ARC 5765C

ARC 5765C

INSURANCE DIVISION[191]

Notice of Termination

Terminating rule making related to fees

The Insurance Division hereby terminates the rule making initiated by its Notice of Intended Action published in the Iowa Administrative Bulletin on March 10, 2021, as ARC 5499C, proposing to amend Chapter 5, "Regulation of Insurers—General Provisions," Chapter 10, "Insurance Producer Licenses and Limited Licenses," Chapter 20, "Property and Casualty Insurance," Chapter 35, "Accident and Health Insurance," Chapter 50, "Regulation of Securities Offerings and Those Who Engage in the Securities Business," Chapter 100, "Sales of Cemetery Merchandise, Funeral Merchandise and Funeral Services," Chapter 101, "Burial Sites and Cemeteries," Chapter 102, "Iowa Retirement Facilities," and Chapter 103, "Residential and Motor Vehicle Service Contracts," Iowa Administrative Code.

Legal Authority for Rule Making

The above-mentioned rule making is terminated under the authority provided in Iowa Code sections 502.304A, 502.321G, 502.410, 509A.15, 511.24, 512B.24, 512B.25, 515.147, 515A.6, 515A.10, 515F.8, 520.12, 521.18, 522A.5, 522E.4, 523A.204, 523A.501, 523A.502A, 523A.812, 523A.814, 523C.3, 523C.4, 523C.24, 523D.2A, 523I.808 and 523I.813.

Purpose and Summary

The Division intended to move the licensing and related fees from statute to rules in order to permit more regular updating of the fee amounts. The proposed fee amounts were the same as currently set in statute except for the following fees: (1) the examination fee for perpetual care cemeteries would have increased from $5 per certificate to $10 per certificate, (2) a late fee for preneed sellers' and sales agents' filing of annual reports would have been added, (3) a late fee for perpetual care cemeteries' filing of annual reports would have been added, and (4) the motor service contract fee would have been reduced.

Examination fee: The Division proposed to increase the examination fee from $5 to $10. This fee was established in 2005 with the enactment of the Iowa Cemetery Act. These fees are charged to perpetual care cemeteries. The cemeteries are allowed to assess the purchaser of burial plots for these fees. Annual revenues are $23,000. These fees are deposited into the Enforcement Fund, which is used in part to provide funds for the operating of cemetery receiverships.

Late fees: The Division proposed to add a $5 per day late fee for preneed sellers, sales agents, and perpetual care cemeteries that file their annual report after the filing deadline. The Division has been unable to secure reasonable compliance with these filing requirements, with increased noncompliance over the past three years. This increasing noncompliance has taken two forms: more filers filing after the deadline and more filers requiring more outreach from the Division. Under the current statute, requests are followed by reminders escalating to subpoenas, and some noncompliance has been referred to the Division's Enforcement Bureau. The Enforcement Bureau can pursue legal actions including warning letters, subpoenas, and formal statements of charges. The goal of the new late fees was to bring more filers into compliance without the additional staff time and expense currently expended seeking compliance.

Motor vehicle fee: The motor vehicle service contract fee was proposed to be reduced from $50 to $35 per contract. Due to new legislation, the entire motor vehicle fee structure was modified. The calculation of fees that changed in 2019 resulted in a $40,000 increase of revenue in 2020. The increase of revenue is attributable to more than new market entrants. The Division proposed to decrease the fee in order to be revenue-neutral, taking into account the other changes made in 2019.

Reason for Termination

The Division is terminating this rule making because the proposed movement of fee amounts from statute to rules was not included in the passed legislation. The proposed fee amount changes were included in the passed legislation.

Jobs Impact

After analysis and review of this rule making, no impact on jobs has been found.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).