View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0585...........................................................by BUSINESS INSURANCE - Adds to and amends existing law relating to the Department of Insurance to set forth provisions applicable to hearings upon denial, nonrenewal, suspension or revocation of a certificate of authority or license; to reference violations by applicants; and to remove language referencing notification and hearing provisions relating to the denial or refusal to renew an applicant's license. 02/08 House intro - 1st rdg - to printing 02/09 Rpt prt - to Bus 02/14 Rpt out - rec d/p - to 2nd rdg 02/15 2nd rdg - to 3rd rdg 02/21 3rd rdg - PASSED - 69-0-1 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali(Sali), Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- None Absent and excused -- Smith(24) Floor Sponsor - Collins Title apvd - to Senate 02/22 Senate intro - 1st rdg - to Com/HuRes 03/01 Rpt out - rec d/p - to 2nd rdg 03/02 2nd rdg - to 3rd rdg 03/07 3rd rdg - PASSED - 33-0-2 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Cameron, Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- Burtenshaw, Pearce Floor Sponsor - Goedde Title apvd - to House 03/08 To enrol 03/09 Rpt enrol - Sp signed 03/10 Pres signed 03/13 To Governor 03/14 Governor signed Session Law Chapter 49 Effective: 07/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 585 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO THE DEPARTMENT OF INSURANCE; AMENDING CHAPTER 2, TITLE 41, IDAHO 3 CODE, BY THE ADDITION OF A NEW SECTION 41-232A, IDAHO CODE, TO SET FORTH 4 PROVISIONS APPLICABLE TO HEARINGS; AMENDING SECTION 41-308, IDAHO CODE, TO 5 REMOVE REFERENCES TO HEARINGS RELATED TO CERTIFICATES OF AUTHORITY; AND 6 AMENDING SECTION 41-1016, IDAHO CODE, TO PROVIDE A CODE REFERENCE, TO 7 REMOVE LANGUAGE REFERENCING HEARINGS, TO REFERENCE VIOLATIONS BY APPLI- 8 CANTS AND TO REMOVE LANGUAGE REFERENCING NOTIFICATION AND HEARING PROVI- 9 SIONS RELATING TO THE DENIAL OR REFUSAL TO RENEW A LICENSE FOR AN APPLI- 10 CANT. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Chapter 2, Title 41, Idaho Code, be, and the same is 13 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 14 ignated as Section 41-232A, Idaho Code, and to read as follows: 15 41-232A. HEARINGS UPON THE DENIAL, NONRENEWAL, SUSPENSION OR REVOCATION 16 OF A CERTIFICATE OF AUTHORITY OR LICENSE OR IMPOSITION OF ADMINISTRATIVE PEN- 17 ALTIES. (1) In the event the director denies an applicant's application for a 18 certificate of authority or for a license, the director shall notify the 19 applicant in writing of the basis for the denial. Within twenty-one (21) days 20 of the issuance of the notice of denial, the applicant may submit to the 21 director a written request for a hearing before the director or his duly 22 appointed representative addressing the basis for the denial of the applica- 23 tion and requesting that the director reexamine the applicant's qualifications 24 for a certificate of authority or a license. An applicant's failure to request 25 a hearing in writing within twenty-one (21) days of the issuance of the notice 26 of denial shall be deemed a waiver of the opportunity for hearing. 27 (2) Except as otherwise provided in title 41 and chapter 52, title 67, 28 Idaho Code, prior to the director's nonrenewal, suspension or revocation of a 29 certificate of authority or license or imposition of any administrative pen- 30 alty, the director shall provide the insurer or licensee, and any appointing 31 insurers that have appointed the licensee as an agent, with advance written 32 notice of the nature of the violations alleged or the charges pending against 33 the insurer or licensee and affording the insurer or licensee an opportunity 34 for a hearing thereon. Within twenty-one (21) days of the issuance of the 35 notice of violations or charges, the insurer or licensee may submit to the 36 director a written request for a hearing before the director or his duly 37 appointed representative addressing the alleged violations and charges pending 38 against the insurer or licensee. An insurer's or licensee's failure to request 39 a hearing or otherwise dispute the notice in writing within twenty-one (21) 40 days of the issuance of the notice of violations or charges shall be deemed a 41 waiver of the opportunity for hearing. 42 (3) All hearings under this section shall be conducted in accordance with 43 the provisions set forth in this chapter and chapter 52, title 67, Idaho Code. 2 1 SECTION 2. That Section 41-308, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 41-308. GENERAL ELIGIBILITY FOR CERTIFICATE OF AUTHORITY. To qualify for 4 and hold authority to transact insurance in this state an insurer must be 5 otherwise in compliance with this code and with its charter powers, and must 6 be an incorporated stock insurer, or an incorporated mutual insurer, or a 7 reciprocal insurer, of the same general type as may be formed as a domestic 8 insurer under this code; except that: 9 (1) No insurer shall be authorized to transact insurance in this state 10 which does not maintain reserves as required by chapter 6 (assets and liabili- 11 ties) of this code applicable to the kind or kinds of insurance transacted by 12 such insurer, wherever transacted in the United States. 13 (2) Before granting authority to an insurer to transact insurance in this 14 state, the director shall take into consideration the length of time the 15 insurer has been transacting insurance; the net profit or loss experienced 16 over the previous five (5) years; or any other factor which for good reason he 17 believes could make the admittance of the insurer not in the best interest of 18 the insurance-buying public. 19 (3) The director shall not grant or continue authority to transact insur- 20 ance in this state as to any insurer the management of which is found by him,21after a hearing held thereon,to be untrustworthy, or so lacking in insurance 22 experience as to make the proposed operation hazardous to the insurance-buying 23 public; or which, after a hearing held thereon,he has good reason to believe 24 is affiliated directly or indirectly through ownership, control, reinsurance 25 transactions or other insurance or business relations, with any person or per- 26 sons whose business operations are or have been marked, to the detriment of 27 policyholders or stockholders or investors or creditors or of the public, by 28 manipulation or dissipation of assets, or manipulation of accounts, or of 29 reinsurance, or by similar injurious actions. 30 SECTION 3. That Section 41-1016, Idaho Code, be, and the same is hereby 31 amended to read as follows: 32 41-1016. ADMINISTRATIVE PENALTY -- SUSPENSION, REVOCATION, REFUSAL OF 33 LICENSE. (1) The director may impose an administrative penalty not to exceed 34 one thousand dollars ($1,000), for deposit in the general fund of the state of 35 Idaho, and may suspend for not more than twelve (12) months or may revoke or 36 refuse to issue or continue any license issued under this chapter, chapter 27, 37 title 41, Idaho Code (title insurance), chapter 11, title 41, Idaho Code 38 (adjusters), oranychapter 12, title 41, Idaho Code (surplus lines brokers), 39licenseif, after not less than twenty-one (21) days' notice of the opportu-40nity for a hearing and of the charges against the licensee given as provided41in section 41-212(3), Idaho Code, to the licensee and to any appointing insur-42ers represented (as to a producer who is appointed as an agent),the director 43 finds that as to the licensee or applicant any one (1) or more of the follow- 44 ing causes or violations exist: 45 (a) Providing incorrect, misleading, incomplete or materially untrue 46 information in the license application; 47 (b) Violating any provision of title 41, Idaho Code, department rule, 48 subpoena or order of the director or of another state's insurance direc- 49 tor; 50 (c) Obtaining or attempting to obtain a license through misrepresentation 51 or fraud; 52 (d) Improperly withholding, misappropriating or converting any moneys or 3 1 properties received in the course of doing insurance business; 2 (e) Misrepresenting the terms of an actual or proposed insurance contract 3 or application for insurance or misrepresenting any fact material to any 4 insurance transaction or proposed transaction; 5 (f) Being convicted of or pleading guilty to any felony, or to a misde- 6 meanor which evidences bad moral character, dishonesty, a lack of integ- 7 rity and financial responsibility, or an unfitness and inability to pro- 8 vide acceptable service to the consuming public; 9 (g) Admitting or being found to have committed any insurance unfair trade 10 practice or fraud; 11 (h) Using fraudulent, coercive or dishonest practices, or demonstrating 12 incompetence, untrustworthiness or financial irresponsibility, or being a 13 source of injury and loss to the public or others, in the conduct of busi- 14 ness in this state or elsewhere; 15 (i) Having an insurance license denied, suspended or revoked in any other 16 state, province, district or territory; 17 (j) Forging another's name on an application for insurance or on any doc- 18 ument related to an insurance transaction; 19 (k) Improperly using notes or any other reference material to complete an 20 examination for an insurance license; 21 (l) Knowingly accepting insurance business from an individual who is not 22 licensed; 23 (m) Failing to comply with an administrative or court order imposing a 24 child support obligation, provided however, that nothing in this provision 25 shall be deemed to abrogate or modify chapter 14, title 7, Idaho Code; or 26 (n) Failing to pay state income tax or to comply with any administrative 27 or court order directing payment of state income tax. 28 (2) The director shall, without hearing, suspend for not more than twelve 29 (12) months, or shall revoke or refuse to continue any license issued under 30 this chapter to a nonresident where the director has received a final order of 31 suspension, revocation or refusal to continue from the insurance regulatory 32 official or court of jurisdiction of the licensee's home state. If cause under 33 this provision exists after the expiration of the twelve (12) months, succes- 34 sive suspensions may be imposed by the director without hearing. 35 (3)In the event that the director denies or refuses to renew an applica-36tion for a license, the director shall notify the applicant or licensee and37advise, in writing, the applicant or licensee of the reason for the denial or38nonrenewal of the applicant's or licensee's license. The applicant or licensee39may make written demand upon the director within twenty-one (21) days for a40hearing before the director to determine the reasonableness of the director's41action. The hearing shall be held pursuant to chapter 2, title 41, and chapter4252, title 67, Idaho Code.43(4)The license of a business entity may be suspended, revoked or refused 44 if the director finds, after hearing,that the violation of an individual 45 licensee, who is registered to or acting on behalf of the business entity, was 46 known or should have been known by one (1) or more of the owners, officers or 47 managers acting on behalf of the business entity and that the violation was 48 not reported to the director and no corrective action was taken. 49 (54) In addition to or in lieu of any applicable denial, suspension or 50 revocation of a license, a person may, after hearing, be subject to a civil 51 fine or administrative penalty pursuant to subsection (1) of this section or 52 any other applicable section. 53 (65) The director shall retain the authority to enforce the provisions of 54 and impose any penalty or remedy authorized by title 41, Idaho Code, against 55 any person who is under investigation for or charged with a violation of title 4 1 41, Idaho Code, or department rule, even if the person's license or registra- 2 tion has been surrendered, has lapsed by operation of law, or if the person 3 has never been licensed.
STATEMENT OF PURPOSE RS 15353C2 This proposal amends existing law to delete language referencing the rights of applicants for a certificate of authority or a license from the Director of the Department of Insurance to notice and hearing prior to a denial of an application or action against a license. It also includes a new section to consolidate language setting forth the rights to notice and opportunity for hearings of applicants for and holders of certificates of authority and licenses. The proposal provides that applicants are entitled to request a hearing following any denial of their application, but they are not entitled to any advance notice or hearing prior to the initial decision on the application. This legislation confirms the rights of existing licensees to advance notice and the opportunity for hearing prior to any action to suspend or revoke an existing license or certificate of authority or the imposition of an administrative penalty except as otherwise provided in the insurance code, and chapter 52, title 67, Idaho Code, (the Administrative Procedures Act). FISCAL NOTE None. CONTACT Name: Shad Priest Agency: Insurance, Dept. of Phone: 334-4214 STATEMENT OF PURPOSE/FISCAL NOTE H 585