USA – IOWA Trends and Developments Contributed by: Benjamin J. Kenkel, Sean M. O’Brien and Blake R. Hanson, Dickinson, Bradshaw, Fowler & Hagen, P.C.
The Commissioner recognises that many insurance contracts contain certain provisions requiring replace- ment or repairs to be completed inside a specified time frame – commonly referred to as “recoverable depreciation”. The Bulletin further acknowledges that, given the magnitude of damage resulting from recent catastrophic weather events like the 2020 derecho, policyholders may, through no fault of their own, require extended periods to navigate the typical claims resolution process. On this point, the Commis- sioner’s guidance sounds a clear warning: the rigid enforcement of contractual deadlines for recoverable depreciation, under circumstances where delays are attributable to the scale of the disaster rather than individual policyholder conduct, may constitute a fail- ure to act in good faith to effectuate a fair and equita- ble settlement of the claim under Iowa Code sections 507B.3 and 507B.4. The bulletin further underscores that insurance carriers must be diligent and appro- priate in applying these provisions as policyholders justifiably request extensions in claims handling. The Commissioner concludes “[h]ardworking Iowans pay premiums diligently and carriers shall work to expe- dite the payment of claims after a disaster. The Iowa Insurance Division expects carriers, who have a duty to be fair in the claims process, to make certain they continue to support their Iowa policyholders through- In May 2026, Governor Kim Reynolds signed H.F.2766 into law, enacting comprehensive amendments to Iowa’s captive insurance statutory framework. The updated legislation serves as a signal to captive insur- ers that the state seeks to remain competitive among other leading domiciles similarly vying for their market share. Among the legislation’s principal amendments are: • a temporary premium tax waiver intended to incentivise the re-domestication of non-life captive insurers to Iowa; • the creation of a new statutory subchapter estab- lishing a regulatory framework for life captive reinsurance companies (LCRCs); • authorisation for special purpose captives to be organised as reciprocal insurers; out the rebuilding process in its entirety”. Captive insurance law modernisation
• a reduction to USD100,000 in the minimum capital and surplus threshold required for a protected cell captive; • expanded entity formation options permitting protected cells to be structured either as LLCs or series LLCs; • explicit permission for a captive insurer to utilise parametric insurance; and • clarification of tax confidentiality on returns filed by captives. The LCRC subchapter draws its regulatory architec- ture from Iowa Code Section 508.33A and associated regulations, governing limited-purpose subsidiary life insurance companies. The legislation does not impose an Iowa domicile requirement on the organising com- pany. Jeff Wilson, Captive Director for the Iowa Insur- ance Division, reasoned that, “[b]y creating a dedicat- ed framework for life captive reinsurance and reducing capital requirements for protected cells, [Iowa is] pro- viding the flexibility businesses need to manage risk while maintaining the non-negotiable standards for solvency and governance that Iowa is known for”. The updated captive insurance law took effect on 1 July 2026. Elder financial exploitation statutory protections Iowa has enacted new statutory protections aimed at safeguarding vulnerable individuals from financial exploitation in the context of insurance law. House File 2232, signed by Governor Kim Reynolds on 9 April 2026, establishes a new subchapter under Iowa Code Chapter 508 authorising insurers, insurance produc- ers, and other similarly qualified individuals to delay and withhold disbursements and transactions upon their suspicion that an eligible vulnerable adult is suf- fering financial exploitation. Arguably most critical to the new statutory scheme is its built-in delay mechanism. Upon forming a reasonable belief that a given solicited transaction or disbursement from an annuity, life insurance policy, or similar account may result in or facilitate the financial exploitation of a qualifying vulnerable adult, the insurer or qualified indi- vidual is permitted to initiate an internal review and tem- porarily withhold the would-be fruits of the suspicious disbursement. The statute defines “disbursement”
322 I NSURANCE L I T IGATI O N 2026
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