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H0003........................................................by MR. SPEAKER
Requested by Department of Insurance
INSURANCE - Amends existing law to provide consistency in reporting
requirements for insurers and to provide correct citations to other
statutes.
01/11 House intro - 1st rdg - to printing
01/11 Rpt prt - to Bus
01/29 Rpt out - rec d/p - to 2nd rdg
02/01 2nd rdg - to 3rd rdg
02/02 3rd rdg - PASSED - 64-1-4
AYES -- Alltus, Barraclough, Barrett, Bell, Boe, Bruneel, Callister,
Campbell, Chase, Clark, Crow, Cuddy, Deal, Ellsworth, Field(13),
Field(20), Gagner, Geddes, Gould, Hadley, Hammond, Hansen(23),
Hansen(29), Henbest, Hornbeck, Jaquet, Jones, Judd, Kellogg, Kempton,
Kendell, Kjellander, Kunz, Lake, Limbaugh, Loertscher, Mader, Marley,
McKague, Meyer, Montgomery, Mortensen, Moyle, Pischner, Pomeroy,
Reynolds, Ridinger, Ringo, Robison, Schaefer, Sellman, Smith,
Stevenson, Stoicheff, Stone, Taylor, Tilman, Tippets, Trail, Watson,
Wheeler, Williams, Zimmermann, Mr Speaker
NAYS -- Sali
Absent and excused -- Black, Denney, Linford, Wood
Dist. 19, Seat A, Vacant
Floor Sponsor - Hammond
Title apvd - to Senate
02/03 Senate intro - 1st rdg - to Com/HuRes
03/03 Rpt out - rec d/p - to 2nd rdg
03/04 2nd rdg - to 3rd rdg
03/09 3rd rdg - PASSED - 33-0-2
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
Hawkins, Ingram, Keough, King, Lee, McLaughlin, Noh, Richardson,
Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner, Stennett, Thorne,
Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Ipsen, Parry
Floor Sponsor - Davis
Title apvd - to House
03/10 To enrol
03/11 Rpt enrol - Sp signed
03/12 Pres signed
03/15 To Governor
03/17 Governor signed
Session Law Chapter 65
Effective: 07/01/99
H0003|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 3 BY MR. SPEAKER Requested by: Department of Insurance 1 AN ACT 2 RELATING TO THE INSURANCE CODE; AMENDING SECTION 41-268, IDAHO CODE, TO CHANGE 3 A REPORTING DATE; AMENDING SECTION 41-307, IDAHO CODE, TO CORRECT A CITA- 4 TION; AMENDING SECTION 41-332, IDAHO CODE, TO CORRECT CITATIONS; AMENDING 5 SECTION 41-342, IDAHO CODE, TO CORRECT A CITATION; AMENDING SECTION 6 41-345, IDAHO CODE, TO REQUIRE REPORTS BE FILED WITH THE IDAHO DEPARTMENT 7 OF INSURANCE; AMENDING SECTION 41-2803, IDAHO CODE, TO CORRECT CITATIONS; 8 AMENDING SECTION 41-2852, IDAHO CODE, TO CLARIFY APPLICATION; AND AMENDING 9 SECTION 41-3806, IDAHO CODE, TO CHANGE A REPORTING DATE AND TO MAKE TECH- 10 NICAL CORRECTIONS. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Section 41-268, Idaho Code, be, and the same is hereby 13 amended to read as follows: 14 41-268. ARSON, FIRE AND FRAUD PREVENTION ACCOUNT. (1) There is hereby 15 created an account in the agency asset fund in the state treasury, to be des- 16 ignated the "arson, fire and fraud prevention account." The account shall be 17 used by the director, department of insurance, for enforcement of this act, 18 investigation of alleged cases of arson, fraud and related alleged violations 19 of the laws of this state, and prevention of fire, explosions and other condi- 20 tions necessary for the public safety, health, peace and welfare. 21 (2) In addition to moneys, if any, appropriated to the account by the 22 legislature, the director shall deposit with the state treasurer for credit to 23 the arson, fire and fraud prevention account: 24 (a) Penalties collected under the provisions of sections 41-261 and 25 41-263, Idaho Code; 26 (b) Assessments and, in the case of surplus lines insurers, fees, col- 27 lected from insurers as defined by section 41-103, Idaho Code; 28 (c) Other moneys now or hereinafter in the state fire prevention account; 29 (d) Other moneys or revenues derived from whatever source for arson or 30 fraud investigation or fire prevention. 31 (3) Not more often than annually, assessments against authorized insurers 32 and fees from surplus lines insurers, as a prerequisite to eligibility under 33 section 41-1217, Idaho Code, will be levied by the director, and insurers will 34 pay the assessments or fees levied within sixty (60) days but not later than 35MayMarch 1 of each year or, in the case of newly 36 applying insurers, upon notification of authorization, or of surplus lines 37 eligibility. Assessments and fees from surplus lines insurers, will be as fol- 38 lows: 39 (a) Insurers writing coverages as defined in section 41-504, Idaho Code, 40 "property insurance," section 41-505, Idaho Code, "marine and transporta- 41 tion," section 41-506, Idaho Code, "casualty insurance," and section 42 41-3101, Idaho Code, "domestic county mutual fire insurers, associations 43 or organizations," not less than one hundred dollars ($100) nor more than 2 1 five hundred dollars ($500) annually; and 2 (b) Insurers including, but not limited to, those defined in sections 3 41-3201, 41-3403 and 41-3903, Idaho Code, not writing coverages, as 4 defined above in subsection (3)(a), shall pay one-half (1/2) the assess- 5 ment made under the preceding subsection but not less than fifty dollars 6 ($50.00) nor more than two hundred fifty dollars ($250) annually. 7 (4) All claims against the account shall be examined, audited and allowed 8 in the manner now or hereafter provided by law. 9 (5) All moneys placed in the account are hereby perpetually appropriated 10 to the department of insurance for the purposes of the provisions of this sec- 11 tion. 12 (6) Pending use for purposes of the provisions of this section, moneys in 13 the account shall be invested by the state treasurer in the same manner as 14 provided under section 67-1210, Idaho Code, with respect to other surplus or 15 idle moneys in the state treasury. Interest earned on the investments shall be 16 returned to the account. 17 SECTION 2. That Section 41-307, Idaho Code, be, and the same is hereby 18 amended to read as follows: 19 41-307. AUTHORIZATION FOR INVESTMENT PURPOSES ONLY. A foreign insurer may 20 make investments in this state without certificate of authority as provided by 21 section 30-1-1061501 , Idaho Code. Such an insurer 22 shall not be subject to any other provision of this code. 23 SECTION 3. That Section 41-332, Idaho Code, be, and the same is hereby 24 amended to read as follows: 25 41-332. FOREIGN INSURERS EXEMPT FROM CORPORATION LAWS GOVERNING ADMISSION 26 OF FOREIGN CORPORATIONS. A foreign insurer authorized to transact insurance in 27 this state and fully complying with this code shall be exempt from complying 28 with the provisions of sections 30-1-1061501 through 29 30-1-1241532 , Idaho Code. 30 SECTION 4. That Section 41-342, Idaho Code, be, and the same is hereby 31 amended to read as follows: 32 41-342. REDOMESTICATION AS A DOMESTIC INSURER -- CONVERSION TO FOREIGN 33 INSURER. (1) Any insurer which is organized under the laws of any other state 34 and is admitted to do business in this state for the purpose of writing insur- 35 ance may become a domestic insurer by complying with all of the requirements 36 of law relative to the organization and licensing of a domestic insurer of the 37 same type and by designating its principal place of business at a place in 38 Idaho. Such a domestic insurer shall be entitled to a certificate of 39 redomestication and a certificate of authority to transact business in this 40 state, and shall have the same rights and obligations as other domestic insur- 41 ers of this state. 42 (2) Any domestic insurer may, upon the approval of the director, transfer 43 its domicile to any other state in which it is admitted to transact the busi- 44 ness of insurance. Upon such a transfer, the insurer shall cease to be a 45 domestic insurer. If the insurer is otherwise qualified, the director shall 46 admit the insurer to this state as a foreign insurer. The director shall 47 approve any such proposed transfer unless he determines that such a transfer 48 is not in the interest of the policyholders of the insurer in this state. 49 After the director has approved the transfer, the director shall provide writ- 3 1 ten notice to the secretary of state that the insurer has transferred its 2 domicile to another state, stating the effective date of the transfer and the 3 state to which the insurer has transferred its domicile. Upon receipt of the 4 written notice from the director and the payment of the fee required in sec- 5 tion 30-1-128(n)122 , Idaho Code, the secretary of 6 state shall file the notice and, on the effective date of the transfer, termi- 7 nate the existence of the insurance company as a domestic corporation. 8 (3) The certificate of authority, appointment of statutory agent and 9 licenses, policy forms, rates, authorizations and other filings and approvals 10 in existence at the time an insurer admitted to transact insurance in this 11 state transfers its corporate domicile to this or any other state, continue in 12 effect upon the transfer of corporate domicile. All rates and outstanding pol- 13 icies of any transferring insurer shall remain in full force and effect and 14 policies need not be endorsed as to the new domicile unless so ordered by the 15 director. Every transferring insurer shall either file new policy forms for 16 use in this state with the director on or before the effective date of the 17 transfer, or use existing policy forms in this state with appropriate endorse- 18 ments as allowed by, and under such conditions as may be approved by the 19 director. Every transferring insurer shall notify the director of the proposed 20 transfer, and shall promptly file any resulting amendments to its corporate 21 documents required to be filed with the director. 22 SECTION 5. That Section 41-345, Idaho Code, be, and the same is hereby 23 amended to read as follows: 24 41-345. REPORT. (1) Every insurer domiciled in this state shall file a 25 report with the director disclosing material acquisitions and dispositions of 26 assets or material nonrenewals, cancellations or revisions of ceded reinsur- 27 ance agreements unless such acquisitions and dispositions of assets or mate- 28 rial nonrenewals, cancellations or revisions of ceded reinsurance agreements 29 have been submitted to the director for review, approval or information pur- 30 poses pursuant to other provisions of the insurance code, laws, rules or other 31 requirements. 32 (2) The report required in subsection (1) of this section is due within 33 fifteen (15) days after the end of the calendar month in which any of the 34 foregoing transactions occur. 35 (3) One (1) complete copy of the report, including any exhibits or other 36 attachments filed as part thereof, shall be filed with: 37 (a) The Idaho department of insurance ;38department of the insurer's state of domicile;and 39 (b) The national association of insurance commissioners. 40 (4) All reports obtained by or disclosed to the director pursuant to sec- 41 tions 41-345 through 41-347, Idaho Code, shall be given confidential treatment 42 and shall not be subject to subpoena and shall not be made public by the 43 director, the national association of insurance commissioners, or any other 44 person, except to insurance departments of other states, without the prior 45 written consent of the insurer to which it pertains unless the director, after 46 giving the insurer who would be affected thereby, notice and an opportunity to 47 be heard, determines that the interest of policyholders, shareholders or the 48 public will be served by the publication thereof, in which event the director 49 may publish all or any part thereof in such manner as he may deem appropriate. 50 SECTION 6. That Section 41-2803, Idaho Code, be, and the same is hereby 51 amended to read as follows: 4 1 41-2803. APPLICABILITY OF GENERAL CORPORATION STATUTES. (1) The applica- 2 ble statutes of this state relating to the powers and procedures of domestic 3 private corporations formed for profit shall apply to domestic stock insurers 4 and to domestic mutual insurers, except where in conflict with the express 5 provisions of this code and the reasonable implications of such provisions. 6 (2) Domestic stock insurers and domestic mutual insurers are exempt from 7 the provisions of sections 30-1-125 (annual report of domestic and for-8eign corporations), 30-1-126 (filing of annual report of domestic and foreign9corporations), and 30-1-130 (franchise tax payable by domestic and foreign10corporations),30-1-1622, Idaho Code. 11 SECTION 7. That Section 41-2852, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 41-2852. IMPAIRMENT OF CAPITAL OR ASSETS. (1) Ifa domestic stock14insurer's capital (as represented by the aggregate par value of its outstand-15ing capital stock) becomes impaired, orthe assets of a domestic16mutualinsurer are less than its liabilities and the minimum amount of 17surpluscapital funds required to be maintained by 18 it underthis codesection 41-313, Idaho Code, for 19 authority to transact the kinds of insurance being transacted, the director 20 shall at once determine the amount of deficiency and serve notice upon the 21 insurer to cure the deficiency and file proof thereof with him within the 22 period specified in the notice, which period shall be not less than thirty 23 (30) nor more than ninety (90) days from the date of the notice. Such notice 24 may be so served by delivery to the insurer, or by mailing to the insurer 25 addressed to its registered office in this state. 26 (2) The deficiency may be made good in cash or in assets eligible under 27 chapter 7 (investments) for the investment of the insurer's funds; or by 28 amendment of the insurer's certificate of authority to cover only such kind or 29 kinds of insurance thereafter for which the insurer has sufficient paid-in 30 capital stock (if a stock insurer) or surplus (if a mutual insurer) under this 31 code; or, if a stock insurer, by reduction of the number of shares of the 32 insurer's authorized capital stock or the par value thereof through amendment 33 of its articles of incorporation, to an amount of authorized and paid-in capi- 34 tal stock not below the minimum required for the kinds of insurance thereafter 35 to be transacted. 36 (3) After any such reduction of authorized capital stock the insurer 37 shall require the surrender to it of outstanding stock certificates in 38 exchange for new certificates to be issued in lieu thereof for such number 39 and/or par value of shares as the respective stockholders are proportionately 40 entitled to receive. 41 (4) If the deficiency is not made good and proof thereof filed with the 42 director within the period required by the notice as specified in subsection 43 (1) above, the insurer shall be deemed insolvent and the director shall insti- 44 tute delinquency proceedings against it under chapter 33 of this code. 45 SECTION 8. That Section 41-3806, Idaho Code, be, and the same is hereby 46 amended to read as follows: 47 41-3806. REGISTRATION OF HOLDING COMPANY SYSTEM INSURERS. (1) Every 48 insurer which is authorized to do business in this state and which is a member 49 of an insurance holding company system shall register with the director; 50 except a foreign insurer subject to registration requirements and standards 5 1 adopted by statute or regulation in the jurisdiction of its domicile which are 2 substantially similar to those contained in: 3 (a) Section 41-3806, Idaho Code; 4 (b) Sections 41-3807 (1), 41-3808 and 41-3809, Idaho Code; and 5 (c) Either section 41-3807 (2), Idaho Code, or a provision such as the 6 following: Each registered insurer shall keep current the information 7 required to be disclosed in its registration statement by reporting all 8 material changes or additions within fifteen (15) days after the end of 9 the month in which it learns of each change or addition. 10 Each insurer which is subject to registration under the provisions of this 11 section shall register within fifteen (15) days after it becomes subject to 12 registration, and annually thereafterwithin one hundred twenty (120)13days after the end of the holding company's fiscal yearfor the 14 year ended December 31 immediately preceding, on the due date provided for 15 filing of audited financial reports or, if the insurer is not subject to fil- 16 ing of audited financial reports, on June 1 , unless the director, for 17 good cause shown, extends the time for registration, and then within such 18 extended time. Nothing in this section shall be construed to prohibit the 19 director from requesting any authorized insurer, which is a member of a hold- 20 ing company system and not subject to registration under the provisions of 21 this section, for a copy of the registration statement or other information 22 filed by such insurer with the insurance regulatory authority of its state of 23 domicile. Upon request of the insurer or of the insurance regulatory authority 24 of another jurisdiction in which the insurer is authorized to transact insur- 25 ance, the director at the insurer's expense shall furnish a copy of the regis- 26 tration statement or other information filed by a domestic insurer with the 27 director pursuant to this chapter. 28 (2) Every insurer subject to registration shall file a registration 29 statement, on a form provided by the director, which shall contain current 30 information about: 31 (a) The capital structure, general financial condition, ownership and 32 management of the insurer and of any person controlling the insurer; 33 (b) The identity and relationship of every member of the insurance hold- 34 ing company system; 35 (c) The following agreements in force, and transactions currently out- 36 standing or which have occurred during the last calendar year between the 37 insurer and its affiliates: 38 (i) Loans and other investments, and purchases, sales or exchanges 39 of securities of the affiliate by the insurer or of the insurer by 40 its affiliates; 41 (ii) Purchases, sales, or exchanges of assets; 42 (iii) Transactions not in the ordinary course of business; 43 (iv) Guarantees or undertakings for the benefit of an affiliate 44 which result in an actual contingent exposure of the insurer's assets 45 to liability, other than insurance contracts entered into in the 46 ordinary course of the insurer's business; 47 (v) All management and service contracts and all cost-sharing 48 arrangements; 49 (vi) Reinsurance agreements; 50 (vii) Dividends and other distributions to shareholders; and 51 (viii) Consolidated tax allocation agreements. 52 (d) Any pledge of the insurer's stock, including stock of any subsidiary 53 or controlling affiliate, for a loan made to any member of the insurance 54 holding company system; and 55 (e) Other matters concerning transactions between the insurer and any 6 1 affiliate as may be required by the director. 2 (3) All registration statements shall contain a summary outlining all 3 items in the current registration statement representing changes from the 4 prior registration statement. 5 (4) No information need be disclosed on the registration statement filed 6 pursuant to this section if such information is not material to the purposes 7 of this chapter. Unless the director by rule, regulationor order 8 provides otherwise, sales, purchases, exchanges, loans or extensions of 9 credit, or investments, involving one-half of oneper cent10 percent (.5%) or less of an insurer's admitted assets as of December 31 11 immediately preceding shall not be deemed material for purposes of this sec- 12 tion. 13 (5) Subject to the provisions of section 41-3809, Idaho Code, each regis- 14 tered insurer shall report to the director all dividends and other distribu- 15 tions to shareholders within fifteen (15) business days following the declara- 16 tion thereof. 17 (6) Any person within an insurance holding company system subject to reg- 18 istration shall be required to provide complete and accurate information to an 19 insurer, where such information is reasonably necessary to enable the insurer 20 to comply with the provisions of this chapter. 21 (7) The director shall terminate the registration of any insurer which 22 demonstrates that it is no longer a member of an insurance holding company 23 system. 24 (8) The director may require or allow two (2) or more affiliated insurers 25 subject to registration hereunder to file a consolidated registration state- 26 ment. 27 (9) The director may allow any insurer, which is authorized to do busi- 28 ness in this state and which is part of an insurance holding company system, 29 to register on behalf of any affiliated insurer which is required to register 30 under subsection (1) of this section, and to file all information and material 31 required to be filed under the provisions of this chapter. 32 (10) This section shall not apply to any insurer, information or transac- 33 tion if and to the extent that the director by rule, regulation,34 or order shall exempt the same from the provisions of this section as not com- 35 prehended within the purposes thereof. 36 (11) Any person may file with the director a disclaimer of affiliation 37 with any authorized insurer or such a disclaimer may be filed by the insurer 38 or any member of an insurance holding company system. The disclaimer shall 39 fully disclose all material relationships and bases for affiliation between 40 such person and the insurer as well as the bases for disclaiming such affilia- 41 tion. After a disclaimer has been filed, the insurer shall be relieved of any 42 duty to register or report under this section which may arise out of the 43 insurer's relationship with such person unless and until the director disal- 44 lows the disclaimer. The director shall disallow a disclaimer only after a 45 hearing thereon with notice to all parties in interest, and after making spe- 46 cific findings of fact to support such disallowance. 47 (12) The failure to file a registration statement or any summary of the 48 registration statement thereto required in this section within the time speci- 49 fied for such filing shall be a violation of the provisions of this section.
STATEMENT OF PURPOSE
RS08351
To amend Idaho Code, Section 41-3806(1), to provide for the filing
of the Insurance Holding Company Registration Statement on the same
date as the audited financial report, which is an exhibit required
of the Registration Statement.
To amend Idaho Code, Section 41-2852(1), to clarify the term
"insurer's capital" to correspond with the definition as used in
other areas of title 41.
To amend Idaho Code, Section 41-3485(3)(a), to clarify that the
insurance department referred to is the Idaho Department of
Insurance.
To amend Idaho Code, Section 41-268(3), to align the reporting
requirements for arson, fire and fraud prevention assessments with
those of the premium tax receipts.
To amend Idaho Code, Sections 41-307, 41-332 and 41-2803 to reflect
renumbered references to Idaho corporation law, title 30.
FISCAL IMPACT
None.
CONTACT
Name: Robert Murphy
Agency: Department of Insurance
Phone: 334-4250
Statement of Purpose/Fiscal Impact H