519A.5 - POLICY FORMS AND RATES.

        519A.5  POLICY FORMS AND RATES.         1.  The rates, rating plans, rating classifications, and policy      forms and endorsements applicable to insurance written by the      association and the statistical and experience data relating thereto      shall be subject to sections 519A.2 to 519A.13 and to the provisions      of the general insurance code which are not inconsistent with the      purposes and provisions of this chapter.         2.  All policies issued by the association shall provide for a      continuous period of coverage beginning with their respective      effective dates.  All policies shall terminate at 12:01 a.m. two      years from the date of finding of an emergency by the commissioner,      or earlier in accordance with sections 519A.2 through 519A.13; or      because of failure of the policyholder to pay any premium or      stabilization reserve fund charge or portion of either when due.  All      policies shall be issued subject to the group retrospective rating      plan and the stabilization reserve fund authorized by this chapter.      No policy form shall be used by the association unless it has been      filed with and approved by the commissioner.         3.  The commissioner shall specify whether policy forms and the      rate structure shall be on a "claims-made" or "occurrence" basis and      coverage shall be provided by the association only on the basis      specified by the commissioner.  The commissioner shall specify the      "claims-made" basis only if the contract makes provision for residual      "occurrence" coverage upon the retirement, death, disability or      removal from this state of the insured. Provision may be made for a      premium charge allocable to any such residual "occurrence" coverage      and such premium charges for such residual coverage shall be      segregated and separately maintained for such purpose which may      include the reinsurance of all or a part of that portion of the risk.         4.  The rates, rating plans, rating rules, and rating      classifications applicable to the insurance written by the      association shall be on an actuarially sound basis, giving due      consideration to the group retrospective rating plan and the      stabilization reserve fund, and shall be calculated to be      self-supporting.         5.  All policies issued by the association shall be subject to a      nonprofit group retrospective rating plan to be approved by the      commissioner under which the final premium for all policyholders of      the association, as a group, will be equal to the administrative      expenses, loss and loss adjustment expenses and taxes, plus a      reasonable allowance for contingencies and servicing.  Policyholders      shall be given full credit for all investment income, net of expenses      and a reasonable management fee, on policyholder supplied funds.  The      standard premium, before retrospective adjustment, for each policy      issued by the association shall be established for portions of the      policy period coinciding with the association's fiscal year on the      basis of the association's rates, rating plans, rating rules, and      rating classifications then in effect.  The maximum final premium for      all policyholders of the association, as a group, shall be limited as      provided in section 519A.6, subsection 5. Since the business of the      association is subject to the nonprofit group retrospective rating      plan required by this subsection, there shall be a presumption that      the rates filed and premiums imposed by the association are not      unreasonable or excessive.         6.  The association shall certify to the commissioner the      estimated amount of any deficit remaining after the stabilization      reserve fund has been exhausted in payment of the maximum final      premium for all policyholders of the association.  Within sixty days      after that certification the commissioner shall authorize the members      of the association to commence recoupment of their respective shares      of the deficit by deducting their share of the deficit from past or      future premium taxes due the state of Iowa. The association shall      amend the amount of its certification of deficit to the commissioner      as the values of its incurred losses become finalized and the members      of the association shall amend their recoupment procedure      accordingly.         7.  In the event that sufficient funds are not available for the      sound financial operation of the association, all members shall      contribute to the financial requirements of the association in the      manner provided for in section 519A.8. Any contribution shall be      reimbursed to the members by recoupment as provided in subsection 6.      
         Section History: Early Form
         [C77, 79, 81, § 519A.5] 
         Section History: Recent Form
         2002 Acts, ch 1111, §33         Referred to in § 519A.1, 519A.2, 519A.3, 519A.4, 519A.10, 519A.13