine each advisory organization referred to in the licensing section and each group, association or other organization referred to in the pool and residual market section, as often as deemed expedient; the reasonable costs are paid by the organization examined; its officers, manager, agents and employees may be examined at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation; and in lieu of an examination the commissioner may accept the report of an examination made by the insurance supervisory official of another state. ✓
4. The commissioner may examine each advisory organization as often as deemed expedient, may examine its officers, manager, agents and employees under oath, and may accept the report of an examination made by the insurance supervisory official of another state in lieu of making one; but a pool, a joint underwriting arrangement and a residual market mechanism are outside this section altogether, not being deemed advisory organizations for the purposes of the chapter, and the reasonable costs of any examination made under it are paid out of the state treasury rather than by the advisory organization that has been examined.

Why: Iowa Code 515F.14 provides that THE COMMISSIONER MAY, AS OFTEN AS DEEMED EXPEDIENT, MAKE OR CAUSE TO BE MADE AN EXAMINATION OF EACH ADVISORY ORGANIZATION REFERRED TO IN SECTION 515F.8 AND OF EACH GROUP, ASSOCIATION, OR OTHER ORGANIZATION REFERRED TO IN SECTION 515F.13. That second limb is what the fourth option removes: although 515F.13(1) says a pool is NOT DEEMED an advisory organization, 515F.14 reaches it by naming 515F.13 separately. THE REASONABLE COSTS OF AN EXAMINATION SHALL BE PAID BY THE ADVISORY ORGANIZATION OR GROUP, ASSOCIATION, OR OTHER ORGANIZATION EXAMINED. THE OFFICERS, MANAGER, AGENTS, AND EMPLOYEES OF THE ADVISORY ORGANIZATION, OR GROUP, ASSOCIATION, OR OTHER ORGANIZATION MAY BE EXAMINED AT ANY TIME UNDER OATH AND SHALL EXHIBIT ALL BOOKS, RECORDS, ACCOUNTS, DOCUMENTS, OR AGREEMENTS GOVERNING ITS METHOD OF OPERATION - no consent is required and no complaint need have been made. IN LIEU OF AN EXAMINATION, THE COMMISSIONER MAY ACCEPT THE REPORT OF AN EXAMINATION MADE BY THE INSURANCE SUPERVISORY OFFICIAL OF ANOTHER STATE, PURSUANT TO THE LAWS OF THAT STATE. AS OFTEN AS DEEMED EXPEDIENT sets no limit, so the once-per-licence-period restriction in the second option is invented.

Iowa Code 515F.4 sets the standards a casualty rate must meet. What are they, and what may be taken into account?

1. Rates shall not be excessive or unfairly discriminatory, an inadequate rate being a matter for the solvency provisions of chapter 515 rather than for this chapter; and due consideration may be given only to the insurer's own past loss experience within this state, to the conflagration and catastrophe hazards within this state, and to a reasonable margin for profit and contingencies, the experience of other insurers and of advisory organizations being irrelevant to what this particular insurer may lawfully charge for an Iowa risk; and in the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not more than the most recent five-year period for which experience data is available.
2. Rates shall not be excessive, inadequate or unfairly discriminatory; and due consideration may be given to past and prospective loss experience within and outside this state, to the conflagration and catastrophe hazards, to a reasonable margin for profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned to policyholders, to past and prospective expenses within and outside this state, and to all other relevant factors, with fire insurance rates taking account of experience over not less than the most recent five-year period for which data is available. ✓
3. Rates shall not be excessive, inadequate or unfairly discriminatory; and due consideration may be given to loss experience, catastrophe hazards, profit and expenses, but only so far as those things arise within this state, since a rate charged for an Iowa risk must be supported by Iowa data alone; and in the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent three-year period for which experience data happens to be available to the particular insurer that is making the rate filing in question.
4. Rates shall be adequate to the risk and shall not be unfairly discriminatory, an excessive rate being left to the discipline of competition rather than to the commissioner; and due consideration may be given to any factor the insurer considers relevant, the section leaving the choice of ratemaking factors entirely to the insurer's own actuarial judgement and requiring only that the resulting rate be filed before it is used; dividends, savings and unabsorbed premium deposits returned to policyholders, members or subscribers may not be weighed at all, being a distribution of surplus after the event rather than a cost of providing the insurance, and no special rule governs the experience period for fire insurance rates.

Why: Iowa Code 515F.4(1) states the three-part standard in five words: RATES SHALL NOT BE EXCESSIVE, INADEQUATE, OR UNFAIRLY DISCRIMINATORY. Iowa Code 515F.4(2) then lists what may be weighed: PAST AND PROSPECTIVE LOSS EXPERIENCE WITHIN AND OUTSIDE THIS STATE; THE CONFLAGRATION AND CATASTROPHE HAZARDS; A REASONABLE MARGIN FOR PROFIT AND CONTINGENCIES; DIVIDENDS, SAVINGS, OR UNABSORBED PREMIUM DEPOSITS ALLOWED OR RETURNED BY INSURERS TO THEIR POLICYHOLDERS, MEMBERS, OR SUBSCRIBERS; PAST AND PROSPECTIVE EXPENSES BOTH WITHIN AND OUTSIDE THIS STATE; AND ALL OTHER RELEVANT FACTORS WITHIN AND OUTSIDE THIS STATE. WITHIN AND OUTSIDE THIS STATE appears three times, which is what the third option denies. The section closes the subsection with a rule for one line only: IN THE CASE OF FIRE INSURANCE RATES, CONSIDERATION SHALL BE GIVEN TO THE EXPERIENCE OF THE FIRE INSURANCE BUSINESS DURING A PERIOD OF NOT LESS THAN THE MOST RECENT FIVE-YEAR PERIOD FOR WHICH EXPERIENCE DATA IS AVAILABLE - SHALL, not may, and five years is a floor rather than a ceiling.

Under Iowa Code 516A.1, whom does the required coverage protect, and on what condition?

1. Any person injured by an uninsured, underinsured or hit-and-run motorist in this state, whether or not that person is insured under the policy, the coverage operating as a fund for the benefit of the travelling public generally rather than as a contract between an insurer and the persons it has agreed to insure under the policy it issued.
2. Persons insured under the policy who suffer bodily injury in an accident with an uninsured, underinsured or hit-and-run motorist, whether or not they would have been legally entitled to recover damages from the owner or operator of that vehicle; the coverage is a pure first-party benefit and questions of fault, contributory or otherwise, do not arise under it at all as between the insured and the insurer that issued the policy.
3. Persons insured under the policy who are legally entitled to recover damages from the owner or operator of an uninsured or hit-and-run motor vehicle, because of bodily injury or death; damage caused by an underinsured motor vehicle is a separate matter for which the section requires no coverage to be provided or offered in this state.
4. Persons insured under the policy who are legally entitled to recover damages from the owner or operator of an uninsured motor vehicle, a hit-and-run motor vehicle or an underinsured motor vehicle, because of bodily injury, sickness or disease including death resulting therefrom, caused by accident and arising out of the ownership, maintenance or use of such a vehicle. ✓

Why: Iowa Code 516A.1(1) requires the coverage to be FOR THE PROTECTION OF PERSONS INSURED UNDER SUCH POLICY WHO ARE LEGALLY ENTITLED TO RECOVER DAMAGES FROM THE OWNER OR OPERATOR OF AN UNINSURED MOTOR VEHICLE OR A HIT-AND-RUN MOTOR VEHICLE OR AN UNDERINSURED MOTOR VEHICLE BECAUSE OF BODILY INJURY, SICKNESS, OR DISEASE, INCLUDING DEATH RESULTING THEREFROM, CAUSED BY ACCIDENT AND ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF SUCH UNINSURED OR UNDERINSURED MOTOR VEHICLE. Two conditions govern everything. The claimant must be a PERSON INSURED UNDER SUCH POLICY, so this is not a public fund. And the claimant must be LEGALLY ENTITLED TO RECOVER DAMAGES from the owner or operator of the other vehicle - fault matters, which is what the third option denies, and Iowa's coverage is a substitute for the recovery the claimant could have had from a solvent, insured tortfeasor. The injury covered is described widely - BODILY INJURY, SICKNESS, OR DISEASE, INCLUDING DEATH RESULTING THEREFROM - but it must be CAUSED BY ACCIDENT. And all three vehicles are named: uninsured, hit-and-run AND underinsured, which is what the fourth option leaves out.

Which of these still requires an Iowa insurance producer licence under Iowa Code 522B.3?

1. A person, not paid a commission for it, who secures and furnishes information for the purpose of group property and casualty insurance.
2. An employer's officer administering a programme of employee benefits for the employer's own employees, who is not compensated directly or indirectly by the insurer issuing the contracts.
3. An employee of an insurer engaged in the inspection, rating or classification of risks who does not sell, solicit or negotiate insurance.
4. A person paid a commission for performing administrative services related to mass marketed property and casualty insurance. ✓

Why: Iowa Code 522B.3(2) lists the exemptions, and three of them carry a NO-COMPENSATION condition that the fourth option breaks. Paragraph (b) exempts a person who performs any of three services AND WHO IS NOT PAID A COMMISSION FOR THE PERFORMANCE OF SUCH SERVICE - securing and furnishing information for group life, group property and casualty, group annuities or group or blanket accident and health; securing and furnishing information for enrolling individuals, issuing certificates or otherwise administering plans; and PERFORMING ADMINISTRATIVE SERVICES RELATED TO MASS MARKETED PROPERTY AND CASUALTY INSURANCE. Paying a commission for that last service takes the person outside the exemption. Paragraph (c) exempts an employer, association, their officers or trustees administering an employee benefit programme AS LONG AS they are NOT IN ANY MANNER COMPENSATED, DIRECTLY OR INDIRECTLY, BY THE INSURER. Paragraph (d) exempts an insurer's employee, or an organisation it employs, engaged in INSPECTION, RATING, OR CLASSIFICATION OF RISKS OR IN THE SUPERVISION OF THE TRAINING OF INSURANCE PRODUCERS who is not individually engaged in selling, soliciting or negotiating.

An Iowa producer's brochure says that claims under the policy she is selling are backed by the Iowa insurance guaranty association, and a claimant files with the association twenty-eight months after the order of liquidation. What do Iowa Code 515B.17 and 515B.18 provide?

1. The brochure is permitted, and indeed encouraged, since the chapter's purpose is to give buyers confidence in the solvency protection behind the policies they buy. The claim is not a covered claim: notwithstanding any other provision of the chapter, a covered claim shall not include any claim filed with the association after twenty-four months from the date of the order of liquidation, or after the final date set by the court for filing claims against the insolvent insurer or its receiver, whichever occurs later, so a court which sets a longer period can extend the association's exposure.
2. The brochure is prohibited: a person shall not advertise or publish, in connection with the sale of an insurance policy, that claims under the policy are subject to the chapter or will be paid by the Iowa insurance guaranty association. The claim is a covered claim: the twenty-four month period runs from the date the claimant knew or reasonably should have known of the insolvency rather than from the date of the order of liquidation, and in any event yields to the final date the court sets for filing claims against the insolvent insurer or its receiver, a claimant who files within that court deadline being in time however long the liquidation has run.
3. The brochure is prohibited: a person shall not advertise or publish, in connection with the sale of an insurance policy, that claims under the policy are subject to the chapter or will be paid by the Iowa insurance guaranty association. The claim is not a covered claim: notwithstanding any other provision of the chapter, a covered claim shall not include any claim filed with the association after twenty-four months from the date of the order of liquidation, or after the final date set by the court for filing claims against the insolvent insurer or its receiver, whichever occurs first. ✓
4. The brochure is prohibited only if it names the association; a statement that claims under the policy are subject to the chapter, without naming the association, is permitted, the section being aimed at the use of the association's name as a selling point rather than at any reference to the statutory scheme. The claim is not a covered claim: a covered claim shall not include any claim filed with the association after thirty-six months from the date of the order of liquidation, or after the final date set by the court for the filing of claims against the insolvent insurer or its receiver, whichever occurs first.

Why: Iowa Code 515B.18, headed PROHIBITED ADVERTISING, is one sentence: A PERSON SHALL NOT ADVERTISE OR PUBLISH, IN CONNECTION WITH THE SALE OF AN INSURANCE POLICY, THAT CLAIMS UNDER THE INSURANCE POLICY ARE SUBJECT TO THIS CHAPTER OR WILL BE PAID BY THE IOWA INSURANCE GUARANTY ASSOCIATION. Both limbs are prohibited, so the fourth option's distinction between naming the association and referring to the chapter is not in the text. The rule exists because the guaranty scheme is a safety net for the public, not a selling point that would let a weaker insurer trade on the strength of its competitors - which is why the second option's reasoning, plausible as it sounds, is the reverse of the statute. NOT EVERY STATE HAS SUCH A BAR, and this bank says nothing about what any other state's law provides; the point of the item is that Iowa's is in the property and casualty act itself. Iowa Code 515B.17, headed TIMELY FILING OF CLAIMS, is also one sentence: NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER, A COVERED CLAIM SHALL NOT INCLUDE ANY CLAIM FILED WITH THE ASSOCIATION AFTER TWENTY-FOUR MONTHS FROM THE DATE OF THE ORDER OF LIQUIDATION OR AFTER THE FINAL DATE SET BY THE COURT FOR THE FILING OF CLAIMS AGAINST THE INSOLVENT INSURER OR ITS RECEIVER, WHICHEVER OCCURS FIRST. Three things are exact. The clock runs from THE DATE OF THE ORDER OF LIQUIDATION, not from discovery, which is what the third option changes. It is WHICHEVER OCCURS FIRST, so a longer court deadline does not help, which is what the second option changes. And the drafting is definitional rather than procedural - a late claim is not a covered claim at all, which is why NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER opens the sentence. That twenty-four months is a different deadline from the THREE YEARS in 515B.16 for commencing an action against the association, although both run from the order of liquidation. Finally, Iowa Code 515B.19 lets the association join organisations of other state associations and designate one to act as a liaison and to bind it in agreements or settlements with receivers, and requires it to make all reasonable efforts to coordinate with receivers in the most efficient and uniform manner, INCLUDING THE USE OF UNIFORM DATA STANDARDS AS PROMULGATED OR APPROVED BY THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.

Replacement cost coverage pays to repair or replace damaged property:

1. With a deduction for depreciation based on the age of the property
2. Only at the original purchase price shown on the insured's receipt
3. With no deduction for depreciation (subject to policy limits) ✓
4. Only at the item's current market value in a sale between willing parties

Why: Replacement cost coverage pays the full cost to replace property with new property of like kind and quality without deducting depreciation, subject to limits.

An Iowa engineer is hired to furnish technical assistance to a licensed adjuster on a fire loss, and separately a claims employee of an insurer handles the same file. Who must be licensed under Iowa Code chapter 522C, and who is outside the chapter altogether?

1. Both must be licensed: the chapter reaches every person who investigates, negotiates or settles a property or casualty claim in this state, and the only persons excepted from licensure are attorneys acting within their professional capacity. A person acting as an adjuster solely for a crop hail or multiperil crop insurance claim is subject to the chapter in the same way as any other adjuster who handles a first-party property claim in this state.
2. Neither needs an adjuster licence: a person employed only to obtain facts or furnish technical assistance is expressly excepted, as is a staff adjuster, and a staff adjuster is outside the chapter entirely, so the standards of conduct in section 522C.11 and the five-year record duty in section 522C.12 do not bind that adjuster. A person acting as an adjuster solely for a crop hail or multiperil crop claim is not subject to the chapter at all.
3. The engineer needs no licence, being employed only to furnish technical assistance to a licensed adjuster, but the insurer's claims employee must hold a staff adjuster licence before handling the file, section 522C.4 requiring licensure of all three of the adjuster types the chapter recognises and excepting only attorneys acting in their professional capacity. A person acting as an adjuster solely for a crop hail or multiperil crop insurance claim is not subject to the chapter at all.
4. Neither needs an adjuster licence: a person employed only to obtain facts surrounding a loss or to furnish technical assistance to a licensed adjuster is expressly excepted, as is a staff adjuster, though a staff adjuster must comply with all other provisions of the chapter except the financial responsibility section. A person acting as an adjuster solely for a crop hail or multiperil crop claim is not subject to the chapter at all. ✓

Why: Iowa Code 522C.4(1) provides that A PERSON SHALL NOT ACT AS, OR REPRESENT THAT THE PERSON IS, A PUBLIC ADJUSTER OR AN INDEPENDENT ADJUSTER IN THIS STATE UNLESS THE PERSON IS LICENSED UNDER THIS CHAPTER. Read it carefully: the licensing requirement names TWO of the chapter's three adjuster types, not three, which is what the fourth option gets wrong. Iowa Code 522C.4(2) then provides that A LICENSE AS AN ADJUSTER SHALL NOT BE REQUIRED OF ANY OF THE FOLLOWING: (a) A STAFF ADJUSTER; HOWEVER, STAFF ADJUSTERS SHALL COMPLY WITH ALL OTHER PROVISIONS OF THIS CHAPTER NOT INCLUDING SECTION 522C.7. (b) AN ATTORNEY LICENSED TO PRACTICE LAW IN THE STATE WHEN ACTING WITHIN THEIR PROFESSIONAL CAPACITY AS AN ATTORNEY. (c) A PERSON EMPLOYED ONLY FOR THE PURPOSE OF OBTAINING FACTS SURROUNDING A LOSS, OR FURNISHING TECHNICAL ASSISTANCE TO A LICENSED ADJUSTER, INCLUDING BUT NOT LIMITED TO A PHOTOGRAPHER, ESTIMATOR, PRIVATE INVESTIGATOR, ENGINEER, AND HANDWRITING EXPERT. The proviso in paragraph (a) is the point of the item and is what the third option removes: a staff adjuster is excused the LICENCE and the FINANCIAL RESPONSIBILITY section, and nothing else - the standards of conduct in 522C.11 and the records duty in 522C.12 still bind. Iowa Code 522C.2(1) defines ADJUSTER as A PUBLIC ADJUSTER, AN INDEPENDENT ADJUSTER, OR A LICENSED STAFF ADJUSTER and adds that A PERSON THAT ACTS AS AN ADJUSTER SOLELY FOR A CROP HAIL INSURANCE OR A MULTIPERIL CROP INSURANCE CLAIM SHALL NOT BE SUBJECT TO THIS CHAPTER - a carve-out from the whole chapter, not merely from licensure. Iowa Code 522C.1 states the chapter's purpose as governing the qualifications and procedures for licensing adjusters and specifying the duties of and restrictions on public adjusters, INCLUDING LIMITATION OF SUCH LICENSURE TO ASSISTING INSUREDS ONLY WITH FIRST-PARTY CLAIMS.

Under Iowa Code 515F.22, what must the Iowa commissioner consider in deciding whether a reasonable degree of competition exists in a market?

1. The number of insurers actually engaged in the market and nothing else; the commissioner shall find a reasonable degree of competition to exist wherever more than a specified number of insurers are writing the class of business concerned, whatever the profitability of that business, the variance in the premiums offered for it, the information available to consumers about the product and the sales outlets through which it may be bought, the efforts insurers have made to provide that information, or the volume of consumer complaints made about that market generally in the period immediately preceding the commissioner's determination of that market's competitive status under this particular subchapter of the chapter.
2. Relevant factors of workable competition pertaining to market structure, market performance and market conduct, and the practical opportunities available to consumers in the market to obtain pricing and other consumer information and to compare and obtain insurance from competing insurers; the factors may include the size and number of insurers actually engaged in the market, the profitability for insurers generally in the market segment and whether it is unreasonably high, the price variance on premiums offered, the availability of consumer information about the product and sales outlets, the efforts of insurers to provide consumer information, and consumer complaints regarding the market generally. ✓
3. The profitability for insurers generally in the market segment and whether that profitability is unreasonably high; the size and number of insurers actually engaged in the market and the price variance on the premiums offered in it are relevant to the renewal of an order after its first year but not to the making of one in the first place, and the availability of consumer information, the efforts of insurers to supply it and consumer complaints regarding the market generally are excluded from the inquiry altogether, being evidence of consumer dissatisfaction with individual insurers rather than of the absence of a reasonable degree of competition among the insurers writing that class of business in this state.
4. Whether every insurer writing in the market has filed rates that meet the standards of section 515F.4 and has filed the supplementary rate information section 515F.24 requires; competition being a matter of price alone, the commissioner looks to the filed rates and to nothing else, and not to market structure, market performance, market conduct or the practical opportunities available to consumers.

Why: Iowa Code 515F.22(2) provides that IN DETERMINING WHETHER A REASONABLE DEGREE OF COMPETITION EXISTS, THE COMMISSIONER SHALL CONSIDER RELEVANT FACTORS OF WORKABLE COMPETITION PERTAINING TO THE MARKET STRUCTURE, MARKET PERFORMANCE, AND MARKET CONDUCT, AND THE PRACTICAL OPPORTUNITIES AVAILABLE TO CONSUMERS IN THE MARKET TO OBTAIN PRICING AND OTHER CONSUMER INFORMATION AND TO COMPARE AND OBTAIN INSURANCE FROM COMPETING INSURERS. SUCH FACTORS MAY INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: (a) THE SIZE AND NUMBER OF INSURERS ACTUALLY ENGAGED IN THE MARKET; (b) THE PROFITABILITY FOR INSURERS GENERALLY IN THE MARKET SEGMENT AND WHETHER THAT PROFITABILITY IS UNREASONABLY HIGH; (c) THE PRICE VARIANCE ON PREMIUMS OFFERED IN THE MARKET; (d) THE AVAILABILITY OF CONSUMER INFORMATION CONCERNING THE PRODUCT AND SALES OUTLETS OR OTHER SALES MECHANISMS; (e) THE EFFORTS OF INSURERS TO PROVIDE CONSUMER INFORMATION; (f) CONSUMER COMPLAINTS REGARDING THE MARKET GENERALLY. Two features of the list matter as much as its content. It is expressly not exhaustive - MAY INCLUDE, BUT ARE NOT LIMITED TO - and half of it is about the CONSUMER'S position rather than the insurers': what information is available, what the insurers have done to supply it, and what consumers are complaining about. That is why the test is not a head-count of insurers.

An Iowa driver has insurance on her car but has left the paper card at home; she has a photograph of it on her phone. Under Iowa Code 321.20B, has she complied?

1. Yes. A person shall not drive a motor vehicle on the highways of this state unless financial liability coverage is in effect for the vehicle and unless the driver has in the vehicle the proof of financial liability coverage card issued for it; but a proof card may be produced in paper or electronic format, and acceptable electronic formats include electronic images displayed on a cellular telephone or any other portable electronic device that has a display screen with touch input or a miniature keyboard. ✓
2. No. The section requires the driver to have in the motor vehicle the proof of financial liability coverage card issued for that vehicle, and a card means the paper document the insurer issued; an electronic image is evidence that such a card exists but is not the card, and the driver must produce the card itself to the peace officer who stops her on the highways of this state, an image displayed on a cellular telephone being expressly excluded by the section from what may be produced as proof.
3. Yes, but only because coverage was in fact in effect; the duty to carry proof inside the vehicle is imposed by the section only on a vehicle registered in another state, an Iowa-registered vehicle's coverage being verifiable by the peace officer against the department of transportation's own records at the roadside, so that no card in any format need be produced for it.
4. No, unless she is driving a vehicle registered in another state, in which case other evidence that financial liability coverage is in effect for the motor vehicle is accepted in place of a card; for an Iowa-registered vehicle only the paper card issued by the insurer will do, electronic format having been approved by the department for fleet owners holding a certificate of self-insurance alone.

Why: Iowa Code 321.20B(1)(a) provides that NOTWITHSTANDING CHAPTER 321A, WHICH REQUIRES CERTAIN PERSONS TO MAINTAIN PROOF OF FINANCIAL RESPONSIBILITY, A PERSON SHALL NOT DRIVE A MOTOR VEHICLE ON THE HIGHWAYS OF THIS STATE UNLESS FINANCIAL LIABILITY COVERAGE, AS DEFINED IN SECTION 321.1, SUBSECTION 24B, IS IN EFFECT FOR THE MOTOR VEHICLE AND UNLESS THE DRIVER HAS IN THE MOTOR VEHICLE THE PROOF OF FINANCIAL LIABILITY COVERAGE CARD ISSUED FOR THE MOTOR VEHICLE, OR IF THE VEHICLE IS REGISTERED IN ANOTHER STATE, OTHER EVIDENCE THAT FINANCIAL LIABILITY COVERAGE IS IN EFFECT FOR THE MOTOR VEHICLE. Two conditions, not one: the coverage must be in effect AND the proof must be in the vehicle. The paragraph then settles the format question: A PROOF OF FINANCIAL LIABILITY COVERAGE CARD MAY BE PRODUCED IN PAPER OR ELECTRONIC FORMAT. ACCEPTABLE ELECTRONIC FORMATS INCLUDE ELECTRONIC IMAGES DISPLAYED ON A CELLULAR TELEPHONE OR ANY OTHER PORTABLE ELECTRONIC DEVICE THAT HAS A DISPLAY SCREEN WITH TOUCH INPUT OR A MINIATURE KEYBOARD. The OTHER EVIDENCE alternative is for a vehicle REGISTERED IN ANOTHER STATE, which is the opposite of what the fourth option says. What FINANCIAL LIABILITY COVERAGE means is fixed by section 321.1, subsection 24B, which is outside this corpus; the minimum limits a policy must carry are in 321A.21(2)(b) and are keyed at IA-PC-SL-0206.

Iowa Code 515D.3 takes certain policies outside the Automobile Insurance Cancellation Control Act. Which set does it name?

1. A policy issued under an automobile assigned risk plan and a policy insuring more than four automobiles only; a policy covering garage or service station operation hazards is within the chapter, as is a policy issued principally to cover premises liability which happens to give some incidental motor vehicle coverage as well.
2. A policy covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; a policy insuring more than two automobiles; and a policy issued under an automobile assigned risk plan. A policy issued principally to cover personal or premises liability is within the chapter to the extent of any motor vehicle coverage it gives, so that an insurer writing such a policy must give the chapter's notices before it withdraws that part of the cover, and must state the reason on which it relies whenever the insured asks for one in writing within the time the chapter allows.
3. A policy issued under an automobile assigned risk plan; a policy insuring more than four automobiles; and any policy issued to a business rather than to an individual. Garage, sales agency, repair shop, service station and public parking place hazards are within the chapter where the policy also insures private passenger vehicles of the proprietor.
4. A policy issued under an automobile assigned risk plan; a policy covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; a policy insuring more than four automobiles; and a policy issued principally to cover personal or premises liability of an insured even though it may also provide some incidental coverage for liability arising out of the ownership, maintenance or use of a motor vehicle on the insured's premises or on the ways immediately adjoining them. ✓

Why: Iowa Code 515D.3 provides that THIS CHAPTER SHALL NOT APPLY TO ANY POLICY: (1) ISSUED UNDER AN AUTOMOBILE ASSIGNED RISK PLAN. (2) COVERING GARAGE, AUTOMOBILE SALES AGENCY, REPAIR SHOP, SERVICE STATION, OR PUBLIC PARKING PLACE OPERATION HAZARDS. (3) INSURING MORE THAN FOUR AUTOMOBILES. (4) ISSUED PRINCIPALLY TO COVER PERSONAL OR PREMISES LIABILITY OF AN INSURED EVEN THOUGH SUCH INSURANCE MAY ALSO PROVIDE SOME INCIDENTAL COVERAGE FOR LIABILITY ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR VEHICLE ON THE PREMISES OF SUCH INSURED OR ON THE WAYS IMMEDIATELY ADJOINING THE PREMISES. The number in (3) is FOUR, not two. And (4) is worth reading twice: a policy whose main business is premises liability stays outside the chapter EVEN THOUGH it gives some incidental motor vehicle cover, so the chapter is not engaged piecemeal by whatever automobile exposure a general liability policy happens to pick up. Read with 515D.2(1), which confines POLICY to two vehicle types insuring an individual or related individuals in the same household, these four exclusions keep ch. 515D to the personal automobile policy.

An applicant is charged a higher auto premium because of information in a consumer report. The producer fails to send any adverse action notice. This most likely violates:

1. The NFIP waiting-period rule
2. The crop insurance rules
3. The Terrorism Risk Insurance Act
4. The Fair Credit Reporting Act ✓

Why: Failing to provide the required adverse action notice after taking action based on a consumer report violates the FCRA.

The HO-3 (Special Form) covers the dwelling and personal property on what basis, respectively?

1. Named perils on the dwelling; open perils on personal property
2. Open perils on the dwelling; named (broad) perils on personal property ✓
3. Named perils on both
4. Open perils on both

Why: HO-3 insures the dwelling and other structures on an open-perils basis but covers personal property (Coverage C) on a named-perils (broad form) basis.

An Iowa homeowner telephones her insurer to ask whether her policy would cover water damage from a burst pipe, decides not to claim, and at renewal finds her premium surcharged because of the call. Under Iowa Code 507B.4, what is the position?

1. The surcharge is permitted. An inquiry is information the insurer lawfully holds and may rate on, and the use of inquiries paragraph restricts only the use of an actual claim that has been filed in rating, underwriting and renewal decisions on personal lines property and casualty coverage or a binder for such coverage.
2. The surcharge is an unfair trade practice. It is a listed practice to consider an insured's inquiry regarding coverage of a policy for a loss, where the insured does not file a claim, for purposes of surcharging, declining, nonrenewing or cancelling personal lines property and casualty coverage or a binder. ✓
3. The surcharge is permitted because the insurer told the insured during the call that the inquiry would be recorded and might be taken into account at renewal; the paragraph carries a disclosure exception, and a disclosed use of an inquiry about coverage for a loss is therefore lawful even where no claim is filed.
4. The surcharge is an unfair trade practice only if the insurer also declined, cancelled or nonrenewed the policy; a surcharge on its own is a rating decision and is dealt with under the unfair discrimination paragraph in this same section instead of under the paragraph of it that deals with the use of inquiries.

Why: Iowa Code 507B.4(3)(k), USE OF INQUIRIES, makes it an unfair trade practice to CONSIDER either of two events FOR PURPOSES OF SURCHARGING, DECLINING, NONRENEWING, OR CANCELING PERSONAL LINES PROPERTY AND CASUALTY INSURANCE COVERAGE OR A BINDER for such coverage. The two events are (1) AN APPLICANT'S OR INSURED'S INQUIRY INTO THE TYPE OR LEVEL OF COVERAGE OF A POLICY, OR AN INQUIRY INTO WHETHER A POLICY WILL COVER A LOSS, and (2) AN INSURED'S INQUIRY REGARDING COVERAGE OF A POLICY FOR A LOSS IF THE INSURED DOES NOT FILE A CLAIM. SURCHARGING is the first of the four listed purposes, so a surcharge on its own is enough. The paragraph contains no disclosure exception: telling the insured that the call will count does not make it lawful to count it. What the paragraph does not touch is the use of an actual CLAIM, which is dealt with by paragraph (m), and it is the difference between an inquiry and a claim that the two paragraphs turn on.

Which of the following best describes how the Broad form's limited collapse provision works relative to the Basic form?

1. Neither form addresses collapse, which is available only by separate endorsement
2. The Basic form already covers collapse from any cause, so the Broad form adds nothing on that point
3. Collapse provisions appear only in inland and ocean marine forms
4. Broad adds coverage for collapse from specified causes that Basic does not provide ✓

Why: The Broad (and Special) forms add a specified-cause collapse provision; the Basic form does not include collapse coverage.

Iowa Code 507B.4 makes one particular basis for a refusal to sell insurance an unfair trade practice in its own right. What is it?

1. Any discrimination in the sale of insurance on the basis of the applicant's occupation, unless the insurer can produce actuarial data supporting the distinction it has drawn between occupations.
2. Any discrimination in the sale of insurance on the basis of the applicant's previous claims history, which the chapter permits an insurer to consider only after the policy has been issued.
3. Any discrimination in the sale of insurance solely on the basis of domestic abuse as defined in section 236.2 or sexual abuse as defined in section 236A.2. ✓
4. Any discrimination in the sale of insurance solely on the basis of the applicant's credit history, unless the insurer has first given the applicant written notice that credit history will be considered.

Why: Iowa Code 507B.4(3)(g)(3) makes it an unfair trade practice to make or permit ANY DISCRIMINATION IN THE SALE OF INSURANCE SOLELY ON THE BASIS OF DOMESTIC ABUSE AS DEFINED IN SECTION 236.2 OR SEXUAL ABUSE AS DEFINED IN SECTION 236A.2. Two things distinguish it from the two subparagraphs above it. It is not confined to UNFAIR discrimination - ANY discrimination on that basis is caught - and it is about the SALE of insurance rather than about the rates, benefits or terms of a contract already made. The word SOLELY is the limit. The definitions come from sections 236.2 and 236A.2, which sit outside this chapter. The paragraph immediately following works the same way: 507B.4(3)(h), RELEASE OR USE OF GENETIC INFORMATION, makes an unfair trade practice of the FAILURE OF A PERSON TO COMPLY WITH SECTION 729.6, SUBSECTION 4, and says nothing else - the substance of the duty is in that section, not in this one. Claims history is dealt with quite separately, at 507B.4(3)(m).

Which set of insurance does Iowa Code 515F.3 say the chapter does not apply to, except as otherwise provided in specific subchapters?

1. Reinsurance of every kind and without exception, joint reinsurance mechanisms included; accident and health insurance; all marine insurance, ocean and inland alike, as determined by the commissioner; workers' compensation insurance; surplus lines insurance; and insurance written by any mutual insurance association, wherever that association happens to be organized, whatever chapter of the Code governs it, and whether the risk it writes is located within this state or outside it.
2. Reinsurance other than statutorily authorized joint reinsurance mechanisms to the extent stated in section 515F.13; accident and health insurance; insurance of vessels or craft, their cargoes, marine builders' risks and marine protection and indemnity, excluding inland marine; workers' compensation insurance; surplus lines insurance; and insurance written by a county or state mutual insurance association under chapter 518 or 518A. ✓
3. Accident and health insurance; life insurance and annuities; workers' compensation insurance; and surplus lines insurance. Reinsurance of every kind and marine insurance of every kind are within the chapter, being forms of casualty insurance written upon risks or operations located in this state, and insurance written by a county or state mutual insurance association is within it as well, chapters 518 and 518A going only to how such an association is organized.
4. Accident and health insurance; workers' compensation insurance; and surplus lines insurance only. Reinsurance of every kind, ocean and inland marine insurance, and insurance written by a county or state mutual insurance association are all of them subject to the provisions of the chapter in just the same way as any other form of casualty insurance written upon a risk or an operation located in this state, the opening words of the subsection reserving nothing to the individual subchapters.

Why: Iowa Code 515F.3(2) opens EXCEPT AS OTHERWISE PROVIDED IN SPECIFIC SUBCHAPTERS OF THIS CHAPTER, THIS CHAPTER DOES NOT APPLY TO, and then lists six. (a) REINSURANCE, OTHER THAN STATUTORILY AUTHORIZED JOINT REINSURANCE MECHANISMS TO THE EXTENT STATED IN SECTION 515F.13 - so the exclusion of reinsurance is not absolute, which is what the second option removes. (b) ACCIDENT AND HEALTH INSURANCE. (c) INSURANCE OF VESSELS OR CRAFT, THEIR CARGOES, MARINE BUILDERS' RISKS, MARINE PROTECTION AND INDEMNITY, OR OTHER RISKS COMMONLY INSURED UNDER MARINE, EXCLUDING INLAND MARINE INSURANCE, AS DETERMINED BY THE COMMISSIONER - ocean marine out, inland marine in. (d) WORKERS' COMPENSATION INSURANCE. (e) SURPLUS LINES INSURANCE. (f) INSURANCE WRITTEN BY A COUNTY OR STATE MUTUAL INSURANCE ASSOCIATION AS PROVIDED IN CHAPTER 518 OR 518A - nothing is said here about what those chapters contain, only that such insurance is outside this one. The opening words matter as much as the list: a subchapter may bring some of this back, and 515F.21 does exactly that in reverse by taking joint underwriting, joint reinsurance and assigned risks out of the competitive rating subchapter as well.

For a newly acquired auto that ADDS to (rather than replaces) the insured's vehicles, Part D physical damage coverage generally applies only if:

1. The vehicle is more than 10 years old, since older autos rate off the existing premium and need no report to the insurer
2. The insured already has physical damage on at least one auto and reports it within the required period ✓
3. It is titled as a commercial vehicle rather than a private passenger auto
4. Nothing is required, as the new auto rides on the policy for the rest of the term

Why: Coverage for a newly acquired additional auto under Part D typically requires that the insured carry physical damage on another auto and notify the insurer within the specified time (e.g., 14 days).