I have no experience with real Iaido. However, I'm a big fan of Iaijutsu in fiction. And the best Iaidoko are not those that are speedy, but rather those that KNOW when to draw.
A mechanic in the Ghost of Tsushima games involves Iaido. You call out your opponents then you face off with your sword sheathed. You have to noticed exactly when to draw and if you do, you instantly kill your foe. If you mistime it, you take huge damage.
A similar mechanic might apply.
As long as you win initiative against your foe you can attempt to perform an Iaijutsu Strike.
You make your Insight check against their Deception check. If you win you can do extra damage, say 1d6/2 levels, or automatically crit, or something like that.
If you fail then your armour class drops by 5 until the start of your next turn.