HOUSE BILL NO. 491

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Bill Status



H0491...........................................................by BUSINESS
INSURER - CERTIFICATE OF AUTHORITY - Amends existing law to provide that
the director may issue new orders of suspension; and to provide that
certificates of authority shall be deemed terminated at the end of the
suspension period if not reinstated or if a new order of suspension is not
issued.
                                                                        
01/20    House intro - 1st rdg - to printing
01/21    Rpt prt - to Bus
02/10    Rpt out - rec d/p - to 2nd rdg
02/11    2nd rdg - to 3rd rdg
02/16    3rd rdg - PASSED - 70-0-0
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
      Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
      Jaquet, Jones, Kellogg(Nonini), Kulczyk, Lake, Langford, Langhorst,
      Martinez, McGeachin, McKague, Meyer, Miller, Mitchell, Moyle,
      Naccarato, Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo,
      Roberts, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
      Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Deal
    Title apvd - to Senate
02/17    Senate intro - 1st rdg - to Com/HuRes
02/25    Rpt out - rec d/p - to 2nd rdg
02/26    2nd rdg - to 3rd rdg
03/10    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason(Andreason), Bailey, Brandt, Bunderson, Burkett,
      Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
      Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
      Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
      Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
      Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Werk
    Title apvd - to House
03/11    To enrol
03/12    Rpt enrol - Sp signed
03/15    Pres signed
03/16    To Governor
03/19    Governor signed
         Session Law Chapter 88
         Effective: 07/01/04

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 491
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO SUSPENSION OF INSURER CERTIFICATES OF AUTHORITY; AMENDING  SECTION
  3        41-329,  IDAHO  CODE, TO PROVIDE THAT THE DIRECTOR MAY ISSUE NEW ORDERS OF
  4        SUSPENSION, TO PROVIDE THAT CERTIFICATES OF AUTHORITY SHALL BE DEEMED TER-
  5        MINATED AT THE END OF THE SUSPENSION PERIOD IF NOT REINSTATED OR IF A  NEW
  6        ORDER OF SUSPENSION IS NOT ISSUED AND TO MAKE A TECHNICAL CORRECTION.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION  1.  That  Section  41-329, Idaho Code, be, and the same is hereby
  9    amended to read as follows:
                                                                        
 10        41-329.  DURATION OF SUSPENSION -- INSURER'S OBLIGATIONS DURING SUSPENSION
 11    PERIOD -- REINSTATEMENT. (1) Suspension of an insurer's certificate of author-
 12    ity shall be for such period as the director specifies in the order of suspen-
 13    sion, but not to exceed one (1) year. During the suspension the  director  may
 14    rescind or shorten the suspension by his further order.
 15        (2)  During  the  suspension period the insurer shall not solicit or write
 16    any new business in this state, but shall file its annual statement, pay fees,
 17    licenses, and taxes as required under this code, and may service its  business
 18    already in force in this state, as if the certificate of authority had contin-
 19    ued in full force.
 20        (3)  Upon  expiration  of the suspension period, if within such period the
 21    certificate of authority has not  terminated,  the  insurer's  certificate  of
 22    authority  shall  automatically  reinstate  unless the director finds that the
 23    causes of the suspension have not terminated, or that the insurer is otherwise
 24    not in compliance with the requirements of this code, and of which the  direc-
 25    tor shall give the insurer notice not less than thirty (30) days in advance of
 26    the  expiration  of  the  suspension  period after which time the director may
 27    issue a new order of suspension. If not so automatically reinstated  or  if  a
 28    new  order  of suspension is not issued, the certificate of authority shall be
 29    deemed to have terminated as of the end of the suspension period.
 30        (4)  Upon reinstatement of the insurer's  certificate  of  authority,  the
 31    authority  of its agents in this state to represent the insurer shall likewise
 32    reinstate. The director shall promptly notify the insurer and  its  agents  in
 33    this  state of record in the department, of such reinstatement. If pursuant to
 34    section 41-328(3), Idaho Code, the director has published notice of such  sus-
 35    pension he shall in like manner publish notice of the reinstatement.

Statement of Purpose / Fiscal Impact


                     STATEMENT  OF  PURPOSE
                            RS 13505
Idaho Code Section 41-329 allows the Director of the Department of
Insurance to suspend for up to one year the certificate of
authority of an insurer that is not in compliance with Idaho's
laws.  In many cases, the company is unable to correct the problems
that led to the suspension within one year and a re-suspension of
the company's license to provide the company additional time to
come into compliance is preferable to terminating the company's
certificate of authority to do business in Idaho.  Section 41-329
does not address resuspending a license, and subsection (3) of that
section could be interpreted as requiring that a company's
certificate of authority automatically terminate if a company
subject to a suspension order has not remedied the problems that
gave rise to the suspension order at the end of the one-year
suspension period.  This bill amends the law to provide the
Director discretion to issue another order of suspension if the
company has not come into compliance within the initial one-year
suspension.



                         FISCAL  IMPACT
There will be no fiscal impact.


CONTACT   
Name:     Shad Priest
Agency:   Department of Insurance
Phone:    334-4214

Statement of Purpose/Fiscal Impact                   H 491