Iowa Code 506.10 – Sale of stock as inducement to insurance
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1. No insurance company shall issue in this state, or permit its agents, officers, or employees to issue in this state its own stock, agency company stock or other stock or securities, or any special or advisory board or other contract of any kind promising returns and profits as an inducement to insurance.
Terms Used In Iowa Code 506.10
- Board: means the engineering and land surveying examining board provided by this chapter. See Iowa Code 542B.2
- Commissioner: means the commissioner of insurance. See Iowa Code 510.1B
- Contract: means the same as defined in section 554D. See Iowa Code 554E.1
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
2. No insurance company shall be authorized to do business in this state which issues or permits its agents, officers, or employees to issue in this state or in any other state or territory, agency company stock or other stock or securities, or any special advisory board or other contract of any kind promising returns and profits as an inducement to insurance.
3. No corporation or stock company, acting as an agent of an insurance company, or any of its agents, officers, or employees, shall be permitted to agree to sell, offer to sell, or give or offer to give, directly or indirectly, in any manner whatsoever, any share of stock, securities, bonds, or agreement of any form or nature, promising returns and profits as an inducement to insurance, or in connection therewith.
4. Nothing contained in this section shall impair or affect in any manner any such contracts issued or made as an inducement to insurance prior to April 16, 1921, or prevent the payment of the dividends or returns therein stipulated to be paid.
5. It shall be the duty of the commissioner upon being satisfied that any insurance company, or any agent thereof, has violated any of the provisions of this section, to revoke the certificate of authority of the company or agent so offending.