USA – IOWA Trends and Developments Contributed by: Benjamin J. Kenkel, Sean M. O’Brien and Blake R. Hanson, Dickinson, Bradshaw, Fowler & Hagen, P.C.
expansively to encompass any attempt to withdraw funds or otherwise attain some policy benefit, including surrenders, policy loans, withdrawals, partial withdraw- als, accelerated benefits, and analogous transactions. The mechanism is structured as a gradual temporal framework. Upon initiation, the insurer or qualified indi- vidual may impose first a delay of up to 15 business days while conducting an internal review. If, upon con- clusion of that review, the reasonable belief that exploi- tation has occurred remains substantiated, the invoking party can further extend the delay to 25 business days. In circumstances where indicia of exploitation continue to warrant protective intervention, the delay may be fur- ther extended to 55 business days. Judicial oversight remains accessible at any stage to terminate, extend, modify, or direct such other protective measures as the circumstances may require. The delay authority is accompanied by mandatory notification obligations. Upon initiating a delay, the insurer must provide written notice to all persons authorised to transact on the affected account, specifying both the existence of the delay and the supporting grounds. Such notice must be provided promptly and in no event beyond seven days fol- lowing commencement of the delay. Concurrently, the insurer must notify the Iowa Insurance Commis- sioner within the same seven-business-day period, including a report on the status of the internal review. The statute carves out a significant restriction to the notification requirement: where the insurer or quali- fied individual has formed a reasonable belief that an authorised transacting party has attempted or com- mitted financial exploitation, insurance fraud, or other abuse directed at the eligible adult, notification to that individual is expressly prohibited. Of particular consequence to industry stakeholders is the statute’s immunity provision. The legislation confers protection from both administrative sanction and civil liability upon insurers and qualified individu- als who, acting reasonably and in good faith, elect to delay a transaction, contact the commissioner, or dis- close relevant information to permissible third parties. Insurers should be advised that the statute mandates all supervisors and employees responsible for han- dling or advising matters regarding complaints, pos-
sible fraud, or investigations receive the required train- ing by 30 June 2027. The bill became effective 1 July 2026. Iowa insurance law adopts NAIC AI standard On 7 November 2024, the Iowa Insurance Division issued formal guidance endorsing the National Asso- ciation of Insurance Commissioners’ Principles of Arti- ficial Intelligence, originally adopted in 2020, as the applicable regulatory framework governing the devel- opment and deployment of AI systems by insurers operating within the state. The Commissioner warns that “Insurers are expected to adopt practices, including governance frameworks and risk management protocols, that are designed to ensure that the use of AI Systems does not result in: a) unfair trade practices or b) unfair claims settlement practices, as defined in Iowa Code section 507B.4 and Iowa Administrative Code chapter 191-15”. The Commissioner further mandates “all Insurers author- ized to do business in Iowa are expected to develop, implement, and maintain a written programme (an ‘AIS program’) for the responsible use of AI Systems that make, or support, decisions related to regulated insurance practices”. The scope of the required pro- gramme is calibrated to proportionality: the controls an insurer adopts should be commensurate with the degree of potential harm posed to consumers by the particular AIS programme in question. Conclusion Iowa’s insurance law is in a period of active and delib- erate recalibration as Iowa broadens the scope of its regulatory expectations while simultaneously equip- ping industry participants with clearer standards against which to measure their own conduct. Insurers operating in Iowa should expect continued regulatory evolution and would be well served to monitor leg- islative developments, Division bulletins, and judicial interpretations as integral components of their com- pliance and risk management strategies. The trends surveyed here suggest that Iowa’s regulatory posture will remain dynamic – demanding ongoing vigilance from those who operate within its borders.
323 I NSURANCE L I T IGATI O N 2026
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