2006 Legislation
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HOUSE BILL NO. 449 – Insurer, inducement to policyholder

HOUSE BILL NO. 449

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Bill Status



H0449...........................................................by BUSINESS
INSURERS - Amends existing law to provide that an insurer or insurance
provider shall not be prohibited from providing to a policyholder or
prospective policyholder inducements of an aggregate value of $50.00 or
less.
                                                                        
01/24    House intro - 1st rdg - to printing
01/25    Rpt prt - to Bus

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 449
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INSURANCE TRADE PRACTICES AND  FRAUD;  AMENDING  SECTION  41-1314,
  3        IDAHO  CODE, TO PROVIDE THAT AN INSURER OR INSURANCE PROVIDER SHALL NOT BE
  4        PROHIBITED FROM PROVIDING TO A POLICYHOLDER  OR  PROSPECTIVE  POLICYHOLDER
  5        INDUCEMENTS  OF  AN  AGGREGATE  VALUE OF FIFTY DOLLARS OR LESS AND TO MAKE
  6        TECHNICAL CORRECTIONS.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Section 41-1314, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
                                                                        
 10        41-1314.  REBATES   --   ILLEGAL  INDUCEMENTS.  (1)  Except  as  otherwise
 11    expressly provided by law, no person shall knowingly make, permit to be  made,
 12    or  offer to make any contract or of insurance, or of annuity, or agreement as
 13    to such contract, other than as  plainly  expressed  in  the  contract  issued
 14    thereon, or pay or allow, or give or offer to pay, allow, or give, directly or
 15    indirectly, as inducement to such insurance or annuity or in connection there-
 16    with,  any  rebate  of  premiums  payable  on the contract, or of any agent's,
 17    solicitor's, or broker's commission related thereto, or any special  favor  or
 18    advantage  in  the dividends or other benefits thereon, or any paid employment
 19    or contract for services of any kind, or any valuable consideration or induce-
 20    ment whatever whatsoever not specified in the contract; or directly  or  indi-
 21    rectly  give,  or sell, or purchase or offer or agree to give, sell, purchase,
 22    or allow as inducement to such insurance or annuity or  in  connection  there-
 23    with,  and  whether  or not specified or to be specified in the policy or con-
 24    tract, any agreement of any form or nature promising returns and  profits,  or
 25    any  stocks,  bonds,  or  other  securities, or interest present or contingent
 26    therein or as measured thereby, of any insurer or other person, or  any  divi-
 27    dends  or profits accrued or to accrue thereon; or offer, promise or give any-
 28    thing of value whatsoever  not  specified  in  the  contract.  Nor  shall  any
 29    insured, annuitant, or policy holder policyholder or employee thereof, or pro-
 30    spective  insured,  annuitant  or  policy  holder  policyholder,  or  employee
 31    thereof, knowingly accept or receive, directly or indirectly, any such prohib-
 32    ited contract, agreement, rebate, advantage, employment, or other inducement.
 33        (2)  Nothing in this section shall be construed as prohibiting the payment
 34    of  commissions  or other compensation to duly licensed agents, solicitors, or
 35    brokers, or as prohibiting any insurer from allowing or returning to its  par-
 36    ticipating policy holders policyholders, members or subscribers, the usual and
 37    ordinary dividends, savings, or unabsorbed premium deposits, or as prohibiting
 38    any  insurer  or insurance producer from providing to any policyholder or pro-
 39    spective policyholder any prizes, goods, wares, merchandise, articles or prop-
 40    erty of an aggregate value of fifty dollars ($50.00) or less.
 41        (3)  Extension of credit for the payment of premium beyond  the  customary
 42    premium  payment  period without charging and collecting interest at a reason-
 43    able rate per annum on the amount of credit so extended and for  the  duration
                                                                        
                                           2
                                                                        
  1    of such credit is prohibited under this section.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS15474

Section 41-1314, Idaho Code, currently prohibits an Idaho-licensed
insurance producer from offering or providing to an applicant or
policyholder "anything of value" that is not specified in the
insurance contract.  Under its terms, this statute prohibits
insurance companies and producers from giving away items to their
clients if the item provided has any value, such as calendars,
pens, or other such items or merchandise.  However, it is current
industry practice to give away such items to policyholders at no
cost to the policyholder.  Insurers should be permitted to provide
items to their applicants and policyholders when such items have an
aggregate value of fifty dollars or less.


                           FISCAL NOTE

None.




Contact
Name: John Mackey, United Heritage 
Phone: 322-2685


STATEMENT OF PURPOSE/FISCAL NOTE                         H 449