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S1176aa.....................................by COMMERCE AND HUMAN RESOURCES
INSURERS - Amends existing law to revise priorities for distribution of
assets in the liquidation of an insolvent insurer; and to provide
application of the act to pending and future claims in existing delinquency
proceedings as well as to claims in delinquency proceedings arising after
the effective date of the act.
02/12 Senate intro - 1st rdg - to printing
02/15 Rpt prt - to Com/HuRes
02/26 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/03 To 14th Ord
03/04 Rpt out amen - to engros
03/05 Rpt engros - 1st rdg - to 2nd rdg as amen
03/08 2nd rdg - to 3rd rdg as amen
03/10 3rd rdg as amen - PASSED - 28-0-7
AYES--Boatright, Branch, Bunderson, Burtenshaw, Crow, Danielson,
Darrington, Davis, Deide, Dunklin, Frasure, Geddes, Hawkins, Ingram,
Ipsen, Keough, King, Lee, McLaughlin, Noh, Riggs, Risch, Sandy,
Sorensen, Stegner, Thorne, Wheeler, Whitworth
NAYS--None
Absent and excused--Andreason, Cameron, Parry, Richardson, Schroeder,
Stennett, Twiggs
Floor Sponsor - Ipsen
Title apvd - to House
03/11 House intro - 1st rdg as amen - to Bus
03/16 Rpt out - rec d/p - to 2nd rdg as amen
03/17 2nd rdg - to 3rd rdg as amen
03/18 3rd rdg as amen - PASSED - 64-0-6
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Black, Bruneel,
Callister, Campbell, Chase, Clark, Crow, Cuddy, Deal, Ellsworth,
Field(13), Field(20), Gagner, Geddes, Gould, Hadley, Hammond,
Hansen(23), Hansen(29), Henbest, Jaquet, Jones, Judd, Kellogg,
Kempton, Kendell, Kunz, Lake, Limbaugh, Linford, Loertscher, Mader,
Marley, McKague, Meyer(Duncan), Montgomery, Mortensen, Pomeroy,
Reynolds, Ridinger, Ringo, Robison, Sali, Schaefer, Sellman, Smith,
Smylie, Stevenson, Stoicheff, Stone, Taylor, Tilman, Tippets, Trail,
Watson, Wheeler, Wood, Zimmermann, Mr Speaker
NAYS -- None
Absent and excused -- Boe, Denney, Hornbeck, Moyle, Pischner,
Williams
Floor Sponsor - Duncan
Title apvd - to Senate
03/19 To enrol - rpt enrol - Pres signed
03/22 Sp signed
03/23 To Governor
03/24 Governor signed
Session Law Chapter 321
Effective: 03/24/99
S1176|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE SENATE SENATE BILL NO. 1176, As Amended BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO INSOLVENT INSURERS; AMENDING SECTION 41-3342, IDAHO CODE, TO 3 REVISE PRIORITIES FOR DISTRIBUTION OF ASSETS IN THE LIQUIDATION OF AN 4 INSOLVENT INSURER; DECLARING AN EMERGENCY AND PROVIDING APPLICATION. 5 Be It Enacted by the Legislature of the State of Idaho: 6 SECTION 1. That Section 41-3342, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 41-3342. PRIORITY OF DISTRIBUTION. The priority of distribution of claims 9 from the insurer's estate shall be in accordance with the order in which each 10 class of claims is herein set forth. Every claim in each class shall be paid 11 in full or adequate funds retained for such payment before the members of the 12 next class receive any payment. No subclasses shall be established within any 13 class. The order of distribution of claims shall be: 14 (1) Class 1. The costs and expenses of administration, including, but not 15 limited to, the following: 16 (a) The actual and necessary costs of preserving or recovering the assets 17 of the insurer; 18 (b) Compensation for all services rendered in the liquidation; 19 (c) Any necessary filing fees; 20 (d) The fees and mileage payable to witnesses; 21 (e) Reasonable attorney's fees; and 22 (f) The reasonable expenses of a guaranty association or foreign guaranty 23 association in handling claims. 24 (2) Class 2.Debts due to employees for services performed and ben-25efits accrued to the extent that they do not exceed one thousand dollars26($1,000) and represent payment for services performed within one (1) year27before the commencing of delinquency proceedings. Officers and directors shall28not be entitled to the benefit of this priority. Such priority shall be in29lieu of any other similar priority which may be authorized by law as to wages30or compensation of employees.3132(3) Class 3.All claims under policies for losses incurred, 33 including third party claims,all claims against the insurer for liabil-34ity for bodily injury or for injury to or destruction of tangible property35which are not under policies,and all claims of a guaranty association 36 or foreign guaranty association. All claims under lifeand37 policies, annuity policies, or disability or health insurance 38 policies, whether for death proceeds, annuity proceeds, or investment 39 values shall be treated as loss claims. That portion of any loss, indemnifica- 40 tion for which is provided by other benefits or advantages recovered by the 41 claimant, shall not be included in this class, other than benefits or advan- 42 tages recovered or recoverable in discharge of familial obligations of support 43 or by way of succession at death or as proceeds of life insurance, or as gra- 2 1 tuities. No payment by an employer to his employee shall be treated as a gra- 2 tuity. 3 (3) Class 3. Claims under nonassessable policies for unearned pre- 4 mium or other premium refunds. 5 (4) Class 4. Claimsunder nonassessable policies for unearned pre-6mium of other premium refunds and claims of general creditorsof 7 the federal government not included in class 2 or class 3 above . 8 (5) Class 5. Debts due to employees for services performed and ben- 9 efits accrued to the extent that they do not exceed one thousand dollars 10 ($1,000) and represent payment for services performed within one (1) year 11 before the commencing of delinquency proceedings. Officers and directors 12 shall not be entitled to the benefit of this priority. Such priority shall be 13 in lieu of any other similar priority which may be authorized by law as to 14 wages or compensation of employees. 15 (6) Class 6. Claims of general creditors and all claims against the 16 insurer for liability for bodily injury or for injury to or destruction of 17 tangible property which are not under the policies. 18 (57 ) Class57 . Claims 19 ofthe federal orany state or local government not 20 included in class 2 or class 3 above . Claims, including those of any 21 state or local governmental body for a penalty or forfeiture, 22 shall be allowed in this class only to the extent of the pecuniary loss sus- 23 tained from the act, transaction, or proceeding out of which the penalty or 24 forfeiture arose, with reasonable and actual costs occasioned thereby. The 25 remainder of such claims shall be postponed to the class of claims under sub- 26 section (810 ) of this section. 27 (68 ) Class68 . Claims 28 filed late or any other claims other than claims under subsections (7299 ) and (810 ) of this section. 30 (79 ) Class79 . Sur- 31 plus or contribution notes, or similar obligations, and premium refunds on 32 assessable policies. Payments to members of domestic mutual insurance compa- 33 nies shall be limited in accordance with law. 34 (810 ) Class810 . The 35 claims of shareholders or other owners arising out of their capacity as 36 shareholders or owners, or any other capacity except as they may be qualified 37 in class 2 or class 6 above . 38 SECTION 2. An emergency existing therefor, which emergency is hereby 39 declared to exist, this act shall be in full force and effect on and after its 40 passage and approval, and shall apply to pending and future claims in existing 41 delinquency proceedings as well as to claims in delinquency proceedings aris- 42 ing after the effective date of this act.
AS1176|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999Moved by Stegner Seconded by Davis IN THE SENATE SENATE AMENDMENT TO S.B. NO. 1176 1 AMENDMENT TO SECTION 1 2 On page 1 of the printed bill, delete line 35 and insert: "association. 3 All claims under lifeandpolicies, annuity poli- 4 cies, or disability or health insurance policies, whether for 5 death".
STATEMENT OF PURPOSE
RS 09000
The proposed legislation amends Idaho Code 41-3342, which sets forth priorities for
distribution of assets in the liquidation of an insolvent insurer. The amendments are made to
conform this section to recent federal court rulings.
FISCAL IMPACT
None.
Contact:
Name: RobertMurphy
Agency: DepartmentofInsurance
Phone: 334-4250
Statement of Purpose/Fiscal Impact
S117