Industry Issues | Surplus Lines Reform

Iowa Insurance Division Conducts Evaluation of Dram Shop Liability Insurance

Regulatory Update - Iowa

PCI has been alerted that certain insurance companies - including surplus lines insurers - have received notice that the Iowa Insurance Division has opened an investigation under Iowa Code §§ 505.11, 515I.3, and 515I.4 to gather data concerning the availability of dram shop liability coverage. It is unclear how the cited statutory provisions directly apply.

Nonetheless, the IID states that on July 1, 2018, Senate File 2169 became effective and directed the Iowa Insurance Division to conduct an evaluation of dram shop liability insurance in Iowa. 

According to new subsection 4 of Section 123.92, Code 2018, The division shall biennially conduct an evaluation concerning minimum coverage requirements of dram shop liability insurance. In conducting the evaluation, the division shall include a comparison of other states' minimum dram shop liability insurance coverage and any other relevant issues the division identifies. By January 31, 2019, and every two years thereafter, the division shall submit a report, including any findings and recommendations, to the general assembly as provided in chapter 7A.
 
Pursuant to this directive, the IID has requested insurance companies to provide direct written annualized data for the years of 2016 and 2017 before December 12, 2018. Respondents are also requested to report direct written annualized data for the year of 2018 before February 11, 2019. Only data directly associated with dram shop coverage are requested - premium for other coverages are to be excluded, even if contained within a single policy.

The reporting template can be found at https://iid.iowa.gov/dramshopreport. The Excel spreadsheet form contains two tabs: the first tab includes the instructions for completing the Dram Shop Report in the second tab. The completed report in Excel format should be submitted via email to Lindsay.Bates@iid.iowa.gov.

The legislative directive and this request are limited to insurance coverage for liability against a licensee or permittee for injuries sustained as a result of the sale and service of alcohol to an intoxicated person (dram shop liability coverage).