2001 Legislation
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HOUSE BILL NO. 156 – Insurance, wholesale producers

HOUSE BILL NO. 156

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Daily Data Tracking History



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

Bill Text


                                                                        
                                                                        
  ||||              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.

Amendment


                                                                        
                                                                        
  ||||              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.".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ||||              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 / Fiscal Impact



                       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