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H0156aa.........................................................by BUSINESS
INSURANCE - WHOLESALE PRODUCERS - Adds to and amends existing law to
provide that when an insurance producer acts as a wholesale producer, the
producer may charge a fee or may be compensated by a combination of fees
and commissions; to provide duties of the wholesale producer; to provide
for disclosure of certain information; to define terms; to provide
application to personal lines insurance policies or surety insurance
policies; and to provide that wholesaler producer fees charged shall not be
considered a premium unless the fee relates to a surplus line policy.
02/06 House intro - 1st rdg - to printing
02/07 Rpt prt - to Bus
03/02 Rpt out - to Gen Ord
03/07 Rpt out amen - to engros
03/08 Rpt engros - 1st rdg - to 2nd rdg as amen
03/09 2nd rdg - to 3rd rdg as amen
03/13 3rd rdg as amen - PASSED - 68-1-1
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow,
Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck,
Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher,
Mader, Marley, McKague, Meyer, Montgomery, Mortensen, Moss, Moyle,
Pearce, Pischner, Pomeroy, Raybould, Ridinger, Roberts, Robison,
Sali, Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson, Stone,
Swan, Tilman, Trail, Wheeler, Young, Mr. Speaker
NAYS -- Wood
Absent and excused -- Cuddy
Floor Sponsor -- Gagner
Title apvd - to Senate
03/14 Senate intro - 1st rdg - to Com/HuRes
03/16 Rpt out - rec d/p - to 2nd rdg as amen
03/19 2nd rdg - to 3rd rdg as amen
03/20 3rd rdg as amen - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
NAYS -- None
Absent and excused -- None
Floor Sponsor -- Goedde
Title apvd - to House
03/21 To enrol
03/22 Rpt enrol - Sp signed - Pres signed - to Gov
03/23 Governor signed
Session Law Chapter 154
Effective: 07/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 156
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE REGULATION OF INSURANCE; AMENDING CHAPTER 10, TITLE 41, IDAHO
3 CODE, BY THE ADDITION OF A NEW SECTION 41-1059, IDAHO CODE, TO PROVIDE
4 THAT WHEN A PRODUCER ACTS AS A WHOLESALE PRODUCER, THE PRODUCER MAY CHARGE
5 A FEE OR MAY BE COMPENSATED BY A COMBINATION OF FEES AND COMMISSIONS, TO
6 PROVIDE DUTIES OF THE WHOLESALE PRODUCER, TO PROVIDE FOR DISCLOSURE OF
7 CERTAIN INFORMATION, TO DEFINE TERMS AND TO PROVIDE APPLICATION TO PER-
8 SONAL LINES INSURANCE POLICIES OR SURETY INSURANCE POLICIES; AMENDING SEC-
9 TION 41-1803, IDAHO CODE, TO PROVIDE THAT WHOLESALE PRODUCER FEES CHARGED
10 PURSUANT TO SECTION 41-1059, IDAHO CODE, SHALL NOT BE CONSIDERED A PREMIUM
11 UNLESS THE FEE RELATES TO A SURPLUS LINE POLICY.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Chapter 10, Title 41, Idaho Code, be, and the same is
14 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
15 ignated as Section 41-1059, Idaho Code, and to read as follows:
16 41-1059. WHOLESALE PRODUCER FEES. (1) Notwithstanding any other provision
17 of title 41, Idaho Code, including, but not limited to, sections 41-1314,
18 41-1323 and 41-1324, Idaho Code, when a producer acts as a wholesale producer,
19 the producer may charge a fee or may be compensated by a combination of fees
20 and commissions. The wholesale producer must provide a written statement to
21 the retail producer that describes the services the wholesale producer is to
22 perform and the fees the wholesale producer is to receive. Information
23 regarding the amount of the fees charged by the wholesale producer shall be
24 disclosed in writing to the insured by the retail producer as a separately
25 itemized charge, prior to the purchase of the insurance contract.
26 (2) For purposes of this section:
27 (a) "Retail producer" shall mean a producer in those situations where the
28 producer negotiates, sells or solicits a commercial lines property or
29 casualty contract directly with an insured or a prospective insured.
30 (b) "Wholesale producer" shall mean a producer in those situations where
31 the producer negotiates, sells or solicits a commercial lines property or
32 casualty insurance contract directly with a retail producer, but not with
33 an insured or a prospective insured.
34 (3) The provisions of this section shall not apply to personal lines
35 insurance policies or surety insurance policies.
36 SECTION 2. That Section 41-1803, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 41-1803. "PREMIUM" DEFINED. "Premium" is the consideration for insurance
39 by whatever name called. Any "assessment," or any "membership," "policy,"
40 "survey," "inspection," "service" or similar fee or other charge in consider-
41 ation for an insurance contract is deemed part of the premium; provided that
2
1 wholesale producer fees charged pursuant to section 41-1059, Idaho Code, shall
2 not be considered a premium unless the fee relates to a surplus line policy.
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
Moved by Deal
Seconded by Tilman
IN THE HOUSE OF REPRESENTATIVES
HOUSE AMENDMENT TO H.B. NO. 156
1 AMENDMENTS TO SECTION 1
2 On page 1 of the printed bill, delete lines 24 and 25 and insert:
3 "disclosed in writing on the face of the policy as a separately itemized
4 charge.".
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 156, As Amended
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE REGULATION OF INSURANCE; AMENDING CHAPTER 10, TITLE 41, IDAHO
3 CODE, BY THE ADDITION OF A NEW SECTION 41-1059, IDAHO CODE, TO PROVIDE
4 THAT WHEN A PRODUCER ACTS AS A WHOLESALE PRODUCER, THE PRODUCER MAY CHARGE
5 A FEE OR MAY BE COMPENSATED BY A COMBINATION OF FEES AND COMMISSIONS, TO
6 PROVIDE DUTIES OF THE WHOLESALE PRODUCER, TO PROVIDE FOR DISCLOSURE OF
7 CERTAIN INFORMATION, TO DEFINE TERMS AND TO PROVIDE APPLICATION TO PER-
8 SONAL LINES INSURANCE POLICIES OR SURETY INSURANCE POLICIES; AMENDING SEC-
9 TION 41-1803, IDAHO CODE, TO PROVIDE THAT WHOLESALE PRODUCER FEES CHARGED
10 PURSUANT TO SECTION 41-1059, IDAHO CODE, SHALL NOT BE CONSIDERED A PREMIUM
11 UNLESS THE FEE RELATES TO A SURPLUS LINE POLICY.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Chapter 10, Title 41, Idaho Code, be, and the same is
14 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
15 ignated as Section 41-1059, Idaho Code, and to read as follows:
16 41-1059. WHOLESALE PRODUCER FEES. (1) Notwithstanding any other provision
17 of title 41, Idaho Code, including, but not limited to, sections 41-1314,
18 41-1323 and 41-1324, Idaho Code, when a producer acts as a wholesale producer,
19 the producer may charge a fee or may be compensated by a combination of fees
20 and commissions. The wholesale producer must provide a written statement to
21 the retail producer that describes the services the wholesale producer is to
22 perform and the fees the wholesale producer is to receive. Information
23 regarding the amount of the fees charged by the wholesale producer shall be
24 disclosed in writing on the face of the policy as a separately itemized
25 charge.
26 (2) For purposes of this section:
27 (a) "Retail producer" shall mean a producer in those situations where the
28 producer negotiates, sells or solicits a commercial lines property or
29 casualty contract directly with an insured or a prospective insured.
30 (b) "Wholesale producer" shall mean a producer in those situations where
31 the producer negotiates, sells or solicits a commercial lines property or
32 casualty insurance contract directly with a retail producer, but not with
33 an insured or a prospective insured.
34 (3) The provisions of this section shall not apply to personal lines
35 insurance policies or surety insurance policies.
36 SECTION 2. That Section 41-1803, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 41-1803. "PREMIUM" DEFINED. "Premium" is the consideration for insurance
39 by whatever name called. Any "assessment," or any "membership," "policy,"
40 "survey," "inspection," "service" or similar fee or other charge in consider-
41 ation for an insurance contract is deemed part of the premium; provided that
2
1 wholesale producer fees charged pursuant to section 41-1059, Idaho Code, shall
2 not be considered a premium unless the fee relates to a surplus line policy.
STATEMENT OF PURPOSE
RS 10890
The proposed legislation is a clarification relating to the legality of
Wholesale Producers receiving fees and commissions. The proposed
legislation would clarify the law by sepcifically authorizing Wholesale
Producers to receive fees and commissions with regard to certain
commercial lines insurance. The legislation also requires written
notice to insureds of the fees to be charged and services to be
provided. Finally, the legislation clarifies that fees are subject to
income taxes instead of premium taxes.
FISCAL IMPACT
There should be no fiscal impact resulting from this proposed
legislation.
Contact
Name: Woody Richards
Organization: Swett & Crawford Group
Phone: 385-5451
STATEMENT OF PURPOSE/FISCAL NOTE H 15