View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0447...........................................................by BUSINESS
INSURERS - Amends existing law relating to investments by insurance
companies to delete provisions limiting the permissible amount of, or loan
to value ratio of, certain loans made by Idaho domiciled insurance
companies; to delete provisions limiting the permissible loan to value
ratio of commercial loans to seventy-five percent of the fair market value
of the property; and to provide that the permissible loan to value ratio of
eighty percent applies to commercial mortgage loans made by Idaho domiciled
insurance companies.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Bus
02/10 Rpt out - rec d/p - to 2nd rdg
02/13 2nd rdg - to 3rd rdg
02/15 3rd rdg - PASSED - 62-0-8
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell,
Bilbao, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon,
Clark, Collins, Crow, Denney, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Hart(Jacobson), Harwood, Henbest,
Henderson, Jaquet, Kemp, Lake, Loertscher, Martinez, Mathews,
McGeachin, McKague, Miller, Moyle, Nielsen, Nonini, Pasley-Stuart,
Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sayler,
Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30),
Smith(24), Smylie, Snodgrass, Trail, Wills, Wood
NAYS -- None
Absent and excused -- Bedke, Black, Deal, LeFavour, Mitchell, Sali,
Stevenson, Mr. Speaker
Floor Sponsor - Snodgrass
Title apvd - to Senate
02/16 Senate intro - 1st rdg - to Com/HuRes
02/22 Rpt out - rec d/p - to 2nd rdg
02/23 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Cameron
Title apvd - to House
03/03 To enrol
03/06 Rpt enrol - Sp signed
03/07 Pres signed
03/08 To Governor
03/11 Governor signed
Session Law Chapter 26
Effective: 07/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 447
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO INVESTMENTS BY INSURANCE COMPANIES; AMENDING SECTION 41-721, IDAHO
3 CODE, TO DELETE PROVISIONS LIMITING THE PERMISSIBLE AMOUNT OF, OR LOAN TO
4 VALUE RATIO OF, CERTAIN LOANS MADE BY IDAHO DOMICILED INSURANCE COMPANIES;
5 AND AMENDING SECTION 41-722, IDAHO CODE, TO DELETE PROVISIONS LIMITING THE
6 PERMISSIBLE LOAN TO VALUE RATIO OF COMMERCIAL LOANS TO SEVENTY-FIVE PER-
7 CENT OF THE FAIR VALUE OF THE PROPERTY, TO PROVIDE THAT THE PERMISSIBLE
8 LOAN TO VALUE RATIO OF EIGHTY PERCENT APPLIES TO COMMERCIAL MORTGAGE LOANS
9 MADE BY IDAHO DOMICILED INSURANCE COMPANIES, TO PROVIDE CORRECT CODE REF-
10 ERENCES AND TO MAKE TECHNICAL CORRECTIONS.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 41-721, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 41-721. MORTGAGE LOANS AND CONTRACTS. An insurer may invest any of its
15 funds in:
16 (1) Bonds or evidences of debt which are secured by first mortgages or
17 deeds of trust on improved unencumbered real property located in the United
18 States.
19 (2) The equity of the seller of any such property in the contract for a
20 deed, covering the entire balance due on a bona fide sale of such property, in
21 an amount not to exceed ten thousand dollars ($10,000) or the amount permissi-
22 ble under section 41-706, Idaho Code, whichever is greater, in any one (1)
23 such contract for deed; nor in any amount in excess of seventy-five percent
24 (75%) of the actual sale price or fair value of the property, whichever is the
25 smaller.
26 (3) Purchase money mortgages or like securities received by it upon the
27 sale or exchange of real property acquired pursuant to section 41-728, Idaho
28 Code.
29 (43) Bonds or notes secured by mortgage or trust deed guaranteed or
30 insured by the federal housing administration under the terms of an act of
31 Ccongress of the United States for June twenty-seventh, nineteen hundred
32 thirty-four, entitled the "National Housing Act," as amended.
33 (54) Bonds or notes secured by mortgage or trust deed guaranteed or
34 insured as to principal in whole or in part by the administrator of veterans'
35 affairs pursuant to the provisions of title III of an act of Ccongress of the
36 United States of June twenty-second, nineteen hundred forty-four, entitled the
37 "Servicemen's Readjustment Act of 1944," as amended, or by any other similar
38 agency of the government of the United States.
39 (65) Evidences of debt secured by first mortgages or deeds of trust upon
40 leasehold estates, running for a term of not less than fifteen (15) years
41 beyond the maturity of the loan as made or as extended, in improved real prop-
42 erty, otherwise unencumbered, and if the mortgagee is entitled to be subro-
43 gated to all the rights under the leasehold.
2
1 (76) Bonds or notes secured by mortgage and insured by mortgage guarantee
2 insurance as provided by chapter 26A, title 41, Idaho Code.
3 (87) Participation interests in any bond, note or evidence of indebted-
4 ness if the entire indebtedness would qualify as an investment under subsec-
5 tions (1) through (76) of this section, and:
6 (a) Such participation is senior and gives the holder substantially the
7 rights of a first mortgagee; or
8 (b) Such participation is of equal priority, to the extent of such inter-
9 est, with other interests therein.
10 SECTION 2. That Section 41-722, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 41-722. MORTGAGE LOAN LIMITED BY PROPERTY VALUE. (1) No commercial mort-
13 gage loan or investment therein upon any one (1) parcel of real property shall
14 exceed in amount, at the time of acquisition, seventy-five percent (75%) of
15 the fair value of the property and the loan is required to be amortized within
16 not more than thirty (30) years by payment of installments of principal and
17 interest thereon at regular intervals not less frequent than every year.
18 (2) No commercial or residential mortgage loan or investment therein upon
19 any one (1) parcel of real property shall exceed in amount, at the time of
20 acquisition, eighty percent (80%) of the fair value of the property and the
21 loan is required to be amortized within not more than thirty (30) years by
22 payment of installments of principal and interest thereon at regular intervals
23 not less frequent than every year.
24 (32) The extent to which a mortgage loan made under subsection (3) or (4)
25 or (5) of section 41-721, Idaho Code, is guaranteed by the administrator of
26 veterans affairs may be deducted before application of the limitations con-
27 tained in subsection (1) of this section.
STATEMENT OF PURPOSE
RS 15459
Under current Idaho law, insurance companies may make
commercial loans on a seventy five percent (75%) loan to value
ratio. In the commercial lending field, however, most lenders
are able to loan at an eighty percent (80%) loan value to ratio.
Furthermore, certain states bordering Idaho allow domestic
insurers to lend at up to an eighty percent (80%) loan to value
ratio. Idaho-domiciled insurers are therefore at a disadvantage
in the commercial lending field. This legislation would even the
playing field for Idaho-domiciled insurers who are active in the
commercial lending field. In addition, this legislation would
amend Section 41-721, Idaho Code, to remove a reference to
investments made by insurers in a "contract for a deed," on the
basis that "contracts for a deed" are outdated real estate
conveyance instruments that are no longer used in the State of
Idaho.
FISCAL IMPACT
None.
Contact
Name: John Mackey, United Heritage
Phone: 322-2685
STATEMENT OF PURPOSE/FISCAL NOTE H 447
REVISED - REVISED - REVISED - REVISED - REVISED - REVISED