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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
|||| 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
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