SENATE BILL NO. 1026

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S1026.......................................by COMMERCE AND HUMAN RESOURCES
LEGAL SERVICE EXPENSE PLAN - Adds to existing law to define "legal service
expense plan"; to exempt legal service expense plans from regulation as
insurance; and to specify code provisions applicable to legal service
expense plans.
                                                                        
01/19    Senate intro - 1st rdg - to printing
01/22    Rpt prt - to Com/HuRes

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1026
                                                                        
                         BY COMMERCE AND HUMAN RESOURCES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO LEGAL SERVICE EXPENSE PLANS; AMENDING CHAPTER 1, TITLE  41,  IDAHO
  3        CODE,  BY THE ADDITION OF A NEW SECTION 41-114B, IDAHO CODE, TO DEFINE THE
  4        TERM "LEGAL SERVICE EXPENSE PLAN," TO EXEMPT LEGAL SERVICE  EXPENSE  PLANS
  5        FROM  REGULATION AS INSURANCE AND TO SPECIFY CODE PROVISIONS APPLICABLE TO
  6        LEGAL SERVICE EXPENSE PLANS; AND DECLARING AN EMERGENCY.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Chapter 1, Title 41, Idaho Code,  be,  and  the  same  is
  9    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 10    ignated as Section 41-114B, Idaho Code, and to read as follows:
                                                                        
 11        41-114B.  LEGAL SERVICE EXPENSE PLANS. (1) The term "legal service expense
 12    plan," as used in this section, means a contract or  agreement  for  a  stated
 13    consideration  between  an organization or individual and a person or group of
 14    persons, whereby the person pays the organization or individual, in advance or
 15    by installments, for the receipt of professional  legal  services,  advice  or
 16    representation  or  as  reimbursement  for charges incurred for such services,
 17    which are provided by attorneys at law duly licensed to practice law in Idaho.
 18        (2)  The marketing, sale, contracting, issuance of a contract, plan admin-
 19    istration and delivery of services under a  legal  service  expense  plan  are
 20    exempt  from  all  other provisions of title 41, Idaho Code. In addition, such
 21    plans shall not be characterized as "insurance" when marketed in Idaho.
 22        (3)  Legal service expense plans shall be subject to the provisions of the
 23    Idaho consumer protection act, chapter 6, title 48, Idaho Code, and the provi-
 24    sions relating to the regulation of the practice of law under title  3,  Idaho
 25    Code.
                                                                        
 26        SECTION  2.  An  emergency  existing  therefor,  which emergency is hereby
 27    declared to exist, this act shall be in full force and effect on and after its
 28    passage and approval.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE
                                
                            RS 10674
                                
                                
Because of the breadth and vagueness of the definition of the term
"insurance" in section 41-102, Idaho Code, an uncertainty has
existed since 1974 as to whether legal service expense plans are to
be regulated by the Department of Insurance.  Despite the existence
of these service plans in the state, no plan has ever sought to
qualify as an insurance company.  This bill clarifies that these
plans are or should be regulated by the Attorney General under the
consumer protection statutes and by the Idaho State Bar Association
under practice of law statutes, and are not to be marketed as
"insurance."




                         FISCAL IMPACT
There should be no impact on the General Fund or other state
government funds.






Contact:  Rep. Max Black
          Idaho House of Representatives
          332-1000
          
     
STATEMENT OF PURPOSE/FISCAL NOTE                       S102